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At what age do you hope to retire/Personal Finance and Investing Thread

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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 1:05 PM Post
Posts: 794
PlayerHader said:
nodakfan17 said:
$2 million is our magic number, but since my wife and I are both in our 30s, I fear we’ll need to save $4 or $5 million by the time we retire just to have the same purchasing power as $2 million has today.


Where do you live? What does retirement look like in your mind?

I live just outside of Green Bay, but hope to build a modest (but nice) custom cottage in Door County for retirement. I’d like to go out for dinner often, but otherwise, I see us spending most of our time reading, walking, and maintaining a small garden or orchard.

If we’re speaking strictly in 2018 dollars, then I hope the $2 million portfolio will generate about $80K (4%) annually in passive income for an indefinite period.


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 1:09 PM Post
Posts: 794
OldSchoolSnapper said:
nodakfan17 said:
$2 million is our magic number, but since my wife and I are both in our 30s, I fear we’ll need to save $4 or $5 million by the time we retire just to have the same purchasing power as $2 million has today.


I doubt it would be that drastic. Your salaries would likely increase along the way assuming you are in professional careers which would help negate some of that inflation and make that $4mm a lot less daunting.

2% inflation over 25 years puts the purchasing power of $2 million in today’s dollars at $3.3 million, but 3% inflation brings it to $4.2 million. Truthfully, I’m a little nervous about our government eventually printing money to get out of our $20 trillion hole, so I’m trying to adjust my expectations just in case.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 1:14 PM Post
Posts: 1075
nodakfan17 said:
PlayerHader said:
nodakfan17 said:
$2 million is our magic number, but since my wife and I are both in our 30s, I fear we’ll need to save $4 or $5 million by the time we retire just to have the same purchasing power as $2 million has today.


Where do you live? What does retirement look like in your mind?

I live just outside of Green Bay, but hope to build a modest (but nice) custom cottage in Door County for retirement. I’d like to go out for dinner often, but otherwise, I see us spending most of our time reading, walking, and maintaining a small garden or orchard.

If we’re speaking strictly in 2018 dollars, then I hope the $2 million portfolio will generate about $80K (4%) annually in passive income for an indefinite period.


If you don't mind me asking, what does your current income/savings percentage look like?


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 1:16 PM Post
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Posts: 2473
Yeah, but if you are like most people, your spending peaks during child rearing/milestones like buying houses and cars, etc. and into the 40s you have more to invest if you so choose, which helps inflate your projections if you choose to do that.

The healthcare costs usually rise, but many other things go down. You are hopefully no longer paying a mortgage, commuting far less, do not have dependents, etc.

For most people the 20s and 30s are the most important not only because of the time you give your investment, but if you can save mentally during that very taxing time you can most likely do it later on at a higher rate.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 1:29 PM Post
Posts: 1075
nodakfan17 said:
PlayerHader said:
nodakfan17 said:
$2 million is our magic number, but since my wife and I are both in our 30s, I fear we’ll need to save $4 or $5 million by the time we retire just to have the same purchasing power as $2 million has today.


Where do you live? What does retirement look like in your mind?

I live just outside of Green Bay, but hope to build a modest (but nice) custom cottage in Door County for retirement. I’d like to go out for dinner often, but otherwise, I see us spending most of our time reading, walking, and maintaining a small garden or orchard.

If we’re speaking strictly in 2018 dollars, then I hope the $2 million portfolio will generate about $80K (4%) annually in passive income for an indefinite period.


If you don't mind me asking, what does your current income/savings percentage look like?


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 1:39 PM Post
Posts: 794
I’ve only contributed 5% of my salary to my 401(k) to get the full employer match, but I’ve been doing it since Day 1 and it adds up. My wife has taken a similar approach. Our family is now complete and our expenses have finally leveled off, so our best saving years are hopefully still ahead of us.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 2:37 PM Post
Posts: 1075
But 5% of roughly what?


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 2:49 PM Post
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Given that his target is $2mm and he does 10% a year it is probably somewhere close to 5% (plus the match so 10%) of 100k household. Give or take a few dollars here and there and that he probably started beneath that and will end higher. It's not like you have a flat salary for 35 years.


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 2:58 PM Post
Posts: 794
Exactly - we both started out earning $30K per year during the recession. Now we each earn an above average wage. We’ve had the same savings rate the entire time (10%, 5% plus match). However, now that our expenses have leveled off and our incomes are still increasing, we plan on paying the mortgage down faster instead of increasing our retirement account contributions (a bird in the hand ... ).


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 7:10 PM Post
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Posts: 5139
Location: Phoenix, AZ
nodakfan17 said:
Exactly - we both started out earning $30K per year during the recession. Now we each earn an above average wage. We’ve had the same savings rate the entire time (10%, 5% plus match). However, now that our expenses have leveled off and our incomes are still increasing, we plan on paying the mortgage down faster instead of increasing our retirement account contributions (a bird in the hand ... ).


You should count your home as part of your retirement income as you can either sell and consolidate to a smaller home or keep it and only have to pay taxes and utilities. Paying just taxes and utilities depending on your area should be less than paying rent.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 8:10 PM Post
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I plan on my home and my life insurance policies as inheritance for my children. Those along with my wife and I pushing for their education should be enough for them if we spend most of our retirement income.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 06, 2018, 9:34 AM Post
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This is probably old news but I am just seeing it for the first time. Vanguard lowered the minimums for admiral shares from $10k per fund to $3k. That is a really nice little bonus for younger people just starting out.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 06, 2018, 3:24 PM Post
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I intend (with the wife) to save about $3.0mil-$4.0mil or so for retirement. Of course it is a long way off and inflation will make that seem much less impressive etc. etc., but that really isn't the point. I basically save so I will either have a great retirement and able to do many things money requires OR if I get sick of working be able to retire early and still have good funds to do so. I don't want to shoot for what I will need at 62 and be forced to work to that age to have the money I want yearly. I also don't want unexpected events take a hit to my retirement plan and suddenly need to work even longer to get the funds I want.

Things could always change, but that is my general retirement plan I like to follow.


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 08, 2018, 8:37 AM Post
Posts: 794
My biggest motivation for saving now is that I’m afraid I won’t be able to control when I retire. I hear looking for a new job in your 50s is brutal. I also worry about health issues preventing me from working, even though I’m in reasonably good health now. Even the best laid retirement plans can go awry when you miss out on those high earning years.


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