Is 1.6 million not enough to retire at 52?

[SoutheastBeast1]

Been reading a blog where financial advisors weigh in on questions like these by real people asking.

The scenario even said the guy felt he could live comfortably on 60k a year. But the response was that he would be better off working 10 more years... wtf??

I feel like 1.6 mil is plenty to live on in this scenario. The 1.6 was split between a brokerage and 401k evenly. He also said he owned his house and had 6 months emergent funds outside of the 1.6 mil

Are these financial planners whack or telling the truth? That’s depressing as f*ck if they don’t even think this scenario the guy could retire.

[~Hades~]

Lots of variables. 60k per year would last him 26 years. Obviously the first question is how old the guy is.


Surely you understand that just throwing an arbitrary number out there isn’t enough info.

Some people could make that last 50 years. Others wouldn’t make it 10.

[SoutheastBeast1]

Lots of variables. 60k per year would last him 26 years. Obviously the first question is how old the guy is.


Surely you understand that just throwing an arbitrary number out there isn’t enough info.

Some people could make that last 50 years. Others wouldn’t make it 10.

It’s literally in the title and there’s not much arbitrary about the scenario. I pretty much broke it down if you read it all.

You took quite frankly the most lazy approach ever to saying it would last him 26 years

It would last him 26 years at a bare minimum if pulled all of the money out of his accounts and held onto the cash itself.


Want to take another crack at responding beyond a lazy 1.6 mil / 60k = 26 years calculation?

[homersexual]

How hard would it be to survive off interest alone from $1.6 million? Even on the conservative side he'd have $50k/yr to spend. I've seen guys pack up and leave for eastern Europe and SEA with 1/4 of that amount and live very comfortably. Fukc working until 60+ and then dying from an illness before you even get to enjoy retirement.

[NoScrubz]

Of course it's enough to retire, you even stated it in the OP: "The scenario even said the guy felt he could live comfortably on 60k a year. But the response was that he would be better off working 10 more years".

Yeah 60k (probably 55k/year at 4% withdraw rate less taxes) is good enough to live on but obviously the more the better. I'm aiming for minimum $3 mil to even consider retiring. In the scenario you provided the guy will get by but I'm sure at that point you'll want to be able to fund hobbies and travel and other chit like that rather than rot every day during your retirement.

[Ikeman83]

I'd rather semi-retire or open an easy turnkey business.

[goonsondeck]

depends where you want to retire

3rd world country very easily

1st world country you buy a property in a decent but cheap area for 600k and the 1mil gets indexed which returns you on average 40-50k roughly

so yes its doable but your quality of life is very simple

someone please correct me I am wrong on the % return

[goonsondeck]

In my opinion though, I don't see the point in retiring at 52. If the person took care of his body/health, 52 is very young. It would be very boring to retire that early.

commuting to work on the train and fighting crowds to sit in a cubicle is not very appealing to most people

if you enjoy what you do sure work till you are dead

[goonsondeck]

Let's say the guy lives to 85.

85-52 = 33 years

He has $1.6 million. If he were to spread that out over 33 years, he would have $48,484/year to spend.

The standard deduction is $12,550 for a single person. Let's keep it simple and assume he only has the standard deduction working in his favor, so his taxable income is $35,394/year. After taxes, he would have $31,147 to spend.

$31,147 is $2596/month. Let's break down his expenses.

House - paid off
Utilities + Internet + Cable - Let's estimate $250
Food/Entertainment - Let's estimate $800
Gas - Let's estimate $100
Car maintenance - Let's estimate $720/year, or $60/month
Travel - Let's say he has one vacation per year that costs $5000. Over a year that's $416/month.
House maintenance, other miscellaneous items - $100/month
Medical expenses - $400/month (guessing here)
Property tax - ?
-------------------------
Per month, he saves $470. With the property tax figure, he probably saves next to nothing.

Now, when you take into inflation, he has even less, unless he is beating inflation in his 401k/brokerage (which he probably is).


So my guess is, yes it's possible to do it. How luxurious his life would be, that I don't know.

you invest the capital you don't use it

live of dividends

[MountainLion84]

Couldn’t he also sell his house and downsize later?

[SillieBazzillie]

If he lives frugally it would be enough money. He'll also pull SS in another decade to supplement his income.

He still won't have enough to travel and do whatever he wants whenever he wants, but he could certainly move to Florida say and get by just fine.

His biggest problem would be boredom and lack of direction. Hopefully you young boyos have chosen careers that make you feel fulfilled and give you some satisfaction in life. That's hard to replace. I don't think man was made to just chill and hobby during the prime of your life (definitely not srs about the prime of your life part...). Now if the dude volunteers, gets a part time gig, gets involved in politics, etc that makes him feel useful to society he'd likely be good to go.

[RobParks2M]

My target was always 2 to 3 million and I could retire regardless of age. That would leave me with about $100k growth/return from investments and I could definitely live off that. In addition I'd probably have a part time job cuz I'd be super bored otherwise.

That said, 1.6 million at 52 with paid off home/vehicle is totally fine ASSUMING he is okay with the possibility of being in a somewhat junky nursing home if he lives to 90+. Realistically his $$ should last him well into his 70s at a minimum and as silly said he starts drawing SS late in his 60s. When money starts dwindling he can sell the house too

[chino3]

Lots of variables. 60k per year would last him 26 years. Obviously the first question is how old the guy is.


Surely you understand that just throwing an arbitrary number out there isn’t enough info.

Some people could make that last 50 years. Others wouldn’t make it 10.

Are you retarded, illiterate, or financially ignorant?

Obviously the first question is how old the guy is.

Obviously the question is answered in the fukking title of the thread

60k per year would last him 26 years.

The 1.6m isn't just in his checking out, and he's depleting it... If he were to put his entire nut into dividend stocks, even at a standard 4% yield grouping, that's $64k/year without touching the actual holdings...

Surely you understand that just throwing an arbitrary number out there isn’t enough info.

Surely you're drunk, and aren't understanding the information and question that is being presented

[jn677]

Yes it is enough. I wouldn't do it though. Semi-retire and put some of that money into a slightly more active investment (relatively turn key business/investment that involves some but not too much time) and you'll yield a higher return on that portion. Do that till for another 10-15 years then reassess.

I definitely would stop a 9-5 if I was in that position at 52 though. My dad died at 51 after retiring due to ill health at 48 so I have a very different perspective, not everyone makes it to 85 so not a fan of 9-5 to 65+.

[Destor]

Prior earnings and standard of living have a big impact. That might be enough for someone who is accustomed to living on $40k/year, but it's probably not gonna be enough for a higher earner who lives and spends like a high earner

[~Hades~]

It’s literally in the title and there’s not much arbitrary about the scenario. I pretty much broke it down if you read it all.

You took quite frankly the most lazy approach ever to saying it would last him 26 years

It would last him 26 years at a bare minimum if pulled all of the money out of his accounts and held onto the cash itself.


Want to take another crack at responding beyond a lazy 1.6 mil / 60k = 26 years calculation?

Yeah i was wasted when I read this thread lol

This is not a good look lmao

[FrankCostanza]

no worries bro you'll have social secur... never mind.


but seriously wait a few months to find out how much inflation we're in for due to the pandemic.

[FrankCostanza]

if you ever need more money you can always downsize the house/ move somewhere cheaper. that said if you have kids don't be a ****. it's going to be harder for them to make a living. leave your house to them.

[guest89]

I can't even tell you how many older people I know are completely retired debt free and living off of a social security check of like $1100-1400 per month. Fugging lol at saying 1.6 million is not enough to retire.


Assuming you went with a low yielding super safe/secure dividend portfolio of 3% returns that would be a minimum of 48k per year for the rest of your life. I've seen some higher yielding dividend portfolios that are around 5%. Which would be 80K per year for the rest of your life without even dipping into that 1.6 mil. Assuming you wanted to sell off 4% per year with no dividend portfolio. That's 64K per year and in theory should still last you for the rest of your life assuming your getting average gains of 7-10% per year.



No matter how you spin it. Its more then enough to retire. Furthermore you could always work some BS part time gig that you enjoy for like 20 hours per week to pick up some extra cash. Pool life-guard. Some kind of personal trainer, athletic coach (Tennis or some crap like that.) Etc.

[DavidL913]

how much would you need to generate 50-60k/year in the markets? just figure out that amount and keep reinvesting. gains are geometric, so they compound exponentially.

After that, live frugally and chill. can live the the rest of your life off that amount.

[Visel]

I've been telling myself lately if I had 2-3 million I'd retire. Reason being, assuming 12% growth, but 3% inflation... so 9% net growth, 2-3 million generates $180k-270k/yr before capital gains taxes. I currently live on less than $60k, like the story from the OP, so I'd hardly have to pull from the growth each year.

[bigcat3655]

depends where you want to retire

3rd world country very easily

1st world country you buy a property in a decent but cheap area for 600k and the 1mil gets indexed which returns you on average 40-50k roughly

so yes its doable but your quality of life is very simple

someone please correct me I am wrong on the % return

This. A buddy of mine moved to western mexico when he retired. He's living very well on his $3000/month pension

[Coachbombay]

With those numbers, he could retire, live off that to a hundred AND double it. Then, he could will it to an infant great grandkid, and she can retire before her first birthday.

[elterrible987]

if he has a pension that doesnt start until sometime in his 60s, have to factor that in. if he is in good health then factor that in.

I think he should do it, only have one life and if he dont like his job and has 1.6 million then why not. if that only has to last until a pension then fuk it.

that is what i am looking at, to retire earlier before a pension kicks in. they have conversion ladders and strategies for this chit, he should talk to a cpa to work out a plan

[Evlve]

If you’re debt free then absolutely as long as you aren’t trying to live in a high COL area

Everyone assumes they are going to live to be 80+ too. He might have 8 years left

[meanstringbean]

Lots of variables. 60k per year would last him 26 years. Obviously the first question is how old the guy is.


Surely you understand that just throwing an arbitrary number out there isn’t enough info.

Some people could make that last 50 years. Others wouldn’t make it 10.

How retards think about retirement

1.6 million would likely last 100 years at 60k a year

[meanstringbean]

60k a year is a pretty sweet life in 98% of the country. Assuming two things:


-House is paid off completely , or can sell and downsize, and that’s not part of the 1.6 mil.

- no need to save going forward



Without mortgage / rent or the need to save money (because you’re already retired) that 60k feels a bit closer to 95k - 100k as a young adult. With that money you can basically still go abroad 2-3 times a year, go out decently regularly, do whatever in terms of hobbies. What can screw you is:


- going out every meal
- buying big ticket items like new cars or boats recklessly
- moving to high COL area. NYC, SF, Seattle, etc eats that fast
- still not shopping around on trips. For example I have spent multiple weeks in Europe, Central America, and Asia for $3,000 TOTAL. I have friends that are idiots and just take first thing available and spend $8k on ONE week at some resort in Mexico


Don’t lose your edge

[pondus_levo]

How hard would it be to survive off interest alone from $1.6 million? Even on the conservative side he'd have $50k/yr to spend. I've seen guys pack up and leave for eastern Europe and SEA with 1/4 of that amount and live very comfortably. Fukc working until 60+ and then dying from an illness before you even get to enjoy retirement.

Someone correct me if I'm wrong, but I believe once you tap into your retirement it's converted to a cash distribution account and no longer makes interest, which is why the longer you keep it in there, the better.

Al the calculators I have used say I need $2 mil at 67.

I do not want to live on a ridiculous budget in my retirement.

[Globally]

Someone correct me if I'm wrong, but I believe once you tap into your retirement it's converted to a cash distribution account and no longer makes interest, which is why the longer you keep it in there, the better.

Al the calculators I have used say I need $2 mil at 67.

I do not want to live on a ridiculous budget in my retirement.

What? No

I’m surprised that multiple people in this thread alone have zero idea how investing works or how the basic equation of retirement net worth works.

[pondus_levo]

What? No

I’m surprised that multiple people in this thread alone have zero idea how investing works or how the basic equation of retirement net worth works.

Well. I read this: "Alternatively, you may choose to let your account continue to accumulate earnings until you are required to begin taking distributions by the terms of your plan."

But I think it just means you can no longer add to a 401k once you retire, but your investments stay the same.

That was my confusion.