I think you mean "coffer," not "coffin." Otherwise, it's a very morbid statement.
Maybe you should double your goal to $2 million :-).
Or enjoy an early retirement now and plan on eventually earning some additional income later in your retirement. I actually like this idea because it helps you plan for inflation. If inflation really jumps and avg wages doubles - it could be really hard to compensate with your investments - but if you plan on earning additional income later in your retirement via a low stress, part-time job, you will be able to benefit in someway from this inflation....
Yep, I figured that as your net worth skyrocketed you would change your mind about retiring. The bottom line is that $1 million isn't enough to last on if you are in your 30's, even with $50k of passive income.
Anyway, why quit in your 30's when you could work through your 40s or even 50s and become a multi-millionaire. Is $10 million in 20 years possible for you? After following your blog for many months I believe it is possible for you MM. Good luck on your journey.
Jeff
I used to think 1.5 million (not in assets but in liquid investable income earning assets) was enough to retire at 40. I have recently decided that I underestimated the impact of inflation especially since it is such an unknown.
Given the pace at which you are saving in your current job I think it would be wise to continue on well past 1 million.
My goal is actually to eventually get enough real estate property earning rental income to use that as my guage against inflation. I figure if wages double, real estate will have to atleast double to keep up with it as will the passive rent income it throws off. Thus if I can get enough real estate to provide the passive income to live off of then it should provide the hedge against inflation that I need.
Of course skyrocketing medical and education costs for the kids is also another thing that is hard to plan for since it is a huge unknown.
I dunno...it sort of depends on what your plans are after retirement, assuming that you do reach your goals and take the plunge at that age. What might your plans be? Sitting around with a fishing pole might be nice for a while, but the reality might be different than what you imagined. I myself would get terribly bored after not too long. I would only guess a person of your obvious intelligence might also, too. You seem to be very thoughtful of risks. As you point out, a flat out retirement would seem to have at least some exposure to uncertainty vs. a part-time gig or small business. Then again, if you do get bored (or broke!), you could just start working again or pursue some other passion.
But in general, you planned and executed so far an excellent plan. It called to mind words told to me by an old family friend, a doctor. At one point he was posted at a miliary base in Europe. His patients were, too often, older people who had scrimped and saved until their 70's and beyond for that retirement trip to Europe, only to find that they were so old by the time they took the trip that they ended up too old to enjoy it and in the hospital with a heart attack or broken whatever. Kudos to you for planning retirement and actually being young enough to enjoy it!!
Sounds like planning of the type and level that got you to this point in the first place is in order. To me, pursuit of a passion would be the most delicious thing about not having immediate money worries. I guess it all depends on just exactly what bangs your particular gong, so to speak. It's a great problem to have, though.
In any event, best of luck in figuring it out. I don't know what brought me to this site in the first place, but I have thoroughly enjoyed it. It's so much better than the idiotic bs that is the focus of too many blogs unfortunately. Once your goal is reached, I hope you'll stay with it. Thanks, and keep us posted.......
It is never enough. Isn't that the point? As your income and savings increase, your taste, needs and standards go up. That's just a plain fact. Retiring at 33 with $1MM also depends on where you intend on living. If you go and live out in the midwest in a small town, undoubtedly, that will be enough.
It does, however, sound like you are used to at least being close to a city. Whether you're able to compromise on this is a rather important question, imho. I live in the northeast whereas it is difficult to imagine that $1MM would be enough. i suppose i could do it if i didn't go out to eat very often and was ultra frugal with my travel / vacation... but i want more... :)
further, with children, and having a 3 year old, i imagine that by the time they go to school, end to end, it'll cost on the order of $200k or more for each child. it nearly is that already! sure, we can all talk about getting the kids to pay for their own education, etc.
it all depends on what you want to do. the other thought is that even if you "retire" at 33, i suspect you'll take some time off but then get to working a bit. the problem, however, is that if you let your skills lag, especially in the software industry, you'll quickly become irrelevant. just sitting around all day is pretty boring....
None of my friends who've retired early with sufficient assets to back it up have regretted it. In fact, most have become busier after retiring than before, and wondered how they found time to work before they retired.
Retiring with $1million + a $50k a year income is like retiring on an $80k a year income (pre tax). That's pretty substantial and should support a good lifestyle anywhere you choose. But don't forget that $80k a year in 2009 isn't as much as $80k a year now.
I'm planning my own retirement at a $100k a year budget to maximize flexibility. That would require about $3million in a diversified portfolio.
If you dont have your primary residence fully paid off, 1M is not much money. A realistic amount is 2M and house paid off for retirement in 2006 dollars.
damn..that makes you like 28-29 at the moment...you've done pretty well for yourself.
All the discussion about early retirement excludes the key costs of children. Expensive little habits that may not be part of your calc's but others should certainly consider the costs before blowing out their retirement candles.
What return are you expecting on your money after retiring and how would you invest your money? It's a lot harder to steadily get 8% than you might think. If you were to lose 15% in any of your 40 retirement years (which is almost certain if you have even 50% in stocks) along with a 4% withdrawal rate, you'd lose 20% in one year. Do you think you could still invest "for the long term" when that happens? I do not think $1M is enough.
Before I had kids, I thought a couple of million was enough to retire on. With kids, their tuition (college expenses too), raising them with all the current doodads they need, plus a busy household that requires more running power, things changed for me. I used to save over $100,000 a year. Now I just can't, with the new budget. So I have decided to focus on making the money, more so than just saving it. So even with substantial assets, you never know, these can still be at risk, so I doubt I'd retire even if I thought it was possible.
1,000,000 isnt going to cut it. Figure that you can withdraw 3% a year for the rest of your life and your nest egg will last the lifetime and keep up with inflation. 1m is only 30K a year. You said you'd make 50K in addition, ok so thats 80K. Hmmm, your choice but that wont work for me.
What is with this kids thing - tuition? Let them pay for it. What is it with people paying their kids way through college. That teaches them nothing other than entitlement and how to party on mom/dad's dime.
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