[quote=AN][quote=cvmom]AN, where did you get your goal number of $5M savings for retirement? I am assuming that is for 2 people? Just comparing “numbers” (ER, I also liked that book).[/quote]
I when I retire, most of my money will be in a very safe investment (CDs laddering) and I’m only expecting to get ~3%. So, 3% from $5M will give me an income of $150k/year. That will be enough to cover all of my expenses, including medical insurance indefinitely. I want to leave the $5M to my heirs. My definition of financial independence is when my money will work for me instead of me working for my money. I also will be traveling a lot more than I do today, so, although I won’t have mortgage to deal with, my traveling and eating out cost will sky rocket. So, I want to make sure I have enough for that. Also keep in mind that I want to retire by the time I’m 55, so there will be many years where I won’t qualify for medicare and social security (although I’m not counting on either one of those to be there for me when I retire).[/quote]
AN – will you adopt me? $5M is a lot to leave your kids.
My kids will get a paid for college education… and our paid for house. We are *NOT* budgeting in an inheritance. But we also aren’t going to be a burden to them. They will need careers, same as we did.
We’re planning on using our nest egg to live. If the economy tanks for longer/deeper than historically has happened, then they might not get our house – since that’s our plan B. (Sell the house and live off the proceeds.) If we die younger than age 100 – they may get some inheritance…
Hopefully a 3% withdrawal rate should last me 40-50 years. Compounding and all that.
I’m also not of the mindset that you go 100% cash/CDs… not with longevity the way it is. You need to come up with an asset allocation that includes equities/bonds/cash/real estate/precious metals/whatever… pick your percentages based on your risk tolerance. but putting 100% in one asset allocation (cash) is a sure way to see a serious decline in your nest egg.
