Retirement by 40

Copart / Product CbXK00
Jun 4 48 Comments

How much savings should one have to retire by 40?

comments

Want to comment? LOG IN or SIGN UP
TOP 48 Comments
  • Facebook public2
    The amount you want yearly in retirement times 26.
    Jun 4 17
    • Facebook public2
      Uhh if cash pays 2.25 I'd hope you can beat 2 rofl.
      Jun 6
    • Intel pFVD84
      10 yr Treasury is 2.12%, and even the US has risk of not paying its debts with $20T in debt.
      Jun 6
    • Facebook public2
      Simple savings is 2.25%. Regardless if you cant earn 7% a year over long periods of time you will never retire anyway.
      Jun 6
    • SAP / Mgmt
      ImposterX

      SAP Mgmt

      PRE
      SAP
      ImposterXmore
      Facebook, what’s your personal strategy? Buy and hold? All in VTSAX ;)?
      Jun 6
    • Google / Eng relprime
      The issue is that there's a high probability of a recession at some point during your retirement and you need to be able to make it through that. You might also have unexpected expenses at some point. (Old people tend to have more medical problems).

      If you suddenly lose 30% but you're drawing at close to the same rate or if you withdraw a huge amount one year, then you'll suddenly be eatting up more than 4% and it won't get a chance to rebound.
      Jun 6
    • Intel pFVD84
      ^ Bingo. Given people retire at 65 and die at 85, they are likely to encounter 2-3 recessions in their retirements.

      7% equity returns were based on when Treasuries were at their 5% average over the last 120 years.
      Jun 7
    • SAP / Mgmt
      ImposterX

      SAP Mgmt

      PRE
      SAP
      ImposterXmore
      I personally calculate with 5% prior to inflation.

      Might be too low, but I don’t have many good expectations for the next decade or two. I think we’re going to hit a massive recession soon and there’s no way to go. Europe is in a bad shape, and don’t get me started BRIC.

      So whatever is invested in the market right now might tank 50% and will recover more slowly than usually.

      Am I very off?
      Jun 7
    • Facebook public2
      That's fine to make your own predictions but the data doesnt support it. Past returns do not gaurantee future returns of course but are a good place to start. Personally my rentals pay my living expenses so haven't touched much stock at all and rents tend to rise during recessions. Downturns are normal and fine but if you want to decrease your risk that's fine.
      Jun 7
    • SAP / Mgmt
      ImposterX

      SAP Mgmt

      PRE
      SAP
      ImposterXmore
      Good advise!
      Jun 7
    • Intel pFVD84
      The data shows the 4% rule lasts 30 years with a 60/40 equity/bond ratio. And that’s not from a starting point with the most expensive asset valuation in history.
      Jun 7
  • Microsoft lol_kek
    Depends on when you die.
    Jun 4 8
    • Oracle pzd
      So true. These days, 40 is not even middle age. It will be tough to support yourself for 40 years after retirement with a 20 year career.
      Jun 4
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      The 4% rule stated above literally covers this scenario.

      Math it out
      Jun 4
    • Google / Eng relprime
      No, it doesn't. The 4% rule is based on the likelihood of running out of money within 30 years.
      Jun 4
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      No, the 4% rules proposes that your money lasts for *at least* 30 years. Big difference.

      Keep in mind that the market traditionally runs at 6% YoY (6.7% in the last 45 years) then 4% is a safe draw.

      Go online and find any 15 year period since your birth year that the market returns were under 4%.

      I’ll wait.
      Jun 5
    • Google / Eng relprime
      Right, 30 years. Presumably someone who retires at 40 will have a longer retirement than someone who retires at 65. Do you plan to be dead by 70?
      Jun 5
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      At least 30 years when the return rate is 4%

      Is not the same as *at 30* years.

      Even at 0% return your principal burndown takes 25 years. 19 years with inflation.

      For many people, social security even, that and all other defined benefit plans are not a part of the 4% calc.
      Jun 5
    • Google / Eng relprime
      "At least 30 years" is still not equal to "At least 50 years". Yes, I understand the difference between cdfs and pdfs. Thanks.

      The point is, retirement age and life expectancy do matter.
      Jun 5
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      I’m on the 1 yr mark.

      I’ll let you know in 29 years if I ran out.

      Cheers
      Jun 5
  • Verizon heamer
    3-4 Million may b
    Jun 4 2
    • Capital One
      thickmama1

      Capital One

      BIO
      Woman struggling to pass interviews
      thickmama1more
      For a family? Yes. For SINK or DINK, about 1.7-2.5M.
      Jun 4
    • Capital One
      thickmama1

      Capital One

      BIO
      Woman struggling to pass interviews
      thickmama1more
      You’re right but this audience isn’t typical consumer.
      Jun 4
  • New qa771
    What is 4% rule?!
    Jun 4 9
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      Jun 4
    • New qa771
      You have a free time. Hope you are enjoying it though
      Jun 4
    • Intel pFVD84
      4% rule is primarily for people who retire at 65 and expect to die before age 90.
      Jun 4
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      That’s (uninformed) opinion masquerading as fact.

      US male life expectancy is 76.

      Good luck making anywhere close to that with your sedentary lifestyle and gadawful diet
      Jun 4
    • Intel pFVD84
      If you exclude the bottom 80% of people whose retirement savings are under $250K, male life expectancy is 85 and female is 90.

      In your mind, the 4% rule works in perpetuity? Let me know when you find any research that indicates that’s true.
      Jun 4
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      😆😂🤣😆🤣 In Russia its 185
      Jun 4
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      Uggh, I dislike people who edit threaded posts to hide their “factual mis-statements”.

      Man up, note your factual inaccuracies and learn up.

      I’m done with this
      Jun 4
    • Intel pFVD84
      Factual misstatements like the relevant population to this conversation dies at age 76?
      Jun 4
    • Google / Eng relprime
      Life expectancy probably drops rapidly when retirement money runs out, so maybe this is a self-fulfilling prophesy.

      Also, life expectancy for someone who reaches retirement age is not the same as the overall life expectancy. There's also a pretty big difference based on wealth.
      Jun 4
  • Oracle alwzangry
    It also depends on the year in which you turn 40.
    Jun 4 5
    • Cruise Automation dkMsa890
      4% rule
      Jun 4
    • Oracle alwzangry
      4% rule could become 8% rule in a few short years.
      Jun 4
    • Oracle alwzangry
      So, past performance? There can never be anything unprecedented? In this decade, we saw signs that people who were to retire last decade had to postpone their plans. You could take a chance. I won't.
      Jun 4
    • Oracle alwzangry
      How many of those 100 years had negative interest rates? What was the inflation like? Can you project if 4% would work during your retirement? In fiat currency? That's what I am talking about. I'm not setting myself up with only a 4% target to run out of money at 80.
      Jun 4
    • Google / Eng relprime
      There are lots of assumptions baked into that 4% rule. Things like past performance predicting future performance, rate of inflation, years til death. You are suggesting it's a rate where you're living off passive income. But, it's a rate where you have a high probability of your original nest egg not being completely gone within 30 years. You might want to read up on it a little more before you hit the beach.
      Jun 4
  • Never looked at it in terms of savings, passive residual income high enough to replace your current means of income 👍🏼
    Jun 6 0
  • Intel pFVD84
    20x your income.
    Jun 4 0

Join verified employees in our anonymous social network! Download the app!

close