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“Forget You” money, how much and at what age?

  1. #26
    Lifer SteveM's Avatar
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    Re: “Forget You” money, how much and at what age?


    Quote Originally Posted by MUZ720 View Post
    well I am not that clever.. it works either way lol .
    ...OK, now we have a Sollozzo quote, you’re on fire!

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  2. #27
    Soul Rider Paul_E_D's Avatar
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    Re: “Forget You” money, how much and at what age?

    I think some of you guys are shooting pretty high with these numbers. 4M in the "bank" would be FU money at pretty much any age. You could easily have no mortgage and enough dividends/earnings to keep from depleting the principal too quickly. 5% is a pretty safe estimate for income bearing investments. That means you could pull up to 200k annually without eating into the principal. I would think that you could live a pretty carefree life in that position. I guess it depends on lifestyle and whether you intend to end with 0, of with an estate to pass on.

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  3. #28
    Lifer SteveM's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by Paul_E_D View Post
    I think some of you guys are shooting pretty high with these numbers. 4M in the "bank" would be FU money at pretty much any age. You could easily have no mortgage and enough dividends/earnings to keep from depleting the principal too quickly. 5% is a pretty safe estimate for income bearing investments. That means you could pull up to 200k annually without eating into the principal. I would think that you could live a pretty carefree life in that position. I guess it depends on lifestyle and whether you intend to end with 0, of with an estate to pass on.
    I mentioned earlier that the choice to preserve or spend down principle makes a huge difference. Also, how much of the draw is regular taxable income, capital gains or tax free also makes a big difference.

    My personal assumptions are based on preservation of capital and mostly regular taxable income. It’s unlikely there’ll be no work until much later, both my wife and I have marketable, in demand skills that make for good consulting roles onsite or remotely.

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  4. #29
    Super Moderator TheIglu's Avatar
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    Re: “Forget You” money, how much and at what age?

    I’m don’t foresee myself getting anywhere near $3m, nevermind $4m.

    $2m could be the target. Not even halfway there in total assets at 40, so I have a ways to go. At least I’m debt free and live relatively cheap.

    Retiring and moving somewhere warmer could be the ticket, especially if that place is cheaper.


    I really should talk to a pro at some point.

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  5. #30
    Burns retinas nhbubba's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by Paul_E_D View Post
    I think some of you guys are shooting pretty high with these numbers. 4M in the "bank" would be FU money at pretty much any age. You could easily have no mortgage and enough dividends/earnings to keep from depleting the principal too quickly. 5% is a pretty safe estimate for income bearing investments. That means you could pull up to 200k annually without eating into the principal. I would think that you could live a pretty carefree life in that position. I guess it depends on lifestyle and whether you intend to end with 0, of with an estate to pass on.
    I think those numbers are excessively risky given the increases in costs and unknowns we are facing. This is the first time I've heard a 5% draw as "safe". Most consider 4% the golden number and for those with very long draw-down horizons 3.5 or even 3% are more appropriate. Run the simulations and 5% risks putting you under water well before death in far too many scenarios in my opinion. YMMV, of course.

    I suppose the "end up with 0" could be a huge driver here. Are we talking about no kids? Or telling the kids "you are on your own" as soon as they hit 18? Or looking to help set them up, maybe help with a home downpayment or higher ed? Is that considered passing some on? If it is, I think a lot of us are hoping to achieve that. At least looking to achieve that before we walk away from a lucrative day-job.

    Of course there are a zillion variables here. Pension. Military or union health care guarantees. DINK status. Family wealth/property to fall back on.

    For someone looking to stay in a metro area, support a couple kids and maybe have some fun on the side, $4M can go quick.

    That said, I agree that $4M is easy walk away money for me. Unfortunately I used to think that way about $1M too. Now I don't.

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  6. #31
    Your Father csmutty's Avatar
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    Re: “Forget You” money, how much and at what age?

    Dude he was saying 5% return and not touching the principal lol.

    I'm thinking 2m would be safe using Paul's logic. That means I would have $100k as income from the investment annually.

    I could live off that easily. Especially with no mortgage.

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  7. #32
    Angry Gumball RandyO's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by Garandman View Post
    The government requires you to go on Medicare at age 65.

    Long term care is the killer. Some elderly parents gift their assets to children while they are healthy. There is a “Look back” of five years.

    I’m trying to figure out how to die gracefully before I get stuck in a long term care facility. If I keep riding the GSX-R750 that is probably handled....
    I personally think it is wise, to have an HSA qualified health insurance plan until yer 65, build up as much in an HSA as you can, will save you from needing Part G to pay Medicare deductibles & copays or if you end up with prescriptions that are in the Part D donut hole

    my dad moved into a long term care facility, for 3 years, then moved back home. His GF required care, he was driving to visit her every day, a double room became available, so he moved in after analyzing the cost of staying home and paying for help, his GF died, he sold his house to my brother and kept life estate. Now he's 95, can't drive anymore, (would need a wheelchair capable driving) but other than knees that don't work, he's sharp, and has good hearing, and excellent vision, but, he's pretty much home bound, needs a ride to appointments. He has managed to travel the world, in his first 25 years of retirement, when still healthy, and live off his SS, and dividends, and still stack $$$ away.

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  8. #33
    Lifer
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by TheIglu View Post
    I really should talk to a pro at some point.
    A lot of 401(K) administrators offer free basic retirement guidance, and many advisor companies will give you a free initial consultation (obviously hoping to hook you into letting them manage your assets). TIAA-CREF did a free and surprisingly comprehensive review of our situation (it runs my wife's 403(b).

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  9. #34
    Lifer gixxer72's Avatar
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    Re: “Forget You” money, how much and at what age?

    Investing 23k per year for 20 years will yield 1M. (Rough numbers at 7% return). If you want 4M plan on investing nearly 6 figures every year, most of which will be after tax money.

    I think 20 years is the right term, most people don’t hit their “power earning” years until a mid point in their career. Even maxing out a 401k contribution is a real struggle for younger people. Factor in a family and lifestyle choices, etc and the average Joe better pray for a big inheritance. Or Powerball.

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  10. #35
    Soul Rider Paul_E_D's Avatar
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    Re: “Forget You” money, how much and at what age?

    Correct, I don't expect many people to achieve fuck you money. That makes you rich, not average in any way. I do not expect/intend to get there. That's kinda like banking on making it to pro level in a sport. exception, not the rule.

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  11. #36
    Lifer gixxer72's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by Paul_E_D View Post
    Correct, I don't expect many people to achieve fuck you money. That makes you rich, not average in any way. I do not expect/intend to get there. That's kinda like banking on making it to pro level in a sport. exception, not the rule.
    Not sure it’s quite that rare, nearly 12 million US households have a net worth of 1M or more. Still definitely the exception though, as you stated.

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  12. #37
    Soul Rider Paul_E_D's Avatar
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    Re: “Forget You” money, how much and at what age?

    net worth 1M is not the measure we are talking about. That number is skewed by inflated housing prices. 4M in bank or liquid assets was the number. I think 2M in the bank would be enough to never work again. But I'm 50 and have no kids.

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    Last edited by Paul_E_D; 11-29-20 at 02:08 PM.
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  13. #38

    Re: “Forget You” money, how much and at what age?

    Don't forget the age of people talking here matters.

    For me $2 mil in 30years has the spending power of $1 mil now with average inflation etc for somebody like me. Meanwhile $2 mil for somebody retiring soon is todays $2 mil spending power.

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  14. #39
    Super Moderator TheIglu's Avatar
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    Re: “Forget You” money, how much and at what age?

    $1m net worth is not a lot at this point. Mainly due to the bonkers housing market.

    Factor in your house(minus what you owe on it), retirement, savings, and appropriate realistic value of large possessions and that number sneaks up on people pretty quick.

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  15. #40

    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by TheIglu View Post
    $1m net worth is not a lot at this point. Mainly due to the bonkers housing market.

    Factor in your house(minus what you owe on it), retirement, savings, and appropriate realistic value of large possessions and that number sneaks up on people pretty quick.
    Are we all talking Net worth or we talking 401k savings?

    Networth is an odd thing to shoot for in this context for reasons stated above (housing). Some networth calculations don't even use your primary housing in the calculation because we all know you always need a place to live so it's not technically liquid, at least not entirely.

    At this point in life, having a pension is one of the biggest assets you can possibly have.

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  16. #41
    Super Moderator TheIglu's Avatar
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    Re: “Forget You” money, how much and at what age?

    Net worth was being referenced due to the 12m US households with net worth of $1m or more stat.

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  17. #42
    Lifer oVTo's Avatar
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    Re: “Forget You” money, how much and at what age?

    Just curious, is there anyone reading this thread who works in the private sector for a company that includes pensions in their benefit package?

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  18. #43
    Lifer Chippertheripper's Avatar
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    Re: “Forget You” money, how much and at what age?

    The whole pension thing is a curveball. How does one place a worth on it?
    What it should pay out X how long you expect to be alive to draw off it?

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  19. #44
    Your Father csmutty's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by oVTo View Post
    Just curious, is there anyone reading this thread who works in the private sector for a company that includes pensions in their benefit package?
    Yup. Company I work at has an ESOP.

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  20. #45
    Lifer SteveM's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by csmutty View Post
    Yup. Company I work at has an ESOP.
    So at retirement age you receive payments for the remainder of your life?

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  21. #46
    Your Father csmutty's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by SteveM View Post
    So at retirement age you receive payments for the remainder of your life?
    Copied and pasted from our ESOP portal.

    YOU MAY RECEIVE PAYMENTS WHILE YOU ARE STILL EMPLOYED, IF THE FOLLOWING EVENTS OCCUR:

    Age 55 and 10 Years of Participation in the ESOP (Statutory Diversification). If you reach age 55 AND complete 10 Years of Participation in the ESOP, you will be eligible to diversify a portion of the Company stock in your ESOP account. That means a portion of your stock account can be invested in something other than Company stock. You may diversify up to 25% of your ESOP stock account in your first diversification year. Additional shares may be eligible for diversification in succeeding years. (The Plan provides for a 6 year diversification period.) You will be notified when you are eligible to diversify your ESOP account.

    YOU WILL RECEIVE PAYMENTS AFTER YOU TERMINATE EMPLOYMENT IF THE FOLLOWING EVENTS OCCUR:

    Separation of Service: If you leave the Company for any reason including Death, Disability or Retirement, the Plan will allow you to withdrawal your entire vested account balances in a single lump sum the end of the first quarter following the quarter you separate service. If your vested stock account balance is greater than $10,000, your stock account portion will be paid in installments over a period of up to 5 years.
    Please note that distributions are not processed in the first quarter as the Plan is being updated for the annual stock appraisal. Any eligible distributions during that time period will have to be processed the following quarter.
    I honestly haven't looked into this much since I can't contribute to it and they contribute a set percentage of your salary to it every year.

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    Last edited by csmutty; 11-29-20 at 06:17 PM.
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  22. #47
    BMW track whore e30addict's Avatar
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    Re: “Forget You” money, how much and at what age?

    I don't know why people hate net worth and housing. That can be a swing of 500,000 to a mil pretty easy. Market might fluctuate some but its still a good chunk of change for the big picture. Sell a nice paid for property in the northeast and you can get something nicer with more land for half the price elsewhere.

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  23. #48
    Lifer SteveM's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by csmutty View Post
    Copied and pasted from our ESOP portal.
    You retire or separate with a balance, like a 401(k), and can draw payments from it until it runs out. Unless there’s something I’m not seeing this is not a pension with guaranteed payments until death.

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  24. #49
    Your Father csmutty's Avatar
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    Re: “Forget You” money, how much and at what age?

    Quote Originally Posted by SteveM View Post
    You retire or separate with a balance, like a 401(k), and can draw payments from it until it runs out. Unless there’s something I’m not seeing this is not a pension with guaranteed payments until death.
    It's called a pension plan. Dunno.

    I'd rather have this than some annuity thing.

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  25. #50
    Burns retinas nhbubba's Avatar
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    Re: “Forget You” money, how much and at what age?

    https://en.m.wikipedia.org/wiki/Empl...Ownership_Plan

    The term we are talking about is a defined benefit plan.

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