Go Back  Airline Pilot Central Forums > Pilot Lounge > Money Talk
How to Retire in Your 30s With $1 Million in >

How to Retire in Your 30s With $1 Million in

Notices
Money Talk Your hard-earned money

How to Retire in Your 30s With $1 Million in

Old 09-10-2018, 08:38 AM
  #11  
Prime Minister/Moderator
 
rickair7777's Avatar
 
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 39,102
Default

Originally Posted by tomgoodman View Post
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.
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.

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.
rickair7777 is offline  
Old 09-10-2018, 09:28 AM
  #12  
Gets Weekends Off
 
galaxy flyer's Avatar
 
Joined APC: May 2010
Position: Baja Vermont
Posts: 5,168
Default

Originally Posted by swaayze View Post
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.
Defined benefit plans were never as widespread as believed or as lucrative. Only about a third of the population had anything like a DB plan and many paid little, perhaps 1/4 to 1/2 do social security. And, all DB plans were invested in the same markets as your current 401k, just a bit cheaper fees. Ask the many state retirees with grossly underfunded DB how secure they feel. I know lots of CT retirees wondering if they’re gonna wind up with a big haircut like the RI retirees got. See Central Falls, RI

GF
galaxy flyer is offline  
Old 09-10-2018, 02:55 PM
  #13  
Gets Weekends Off
 
SonicFlyer's Avatar
 
Joined APC: Apr 2017
Posts: 3,574
Default

Originally Posted by rickair7777 View Post
$1M can't be anywhere near enough to retire early.
Very true... $2 million is really what's needed to live a fairly upper middle class lifestyle with longevity. That produces an income of $100k/yr which will work for most places.


Originally Posted by rickair7777 View Post
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.
This statement shows a gross lack of understanding of economics, human nature, and investments...

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.
SonicFlyer is online now  
Old 09-10-2018, 02:57 PM
  #14  
Gets Weekends Off
 
SonicFlyer's Avatar
 
Joined APC: Apr 2017
Posts: 3,574
Default

Originally Posted by swaayze View Post
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.
A properly diversified portfolio always makes money over the long term and almost always makes money over the medium term. This is why anything less than $2 million just isn't enough to retire on with a 5% withdrawl.
SonicFlyer is online now  
Old 09-10-2018, 02:59 PM
  #15  
Gets Weekends Off
 
SonicFlyer's Avatar
 
Joined APC: Apr 2017
Posts: 3,574
Default

Originally Posted by rickair7777 View Post
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.
Exactly. Notice how a lot of people are moving out of s-holes like NY and LA and Chicago... and they are moving to places like IN, OH, TN, TX, AZ, ID, CO.... and they are voting the exact same way that they did in the cesspool in which they left.

Originally Posted by rickair7777 View Post
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.
LOL... that would be tossed out in court faster than a New York minute!
SonicFlyer is online now  
Old 09-11-2018, 08:05 AM
  #16  
Gets Weekends Off
 
Joined APC: Mar 2005
Position: DFW A320 FO
Posts: 586
Default

Originally Posted by galaxy flyer View Post
Defined benefit plans were never as widespread as believed or as lucrative.

GF
Perhaps, but that was not really the point I was trying to illuminate. No argument on the security of a DB plan (BTDT).

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.
swaayze is offline  
Old 09-12-2018, 08:02 AM
  #17  
Gets Weekends Off
 
Joined APC: Nov 2016
Posts: 233
Default

" 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. (?)

Stimpy the Kat is offline  
Old 09-12-2018, 08:35 AM
  #18  
Gets Weekends Off
 
Joined APC: Mar 2005
Position: DFW A320 FO
Posts: 586
Default

Originally Posted by Stimpy the Kat View Post
"

1-2M to retire comfortably ?

Man, ya'll must have Crack habits or another Family on the side. (?)

The discussion is EARLY Retirement, like in your late 20’s or 30's (a typical FIRE goal).

$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.
swaayze is offline  
Old 09-12-2018, 10:06 AM
  #19  
Gets Weekends Off
 
Joined APC: Nov 2016
Posts: 233
Default

20's and 30's?

Yup...you will need ALL of the 1-2M.



Stimpy the Kat is offline  
Old 09-12-2018, 03:47 PM
  #20  
Gets Weekends Off
 
Joined APC: Mar 2005
Position: DFW A320 FO
Posts: 586
Default

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
swaayze is offline  
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
Thunder1
Major
5
01-24-2015 06:59 AM
proletariatav8r
SkyWest
16
02-22-2012 08:23 PM
RiddleEagle18
Major
1
04-21-2011 07:13 AM
AAflyer
Major
1
10-18-2007 05:32 AM
Freighter Captain
Cargo
0
07-09-2005 09:27 PM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread
Your Privacy Choices