Originally Posted by tomgoodman
(Post 2671445)
It’s a sneakers/charging bear situation. The $1M doesn’t have to last a lifetime; it only has to outlast everyone else’s retirement fund. :D
The system is spring-loaded to divert wealth to those who are currently working, and/or those who can muster political power. CA pols were discussing retro-active tax changes at one point as a way to to feed their vast social programs... they would increase the rates on past tax years, and then retro-bill those with the means to pay. That would include folks who have subsequently moved out of state, since they are concerned that when they really start tightening the screws that those with flexible employment situations (ex pilots, work-from-home types) and retirees would leave in droves to protect their assets. I'll diversify eventually, might even need to go offshore if that can provide legal protections. |
Originally Posted by swaayze
(Post 2671455)
Ha, I wish. Already far ahead of the average American.
Sadly it’s obvious that retirement is gonna be quite the crisis in the years ahead now that DB pensions are mostly gone and the vast majority saves little to nothing. GF |
Originally Posted by rickair7777
(Post 2670136)
$1M can't be anywhere near enough to retire early.
Originally Posted by rickair7777
(Post 2670136)
If too many people rack up a big nest egg and retire, there will be nobody left to do the work. Inflation and wages will rise, your lawn guy would then charge $100K to mow your lawn, and your employed neighbor who's now making $2M/month could afford it.
1- not enough people will be following the "live beneath your means" plan 2- investments, especially a properly diversified portfolio, will always keep up with inflation... companies have to raise prices too 3- the entire scenario you described is patently absurd. |
Originally Posted by swaayze
(Post 2671414)
Increased income yearly is exactly the issue/problem. You cannot index yearly to inflation unless you have returns measurably over and above inflation. While that has been very easy for the last ten years that won’t always be the case. Soon (?) that will flip flop for a time and portfolios will decrease, but your minimum expenses will continue to increase, eating into your principal (unless you’re working some); the boat will take on water faster than you can bail without a bigger bucket (other income). That’s why the best of the promoters are quick to disclose that it’s more about FI than RE.
Yet this is what I worry that many of the younger FIRE folks really don’t get, because they haven’t lived a couple of market cycles as investors (or even employees). For instance, I can assure you that spending more by converting to a ROTH during my two furloughs was the last thing on my mind, tax savings be damned. |
Originally Posted by rickair7777
(Post 2671457)
I don't know about that... when they all run out of savings, they'll be voting for politicians who plan to seize YOUR savings.
Originally Posted by rickair7777
(Post 2671457)
CA pols were discussing retro-active tax changes at one point as a way to to feed their vast social programs... they would increase the rates on past tax years, and then retro-bill those with the means to pay. That would include folks who have subsequently moved out of state, since they are concerned that when they really start tightening the screws that those with flexible employment situations (ex pilots, work-from-home types) and retirees would leave in droves to protect their assets.
|
Originally Posted by galaxy flyer
(Post 2671480)
Defined benefit plans were never as widespread as believed or as lucrative.
GF DB plans were at least something for many, designed as a piece of the puzzle (3-legged stool analogy). They were mindless and required no action on the part of the employee. Now, most people still take no action, but the stool only has two legs to begin with. Hard days are coming for them, which will inevitably create a crisis that those of us who have worked hard and sacrificed now to have a secure future will likely be called upon to solve. |
" What most people don't realize, or fail to, is that things don't buy happiness, but instead buy burden."
Yup. That is why they are called possessions...they possess you. And funny, according to my calculations, when I retire I am in danger of leaving WAY to much money to my heirs if I don't start spending more. 1-2M to retire comfortably ? Man, ya'll must have Crack habits or another Family on the side. (?) :) |
Originally Posted by Stimpy the Kat
(Post 2672907)
"
1-2M to retire comfortably ? Man, ya'll must have Crack habits or another Family on the side. (?) :) $1-2M would be ok for most of us if retiring after 60 and within 10 years from now or so, AND assuming SS will provide most of what it’s supposed to. But trying to do a 4% withdrawal yearly, and keep up with inflation, over a 40-60 year retirement without considerable risk is very unlikely on (at least the low end of) that range imo. You have to wrap your head around increasing medical expenses; regardless of lifestyle, aging causes problems. Medicare just isn’t that great or inexpensive. And I’m factoring that some degree of medical assistance (LTC) will likely be required. Either pay large premiums now for insurance or save additional capital to draw down as needed (capital is my plan for now, as I cannot imagine I can get my spouse covered at any reasonable rate given her Type 1 diabetes and associated issues). $40-80k/yr is doable, but don’t forget some of that will still be taxed. And property taxes, insurance, maintenance and utilities will all continue to increase as well. Tax rates will likely never be lower than today. Etc. |
20's and 30's?
Yup...you will need ALL of the 1-2M. :) |
Aw Stimpy, you deleted the stuff I was gonna congratulate you on.
Yes, you are atypical and in a great way. I wish I was as disciplined. Continue to enjoy your apparent FI. I, otoh, am looking at retirement in 14 years, so I expect today's $1M to be equivalent to about $1.5M at that point. It would throw off about $60k/yr (or $40k/yr in today's dollars) to supplement any SS I might get. While my expenses should definitely decline, I'm also hoping to amass enough to have 100% of my pre-retirement spending in income. Then I can continue to splurge once in a while and to help out the adult kids on occasion. To be clear though, I won't be retiring in my 30's; more like 65 :o |
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