Hello, I am taking a few year career break that could end up in retirement. Worked at Amazon. Net worth 400k in fidelity brokerage I am moving to Portugal where my budget will be about $36k per year after taxes, but I will make about $12k after taxes making some sailings trips, so I will only need to withdrawal $24k per year. If I put the $400k in a low cost mutuals&p index fund and the gain is 10% per year, numbers work. But do you think that 10%/year will happen? once I am 67 I will have about &1200 month (inc WEP) from USA social security and about $800 from Portuguese social security. Thoughts? doable?
perhaps need some additional steady income along the way. don’t count on social security. also, those retirement plan numbers might feel very low given inflation over 25 years
the social security numbers will updates with inflation. I don’t think social security will go away maybe 80% of what it is today. My question is about the 10%? do you think it will happen. What else could I do?
Social security might go away completely. At least change form from where it is now. Look at pensions, these are pretty much gone and replaced by 401Ks. There’s going be higher growth in retirees than growth in workers.
I'm a similar age ( a bit older) and while enticing i think this honestly this sounds super risky with no room for unanticipated health issues or inflation. A more realistic option could be to find a job outside of sailing so that you don't touch that $400k. Do you also have retirement funds outside that $400k?
400k in total. Healthcare ia budgeted in the 36k withdrawal. Health care is not expensive in Portugal.
Does your healthcare estimate account for major surgeries or complications which may happen when old? as you age your medical costs will go up
You have enough money to take a 2-4 year break but you might have to return to work to make more $$$
10% is overly optimistic. You’ll be comfortable for 5 years. You should try to increase your secondary income, get a part time job, or consider returning to a full time job after a break.
but thar is the S&P 500 index historical, you dont think it will happen again?
Money grows when you don’t touch it and don’t look at it 😉.
You will still owe US federal income tax and early withdrawal penalty. The average return of the S&P is just under 10% over the last 30 years, so that could be optimistic. We might be near the top of the market right now, so it might take 10 years to double instead of 7, using the rule of 72. You would need a lot of things to go right for this to work.
I only need to withdrawal 24k per year. That is a 6 percent. yes, I guess I would need to keep myself ready to work more if needed.
10% per year is not realistic. Also you need to factor in inflation, last year in Europe it was around 10%. So the 10% gain on your investment would actually equate to 0%. Sorry to break your dream on this, you're going to have to get back to work and increase your NW
Sp500 averaged returns around 10-12% per year depending on what year you start looking back 100 years.
Rede88 is right- you need closer to $800k to do this…
Try Cape Town South africa money will go a long way . Look up the folks moving from the US
Are you implying Cape Town is very cheap? How does it compare to Thailand?
Cape Town would be more expensive than Thailand generally (Depending on which Thai city) . I've heard some South Africans compare the CPT prices to Samui Prices. Accommodation would be more expensive in South Africa but day to day living would be very similar to Bangkok
I am dual, going back home. But that 10% inflation was less, and an exception
U got house in Portugal?
Yes, my parent’s house has an attached house I will use with my kids. The 36k includes the maintaince of the house. 36k in portugal is like 100k in ATL
Congratulations!