You can be thrifty and not be a "wage slave" for a lot less than a million in the bank. I quit my job 8 years ago at age 53. I will get my SS next year at age 62. I have only hit my nest egg for $15,000 in 8 years. Everything must be paid for, no debt! You need to buy good used vehicles and RVs to save on insurance etc. Plus your expenses are a lot less once you quit work. I do have about $1,000 month income from rental property and I have VA med.
There are lots of ways to make money as well. I turn down jobs and free camping deals all the time while traveling.
The key is to start with a bundle, maybe $500,000 and draw from it as needed. Be out of debt. Replace what you withdraw when you can.
Here is a neat site: whywork.org
I wish I would have quit work at 45 yeras old.
mtnman
The answer to OP's question depends on the lifestyle one wishes to follow and the amount of debt one has. If everything is paid for, and you can live on $4000/month, then one million in the bank should be fine. Even at a safe return of 5%, that's $50,000/year. I retired at age 56 with a good pension and had some retirement investments that I thought were sufficient, but then lost 40% of my investments when the market tanked. I decided to return to work for several reasons, but one was to be able to continue to live the same lifestyle without tapping into the investment accounts to supplement the pension. I figure (read "HOPE") that in a couple of years, the investments will ecover and I can quit again.
Ritirement is a tough question and the same answer does not apply to everyone. There are many factors to consider. I retired at 58 and I am now 62. At 55 you can start taking monthly withdrawals from your IRA (401K) based on what is called the rule of 72T where the government specifies a monthly minimum that has to be taken. This set withdrawal has to continue until you are 62 to prevent the 10% penalty. At 59 1/2 there is no penalty for early withdrawal, I waited until I was 59 1/2. You need to look at you expenses, will you have medical coverage or need to buy your own?. Medical coverage is very expensive unless you go with a high deductible and catastrophic insurance which will cover something major like a heart attach and your deductible will be in the thousands of dollars. The next thing to look at is your debt level or are you debt free. Now look at your current yearly income, it will not go down. This was a surprise to me but we are traveling more and doing more activities that when I was working. It all comes down to your current life style and the life style you want in retirement. Most financial advisers are conservative and recommend no more than 4% a year be withdrawn from your reitrement accounts to prevent you from running out of money. Remember at age 55 retirement you could have another 30 years for the money to last. Say that you have a million in retirement funds and take out 5% yearly then you decide to buy a new car say $30,000, do you starve next year and not withdraw anything? My goal was to ensure I had 2 million in my retirement account. Remember that the stock market will go up and down and in really bad times you can be down 40-50% and when you withdraw in a down market you are dipping into your principal and you may not be able to make it up going forward. But the stock market is where you are going to get your long term (over many years) return on your investment. You really need to look at what your expected life style is going to be, health insurance status, and if your finances can support this retirement life style.
The goal is for retirement with dignity and independence. Good luck
I agree with everything Buck said. A common theme seems to be planning on living another 30 years. Well, what if you retire at 55 and live to be 90? If you plan on 3% inflation what will what will you need per in 30 years? As to returning to the work force, the older you get the harder that will be. If you are full timing what will be the price of fuel in 10 years? You may not be able to afford to drive that RV anywhere. Lots to consider.
9 years ago I retired at 55 with pension and health insurance. My wife just plain quit working without pension nor insurance benefit. I haven't worked since then...a regular job that is. We've live(d) comfortably. The key for me was that I planned my retirement by downsizing the house, no bills and in great health.
This past Feb. the wife filed for social security which goes directly to a savings account and will be used for vacations, home improvements, toys and more toys. Life is great.
vfrmarc wrote: Retire at 55? Ah those were the days..... I'm looking at 62. My pension will be as maxxed out as it will get since no more company pension growth after 2010. And the big number in my 401K well that's a smaller number now. Lastly maybe or maybe not SS at 62. That gives me three sources of income. Probably work partime when not on the road which will force me to hold back on SS until 66. All and all the monthly income will be better than 5% of 1 million in the bank, but I admit having that number in your hands is somewhat more comforting than tjhe three sources of income. Just lose one and things start to hurt.
How much of the projected SS will you get if you're also receiving a pension? My retirement counselor projects I'll get 70% of the projected SS because I'll get "dinged" for receiving a state pension. This % is pretty good only because I've been paying into SS consistently for 40 years to date.
Steve,Kathy,Josh & Morpheus the Basenji
2004 40' TSDP Country Coach Inspire DaVinci
350 Cummins, 3000 Allison
2008 Wrangler X Sahara/Blue OX Tow Bar/Apollo Brake
vfrmarc wrote: Retire at 55? Ah those were the days..... I'm looking at 62. My pension will be as maxxed out as it will get since no more company pension growth after 2010. And the big number in my 401K well that's a smaller number now. Lastly maybe or maybe not SS at 62. That gives me three sources of income. Probably work partime when not on the road which will force me to hold back on SS until 66. All and all the monthly income will be better than 5% of 1 million in the bank, but I admit having that number in your hands is somewhat more comforting than tjhe three sources of income. Just lose one and things start to hurt.
How much of the projected SS will you get if you're also receiving a pension? My retirement counselor projects I'll get 70% of the projected SS because I'll get "dinged" for receiving a state pension. This % is pretty good only because I've been paying into SS consistently for 40 years to date.
You bring up a good point but not all incomes affect your SS checks. Just grabbing figures, if you earn $250,000 a year in capital gains from stocks, it does not affect the size of your SS at all. The SS does get added to your CG profits as total income and you are taxed on it at whatever percentage you pay. My wife's pension also does not affect the SS check amount at all, but again, it all gets added together as taxable income.
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