<p>Our only debt is less than 10 years on the house (less than $100,000) at 2.5% interest rate. We have almost exclusively only had house debt in our marriage.</p>
<p>If you meet a certain minimum, Vanguard will provide financial advice and move your assets for a 3/10ths of 1% fee, which is much less than the 1% fee. It is worth considering if that interests you. The company tends toward index funds, which is a great way to diversify.</p>
<p>We are considering donor advised funds with Vanguard as a way to contribute from our appreciated assets. Havenāt done the transfer yet but will probably do it this calendar year. As was said, there is a minimum of $5000 in assets you need for your account and at least transfers of $100 apiece. They charge about 1% of your assets as an annual fee. Hereās some more info about Vanguardās fund. <a href=āhttps://www.vanguardcharitable.org/individuals/resource_center/giving_option_daf/ā>https://www.vanguardcharitable.org/individuals/resource_center/giving_option_daf/</a></p>
<p>Several of the other brokerages also offer a similar option.</p>
<p>
We have done the same. (An exception is that we had the auto loan for our first new car - but it was mostly for building up our credit at that time.)</p>
<p>DS is not so lucky because he has student loans to pay back. Sometimes I think our next generation need to work harder than us but may still get a worse deal. (How many of them can have the pension when they retire? How many of them do not have student loan debt when they are young and it may take them longer to pay off their student loans unless their parents are capable of helping them out?)</p>
<p>Himom, 1% is a lot! Wouldnāt it be cheaper to set up a charitable family trust and appoint yourself to be a trustee?</p>
<p>I just donated directly to the arts, no middle man.</p>
<p>Just had a conversation along these lines with my brother.</p>
<p>1st of all, to answer the OPās question, NEED and WANT are very different AND so are age (of retirement) and lifespan. My assumptions are;</p>
<ul>
<li>retire (as in to stop working for money) at age 60. To do that, I NEED 500k (got it) and WANT 1M (got that too).</li>
</ul>
<p>W and I will have to cover the 2 year gap before filing for SS. House is paid for, no debt, no problem.</p>
<p>At 62, 2.5k/mo in SS kicks in and we supplement by withdrawing another 3k/mo. 66k/year!? who canāt live on that, in the reduced senior tax category?? And even with only 500k earning a paltry 4% annually? thereās 30 years of runway before running out of money. Even though our FP always projects out to 90, nobody in my family has made it past 80 (77). With our current āset asideā we can comfortably double that draw down (6k/mo + SS bennies)ā¦ We feel plenty good.</p>
<p>Who canāt live on 66K/yr? Even if your house is paid off, there is still property tax and insurance. And retiring early, most would have health insurance and medical expenses. Uh oh, I think after taxes, Iād spend that much on coffee, wine,groceries, eating out and dogs. And those are essentials. Whatās the purpose of retiring early if you canāt afford to go anywhere or live well?</p>
<p>busdriver that income is approximately the median income for a family of four in the US. Most retirees would live just fine on that. giterdone was able to accumulate a million dollars so I am sure he spends wisely and will do fine on that amount. With no mortgage I could live on less than that. My wife not so much.</p>
<p>If one can live comfortably on that, more power to them. It would be tough for a family, and Iām sure any family of four might tell you so. Just because itās the median, doesnāt make it painless. I suspect many people get further in debt with just every day living expenses. But with retiring early, you may have an additional 10-15k of health care costs, not covered by an employer. That is huge.</p>
<p>youāre forgetting about Obamacare (and Iām a republican). We have 20 years of baby boomers plowing the road through the AARP to ensure medical expenses stay low. And since our nest egg is mostly after tax already? our taxes will be next to nothing.</p>
<p>Everybody has different standards, but if I can spend 6 months in FLA every winter and the balance here in the upper midwest? weāre golden! Half my peers donāt GROSS 70k a year. Get off either coast and your money goes a loooong way.</p>
<p>Retirement income needs will depend a lot on location and medical expenses (especially if retiring prior to Medicare). </p>
<p>āWorking part time?ā - My company has offered part time pre-retiment deals. Iām not ready, but Iāve wondered ā¦ how does that impact SS formulas if last year(s) is lower salary? </p>
<p>Your SS payout is based on the total you paid in and calculated at the time you file. If you run the SS benefit estimator, it takes your last years income and projects that (statically) until your retirement age. If you earn less for the last fist full of years? your payout will be lower, but probably only 30 or 40 bucks a month.</p>
<p>Yes Iām sure if people get off the coasts they can live much cheaper. And if they have everything paid off, and major home items fixed, good cars, etc. I didnāt think that Obamacare would help much though, at that income. And with higher medical costs and no ss for the first two years, youāre dipping into principal pretty highly. Then again, everyone has different factors like longevity, possible inheritance, and paid off real estate assets they could sell.</p>
<p>I really need a good retirement planning book to read. I know people recommended some, but I forgot what they were.</p>
<p>To add, I look at what my parents spend just on dental, and itās huge. They are ridiculously frugal, but they canāt avoid those costs.</p>
<p>youāre confusing principle draw downās with income. Itās not. my income will be zero (other than investment income) in years 60-62. Thatāll be practically poverty level. And I wonāt need much principle anyway. Property taxes and insurance donāt exceed 8k/yr. Throw in health insurance, utilities, groceries and entertainment? If we spend another 30k? Iād be shocked.</p>
<p>And like I said, we have plenty of wiggle room. You collapse the scenarios to something more reasonable (80-85 life expectancy)? and tweak the ROI to something more realistic (5-5.5%) and suddenly, if weāre not drawing down 8k+ a month (+SS bennies)? we aint spending enough!</p>
<p>
The formula is pretty complex so it is hard to answer.</p>
<p>I used the benefits calculator on the SS website, and determined that if I retire early and make nothing, my benefit drops about 1.1 to 1.5% per year of not working (based on the age 62 benefit), depending on when I stop. Iāve also been at the income maximum for a lot of years now.</p>
<p>So that is worst case. If you are making something, the decrease would be less. Herās the calculator page, you can try your own numbers:</p>
<p><a href=āhttp://www.ssa.gov/retire2/estimator.htmā>http://www.ssa.gov/retire2/estimator.htm</a></p>
<p>Your top 35 indexed working years are used. Some people will have some years with 0 income.</p>
<p><a href=āSocial Security Retirement Benefit Calculationā>http://www.ssa.gov/oact/progdata/retirebenefit1.html</a></p>
<p>Hear you busdriver
Years ago my neighbor (who worked in the financial end of a company in the same industry as my husband does, with wild swings in pay and prospects) calculated that they would want 3million net worth to retire early. I laughed. Now that we are looking at 60 through the bottom half of our bifocals, that doesnāt seem so outrageous. Health care until 65 would cost us $1200/month through the ACA, plus probably another 5 grand in uncovered costs (one of us has expensive condition). We would retire early to travel and have fun, not to sit at home. No pension, would wait on SS until full retirement age. Iām thinking we need more than we used to think that we neededā¦</p>
<p>haha. $3 million will earn you 150k/year without touching principle? You could pay yourself 200k a year for 30 years! Youād be equal to a 1%'er in RETIREMENT! really? thatās the baseline for ātraveling and fun?ā Wow. Champagne wishes and caviar dreams, I guess.</p>
<p>My MIL lives quite nicely on her 2k/mo General Mills pension + SS and spends every winter in TX. Weird.</p>
<p>It is interesting to read what various people need or want .</p>
<p>If somebody receives 25,000 from SS and spends 65,000 a year plus inflation for 30 yearsā¦</p>
<p>That person does not need anything near $3 million in investable assets. </p>
<p>However, if somebody is spending 150,000 in todayās money and wants to spend the equivalent of that going forward for 30 years, that person will in all likelihood need more than 3 million.</p>
<p>I am not counting pensions which lessen the need for other assets.</p>