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  #11  
Old 03-10-2014, 12:47 PM
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mathmajor mathmajor is offline
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Retire at 40? I'd be bored silly and it would be goofy just to stop working, with the income (I hope) I make by then. If I really wanted a change of pace, perhaps I'd set up an independent consultancy or something.

Also who makes $10M by age 40? That seems extraordinary to loyal donkies like myself...
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Old 03-10-2014, 12:52 PM
WhatsGolden WhatsGolden is offline
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Originally Posted by mathmajor View Post
Retire at 40? I'd be bored silly and it would be goofy just to stop working, with the income (I hope) I make by then. If I really wanted a change of pace, perhaps I'd set up an independent consultancy or something.

Also who makes $10M by age 40? That seems extraordinary to loyal donkies like myself...
People who inherit $8M by age 40?
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Old 03-10-2014, 01:16 PM
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Arthur Itas Arthur Itas is offline
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I have been thinking about the OP's question. I don't have an exact answer on what's "enough" to retire very early. For me $10M would be more than enough, and $2M would not be enough.

And yes, you'd want to fill your day with activities beyond just leisure time.
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Old 03-10-2014, 01:25 PM
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If I have $2M-$3M by age 45 I will retire. Or at least decrease my work week.
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Old 03-10-2014, 01:37 PM
lulzEMH lulzEMH is offline
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Originally Posted by Arthur Itas View Post
I have been thinking about the OP's question. I don't have an exact answer on what's "enough" to retire very early. For me $10M would be more than enough, and $2M would not be enough.

And yes, you'd want to fill your day with activities beyond just leisure time.
I'm guessing I fall between 4m and 6m. At 4m I would be actively looking to be part time.
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Old 03-10-2014, 01:37 PM
C8 Guy C8 Guy is offline
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$3M is about what I keep coming up with after playing around with several spreadsheets over the years.
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Old 03-10-2014, 01:39 PM
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The % of it that was liquid would probably matter too. If it is all locked into real estate, small businesses, 401k that don't produce cash flow then you would have to leverage somehow to retire.
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Old 03-10-2014, 02:02 PM
WhatsGolden WhatsGolden is offline
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I figure that I'll need about $4M at 65 to comfortably retire. So to retire at 40, I'd need about $1M of assets (assuming 6% growth) that are devoted to 65+ retirement. I'd also want enough saved up in liquid/cash producing assets to get me 25 years. Assuming 50k draw per year, an additional $1M should do here. So about $2M total should be sufficient given that allocation is appropriate. That being said, having just the $2M saved would make me cautious and I'd probably work a couple extra years to build it up. So realistically for me it'd be in the $2.5-4M range.

In reality, I'd probably work just a little bit longer to help out others and ensure that I could leave some for those that I care about. Life is like stairs, and getting to the top is easier if you start out a few steps higher.
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Old 03-10-2014, 05:58 PM
Liz Lemon Liz Lemon is offline
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I think it depends on how you define "retirement". If you want to travel from one tropical island to the other, you will need more assets.

I've been thinking a lot about early retirement, I'd like to do it but in more of the MMM fashion. The theory is once your invested assets can produce enough passive income to cover your living expenses you are good to go. The variable that you have the most control over is living expenses. If you need $80,000 per year you might need close to $3M in assets. If you only need $20,000 per year that number is closer to $700,000.

We are currently working on aggressively paying off our mortgage. Once that's done, our annual living expenses are below $24,000. I'd rather have free time to pursue other interests, spend time with family and volunteer, rather than having to report to work 5 days a week. I can guarantee that I won't be bored. Right now, after working all week, I'm too exhausted to want to do anything else.
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Old 03-10-2014, 06:17 PM
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2 - 4 million for most people is probably enough to retire and live off the investment income.

https://personal.vanguard.com/us/fun...FundIntExt=INT

This is a "managed payout fund" from Vanguard that seeks to maintain your capital and increase your monthly payout with inflation... though the principal and the monthly payout are NOT guaranteed. Still, I think it's useful as an idea of how far your money will take you.

The fund pays out $0.0555 per month per share and shares cost $18.81 as of today's close. So by my math, that's .0555/18.81 = 0.002950558 per dollar invested.

Figure out what you want your monthly income to be ($X) and divide by 0.002950558 to get an approximate idea of how much savings you need.

$5,000 monthly income - need $1.7 million
$10,000 monthly income - need $3.4 million
etc.

That assumes you're not digging into the principal too much. You can obviously dig in to the principal a bit, though if you're retiring young, it's probably best if you can live off the investment income... at least until you're old & gray.

Also, probably think about some LTC insurance.
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