People keep telling me I need to have $3m to retire

[MrDevereaux]

I've legit heard this same figure from several people, all of whom I respect and consider to be intelligent. My reaction each time has been as below.

The more I hear this, the more it fills me with fear because it just seems like an unattainable figure. I'm just going to ignore them and pretend everything is going to be alright. Or hope the world ends before my lack of $3m becomes a problem.

[Guapscotch]

It's depressing thinking about working your whole life away to save up an insane amount of money.

And you can't touch it until a certain day. Makes you think.

[Austanian]

They are right, but it is not that unattainable.

It just requires consistency and starting early.

[Dave P]

Depends on at what age.


3 mil is a bit extreme though.

[PwnedTheism]

only way i see that being possible is if im making 6 figures a year.

[MrDevereaux]

1) You can work until you are 50-60.

2) Who the hell wants to live past 60. Brb, literally rotting away every day with no hope of ever getting better.

STRONG this. Fukk it, seriously. I'm going out in a blaze of glory the day before my 60th.

[CharolaisBull]

Nah brah, you'll most likely need 3.5 million to retire in this economy.

[m1n2v5]

I've got about $900 saved so far, only 2,999,100 to go

[OaklandCali]

3 million dollars was the number for baby boomers. With the inflation rate 80’s & 90’s kids need 6.5 million dollars.

[woodbarry]

Why not just plan on working your entire life? And while your at it why not work a job you love? This is how you can actually enjoy life instead of being suicidal.

[Mav3535]

It's more than doable. It's called patience and self control, *******.

I don't know your age, let's assume you're 25. Lets also assume that you are well aware of how the stock market has worked historically. If you regularly put in money every month, you should be able to double your money every 5 years on avg. Historical returns are 10% a year.

So lets say you have 10,000 saved at age 25. Lets do the projection:
Age 30: 20,000
Age 35: 40,000
Age 40: 80,000
Age 45: 160,000
Age 50: 320,000
Age 55: 640,000
Age 60: 1.2 million
Age 65: 2.4 million

That's if you only have 10k in your bank account at age 25 and decide to put it into the stock market. Now imagine if you had even better than avg. returns over that time period and had more than 10k saved up (or put in a lot more per month over time, instead of the same amount every month). You'll reach 3 million easily. Now, we have to take inflation into account, but it's still a good amount. But you if you aren't a potato, you should be able to beat the projection that I just posted.

edit: This is why you invest aggressively in the stock market. Yes, this is more than possible to do. Any financial brah can confirm this. Buying and holding = you win in the long run
edit2: And no you don't need to put every penny you earn into this. As long as you invest a portion of your income over time, you'll make it. You can still live very comfortably.

[MrDevereaux]

Nah brah, you'll most likely need 3.5 million to retire in this economy.

It just keeps getting worse.

I've got about $900 saved so far, only 2,999,100 to go

Feels bro.

3 million dollars was the number for baby boomers. With the inflation rate 80’s & 90’s kids need 6.5 million dollars.

Stop!!!!!

Why not just plan on working your entire life? And while your at it why not work a job you love? This is how you can actually enjoy life instead of being suicidal.

This is the answer.

[Ceo10kdaybro]

OPie enjoy your life.

[datdudeaf]

More like 1M. All depends where you live and how.

Assuming you retire at 65, you'll need around 30 years income. Hopefully by then your mortgage will be paid off. How much money do you need a month to live if you aren't paying rent? 3k comfortably? 3k * 12 * 30 = ~1M.

Or just invest in some rental properties and live off the passive income for the rest of you life.


Just FYI, that 3M number comes from the decent advice of needing 30x your salary, but it doesn't scale linerally. It really should be 30x your living expenses to be more accurate. If you make 250k a year you certainly don't need 7.5M to retire.


Hope this helps.

[Austanian]

More like 1M. All depends where you live and how.

Assuming you retire at 65, you'll need around 30 years income. Hopefully by then your mortgage will be paid off. How much money do you need a month to live if you aren't paying rent? 3k comfortably? 3k * 12 * 30 = ~1M.

Or just invest in some rental properties and live off the passive income for the rest of you life.


Just FYI, that 3M number comes from the decent advice of needing 30x your salary, but it doesn't scale linerally. It really should be 30x your living expenses to be more accurate. If you make 250k a year you certainly don't need 7.5M to retire.


Hope this helps.

1 million is not enough. You didn't factor in inflation.

[MrDevereaux]

More like 1M. All depends where you live and how.

Assuming you retire at 65, you'll need around 30 years income. Hopefully by then your mortgage will be paid off. How much money do you need a month to live if you aren't paying rent? 3k comfortably? 3k * 12 * 30 = ~1M.

Or just invest in some rental properties and live off the passive income for the rest of you life.


Just FYI, that 3M number comes from the decent advice of needing 30x your salary, but it doesn't scale linerally. It really should be 30x your living expenses to be more accurate. If you make 250k a year you certainly don't need 7.5M to retire.


Hope this helps.

Thanks bro. Feel a bit less terrified now. Repped.

[Bar182]

I would retire on 500k.

[datdudeaf]

1 million is not enough. You didn't factor in inflation.

1 million 2015 USD is enough. I'm not giving advice in 2065 USD.

[Austanian]

Thanks bro. Feel a bit less terrified now. Repped.

Go talk to a Financial Advisor. That dudes numbers blow.

Assuming 40 years to retirement and an inflation rate of 3.5% 1 million dollars in the future is only worth about 250,000 dollars right now.

How long would you last with 250k?

[Austanian]

1 million 2015 USD is enough. I'm not giving advice in 2065 USD.

Okay I will play for right now.

How much money are you with drawing every year?
What percentage of return are you counting on?
How many years are you expecting to live?

[datdudeaf]

Okay I will play for right now.

How much money are you with drawing every year?
What percentage of return are you counting on?
How many years are you expecting to live?

You don't need to explain the numbers to me, thanks. You are right, if he has 1 million 50 years from now it's not enough. Someone retiring today needs 30 times his yearly living expenses. It's easiest to discuss this in the present tense, unless you want to explain to him that his 60k a year job will be paying twice that in the future to match the cost of living.

Feel free to contribute to his anxiety though

[Austanian]

You don't need to explain the numbers to me, thanks. You are right, if he has 1 million 50 years from now it's not enough. Someone retiring today needs 30 times his yearly living expenses. It's easiest to discuss this in the present tense, unless you want to explain to him that his 60k a year job will be paying twice that in the future to match the cost of living.

Feel free to contribute to his anxiety though

It is the early years that matter though... Once you get behind on time it costs A LOT to catch up.

[MrDevereaux]

Thanks for the answers. Still a bit daunted but gonna keep on hustling.

[Lucianus]

So some of you plan on working ahead and not retiring?

Do you realise how much damage that can do to our economy? We have to retire so the young can get work

[datdudeaf]

It is the early years that matter though... Once you get behind on time it costs A LOT to catch up.

Agreed, he should start investing now.

Personally, I work in real estate development and don't ever plan on retiring, at least not completely. That's the best way to get alzheimers.

[Frank Drebin]

In future dollars maybe.

I look at it like this: You need money to live a comfortable retirement from 55-80. After 80 your life is likely ****, if you still need money you can sell your house, rent, and live off the government.

So how much do you need for 25 years? 1 Mill should give you ~70k/yr for 25 years.

[Mav3535]

I like how everyone ignored my reply, the most financially grounded one in the thread

Strong

[Gmoney23]

A lot of variables to consider here OP.

Current Age
Retirement Age
Current Income
Future Income
Current Amount Invested
Lifestyle Expected in Retirement


Generic advice here before getting more details is you should try and save at least 10% of your income with a goal to getting toward 20%, if you can do this and start young enough with modest investment performance you will likely be able to at least continue your current lifestyle in retirement.

Savings tools to look at. Max your companies 401k match if offered (take all the free money you can get). If no 401k or no match then contribute to a Roth unless you are over income thresholds.

I used to have a retirement thread on here. Assuming fairly young age since on the misc I would gear your investment to 100% equity exposure in funds or indexes. If you can handle even choppier results allocate more towards small/mid cap exposure opposed to all in large cap.


Take advantage of tax shelters such as Traditional & Roth IRA's, 401k's, and free money such as pensions.

[MrDevereaux]

I like how everyone ignored my reply, the most financially grounded one in the thread

Strong

Thanks bro, am reading through some of the answers. Measly reps on recharge.

[ohsnapzach]

GL with your savings goals.. wont matter if you die of a heart attack when you're 45

Enjoy life and save at the same time