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At any point in life, even "retiring" in your 30's, you can do that with Zero income and live a fairly comfortable life. So go up from there for your number!
Back in the 80's, my crazy friend Pam, with 2 college degrees, opted out of the rat race, and resigned herself to being homeless. She knows every city's homeless shelters across the country, as a traveling homeless gipsy and she happens to be the amongst the happiest of the homeless! Long ago, she was encouraging me to follow suit! No thanks!
I think he is saying that the income flow from the $2.5 million, PLUS the $2000 a month pension, PLUS Social Security, adds to much more than his expenses. I am in a similar position but without the pension. Let's start with the $2.5 million, divide by 21.5 (the Sexauer-Siegel number), you get $116,000 annual income, growing with inflation for 20 years then staying flat. Add to that $62,000 in Social Security (with payout beginning at age 70; I'm married and have paid in the maximum), for a total pre-tax income of $178,000. It's not quite champagne and caviar but it's just fine.
The truth is that it is champagne and caviar and it's way more than "just fine".
Although I haven't looked this up, I rather imagine it puts you in the upper 5% of retirees in the United States.
The truth is that it is champagne and caviar and it's way more than "just fine".
Although I haven't looked this up, I rather imagine it puts you in the upper 5% of retirees in the United States.
That was exactly my point. I am as sure as you are that it does put them into that bracket of retirees in the US.
Quote:
Originally Posted by Larry Siegel
I think he is saying that the income flow from the $2.5 million, PLUS the $2000 a month pension, PLUS Social Security, adds to much more than his expenses. I am in a similar position but without the pension. Let's start with the $2.5 million, divide by 21.5 (the Sexauer-Siegel number), you get $116,000 annual income, growing with inflation for 20 years then staying flat. Add to that $62,000 in Social Security (with payout beginning at age 70; I'm married and have paid in the maximum), for a total pre-tax income of $178,000. It's not quite champagne and caviar but it's just fine.
I can even put my numbers up against yours and I could almost do champagne and caviar and I don't come into your league of numbers. I probably have just under 1/4 of your savings numbers at about 3/4 mil and double your pension after annuity for DW. Since my numbers are too close to making that 35% bracket I am pretty sure we are taking at FRA so that our numbers keep us under. So if I feel like I could do C&C for a good number of breakfasts you can do as well.
Just another point here. I applaud your work and ability to come up with those numbers. I envy those who were talented enough to have a superior paying job. I went for the surety and security but I feel good about the way I went about it. So please enjoy your cushion. You deserve it and earned it.
That was exactly my point. I am as sure as you are that it does put them into that bracket of retirees in the US.
I can even put my numbers up against yours and I could almost do champagne and caviar and I don't come into your league of numbers. I probably have just under 1/4 of your savings numbers at about 3/4 mil and double your pension after annuity for DW. Since my numbers are too close to making that 35% bracket I am pretty sure we are taking at FRA so that our numbers keep us under. So if I feel like I could do C&C for a good number of breakfasts you can do as well.
Just another point here. I applaud your work and ability to come up with those numbers. I envy those who were talented enough to have a superior paying job. I went for the surety and security but I feel good about the way I went about it. So please enjoy your cushion. You deserve it and earned it.
What are your responsibilities? How many family members are you supporting? How many have special needs and always will, even after you've expired? Before you criticize your neighbor, walk a mile in his moccasins.
By the way, I can afford actual champagne and caviar - they're not that expensive. However, they are symbolic of a lifestyle in which I can only participate very slightly: luxury foreign vacations, second homes, you know the drill.
Just another point here. I applaud your work and ability to come up with those numbers. I envy those who were talented enough to have a superior paying job. I went for the surety and security but I feel good about the way I went about it. So please enjoy your cushion. You deserve it and earned it.
Quote:
Originally Posted by Larry Siegel
What are your responsibilities? How many family members are you supporting? How many have special needs and always will, even after you've expired? Before you criticize your neighbor, walk a mile in his moccasins.
By the way, I can afford actual champagne and caviar - they're not that expensive. However, they are symbolic of a lifestyle in which I can only participate very slightly: luxury foreign vacations, second homes, you know the drill.
Where is the criticism? I think I applauded you and your work to get that much. In fact I said you deserve it and earned it. My foreign vacation? Talil AFB Iraq 2003 to 2004.
I don't think he was critical, just pointing out that one man's $60k per year is another's $170k depending on who and how many you support, and where you live, and what your safety net is. People that make $170-180k are not having caviar and champagne for breakfast. People that make $1M per year are. Personally, I think someone thar pays $28k per year in taxes and fees, and maintain a $700k home, and expects to live with a cusion on $130k based mostly on Savings derived income is cutting it pretty close. Basically selling the house and downsizing is the cushion.
Often discussed is that starting retirement income is usually a higher percentage of living expenses compared to later in retirement, and this is of course where very old seniors get caught even though they thought they planned well. Basically, COLA on SS doesn't actually keep pace with increased costs of living, and most pensions , even if fortunate to have one do not have COLA, and investing becomes more conservative much later in life so add in higher medical or AL, and poof, monies gone. I hope that by starting my retirement with say 25% more than my expenses are, so my savings continue to grow longer I will avoid that dilemma ..it would be so much easier if I had successful kids to support me....
Last edited by Perryinva; 09-10-2015 at 06:56 AM..
I don't think he was critical, just pointing out that one man's $60k per year is another's $170k depending on who and how many you support, and where you live, and what your safety net is. People that make $170-180k are not having caviar and champagne for breakfast. People that make $1M per year are. Personally, I think someone thar pays $28k per year in taxes and fees, and maintain a $700k home, and expects to live with a cusion on $130k based mostly on Savings derived income is cutting it pretty close. Basically selling the house and downsizing is the cushion.
I think downsizing will be key for me. Cashing out equity in the current home might buy the smaller place outright or at the very least will make the mortgage very small. A smaller house is cheaper and easier to maintain also. I think we could come pretty close to cutting housing costs in half and still live as well as we do now. Because I max out the 401k, my take home is a smaller percent of my gross than most people. My company only pays a portion insurance equal to the rate for a single and I pay 5 times that much for a family. A significant portion of my current expenses are related to kids' schools. My current gross puts me in a high bracket. When you take all these factors into account, I can get well below 50% before I start even talking about making any sacrifices.
My goals: $2.5 million, paid-off $700k house, and $24k/year pension (need company to continue to vest or 10 years---fingers crossed).
My big uses of cash: property taxes - $14k/yr, HOA - $2k/yr, golf membership - $12k/yr.....figure I need $120k/year to easily cover my annual expenditures---there's some cushion here....but it will need to pay significant amount of taxes on RMD's on our 401(k)'s.
Retired and fairly close to your 10 year goal now. I keep my income around $120K, fed tax at 11 or 12%. $400K house paid off. We only need $60K, my checking and money market accounts are all in the 6 figure range. Far more coming in than going out and we give much of it away to our adult children.
Where is the criticism? I think I applauded you and your work to get that much. In fact I said you deserve it and earned it. My foreign vacation? Talil AFB Iraq 2003 to 2004.
The criticism was very mild and was from someone else.
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