How much money do you need to retire and live off the interest and/or dividends?

[ramirez]

Assuming of course your house and car are already paid off.

 

[PrinceofWands]

There is no one answer, it depends on how much you need to live annually. I can live on 10-20k easily, but other people need considerably more. Until you know that, there is no answer. It would also help to have some idea how many years you'll be living. Then there's always the question of how much safety do you require in your investments? More risk, more income, but also more chance that something will come along and destroy you.

 

[keeleysam]

All of it.

 

[KLin]

Originally posted by: keeleysam
All of it.

1 MEEEEEEEEEEEEEEEEEEELLLLLLLLLION DOLLARS


/pinky to mouth

 

[EyeMWing]

Lets say this money is actually in the most convenient form - your checkings and savings accounts. No real investments. Lets give you a comfortable 150k/yr interest-only income. At my bank's checking/savings rate of 2.25%, you need $6,666,666.67 stuffed in there. So, $6.7M. To pull that off, you'd need to put away $150k/yr for 44.5 years. But that's all you make, so you're going to need to go for 89 years since you can only really put away like half of that. Lets say you don't hit that $150k/everything paid off mark until you turn 27. You can retire at age 116.

Yes, there are some logical holes in that argument there, like "why do I suddenly need to double my income after being alive for 116 years?" - but I'm tired.

You need a lot if you're going to invest casually.

A good rule of thumb is that 5% investments are easy to come by - CD's and such. So to pull 1M/yr at 5% rates, you're going to need 8M to start with. Which really makes you wonder... "why the hell do lottery winners ever run out of money?" 1M in a 5% investment will pull you a cool $50k in interest - which should be more than enough to retire on, and 1M is a very attainable goal for many, many blue collars, and easily reachable for white collar.

 

[BudAshes2]

Im hoping the negative 10k i have right now will do the trick and let me retire by 25.

 

[swtethan]

i would need like 7 billion

 

[DainBramaged]

Originally posted by: KLin

Originally posted by: keeleysam
All of it.

1 MEEEEEEEEEEEEEEEEEEELLLLLLLLLION DOLLARS


/pinky to mouth

 

[DaveSimmons]

Remember you still have to pay taxes on your income and on withdrawals from a traditional (but not Roth) IRA.

Also, event if you own your home, you still pay property taxes. And you'll want a new car eventually too.

Ignoring social security, I could retire comfortably with $600-800K in investments but I don't have any kids to put through college.

 

[OS]

there was a decent thread about this a couple weeks ago here

as mentioned you need to consider taxes

also consider inflation