How much money is "enough"?

[Jorgen]

How long could you live off of one million dollars and do all of the above?

$1,000,000/10=$100,000 per year for 10 years. That isn't shit if you include family, college, retirement, lifestyle etc.

And at what age do you retire? How long do you live after retirement? You retire at 65 maybe you live another 25-30 years. At 100k a year you're going to need at least 2.5-3 million in savings minimally.

Is that $1M pre or post taxes?

There are a lot of benefits for having cash up front, not paying interest is a very worthwhile item e.g. if I had cash totaling what I owe on my house I could pay it off, that is equal to about 8.5 years of payments which at the end of that 8.5 years I would still have 20 years to pay (if I only paid minimum payment). Since this is cash and I wouldn't have income every year in your game I wouldn't get the interest deduction so I may as well pay the place off.

Overall assuming I pay off my house, car, student loan and invested 50k for my daughters college I would have about $730k left in cash to live off of. Without the payments I currently have on the all items paid off I would have reduced expenses by about 30k/year. If my wife and I didn't work take another 20k off that for not paying a nannny. Livinhg the life style we currently do we could cover everything else for say 40k (property taxes are still going to be 5k/year, 3k in life, home and auto insurance, etc.) Even if you assume you need 5% more each year starting at that 40k. and only get 3% return on your cash. It looks like we might be able to pull of 16 years give or take.

The one major item not accounted for is health insurance which if I had a lump sum of cash and were no long in the work force would be another probably 15k/year for an individual plan for the family. If you add this cost in to the 40k and start at 55k it takes it down to about 12 years.

If I were allowed to keep working we would never touch the princple until retirement would have a lower expense rate than the plan paying our own insurance.

As for your retirement items, I am currently 29 I am looking forward that my wife and I need about $4-5M assuming about 20% in Roth and 80% in 401K (tax situation).

[samiam3356]

Family of 6, around 150k pays the bills and lets me max out the retirement plan every year. Both cars are paid for and I usually get back around 10k every years from taxes because of the 4 kids and non working wife. Not easy as it seems however.

[joshh]

hopefully you'd have that $1-4 million in an account that earned interest.. if you had a decent job, between your job and the interest income you'd do just fine.

how do you think wealthy people do it? they don't make money from their jobs. they make it from their interest income.

They usually reinvest the majority of it. Interest isn't going to make you a ton of money that you're going to be able to live off of unless you're a billionaire. Although it sure helps.

Is that $1M pre or post taxes?

There are a lot of benefits for having cash up front, not paying interest is a very worthwhile item e.g. if I had cash totaling what I owe on my house I could pay it off, that is equal to about 8.5 years of payments which at the end of that 8.5 years I would still have 20 years to pay (if I only paid minimum payment). Since this is cash and I wouldn't have income every year in your game I wouldn't get the interest deduction so I may as well pay the place off.

Overall assuming I pay off my house, car, student loan and invested 50k for my daughters college I would have about $730k left in cash to live off of. Without the payments I currently have on the all items paid off I would have reduced expenses by about 30k/year. If my wife and I didn't work take another 20k off that for not paying a nannny. Livinhg the life style we currently do we could cover everything else for say 40k (property taxes are still going to be 5k/year, 3k in life, home and auto insurance, etc.) Even if you assume you need 5% more each year starting at that 40k. and only get 3% return on your cash. It looks like we might be able to pull of 16 years give or take.

The one major item not accounted for is health insurance which if I had a lump sum of cash and were no long in the work force would be another probably 15k/year for an individual plan for the family. If you add this cost in to the 40k and start at 55k it takes it down to about 12 years.

If I were allowed to keep working we would never touch the princple until retirement would have a lower expense rate than the plan paying our own insurance.

As for your retirement items, I am currently 29 I am looking forward that my wife and I need about $4-5M assuming about 20% in Roth and 80% in 401K (tax situation).

I was just pointing out that anyone who thinks they can live off of a "lump sum" without still working their ass off daily is lost.
But I think you have the right idea. Savings and investments is all.

[Jorgen]

I was just pointing out that anyone who thinks they can live off of a "lump sum" without still working their ass off daily is lost.
But I think you have the right idea. Savings and investments is all.

I just like playing the financial planning game, kind of a geek for that kind of stuff.

[samiam3356]

Generic way of calculating what you'll need to retire.


(Monthly income X 12) / .045 = Lump sum you'll need

Why 4.5% because your money need to grow for taxes and inflation.


5 milllion X 4.5% = 225,000 of yearly income that could count on with out touching the principle and growing the money to combat inflation.

[expressfish]

I could do with a lot less than what i have. Its amazing how fast a human can adapt. Ive never been what I consider "rich" but Ive been flat broke and pretty comfortable and everything in between and I have always been ok with whatever Ive had. You just adjust

agree 100% we as a husband and wife and two kids are in the low six digit bracket. I sometimes think how much money we would have selling our "ranch style" house on three acres and moving back to the city. I remember in my early twenties paying $260 bucks for rent as a single buck.......those were the days . Now we have a freaking $1700 mortgage payment, but its all worth it, peace, serenity, gangster/punk ass free schools, ect.

[deutschman]

I think with 75-100k my girl friend (future wife) and I could live very well. We both do not want children (we both have large families and are god parents) so that gets rid of a large expens. That would give us enough money to live with fewer wories and have some money to help out friends and familly.

[cale]

$47k and have to decide between renting and managin my money well to have my bike and car with money to have fun with them or barely get a mortgage, eat ramen to make payments and be stressed out. It's entirely dependent on where you live, 50k is more than enough in some places for a family but nowhere near enough in others to consider being a homeowner.

[InuFaye]

43k and i live at home.

Yet im broke most of the time.

I need to slow my spending.

[Jaxx_]

4 million one time is not gonna last you terribly long

you couldn't live with $4000/month until you're 70? get the fuck out of here. The interest alone could support a more substantial income.

[02stu]

[ak-]

Blunt said it best. No matter how little or how much you make, you adapt to it and stress yourself usually.

[e30e]

43k and i live at home.

Yet im broke most of the time.

I need to slow my spending.

Same page except its all on debt