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Originally Posted by dreamingat30fps
Lots of factors that would come into play. Like age, life expectancy, single, married, existing savings, paid off home etc etc.
I've always heard about being able to live on 4% of your savings for retirement. Haven't looked much into it so dunno how legit that is or is that the same if you plan to retire at 70 or 40? Probably not. Given your numbers 4% on the 1M is $40k/year. Not great, but if I just had to retire tomorrow for some reason I'm sure I could adjust to survive on $40k with a paid off home. However I don't mind what I do right now so I will keep doing it for as long as it lasts or as long as I can keep doing it.
Now if I change the question to be how much $$ would it take to force me to retire right now... then probably $10M.
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Yes, $40K of $1M is 4%, but keep in mind that for most, that $1M is largely tied up in investments that are growing, bringing dividends, etc. Your portfolio should be brining in around 6-8%, some years much better and some years much worse, but overall, it will likely be around 6-8%. That's $60-80K a year. Assuming your house is paid off and the kids are moved out, your expenses shouldn't crazy high assuming you're not living some super lavish lifestyle.
This retirement calculator has been super helpful for me:
https://engaging-data.com/will-money-last-retire-early/ The calculator has all sorts of inputs gives you probabilities about going broke or out living your money. With our $2M goal, me retiring at 52 and living until 82, us spending $80K/yr, and my wife still working, there's a 0% probability of going broke in our late 70s, and there's a 9% of us having $10M when I'm dead at 82. The calculator accounts for inflation.
We currently spend around $70-80K/yr and that includes having two kids at home with kid costs accounting for around 25% of that number. When I'm 52, one will be graduated and the other just starting college. Both kids having 529s with enough to cover nearly 100% of their college costs. My daughter swears she won't need the money though as she'll get a full ride playing volleyball at a D1 school
