Don't Noonan
Footballguy
With the 10 year Treasury at a 1.3 handle today there is risk in bonds as well. Tough investment environment right now. I agree that the diversified approach makes sense right now.
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PBS Frontline : The Retirement Gamble, sorta Must See (1 Viewer)
- Thread starter Smack Tripper
- Start date
Also, it always cracks me up when people refer to the massive drop in the stock market during 2008/2009 without referring to the massive increase in the following few years (along with the run up beforehand).
Just some perspective....the DJIA on a few significant days...
10/7/2007 = 14,164
3/6/2009 = 6,443
12/31/2010 = 11,578
2/28/2012 = 13,005
Just some perspective....the DJIA on a few significant days...
10/7/2007 = 14,164
3/6/2009 = 6,443
12/31/2010 = 11,578
2/28/2012 = 13,005
Sand
Footballguy
Doctor Detroit
Please remove your headgear
I don't think there is any reason to quibble about stock and bond allocation. It all basically comes down to timeline but more importantly, risk tolerance. Since there is generally less variance in highly rated corporate bonds or government treasuries, those places offer a special comfort zone for the risk averse. I have been mostly in stocks since I began investing 20 years ago, and still have almost 95% stocks in my Roth IRA for example. In my 401k (TSP) I have always had at least 80% stocks but as much as 95% some years/quarters.
Right now I can retire in 13 years but this does not currently impact my asset allocation. I did move to 18% bonds at the end of the first quarter, up from 12%, but I don't see me going below 80% stocks for five to six years. Reason is 13 years is the best case scenario, but retiring at that age would require me to accumulate a larger portfolio in the meanwhile. So I will likely be pretty stock heavy until very close to first possible retirement age, and I don't think I'd ever go under 50% until I am 5 years or more into retirement. I have a pretty high risk tolerance though, and I also have other income sources besides the stock market.
I also still have 95% of my contributions going to stocks, and I re-balance accordingly every quarter. Other than that I don't even check my 401k, I don't check it when the market is up and I don't check it when the market is down. I just track my contributions, make sure my allocations are right, and then every quarter I re-balance to reflect my risk tolerance and the optimum portfolio for Doctor Detroit. I don't worry about what other people are doing, and I don't subscribe to any general portfolio allocation strategy regardless of the source. Instead I just use a strategy I've learned form all sources that best fits my needs as an investor.
I generally would tell people in their 20s and 30s to be balls deep in U.S. equities, but I'm not going to criticize them for having 25% in bonds or even a money market because they can't stand a large unrealized loss. My buddy is 32 and asked me for allocation advice and I told him about 85% stocks. So a few months back when the markets were lagging he complained because he had lost $2500 that week or whatever. He had a alert system that updated him several times a day what his 401k balance was. I told him to turn that #### off or put all his retirement savings into a money market account, because I didn't want to hear the #####ing anymore. If you are close to retirement and want to check your balance every day, cool. If you are 25+ years away, stop doing that. You'll die of hypertension five years before you can retire.
tl;dr
Right now I can retire in 13 years but this does not currently impact my asset allocation. I did move to 18% bonds at the end of the first quarter, up from 12%, but I don't see me going below 80% stocks for five to six years. Reason is 13 years is the best case scenario, but retiring at that age would require me to accumulate a larger portfolio in the meanwhile. So I will likely be pretty stock heavy until very close to first possible retirement age, and I don't think I'd ever go under 50% until I am 5 years or more into retirement. I have a pretty high risk tolerance though, and I also have other income sources besides the stock market.
I also still have 95% of my contributions going to stocks, and I re-balance accordingly every quarter. Other than that I don't even check my 401k, I don't check it when the market is up and I don't check it when the market is down. I just track my contributions, make sure my allocations are right, and then every quarter I re-balance to reflect my risk tolerance and the optimum portfolio for Doctor Detroit. I don't worry about what other people are doing, and I don't subscribe to any general portfolio allocation strategy regardless of the source. Instead I just use a strategy I've learned form all sources that best fits my needs as an investor.
I generally would tell people in their 20s and 30s to be balls deep in U.S. equities, but I'm not going to criticize them for having 25% in bonds or even a money market because they can't stand a large unrealized loss. My buddy is 32 and asked me for allocation advice and I told him about 85% stocks. So a few months back when the markets were lagging he complained because he had lost $2500 that week or whatever. He had a alert system that updated him several times a day what his 401k balance was. I told him to turn that #### off or put all his retirement savings into a money market account, because I didn't want to hear the #####ing anymore. If you are close to retirement and want to check your balance every day, cool. If you are 25+ years away, stop doing that. You'll die of hypertension five years before you can retire.
tl;dr
Sand
Footballguy
CR69
Footballguy
I think it depends on how close you are to retirement and why you want to put that money into a rental property.
REITs are a better way to diversify, pay solid dividends and are a lot easier than being a landlord. If you have a while until retirement, then using that money to flip properties could offer higher returns and then allow you to eventually purchase a higher income property. If you're getting a great deal on the property, say from a family member, then age and purpose could be irrelevant.
Lots of variables.
Doctor Detroit
Please remove your headgear
So in June the TSP (the government 401k plan for those that don't know) had $2.1 billion in outflows from stock funds. As I've mentioned before these guys have their little systems where they move to 100% in the government treasury fund, or 100% to small cap stock fund, or whatever trying to time the market. So I made a snarky comment (yeah imagine that) that was not too edgy and I had a flock of these market timers swoop in to rid me of their forum. I then linked this and a few similar ideas, and they lost their minds. 
Look, you can do what the hell you want with your retirement accounts. You can day trade them, put them in CDs or silver, whatever makes you feel comfortable. But when you charge money to follow systems that don't work, when you promote those systems as proven market timing methodology that can make you rich, then you deserve some shade thrown your way.
ETA: Here is what I wrote to the guy who runs a premium pay market timing system: "Here is what I suggest. Just get rid of this forum and any others that even mention long-term investing in the TSP. Put key words in that alert you if any scoundrel that wants to buy and hold, send a pop up banner with your market-timing system that crashes the computer if they try to move off of it. The only sub forums should be Silver: the next Microsoft, Whole Life Insurance Annuity Strategies, and How to cheat your elderly family members with Reverse Mortgages."
I'm guessing I won't be invited back.
Look, you can do what the hell you want with your retirement accounts. You can day trade them, put them in CDs or silver, whatever makes you feel comfortable. But when you charge money to follow systems that don't work, when you promote those systems as proven market timing methodology that can make you rich, then you deserve some shade thrown your way.
ETA: Here is what I wrote to the guy who runs a premium pay market timing system: "Here is what I suggest. Just get rid of this forum and any others that even mention long-term investing in the TSP. Put key words in that alert you if any scoundrel that wants to buy and hold, send a pop up banner with your market-timing system that crashes the computer if they try to move off of it. The only sub forums should be Silver: the next Microsoft, Whole Life Insurance Annuity Strategies, and How to cheat your elderly family members with Reverse Mortgages."
I'm guessing I won't be invited back.
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mquinnjr
Footballguy
So in June the TSP (the government 401k plan for those that don't know) had $2.1 billion in outflows from stock funds. As I've mentioned before these guys have their little systems where they move to 100% in the government treasury fund, or 100% to small cap stock fund, or whatever trying to time the market. So I made a snarky comment (yeah imagine that) that was not too edgy and I had a flock of these market timers swoop in to rid me of their forum. I then linked this and a few similar ideas, and they lost their minds.
Look, you can do what the hell you want with your retirement accounts. You can day trade them, put them in CDs or silver, whatever makes you feel comfortable. But when you charge money to follow systems that don't work, when you promote those systems as proven market timing methodology that can make you rich, then you deserve some shade thrown your way.
ETA: Here is what I wrote to the guy who runs a premium pay market timing system: "Here is what I suggest. Just get rid of this forum and any others that even mention long-term investing in the TSP. Put key words in that alert you if any scoundrel that wants to buy and hold, send a pop up banner with your market-timing system that crashes the computer if they try to move off of it. The only sub forums should be Silver: the next Microsoft, Whole Life Insurance Annuity Strategies, and How to cheat your elderly family members with Reverse Mortgages."
I'm guessing I won't be invited back.
People HATE common sense, GB. You want to gamble? Sign up with 5Dimes and deposit you 401k and match via Bitcoin and play some college football sides this fall. You want to retire with a nice nest egg? Do what's not sexy and not fun to talk about at dinner parties: invest in low cost index funds, and don't deviate from your deposit schedule.
Judge Smails
Footballguy
Here is some of what they sent me in terms of performance based on what I have with Wells Fargo vs. their method. Granted, my current portfolio got conservative in the last year as my broker suggested a downside was coming (wrong) and to get more conservative.
Basic idea is that they don't invest in any mutual funds. All individual stocks based on their analysis/formulas. They sent a lot of detail on that.
1. Summary review of your current Wells Fargo IRA:
a. Your Wells Fargo portfolio is currently 10.0% Cash; 42.0% Bonds; 42.0% Stocks; and 6.0% Other
b. Ex-Cash - 90%+/- of the portfolio is invested in mutual funds
c. The standard deviation (measure of volatility) of your portfolio is 7.20% or 42.0% of the U.S. Stock Market
d. Your seven year returns ended April 15, 2016 are 6.29%
2. Summary review of our proposal based on your current age of 54 and a retirement age of 67:
a. We will most likely recommend a portfolio of 74.0% stocks and 26.0% bonds
b. The stocks will be split between Quality Growth stocks and Quality Dividend paying stocks
c. The bonds will be 80.0% investment grade corporates and 20.0% Global Hi- Yield
d. Overall you will own 50+/- stocks and 30 +/- Bonds – No single security will represent more than 3.0% of your portfolio
e. The standard deviation (measure of volatility) of the portfolio is 10.44% or 62.0% of the U.S. Stock Market
f. The seven year returns ended March 31,2016 (net of "ALL" investment fees of 1.15%) are 12.59%
basically return would have been doubled. Granted - this was based on a retirement age of 67, and I'm not planning to go much past 60. So they'll have more bonds going forward. I'm still torn on this. I'm 54. What would be an acceptable rate of return net fees with acceptable risk for my horizon (I know that is individual, but looking for guidance).
Does this look like a reasonable approach?
Binky The Doormat
Footballguy
This looks like their "Compass" program. The last time I went with a managed managed approach - I split my money in 3 chunks (about 40% individual municipal bonds), and 30% market index funds and 30% this program.
Over 3 years result: the market index funds beat the Compass program returns by a decent margin. I mean like a percent to a percent plus.
Yeah, that is only a 3 year window - OK, here is the deal.
When every book you read, every knowledgeable, respected financial whiz says, "...over the long haul, no one has proven to beat the market" why do we keep believing that Wells Fargo portfolio managers can beat the market - PLUS beat the market over and above their 1%+ fees (varies with graduated scale).
Go with Fidelity or Vanguard, and minimize the fees. Get their free advice on which funds to buy how in order to properly balance your portfolio.
Sand
Footballguy
In this environment where profit margin has been plunging I don't hate an even split of stocks and bonds right now. I'm not too far off of what you're doing right now - 53% stocks, 10% real estate, 27% bonds, 10% cash (my horizon is longer). If your horizon is 6 years I wouldn't go more than 55% stock/45% bonds. When you (or I) hit retirement I'd be completely comfortable sitting right at 50/50.
BTW I hate their suggestion of the bonds being investment grade corporate and 20% junk bonds. That's ####### insane. 20% junk bonds - now? Talk about recency bias. Junk bond defaults have been soaring lately, too. In a market downturn all of these will track right along with stocks. The reason for bonds is to even out the return curve - this exacerbates it. The bond portion should be more like 80% T-bills (5-7 year) and 20% investment grade corporate. International bonds are optional (many think they don't add much at all to diversification).
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FUBAR
Footballguy
It seems an easy choice to me.
A. Seek average returns at s low cost.
B. Pay a premium for roughly a coin flip on whether you beat the market.
I'll take A, consistently.
Judge Smails
Footballguy
OK. So if I get away from these wealth advisors all together, and say I have a 6-8 year working horizon, what would you recommend if I go directly into low cost fund options?
Judge Smails
Footballguy
Thanks guys. I'm digging in. Spent a bunch of time on Bogleheads tonight. Time to get really educated....
Binky The Doormat
Footballguy
Yes - and they will provide a set of recommendations and review for you at no charge (based on a minimum $ amt). They will have you do the typical risk tolerance questionnaire first.
wilked
Footballguy
If an "advisor" can't show you how their portfolio would have beaten your portfolio, they should be fired immediately. They are salesmen paid to sell, and can always find a window / historical comp / etc to show how they were the better choice.
It appears they are comparing your 50/50 portfolio against a 75/25 portfolio, and showing returns over a period where stocks significantly outperformed bonds. This would be like a handicapper showing how his pro-Patriots betting algorithm has beaten the market 8 of the last 10 years. Should I go heavy on the Patriots this upcoming year? Jimmy G FTW?
If your risk tolerance has you at 50/50, stay at 50/50. If that means 6-7% returns, that is great - capital preserved, staying ahead of inflation, etc. Ignore the snake oil salemen
It appears they are comparing your 50/50 portfolio against a 75/25 portfolio, and showing returns over a period where stocks significantly outperformed bonds. This would be like a handicapper showing how his pro-Patriots betting algorithm has beaten the market 8 of the last 10 years. Should I go heavy on the Patriots this upcoming year? Jimmy G FTW?
If your risk tolerance has you at 50/50, stay at 50/50. If that means 6-7% returns, that is great - capital preserved, staying ahead of inflation, etc. Ignore the snake oil salemen
Ministry of Pain
Footballguy
I don't post much in this thread, many people seem to have all the answers so I just nod and write down interesting notes...I have a book on my shelf that I actually got on a recommendation here maybe 10 years ago but it's been a good book and helped us do a lot of what you are advocating which is spread it out over index funds and the like. We invest heavily into the 401Ks and at times have gotten an unbelievable match. For many years my wife received 2 for every 1 she invested, that was an easy max out and we were shocked to learn a lot of folks did not put anything into their 401ks even with the outstanding match offered.
People HATE common sense, GB. You want to gamble? Sign up with 5Dimes and deposit you 401k and match via Bitcoin and play some college football sides this fall. You want to retire with a nice nest egg? Do what's not sexy and not fun to talk about at dinner parties: invest in low cost index funds, and don't deviate from your deposit schedule.
When I learned that my wife worked with people driving nicer cars and making less than her but not putting one dime in their 401ks, my first indicator that human beings are even dumber as a whole than previously thought. How do you turn down free money that will then be working as compound interest FOR YOU and not against you?
-The Intelligent Investor is the name of the book, it's a revised edition so I imagine it's been around since Moby **** was a minnow. Nothing fancy in it, just good basics.
mquinnjr
Footballguy
Please don't interpret this as a politics discussion, because I don't intend for it to be at all, but more an example within this thread. With that said, it's hard to go against doing what rich people do to manage their wealth. I will use Hillary Clinton's financial disclosures for her presidential candidacy as my example as was previously mentioned in this thread.
With no knowledge otherwise, I'll bet a lot of people would assume, "She and Bill probably have an army of quant guys being paid very well in a bunker somewhere, whose sole mission is to pick stocks and make it rain, which no common man or woman could possibly afford." Wrong, they use Vanguard and other low-cost index funds. Bet with the house, not against it. Indexes are a rare way to be able to do so, and you win with them in the long run. Do as the wealthy do, and hey, you'll get there there some day at your own relative income level. The returns year-over-year won't be very sexy, but low cost index investing isn't. Far too many people fail to grasp this concept because they all want the lotto ticket, the next Apple stock. It's not that easy.
Dentist
***Official FBG Dentist***
2 for 1, holy crap that's incredibly awesome.
Humans are dumb... even book smart people can be so dumb. But I would say even if you sat down and explained the benefits to people and really laid out what they were leaving on the table.. and tried to beat it into them, they still might pass... honestly so many people are just on the mindset of "screw their future selves" because that person is old and sucks... I want my new car now while I'm young and can enjoy it!
Nearly all those people will eventually regret that when they are working longer than they want to, or live out their years when they need that money the most in poverty, or in a poor care facility, or burden a family member... and they'll tell their children or children's children that they should really save their money so that this doesn't happen to them... and they won't.. and the cycle will continue.
Discipline and self denial are the hardest things to do in the world. Money management, diet and exercise management, staying faithful to a spouse in the midst of temptation.. these are all really hard things for people. I am fantastic with money, but my diet and exercise could improve.
Doing the right things for yourself is hard, and it doesn't come natural. Retirement is a pretty young concept in the history of the world. It's tough.
Ministry of Pain
Footballguy
They also had something called the Clinton Global Initiative which brought in a lot of money and she gets paid a penny to speak
just saying that I wouldn't use them as a good measuring stick but I also think most folks wouldn't post back what I just did...I'm a jaded citizen and voter Mq, I don't think any of them like you or me much and don't want much to do with us other than get a vote every few years as needed.Your points are well noted and I understand none of what I posted had much to do with your point. Yes folks should master the basics...also we save a lot of money where others waste. As an example, I don't run up bar tabs like I did in my 20s. It's expensive and a big waste of money. I get ribbed for being frugal in places I don't need to be. I always say that saving money is not cool and doesn't usually expand your pool of friends.
Your point is well taken, appreciate you posting back.
Ministry of Pain
Footballguy
This was the hardest part of the decision to move from Miami to where we live now and us jumping from Univ of Miami. I hammered this point 2/1 again and again when we were negotiating the relocation/salary/bonuses...new place is not even 1/1
. I had to sit down and show them what it meant over 10 to 20 years, the difference in their benefits. We amassed a nice chunk into the 401ks(403b/c?) but we're in our early 40s and we didn't want to live in Miami till we were 65, it was time to move on. If what is already in there just doubles a couple times between now and 60 or whenever we can get to it, life will be OK and we won't have to suffer like so many elderly folks do. We still are putting the same into it, just not getting as much of a match as we did prior. And yes it was well worth the move just in terms of the drive time going from 60 minutes one way to Coral Gables each day to now taking 5 minutes, 2 hrs a day or more when traffic was backed up to about 10 minutes unless you get caught at a bridge. Life got a lot easier when we moved and I feel like our hard work when we were in our 20s and 30s really paid off. If I could say just one thing to anyone in their 20s that frequents these boards, work like hell when you're young because it gets harder as you get older. My wife and I are actually focused on trying to re-direct not retire when we reach 50. At that point I would like the two of us to travel and own very few material things. A small house or apartment/condo as a home base with the idea of being gone 6 months out of the year.
That might change but it's a goal or target for the moment.
I drive a 2005 Honda Accord 125k miles, it's showing its age now but it's paid off and needs very little maintenance.
She drives a 2012 Subaru Impreza h/b 45k miles, paid off.
We don't like bills and overhead, we've gone years without cable TV at times. I have underwear that's 10 years old...I worked in Primerica when I was in my early to mid 20s, it inspired me to want to invest and while the company was a little ahead of me I learned a lot. We're talking 20 years ago almost. I teach the rule of 72 to anyone that wants to learn, it usually flips them out.
Ministry of Pain
Footballguy
Question for the investment community:
How much money could an avg person expect from an investment of $100k? Meaning I want a monthly check that will not diminish the $100k, I want that income to continue on forever and ever as I live. How much would someone be able to assume they could receive?
If I know that then I can multiply that out vs what I expect to be in there when we turn 60...see where I'm going with this? Also trying to figure out how much we should be investing a month into things we could access at say 50 rather than 60.
Thanks everyone and cheers!
How much money could an avg person expect from an investment of $100k? Meaning I want a monthly check that will not diminish the $100k, I want that income to continue on forever and ever as I live. How much would someone be able to assume they could receive?
If I know that then I can multiply that out vs what I expect to be in there when we turn 60...see where I'm going with this? Also trying to figure out how much we should be investing a month into things we could access at say 50 rather than 60.
Thanks everyone and cheers!
Random
Footballguy
Ministry of Pain
Footballguy
NewlyRetired
Footballguy
I first thought you were talking about something like the 4% rule of thumb but in reading your post again, I am confused.
http://www.investopedia.com/terms/f/four-percent-rule.asp
If you 100% never want to see any losses that means you can only invest in items that have guaranteed returns, which these days are extremely small.
when building toward retirement, you probably want to avoid these type of investments as 100% of your portfolio. Heck even in retirement, the likelihood that your nest egg will be large enough to support only guaranteed returns is low imo.
NewlyRetired
Footballguy
MOP, if I am understanding your question correctly, I think you would benefit from some modelling. I found it very helpful in preparing for retirement.
There are numerous tools out there to help you do this. One good one is http://www.firecalc.com/
You can begin with a small amount details to start your models and then build in more and more as you start to build up the information into the model. The more details you enter, the easier it is to see how small changes in certain aspects of your plan will alter your nest egg.
There are numerous tools out there to help you do this. One good one is http://www.firecalc.com/
You can begin with a small amount details to start your models and then build in more and more as you start to build up the information into the model. The more details you enter, the easier it is to see how small changes in certain aspects of your plan will alter your nest egg.
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Ministry of Pain
Footballguy
I'm right there. We bought and sold a SFR in the Biscayne Park section of Miami and we had it 3 years so no capital gains, it's by far the most lucrative investment we did but it came at a price...and I think I'll leave it at that. But yeah I'm all ears.
Ministry of Pain
Footballguy
I'll ask it a different way...
Let's assume my family needs $5k a month income to meet our needs. I want to know how much money I need to have in order to produce $60k in yearly income...$1M/2M?
I'll try the link as well, much appreciation for all the help, from all of you.
Random
Footballguy
Ok, lots of ways to do this. Some guys will take the 100K and buy 500K-1M worth of RE depending what you need to put down. Where I am, I can buy 4-6 units with 100K. This would return 2-3K/mo net. But like you said, it does come at a price. As much a part time job as it is an investment.
NewlyRetired
Footballguy
Ok, yes, the online tools will help you answer this question. If you don't like the tool I linked (it can be a bit confusing for first time modelers) just google "retirement calculators" and pick the one that best fits your situation and questions.
Grace Under Pressure
Footballguy
$1.4 million will last 30 years taking $60K of annual income in 91% of scenarios, according to Firecalc.
Ministry of Pain
Footballguy
Dentist
***Official FBG Dentist***
NewlyRetired
Footballguy
there are a million variables you can tweak so any answer is a bit meaningless with out knowing your low level details.
If you use all the preset choices in firecalc, if you want to spend 120k a year, a $3m nest egg will last 30 years in 95% of the cases, if you retire today.
But again, very small tweaks can change that % significantly (for instance just a small change in the inflation rate)
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Dentist
***Official FBG Dentist***
if I need 35 years and am comfortable with a 85% rate of success, is the 3mil still good? That's always been my benchmark.
And I don't think I'm going to make it because I don't even have a full million in investments.. i'm already 38, and I've only got 17 years to go.
NewlyRetired
Footballguy
yes, again using the preset values (which may not represent your case in the least), 3 million will last 35 years 92% of the time.
Is the $120k in today's dollars or are you projecting out using inflation?
SouthJersey
Footballguy
Does anyone have any experience with Betterment or Schwab Intelligent Portfolios?
I changed jobs last fall to a company that doesn't offer a 401k. Blows not being able to shield $18k/yr from the government. Have been using what I would've saved in retirement accounts to pay off student loans that are at 6.5%. Down to my last $3k so soon will need to start saving in a taxable account. Was reading about Betterment and how they let you pick an allocation and invest in low cost index funds for you, with auto rebalancing and tax loss harvesting (the most interesting thing about the service) for a pretty low fee (.25% for $10-100k, .15% for >$100k). Schwab does the same for free, though from what I read the knock on them is they get their "fee" by forcing you to keep a certain percentage of your portfolio in cash (I believe I read the most aggressive asset allocation still makes you keep 6% in cash).
Since this is in a taxable account the tax loss harvesting is the main thing I'm interested in. Otherwise I'd just put the money in VFIAX in my Vanguard account.
I changed jobs last fall to a company that doesn't offer a 401k. Blows not being able to shield $18k/yr from the government. Have been using what I would've saved in retirement accounts to pay off student loans that are at 6.5%. Down to my last $3k so soon will need to start saving in a taxable account. Was reading about Betterment and how they let you pick an allocation and invest in low cost index funds for you, with auto rebalancing and tax loss harvesting (the most interesting thing about the service) for a pretty low fee (.25% for $10-100k, .15% for >$100k). Schwab does the same for free, though from what I read the knock on them is they get their "fee" by forcing you to keep a certain percentage of your portfolio in cash (I believe I read the most aggressive asset allocation still makes you keep 6% in cash).
Since this is in a taxable account the tax loss harvesting is the main thing I'm interested in. Otherwise I'd just put the money in VFIAX in my Vanguard account.
Dentist
***Official FBG Dentist***
NewlyRetired
Footballguy
that changes things significantly as the preset parameters are set up based on retiring today and using today's dollars.
You are likely to need a much bigger nest Egg in 17 years if you want to spend $120k in today's dollars 17 years from now.
Dentist
***Official FBG Dentist***
I was nervous they were going to require me to have near 5 mil.
I'm on a reasonable pace for 3 if the market cooperates, should get a mil or so from inheritance.... but it sounds like retiring at 55 may not be feasible unless i get my butt in gear and do more dentistry. I may have to shift to 58 and then commit to dying sooner #morecigars
NewlyRetired
Footballguy
It would have taken me decades longer to retire if I wanted to spend that much in retirement.
NewlyRetired
Footballguy
let me run some quick numbers for you.
* If you want to spend $120k in today's dollars 17 years from now, we need to project.
* Using a constant 3% inflation rate means that in 17 years you will be spending roughly $200k per year
* Assuming you want roughly a 90% success rate and want the money to last 35 years
You will need the $5 million you guessed to achieve a 92% success rate. If you can expect to pick up a million in inheritance then you need to accumulate ~$4 million with in 17 years.
As a side note, when looking at the $120k a year are you factoring in that you should have no mortgage to pay?
NewlyRetired
Footballguy
It actually made me cringe when I read it.I think you are grossly overestimating your retirement expenses. I hope so anyway.
Even when we add a decent amount of travel to our retirement once our daughter is settled in college, we won't come anywhere near that number.
