Been retired for 20+ years. Paid cash for new home when retired at age 65.
Foolishly, did not invest remaining cash so have lost 80% or more. Social Security is our only real asset, but it gets us through each month.
YOU MUST INVEST YOUR SAVINGS, BUT WISELY.

*** Old thread necromancy, this thing was dead dead dead.****

A ton of good advice was given, and listened to. My wife retired on Dec 31, I retire on May 1. Our accounts position has improved significantly, but our goals have not changed. We plan to retire on a little bit less than our pre retirement take home. That can be sustained for 30+ years. Not that I expect to live to 96, we have a very comfortable life. It can continue.

Figured I'd follow up on this one. This was a very informative thread, and I hope to see more good advice. This place is a treasure trove of information.

This old thread brings back memories.

I was in the process of crunching a spreadsheet AND writing a post for the case that the "4% rule" isn't a good idea due to actual inflation (as opposed to the fake number posted by the gov't), but 3.33% to 3.5% is a much better idea. I never finished the spreadsheet or post because every broadcast in the US was interrupted to announce that DJT had been shot in the head in Butler, PA.

Thanks, Scratchy.

I'm going to jump in here because back then in the dark, dark Biden years a question was asked about Roth IRA's and Roth IRA conversions. Back in those evil days they were talking about ending them, but thank God they didn't and thank God the US of A is enjoying a new Golden Age of Trump.

What I've been advised to do re Roth IRA conversions is this: near the end of the year I will have a good estimate of my income, RMD's, and tax for the year. If there is a large gap between my taxable income and the amount I would earn to put me in the next higher tax bracket, then I make an extra withdrawal from my IRA's to get taxable income close to the floor for the next tax bracket up.

In other words, I take out as much as I can without getting me into the next tax bracket. I convert it to a Roth IRA account. If I can do this over a number of years, my RMD's go down, and investments grow tax-free in the Roth IRA.

I have been looking at that as well. It looks like a good plan.

Whatever I have at 63 is what I’m retiring with.

quote:

Originally posted by tatortodd:
This old thread brings back memories.

I was in the process of crunching a spreadsheet AND writing a post for the case that the "4% rule" isn't a good idea due to actual inflation (as opposed to the fake number posted by the gov't), but 3.33% to 3.5% is a much better idea. I never finished the spreadsheet or post because every broadcast in the US was interrupted to announce that DJT had been shot in the head in Butler, PA.

Only because you brought up spreadsheets, I’ve been an Excel person most of my working life and I’m great at crafting spreadsheets. Sometime last year I completed the opus of my Excel experiences.

I download from Quicken and the Excel file integrates and connects my portfolio accounts, bank account balances, monthly budgets and actual expenses, projected income for the year, and it gives me my U.S. and state income tax liabilities year to date or full year. For my portfolio which is spread between several accounts between my wife and I, I can look at all the investments and see them by what stock market sector I’m invested in by how much and I can peg each security - account to which time period I’m expected to use them. So, I can see how much money I need for Year 0, 1, 2, 3 through 10, and 11 through 20.

As part of the tax planning, it gives me how much I can convert to the top of my current threshold or, currently, the limit of $150,000 to maximize the additional senior benefits.

When I need to withdraw money to move it to year 2 as the new year starts, it works with Grok to tell me what sectors I need to sell or buy and it rebalances within each time horizon and between both horizons (mid and long term.

Because I can monitor the amounts among the different time horizons, I can manage how conservative or aggressive each time horizon is. Like year 0, the current year is all 3 month treasuries beyond my immediate need for the current month, years 1 and 2 are corporate ladder bonds, 3 through 10 is a conservative mix designed to minimize any 20% or more correction in the next 3-6 months, and the 11-20 is more growth oriented.

Right now, it looks like I have enough. It can go either way but, at least, I won’t be surprised and I can tighten the belt as needed.

quote:

In other words, I take out as much as I can without getting me into the next tax bracket. I convert it to a Roth IRA account. If I can do this over a number of years, my RMD's go down, and investments grow tax-free in the Roth IRA.

I do the same thing with capital gains in non-tax advantaged accounts: sell enough high gain stocks to take advantage of the 0% rate and buy the stock back.

I have been considering this deeply since this thread was first posted. I am retiring at 59 1/2 with whatever i have. I would rather rewrite with less and have my health than wait until I have a lot of money and either die or not have the health to do what i want.

quote:

Originally posted by mrvmax:
I have been considering this deeply since this thread was first posted. I am retiring at 59 1/2 with whatever i have. I would rather rewrite with less and have my health than wait until I have a lot of money and either die or not have the health to do what i want.

Yes, a thousand times yes. I think the prevailing view overestimates how much is needed.

I remember a tv segment showing an aborigine waking up from his hammock. Strolling down a nearby creek where he drank some water and ate some snails. He was smiling, satisfied, and content. He had no 401k but he had the world’s riches under his feet for the taking. It’s all a matter of mindset.

quote:

Originally posted by tatortodd:
This old thread brings back memories.

I was in the process of crunching a spreadsheet AND writing a post for the case that the "4% rule" isn't a good idea due to actual inflation (as opposed to the fake number posted by the gov't), but 3.33% to 3.5% is a much better idea.

The 4% rule is a handy rule-of-thumb for safe withdrawals without ever depleting the principal.
Like most "rules-of-thumb" it has limited usefulness.
Withdrawal rates are going to vary greatly, person to person, based on circumstances.
Also, it doesn't take performance into account.
If the majority of assets are in equities, and managed fairly well, a long term return of 10% is reasonable.
You can adjust withdrawal rates annually to take into account market results from the prior year.
Many people will increase spending on trips and such in early retirement but then rarely spend more than the RMD after a few years of that.
Besides, you don't owe the principal to your heirs. It's yours and you can spend it all if you want!

I don't think I will ever retire, I'm self employed have been all my life, only had 1 job punching a time clock and hated every minute of it.
I'm at the age I should retire and get asked often (65) I took the month of december off and wife and I visited my daughter a couple of states over I had a great time did some shooting etc, but after a couple of weeks lacked a sense of purpose and wanted to build something, I never did and did get bored quickly.

I think if I did punch a clock all my life I could see how you would want out of that mess, but for know I'm just going to keep doing what I do and see how it goes. I do worry that I don't have enough to let me buy whatever i want when I want it, never been on a fixed income and that in itself keeps me from going there.

I could scrape by on 10 million. Then the math would be easier.

quote:

Only because you brought up spreadsheets, I’ve been an Excel person most of my working life and I’m great at crafting spreadsheets. Sometime last year I completed the opus of my Excel experiences.

pedropcola,

That sounds like what I do but manually: I use Banktivity since I'm on a Mac. Download category report for the year after going through and making sure expenses are properly categorized for tax-related items (we have had three rental homes so that's the complicated part). Import into Excel, as one tab for my annual tax estimate spreadsheet.
I link category sums for donations, rental home expenses, taxes paid, etc. to my tax estimate spreadsheet template. I make sure I have this year's tax rate schedule for fed and state.

Of course I keep pdfs for 1099's, 1098's, and annual statements from property managers.

At the end I send it all to my CPA because it's complicated enough (depreciation, etc.) that I feel more secure using an accountant.

The trouble will come if/when I can't do this anymore, then will be hard for my successor trustee, who will be my daughter. But she's very smart, tech savvy, so should do fine. I don't burden her with it now because she has little kids to raise.

quote:

Originally posted by sjtill:

quote:

Only because you brought up spreadsheets, I’ve been an Excel person most of my working life and I’m great at crafting spreadsheets. Sometime last year I completed the opus of my Excel experiences.

That sounds like what I do but manually: I use Banktivity since I'm on a Mac. Download category report for the year after going through and making sure expenses are properly categorized for tax-related items (we have had three rental homes so that's the complicated part). Import into Excel, as one tab for my annual tax estimate spreadsheet.
I link category sums for donations, rental home expenses, taxes paid, etc. to my tax estimate spreadsheet template. I make sure I have this year's tax rate schedule for fed and state.

Of course I keep pdfs for 1099's, 1098's, and annual statements from property managers.

At the end I send it all to my CPA because it's complicated enough (depreciation, etc.) that I feel more secure using an accountant.

The trouble will come if/when I can't do this anymore, then will be hard for my successor trustee, who will be my daughter. But she's very smart, tech savvy, so should do fine. I don't burden her with it now because she has little kids to raise.

If I had 3 rental homes, I would simply organize my documents into the categories you mentioned, send it off to my CPA and deduct his fees as a business expense. The rental properties are a pretty big complication with depreciation, expenses, etc.

Doc, I’m not the spreadsheet guy. I’m the “I think I could scrape by on 10 large guy”. No spreadsheets no math.

quote:

Originally posted by pedropcola:
I could scrape by on 10 million. Then the math would be easier.

If you had 10M you'd wish you had 11!

I'd be thinking of all the things I could do if I just had one more million!

quote:

Originally posted by Fly-Sig:

quote:

Originally posted by pedropcola:
I could scrape by on 10 million. Then the math would be easier.

If you had 10M you'd wish you had 11!

It's funny but there's some truth here.

To the thread title: How much is enough?
Most people have a number in mind, usually unspoken. The answer in their head is usually about twice what they have. As they approach the inevitable, and they haven't reached the imaginary goal, the goal becomes more realistic and in line with what they have.

I had a dentist friend/client who was quite wealthy who asked me this exact question: How much is enough? I told him that he was already there.

I've had a number of friends and family retire over the past few years. Each and every one of them has commented that it is remarkable how much money you DON"T need. Granted, none of them are globetrotters, or buying expensive toys or vacation homes. They are just your average Joes who are debt free.