Fun Time........What would YOU need to retire????

[redgtxdi]

So it looks like $1,000 earns about $4.25 per month right now.....(roughly figured) in interest if you're parked in a money market account earning about 5% interest.

At that amount.........how much would you need to retire at this point in your life????


(Yes, this is just make-believe fun, type day-dreamer crap, but I love this stuff).........

 

[MoPHo]

this may sound pretty sad...but eleventy billion dollars sounds about right...

 

[NogginBoink]

My back of the hand calculation is that I'll start seriously looking at retirement when I have $2M.

 

[FoBoT]

i will need $11 million if i try to retire in 2031 (at age 65)

so i'll probably work until i die or until ~2040+

 

[SpunkyJones]

I dont' worry too much, I have children, so worse case scenario is I get a room in the basement.

 

[Tiamat]

50,000$ per year for essentials. x$ for toys like a Pipe Organ ($2.5M), Stereo ($1.0M), vacationing ($shrugs).

Guess I should start saving soon :/

 

[redgtxdi]

LOL!!! Great replies!!!

I dunno how much I'd need to be honest. I think if I actually look at how much I'll need it'll just shatter my hopes.......LOL!!!

I think it'd be kinda' nice to have at least a million socked away.......(still a ways from that, however), but my gut tells me that at least a couple million is probably gonna end up having to be a more realistic goal as things are just gonna get more & more expensive so while a single million might cut it now, I doubt that it will 30 years down the road!

Of course, getting the house paid off will help!! That's my current near-future goal.......(lookin' at about 6-7 years to make that one happen!) Then I'll need a bit less money to be able to unplug the alarm clock for good! :clock:

 

[SlitheryDee]

10 million

 

[redgtxdi]

Originally posted by: SlitheryDee
10 million

Ahhh........I see.........so you're on the "Working 'Til I Die" plan??

 

[BurnItDwn]

I don't plan on using a money market account to retire. I'm hoping REI will afford me enough cash flow to retire.

Currently I'm still paying off my first home (bought for 120K with 0 down. Worth about 160K now. Made several extra payments when I had extra cash, owe 109K now. Approx 51K equity. In 2 or 3 more years I'm hoping to pay down another 20K to 25K. Then Rather then sell the townhouse and buy a bigger better house, I plan on keeping the existing townhouse, using my equity as the down payment on another property, and buying something that has a garage (or at least a personal driveway rather then assigned single parking space), and is at least a little bit closer to work. Then, I'd like to rent out the old place and Live in the new place.

I am realistic here, I do not expect a positive cash flow from one rental property in the first few years of renting as I know there will be problems, and I'll still be making some pretty good sized payments on the mortgage myself. However, once the RE market starts to bounce back, property values will go up again, rent will go up, and I'll probably start being able to make a positive cash flow ater 2 or 3 slightly difficult years in the beginning. After that I just would try to purchase 1 new rental property every several years.

Hopefully by the time I retire I'll have at least 7 or 8 rental properties with at least 5 of them earning positive cash flow and the rest breaking even.

Retiring before 60 would be awesome, except I do like working, so I'd probably switch to part time rather then fully retire.

 

[dullard]

Assuming:
[*]5% interest earned a year, once a year.
[*]Withdrawl of $40,000 of today's money made once a year.
[*]3.5% average inflation. Historically this is just barely above average, but with inflation running nearly 4% early on, 3.5% is probably the best estimate possible.
[*]I pay off my house immediately from this chunck of change.
[*]Social security/medicare or whatever else is around then will pay for my added medical expenses above and beyond the $40k/year I withdraw.
[*]I need to pay for 55 more years (That'll mean I die in my mid 80s).

Then I need $1.607M today to retire. I won't retire in luxury. But I'll be comfortable.

If I bump that up to $2.328M, I can withdraw $60,000 a year and live in luxury (especially since the house will be paid off).

Edit: The withdraws is pre-tax money. I didn't include the tax on the interest. And the initial money is post-tax money. If you include tax, the amount is signficantly higher.

 

[Ika]

Too much.

Is anyone taking into account inflation?

 

[everman]

Life expectancy for someone in their 20s-30s right now may be a lot more than today due to technological advancements. This means you might need a lot more money...or maybe not? hm

 

[dullard]

Originally posted by: everman
Life expectancy for someone in their 20s-30s right now may be a lot more than today due to technological advancements. This means you might need a lot more money...or maybe not? hm

Life in the 90s is pretty pathetic. So even if you could theoretically have a great medical advancement to live to be 200 years old, I wouldn't want to do it. That is, unless we have two major medical advances. (1) Solve most forms of death such as heart disease and cancer so that we can live longer and (2) solve the aging problem.

 

[mrizvi66]

i need 5 million....and i'll never work again...

*runs to buy lotto tickets....*

 

[everman]

Originally posted by: dullard

Originally posted by: everman
Life expectancy for someone in their 20s-30s right now may be a lot more than today due to technological advancements. This means you might need a lot more money...or maybe not? hm

Life in the 90s is pretty pathetic. So even if you could theoretically have a great medical advancement to live to be 200 years old, I wouldn't want to do it. That is, unless we have two major medical advances. (1) Solve most forms of death such as heart disease and cancer so that we can live longer and (2) solve the aging problem.

Those two are main things I have in mind when making that statement. Personally I think for someone in their 20s or younger today that they could expect 100yrs to be very possible. I'm not so sure about 200 though.

 

[dullard]

Originally posted by: everman
Those two are main things I have in mind when making that statement. Personally I think for someone in their 20s or younger today that they could expect 100yrs to be very possible. I'm not so sure about 200 though.

I'm going to assume at most only one of the two is solved. Thus, even if I could live much longer, I don't want to live into my 90s. An exciting life in my late 80s should take care of that problem.

 

[D1gger]

Originally posted by: BurnItDwn
I don't plan on using a money market account to retire. I'm hoping REI will afford me enough cash flow to retire.

Currently I'm still paying off my first home (bought for 120K with 0 down. Worth about 160K now. Made several extra payments when I had extra cash, owe 109K now. Approx 51K equity. In 2 or 3 more years I'm hoping to pay down another 20K to 25K. Then Rather then sell the townhouse and buy a bigger better house, I plan on keeping the existing townhouse, using my equity as the down payment on another property, and buying something that has a garage (or at least a personal driveway rather then assigned single parking space), and is at least a little bit closer to work. Then, I'd like to rent out the old place and Live in the new place.

I am realistic here, I do not expect a positive cash flow from one rental property in the first few years of renting as I know there will be problems, and I'll still be making some pretty good sized payments on the mortgage myself. However, once the RE market starts to bounce back, property values will go up again, rent will go up, and I'll probably start being able to make a positive cash flow ater 2 or 3 slightly difficult years in the beginning. After that I just would try to purchase 1 new rental property every several years.

Hopefully by the time I retire I'll have at least 7 or 8 rental properties with at least 5 of them earning positive cash flow and the rest breaking even.

Retiring before 60 would be awesome, except I do like working, so I'd probably switch to part time rather then fully retire.

This is the same plan I am working on, but I have only two rental properties now, both paid off and giving positive cashflow.

In addition to the cashflow from investments (property, money market fund, etc.) I plan on using some of the equity as I age. The plan is to spend my last $1,000 on a hooker the night before I die.

 

[tfinch2]

Considering $1 million draws more than $40,000 in interest assuming 4.5% return, I could earn 40k a year before taxes off interest, and still have plenty of money if I ever needed it.

Assuming I have medical care and a house paid off by then, I will be able to live very comfortably off of 40k a year before taxes.

 

[dullard]

Originally posted by: tfinch2
Considering $1 million draws more than $40,000 in interest assuming 4.5% return, I could earn 40k a year before taxes off interest, and still have plenty of money if I ever needed it.

Remember, that $40k before taxes will only be worth $8000 near the time you retire due to inflation. Can you honestly live off of $8000 BEFORE TAX?

 

[dullard]

Originally posted by: BurnItDwn
I am realistic here, I do not expect a positive cash flow from one rental property in the first few years of renting as I know there will be problems, and I'll still be making some pretty good sized payments on the mortgage myself. However, once the RE market starts to bounce back, property values will go up again, rent will go up, and I'll probably start being able to make a positive cash flow ater 2 or 3 slightly difficult years in the beginning. After that I just would try to purchase 1 new rental property every several years.

I don't want to burst your buble, but instead I want to tweak one flaw in it. When property values go up, rents are steady. When property values go down (or steady) rents go up. The two go in opposite trends. Your post said that they go hand-in-hand which is false.

 

[Glavinsolo]

Been maxing out my Roth the past 2 years, I'm in my 20s and still in college. Fiancee and I have a down payment mutual fund, retirement fund, and travel fund. Since Social security and pensions may soon be a thing of the past, we don't plan on relying on these 2. So to answer your question. I plan on rolling both 401ks and Roths together into a conservative plan and forming an LLC (heirs as trustees) for my retirement so it will be easily transferable to my heirs without a huge tax hit. I'm thinking 2 Million and an annuity of $50,000 a year retiring at 55 or earlier. There is much more to life than work.

 

[Vegitto]

Heh, I don't need retirement. I plan on being dead before 25.

 

[BurnItDwn]

Originally posted by: dullard

Originally posted by: BurnItDwn
I am realistic here, I do not expect a positive cash flow from one rental property in the first few years of renting as I know there will be problems, and I'll still be making some pretty good sized payments on the mortgage myself. However, once the RE market starts to bounce back, property values will go up again, rent will go up, and I'll probably start being able to make a positive cash flow ater 2 or 3 slightly difficult years in the beginning. After that I just would try to purchase 1 new rental property every several years.

I don't want to burst your buble, but instead I want to tweak one flaw in it. When property values go up, rents are steady. When property values go down (or steady) rents go up. The two go in opposite trends. Your post said that they go hand-in-hand which is false.

Ahh .... my mistake. I just recall from my own personal experience with rent rising. When I was renting prior to purchasing my townhome, The rent went up every year, and during the same time, Real Estate prices were increasing by 10+ percent annually in the area. Though it does make sense that it would work the way you mentioned it. And I do recall the increases to the rent were generally less than that of the increases in property value.

 

[redgtxdi]

Originally posted by: D1gger

In addition to the cashflow from investments (property, money market fund, etc.) I plan on using some of the equity as I age. The plan is to spend my last $1,000 on a hooker the night before I die.

LOL!!!!

My boss read some book called "Die Broke" (or something like that). And while I understand the philosophy, I dunno how far I could get into my principal/equity before I started getting scared!!

Who knows how long you're gonna live & if you plan on living 'til 80 but you live 'til 90, there's 10 years you've gotta account for being broke if you spend your last dollar at 80!!!
(Of course, you might be able to coax the hooker into killing you after???) LOL!!