Do we need $20m to retire in Bay Area at 50?

Cisco
YVDx86

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YVDx86
Dec 12, 2020 31 Comments

I read from some financial website that you can only withdraw 1% every year from your investment if you don’t want it to deplete over time. If I want to have $200k per year by the time I am 50, does it mean I can only retire when I save up $20m? That seems like a lot to me. Is the number realistic? Wanted to hear from someone closer to that age or net worth on their outlook on retire

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TOP 31 Comments
  • Amazon
    rowdyguy

    Go to company page Amazon

    BIO
    I'm a rowdy guy
    rowdyguy
    Not enough you need $50m
    Dec 12, 2020 0
  • Cisco
    YVDx86

    Go to company page Cisco

    YVDx86
    OP
    I’m not trolling. Read this https://www.financialsamurai.com/reconciling-three-retirement-goals-25x-expenses-20x-income-0-5-withdrawal/. I actually think he has a point. He is saying 0.5%! I’m being aggressive! I think one will deplete at 4-5% for sure. Also I think 0.5% is too conservative. Maybe 1% is just right hence wanted others opinion
    Dec 12, 2020 5
  • Is this a troll post? 4-5% withdrawal is the standard. What’s with the 1%? Even with no growth you’ll live until 150 at that rate, plus most people spend under 200k a year and you’ll get SS later on.
    Dec 12, 2020 5
    • Amazon
      gujohu

      Go to company page Amazon

      gujohu
      It's definitely a possibilty but so is you getting hit by a bus tomorrow. Ultimately you want to use a reasonably conservative savings rate which at 3% works very well.

      Also the closer you are to retirement the more diversified you should be to avoid a Japan like scenario. Get market cap weighed total stock (world) etfs, buy some real estate, have decent amount of bonds, precious metals etc.

      That should work much better than wasting a couple more decades working to feel safe withdrawing 1%.
      Dec 14, 2020
    • Probability is very low betting hit by a bus. Go look at actuarial models. Most of us are likely going to give to our late 80s to young 100s unless you are obese. I am young without kids but I want to leave my future kids with alot of wealth in a trust. Retiring young is overrated after a few years. I seem too many go into depression. Ultra wealthy people tend to worry about their assets too. Too much diversification may spread growth too thin.
      Dec 14, 2020
  • Need no, nice to have sure. The trinity study suggests 5.5% withdrawal rate or 4% if you are super conservative. 1% is way way too low. Some ultra conservative folks may suggest 3% to be over the top safe. Financial samurai fell behind on clicks and is trying to get back into relevancy...
    Dec 12, 2020 2
  • The cost of an average home is max 40k per year (tax utilities maintenance etc.)

    What on earth are you doing with 160k every year to eat and breathe? Do you currently have a 400k TC and burn all your after tax income today ...?
    Dec 12, 2020 5