Retirement threshold

[Ramathorn]

How much money would it take for you to walk away from your job or stop working altogether?


When I was a kid, I thought wow a million bucks. But this day and age, if a forty year old won a million bucks, he would likely have to keep his job, correct?

If I won a million dollars, I'd likely quit, relax for 3 months and go into business for myself. But, it's certainly not rest on your laurels time.





Give an age range and the situation you're in, financially.

 

[Bob in Houston]

Several years ago, I told someone that if I won a million bucks in the lottery, it wouldn't change my life much. If anything, that sum would mean even less now. I wouldn't turn it down, but I'd still have to work, eventually.

 

[Ramathorn]

How about 2 million?

 

[BA93]

With a $1 million win, I would attempt to lower my monthly expenses as much as possible. Even up to placing some money in a savings account with the interest going to bills.

Then start using my salary to fund investments.

Even with a $5 million , I would want to work. It wouldn't be a job I dislike.

 

[Gardner Barnes]

Tax free fund yields run about 4-5%. So take goal salary after taxes and divide it by .03 on the conservative side and .05 on the aggressive side. If you can live on that amount (remember that the yield is tax free) then you have your walk number.

Personally, I would probably walk for 120k or about 10K/month. That is 2.4 million on the aggressive side which would allow me to live solely off the principal.

For an annuity style lottery win that would be about $8 million before taxes.

That being said, know that muni yields have really started to suck diddley-uk and your income is not fixed.

Of course, at that liquidity level, I would wager you can increase the yield greatly though more intelligent investing.

For ref, here is a good solid Fidelity tax free bond fund:The Link

 

[jimmyjazz]

Let me offer up the idea that it is one thing to imagine what one might do with X million dollars, and another thing entirely when one actually has X million dollars. Greed is an amazing thing.

 

[LonghorninAustin]

In reply to:

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[EPThorn]

Peter Gibbons: What would you do if you had a million dollars?
Lawrence: I'll tell you what I'd do, man, two chicks at the same time, man

 

[hornpharmd]

if we are talking about retirement then I have heard 2-3 million now if you are close to retirement age. of course if you already own your home and are not in debt then you probably need less.

There are many people who are very young that have realized that they can live very cheaply by living a simple life. If you have a need for a very high quality of living then you are going to have a higher cost of living and thus will need more.

 

[RayDog]

For me it's $250,000, but then I don't plan to retire in the US, and I'll have a small state retirement on top of that. (I'm only waiting on the state retirement at this point).

For me the biggest problem with retiring in the US is property taxes. I could easily see my property taxes being greater than my social security check in 20 years (assuming social security is still available). Otherwise property is a great investment since the principle and income adjust to inflation. It just doesn't work as well at US level tax rates.

I will always work for myself in some fashion just to keep busy.

 

[UofTOrange]

Anything over 5MM and I'd quit working my current job and I love my current job. But with that amount of money I could go into business for myself very easily and that would be too hard to not do.

 

[Ramathorn]

I'll have money for my kids college, car, and some retirement. But if possible, I've always thought it's best to take advantage of your wealth when young. I mean, you can only save so much.

 

[HOOKMD]

5 million, so that I could maintain my current lifestyle off of conservative interest gains.

 

[NBMisha]

I'm sort of with the $5 million guys. Lets assume that's after tax. 4% of that or $200 grand a year would work pretty well.

Maybe it should be $10 million, since we're dreaming.

 

[Ramathorn]

I'm about 40 years away. How much will gas prices be then, lol.

 

[DeadHorse]

Ditto what Gardner said. Historically, the tax free muni market has been in the 3.5-5% range. $1 million at 4% is $40,000/year tax free. You can easily live on that if you want to.

I'd do that plus get a job that I actually liked but likely paid a lot less than what I'm making now. Those two together would generally simplify my life.