How much $ to retire and how to fund your lifestyle in retirement

[dmvevguy]

I was lucky enough to have a financial advisor who got my 500k invested in airline companies and lost 450 grands.
I invested 100k in tsla at that moment and compensated for this investment disaster.
So I am lucky enough to bit have the choice to retire now
If I had invested 500k in TSLA December 2017. I would have 5M and be on the brink of becoming useless to society with my early retirement

Damn...well I made a dumb move too, I sold an initial 300k position I took out at $250 a few years ago, and sold it too early when it hit 400. I was happy with the doubling of the $, but I wish I would have held that position long, then I could have had much more, but it's all good.

I think after this FSD release, we are looking solid the next few years esp when robotaxi comes. Now, I have full belief in Tesla's FSD and it's truly a game changer that he proved everyone wrong without Lidar. Curious to see FSD in Rain and Snow, though, before I get too many hopes up. Also, I hope and pray no one dies or gets killed, so we all need to remain vigilant whenever we get FSD and use it.

Btw, I stopped respecting any financial advisors etc. a long time ago lol.

For the folks on this thread, and who own a business, I'd also recommend looking into a trust and putting some cash on a life insurance policy. You can take the business deduction write-off, depending on your age and how much insurance you get, and then later on that could be a tax free vehicle for you to take $ out starting around 59 (I think) completely tax free. Seems to be at a growth rate of 5% though, but if you make lots of $ in the business, it's another nifty write-off and investment vehicle with low risk.

 

[Ocelot]

I’m 33 and was thinking about retiring early as soon as I hit 2M. However, if you are patient enough and retire when you have 5M. If you average 5% interest rate on a conservative ETFs portfolio, you make $250k annually in interest, reinvest $125k and live on $125k annualy. This way you can have the house you want. I have my corporation since 2016 so I can’t ask to be laid off but as a consultant, I decide about my schedule and can work 2 days a week during the summer and now 4 days a week when it’s raining every day during automn.

My Tesla portfolio is the way to reach financial freedom sooner. Aim high, compounded interest is awesome.

wow ortho surg! did you go to med school right out of high school? I think you can do that in Quebec? Also unless things change...I think the only way to reinvest that 125k you mention is to reinvest it in taxes...unless you hold everything in your TFSA. Or do you mean taking off the 125k, paying tax on that, and living with whats leftover which would be a little over 7k per month.

 

[adiggs]

Best of luck to you, and I'm sure you'll get there soon!!!

I'm there mentally already!

My job will catch up on Jan 15.

 

[adiggs]

Curious to see FSD in Rain and Snow, though, before I get too many hopes up

As somebody that has used the current FSD in both conditions, these are good things to worry about.

In both conditions, I've seen a "Bad Weather Detected" message which disabled NOA (but left lane keeping active, as well as manually issued lane change commands).

I've seen the lane change functionality disable.

In snow conditions, I've seen lane keeping disabled.

And I've even seen bad enough weather where cruise control disabled. Apparently, we can't have a standard cruise - we ONLY get adaptive cruise. Talk about annoying - driving on a snowy road where a steady 35 mph would have been ideal, I couldn't get cruise to turn on, and had to maintain that speed with my foot / ankle. Oh the horror!


As you've identified, just 2 of many barriers between here and cars that fully drive themselves.

(And FSD has SO much utility, short of enabling cars to drive themselves)

 

[OrthoSurg]

wow ortho surg! did you go to med school right out of high school? I think you can do that in Quebec? Also unless things change...I think the only way to reinvest that 125k you mention is to reinvest it in taxes...unless you hold everything in your TFSA. Or do you mean taking off the 125k, paying tax on that, and living with whats leftover which would be a little over 7k per month.

2 years of CÉGEP before med school, so you start medschool at 19, graduate at 29.

I think the rule of the 5M is just retiring 125k yearly on the average 250k compounded interest, stock growth, and dividends. So you have your initial capital growing eternally for your family to become in the 1% richest and you can live easily on the 80k left after taxes from the 125k if you work for fun 2-3 days a month.

 

[st_lopes]

2 years of CÉGEP before med school, so you start medschool at 19, graduate at 29.

I think the rule of the 5M is just retiring 125k yearly on the average 250k compounded interest, stock growth, and dividends. So you have your initial capital growing eternally for your family to become in the 1% richest and you can live easily on the 80k left after taxes from the 125k if you work for fun 2-3 days a month.

The other element I add to the financial freedom at 2/5M in portfolio is to consider selling options premium as the income generator (in addition to or replacing drawing down on continued portfolio compounding).

For instance, on $100k of cash in a margin account you can generate some fairly reasonable weekly cash flow (7-10k cash weekly) by selling puts/calls. Naturally nothing guaranteed and on a bad week you may give up a week’s premium or dip in to prior gains (or get shares assigned to you or sold away at a presold price).

Some refer to that approach as « the wheel » as if it’s a defined strategy, but your risk tolerance dictates how close to the money you want to trade at, as well as what expiration dates you sell against (and thus what your potential weekly premiums may be, as well as how much time you want to spend planning each trade).

 

[OrthoSurg]

The other element I add to the financial freedom at 2/5M in portfolio is to consider selling options premium as the income generator (in addition to or replacing drawing down on continued portfolio compounding).

For instance, on $100k of cash in a margin account you can generate some fairly reasonable weekly cash flow (7-10k cash weekly) by selling puts/calls. Naturally nothing guaranteed and on a bad week you may give up a week’s premium or dip in to prior gains (or get shares assigned to you or sold away at a presold price).

Some refer to that approach as « the wheel » as if it’s a defined strategy, but your risk tolerance dictates how close to the money you want to trade at, as well as what expiration dates you sell against (and thus what your potential weekly premiums may be, as well as how much time you want to spend planning each trade).

Of course if you are a great option tarder in a bull market and can recognize the switch to a bear market and make good regular income this is the best scenario. Then you can stop much sooner. However, my income at work can be around that with 2 days of work in the private sector. That’s why I plan to transition from public to private once I reach my 5M target and then just for 1-2 days a week for fun.

 

[Featsbeyond50]

By my back of the napkin calculations, I need 2m in retirement savings plus 100k for every year prior to age 62.

 

[Raechris]

Regarding retirement, in the sense that you can do anything you want, how much money/how many years of expenses do we feel like a good place to start if we hate/love our job?

Time and burn rate. Younger you are the more real inflation will be a factor. If you are older it comes down to burn rate. Then we have longevity. Bottom line too many unknowable variables to answer the question for anyone. Get a job you love and make the sacrifices to have it if you hate your current. Life too short and money is great but will never buy happiness - despite everyone wants to try this for themself.

 

[juanmedina]

The 4% rule is death.... 5% and even 7% could be ok. That makes a huge difference .

 

[MikeQ]

The 4% rule is death.... 5% and even 7% could be ok. That makes a huge difference .

If we don't pull out a decent amount more than 4%, we're going to get murdered by required minimum distributions at 72.

 

[Stretch2727]

Anyone engage an estate planning attorney? I am thinking beyond my retirement. I do almost everything myself, taxes etc so don't have contacts in this area.

How do you find a good one?

 

[Mokuzai]

How do you find a good one?

If you have any wealthy friends that live nearby you could ask them who they use. That's what I'm planning on doing with finding a CPA this year. Normally do it myself but keep seeing so much advice to get it professionally done so I'll see what difference it makes. Maybe run the numbers myself and compare it to what they get.

 

[Mokuzai]

Jeremy touting $2MM to retire by 40 for an expensive place like US/UK/Canada and $1MM for someplace cheaper. While I can see $1MM for someplace like the Philippines, $2MM for the expensive places seems way low. Though there's a huge range there as well...I'm coming from the perspective of living in LA but there are parts of the US that can maybe be done with $2MM if done frugally.

 

[Mich]

It's time to bring this thread to the frontpage.

 

[AudubonB]

“Estate planner”? If you’re in the US, a supremely important criterion is to make sure he or she is qualified to advise you in your state. Make that, in fact, an absolute requirement - no exceptions.

If you’re too young to have retired under normal circumstances - 65 still is a good first approximation but if you or a significant family member is in very poor health then that might be adjusted younger; alternatively, my father was still working 25-30 hours a week and traveling tens of thousands of miles each year until three weeks before his death in his 94th year - then do NOT wait until you ‘retire’ to figure out how you are going to make productive use of the subsequent decades. First, because you’ll be bored to death and second, because you’ll be sick to death and third, because you’ll die, literally.

Now, very seriously: if someone thinks he or she + family is interested and potentially capable - and I can tell better than you if that is so - after a quarter century building and nurturing and loving our wilderness lodge in Alaska we ourselves are ready to move on and sell it to whoever can demonstrate is best able to carry on. It is a great way to be productive in your mature years. Any of you who don’t know who I am or can’t figure out the operation and how to contact me from the breadcrumbs throughout TMC....doesn’t qualify.

 

[Oil4AsphaultOnly]

...
Now, very seriously: if someone thinks he or she + family is interested and potentially capable - and I can tell better than you if that is so - after a quarter century building and nurturing and loving our wilderness lodge in Alaska we ourselves are ready to move on and sell it to whoever can demonstrate is best able to carry on. It is a great way to be productive in your mature years. Any of you who don’t know who I am or can’t figure out the operation and how to contact me from the breadcrumbs throughout TMC....doesn’t qualify.

Oooh ooh! Let me guess ... you run an animal shelter (if I were one of your guests, that label would be appropos)!?!?

 

[Rockster]

Here's something I struggle with: estimating our annual living expenses after retirement. We track and categorize everything we spend now, and have for years, so historical data is plentiful. We currently have two teenagers and, if things go well, we're probably going to retire right when the youngest one leaves for college in 18 months or so (though she might live at home and go to the community college nearby for the first year while she decides on a major).

That said, using all of this historical data, I've tweaked and modified various categories to best estimate how much we'll be spending when it's just the two of us. The figure I keep coming up with is double or more the "40k to 50k" that I see many people in various online retirement blogs and newsletters say that they expect to spend annually.

In my calculations I've tried to think of everything, including recreation, travel, dining out, new clothing, and even a car payment (because we're going to want to have at least one of our two cars be the latest and greatest Tesla), so maybe I'm being overly generous to ourselves, I dunno. I don't to retire only to sit at home and eat Alpo.

Still, even in a relatively decent cost of living area, without a house payment and our no longer saving for college, I don't see how we can retire comfortably on the $40k or $50k that many sites report as a typical annual retirement expenditure.

 

[Snerruc]

I think anyone posting on TMC would have a problem retiring on less than $100,000 per year unless they were an aesthetic. I would suggest you consider your current income to be more realistic. Remember inflation will eat into that over the years.

 

[eloder]

I don't think I'm in the right forum to be asking this, but is there anyone who retired early with expenses under $30-40k a year? If so, when did you retire and about what was your nest egg / withdrawal strategy like?

I'm in a moderate COL city but have a low-cost lifestyle. No other people to worry about, paid off my mortgage years ago, and paid off my Model 3 (which should last forever since I only drive about 5k miles a year pre-covid). Annual expenses were under $21k last year when ignoring the car pay-off. The only major retirement expense increase I see is health insurance and medical costs. (Not worried about entertainment)

Also, how do you find the will to keep working when your stressful day job can't even cover the bill from your capital gains taxes? If only this year's gains could be repeated every single year...