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How Much to Retire right now? (1 Viewer)

sublimeone

sublimeone

Footballguy
A wealthy benefactor wants to buy you out of your job so that you can focus on the good life.

Here are the stipulations:

* You will give up all of your existing assets, retirement funds, real estate etc... anything of significant monetary value.

* You can never be employed again but you can manage passive investments.

* You will still receive social security benefits

* The buyout is a one-time lump sum paid out immediately.

What is your minimum lifetime buyout amount, your age and number of dependents?

 
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How old are you to base this number on?    Two previous answers didn't address.  

ETA:  This is an after-tax number ...correct?

 
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proninja said:
Hmm. I'm 37. Two kids. 

700k house (I don't want to move away from family, and that's under the median in my area)
400k kids college
2,000,000 at a 4% withdrawal rate is 80k a year, which is pretty comfortable without a mortgage (more realistically, I'd use it to acquire rental real estate)

Just over $3m seems like a safe minimum. 
 
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You don't necessarily have to sell your house but you have to buy it for the full market price out of the buyout

 
proninja said:
Hmm. I'm 37. Two kids. 

700k house (I don't want to move away from family, and that's under the median in my area)
400k kids college
2,000,000 at a 4% withdrawal rate is 80k a year, which is pretty comfortable without a mortgage (more realistically, I'd use it to acquire rental real estate)

Just over $3m seems like a safe minimum. 
 
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Sounds about right.  But I'd add a beach house and we have 5 kids so $5 million. 

Eta: if I'm losing the benefits I've already compiled and all future earnings, $5 million seems a little light plus my activities will increase in cost big time. 

I'd volunteer and travel a lot.  Traveling with kids is expensive.

 
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proninja said:
So 14.5 and you'd say no?
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Probably. Too much uncertainty. Who knows what could happen? What if we see some ridiculous inflation and I'm broke and unable to work again at 60? I like having a job, if I can't ever work again he's gonna have to pay for it. 

 
35 with a 3 year old and another expected in 2 months. $3M would probably be enough. Few acres of land with a modest house would be about $500K in my desired area. Another $200k to get my cabin back. $300-400K for 2 kids education. Could easily live off the $80k @ 4%. 

 
Moe. said:
Probably. Too much uncertainty. Who knows what could happen? What if we see some ridiculous inflation and I'm broke and unable to work again at 60? I like having a job, if I can't ever work again he's gonna have to pay for it. 
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You can invest it... you don't have to store it all in cash under your mattress

 
I understand that. I'm 32. If you're telling me I can't earn another dime for the rest of my life then I am going to be sure. 

The more I think about it - I'd probably pass unless it's some ridiculous number. Just way too much that could go wrong. 

 
So I can just take this lump sum payment and invest it in the market?  If so, I'd say $1.5M would be the miminum.   I'm 40 with 2 kids.

 
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I mean at the rate we are going some minor medical procedure will cost two million dollars by the time I'm 75.

 
Do I have to take my wife?  Could you throw in a bundle of cash so I could buy her out?  I mean Hypothetically.  

 
Walking Boot said:
200k a year might be merely average salary in 2070. Right now you have to figure it costs anywhere from 60k to 100k today to spend a year in a good retirement facility with medical care if you have needs beyond the basics. You get a tough disease, alzheimer's, or require any kind of personal care and 200k might eat up everything in just a couple of decades.
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Its rare to spend that long in a full blown retirement facility.   I remembering seeing a chart where the average was just a few years with 5 years being very uncommon.    

 
Why would I reveal my hole card?  My bottom number, please.  This wealthy benefactor is going to have to do better than that.  Yo! John Beresford Tipton, you gotta bring your A game Baby!

 
Walking Boot said:
200k a year might be merely average salary in 2070. Right now you have to figure it costs anywhere from 60k to 100k today to spend a year in a good retirement facility with medical care if you have needs beyond the basics. You get a tough disease, alzheimer's, or require any kind of personal care and 200k might eat up everything in just a couple of decades.
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Using the 4% rule you would have around $200k a year in today's dollars annually and still be adding enough to your principle to keep it growing fast enough to compensate for inflation.

 
Walking Boot said:
200k a year might be merely average salary in 2070. Right now you have to figure it costs anywhere from 60k to 100k today to spend a year in a good retirement facility with medical care if you have needs beyond the basics. You get a tough disease, alzheimer's, or require any kind of personal care and 200k might eat up everything in just a couple of decades.
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With 14.5 million I'd imagine you could afford some good long-term care insurance.

 
I'm 35 I would take 3 million, might be tempted at 2 million honestly.  I don't need 80K/year especially considering I wouldn't be paying taxes outside of Cap Gains.

 
The real problem is the wife. If I'm living the good life, she sure as heck isnt going to schlep herself to work.

I'd go for 2.25, but need to cover her as well, so all in at 4.5M

 
proninja said:
14.5m is a ridiculous number. If you lived to 102 that would be 200k a year without any uncertainty. No interest. Never having to work again. 

What's your concern? That you'll live to 200? That 200k isn't enough? I don't think you appreciate how much money that is. 
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I assure you that I understand how much money that is. I could make it work on a sixth of that if I had to, but I wouldn't want to. If I am going to have to give up everything I've accrued up to this point, plus all future earnings/benefits/inheritances etc he's going to have to wow me with the number. It would be much less stressful for me to live my regular life imo than to take a couple million at 32 years old and manage it properly for the next 60 years. 

I promise I understand the time value of money and all that crap, you don't have to be condescending. Also, there's more to it than just the money. I like working. If he's taking that away from me, the ******* is going to have to pay. 

 
Moe. said:
I assure you that I understand how much money that is. I could make it work on a sixth of that if I had to, but I wouldn't want to. If I am going to have to give up everything I've accrued up to this point, plus all future earnings/benefits/inheritances etc he's going to have to wow me with the number. It would be much less stressful for me to live my regular life imo than to take a couple million at 32 years old and manage it properly for the next 60 years. 

I promise I understand the time value of money and all that crap, you don't have to be condescending. Also, there's more to it than just the money. I like working. If he's taking that away from me, the ******* is going to have to pay. 
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Secret shopper for strip joints? 

 
Walking Boot said:
This requires putting the lump payout at risk. Remember, you can't earn any more if you lose it. You really going to have it all in the stock market? Or even half? It would be crazy to have to live on it for 50+ years and put it anywhere but the safest places possible. Rock solid bonds and simple-interest bearing accounts. I'd figure a bare minimum and then would only risk the amount above that if I had to.
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Yes. I would have at least half in the market because over a 50 year period the risk is very low. 

 
This is really a question about what you think your future earning potential is.  Not to mention the fact that there's a significant chance of blowing the money, investing poorly, getting divorced, etc.  Most lottery winners, NFL players, etc. think they are set for life and wind up broke.  Some of us would too.  

 
There's a certain level of risk that I'd factor in to not have to work during what are still the prime years of my life.  To have my 40's and 50's all free to spend with my kids and do the things that I physically like to do while I can still do them well would be awesome.  Sure there's a very small risk that if you follow a common rule like 110-age in stocks and rest in bonds, that you'll run out of money when you're 80 instead of 100 (the age I always project to) and then have to live on SS, but that's a risk I'm willing to take.  

 
AAABatteries said:
Per the OP the wife could still have a job so may not be worth killing her.
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If I'm sitting on my rump playing with T bills for two hours a week and calling it work, she's not going to go into the city to listen to some millennial claim the lack of BBQ chips is a microaggression.

 
If I'm giving up all my current assets and all future inheritances, Probably like $5 Mil.

33. Single, no kids.

I'm already planning on adopting a super risky lifestyle once I turn like 60 years old. No desire at all live past like 80.

 
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