What's your magic number

[deleted314957]

How much do you want/need to retire? Assume: no debt/mortgage, no more kid's costs, don't count value of personal property, jewelery, art, etc. just cash, ira, 401-k, non-retirement investments, etc. Just throwing this out here

---

Members don't see this ad.

 

[pathstudent]

How much do you want/need to retire? Assume: no debt/mortgage, no more kid's costs, don't count value of personal property, jewelery, art, etc. just cash, ira, 401-k, non-retirement investments, etc. Just throwing this out here

Retire? Who has any hope of retiring? Today we need to think like gladiators. Only death can release us from service.

 

[Pathologee]

I'm no mathematician or anything but I figure I could get $150k to last for a long time.

 

[mlw03]

2 million. I want something that I can conservatively invest and count on 5% return. That's 100K/year and never touching the principal, which would be for my (future kids). That's what I'll be trying to work towards - enough to bring in 100K/year and never have to touch the principal.

 

[Path or bust]

2 million. I want something that I can conservatively invest and count on 5% return. That's 100K/year and never touching the principal, which would be for my (future kids). That's what I'll be trying to work towards - enough to bring in 100K/year and never have to touch the principal.

That's reasonable.

 

[WEBB PINKERTON]

I started throwing most of my money into farmland in the 90s so I am land rich more than cash rich. Make sure you invest heavily. If I were a younger pathologist I would probably buy up rental properties. Farmland is way too expensive at the moment. A 150 acre farm that I was hoping to add to my thousands of acres went for over a million dollars not long ago.

 

[BU Pathology]

There are a number of books written on this exact subject. One is called The Number by Lee Eisenberg that discusses how much you will need.

 

[malchik]

2 million. I want something that I can conservatively invest and count on 5% return. That's 100K/year and never touching the principal, which would be for my (future kids). That's what I'll be trying to work towards - enough to bring in 100K/year and never have to touch the principal.

Well half of that 2mil will go to estate tax so you should invest it in something and transfer that instead of cash

 

[mlw03]

Well half of that 2mil will go to estate tax so you should invest it in something and transfer that instead of cash

I'm 31. Not really thinking that far ahead yet. When the time comes, I expect I will pay some knowledge young financial adviser how to best minimize my estate's taxi liability. The question was about how much to feel really financially secure. For me, that number is 2million.

 

[pathstudent]

Well half of that 2mil will go to estate tax so you should invest it in something and transfer that instead of cash

In the us a married couple can leave 10000000 tax free.

 

[wp746911]

2 million? Obviously this isn't a financial forum. It all depends on how much you are used to living off now, and what tax bracket you would be in. Will your house be paid off? What return are you getting. I'd bet that for many here the goal of 2 million wouldn't be enough (especially 30 years from now).

 

[KCShaw]

There's a lot of "depends" involved here. One of the multitude of concerning issues is the problem of unexpected expenses which eat into that "principle" amount, perhaps to the point that you can no longer really live solely off of the interest/investment income and suddenly that principle vanishes more and more quickly. Currently I'm exceedingly conservative about it all and would like a Very Big Number, especially considering the unknowns of investments, interest, unexpected expenses, and rising cost of living, without even getting to the expenses of aging. But I concur with getting an intelligent and trustworthy professional involved who can help base that decision on history and hopefully better reasoned/supported projections than I might have.

 

[path24]

Definitely need more then two million...not going to be enough with inflation averaging 2-3% a year.

Become Bogleheads people, don't waste your money on a financial advisor (Or at the least very little). A little reading and research could save you a ton of money.

 

[KCShaw]

Disagree with the extreme end of that. It's kinda like recommending one replace seeing a physician or even a PA with a little internet research. It may or may not work out, and this isn't exactly a little rash. Granted, not every financial "pro" knows what they're doing either, nor will all of their approaches sync with you, but even if you don't lump your money with them simply having a proper sit down about -your- finances for a few bucks every now and then is a spit in the ocean when you look back in 20-40 years or so. Still, learn what you can on your own of course, but be wary of learning just enough to be stupid.

 

[pathstudent]

Definitely need more then two million...not going to be enough with inflation averaging 2-3% a year.

Become Bogleheads people, don't waste your money on a financial advisor (Or at the least very little). A little reading and research could save you a ton of money.

Right. And given the national debt, if the fed decides to print money to solve it, then the 2 million you save is now worth 1 million.

I plan on working into my 70s, but I think 6,000,000 would keep me living like I am used to without me touching the pricipal and giving my kids a nice chuck of change when I move on to the next level.

 

[mlw03]

Definitely need more then two million...not going to be enough with inflation averaging 2-3% a year.

Become Bogleheads people, don't waste your money on a financial advisor (Or at the least very little). A little reading and research could save you a ton of money.

Also disagree with the advice to be one's own financial advisor, unless you're really into this stuff and have the time and aptitude for it. We think of ourselves as professionals who provide a valuable service, for which we are paid. We produce nothing - our value is knowledge, interpretation, and offering our opinions to help people. Financial planning is similar. These people do that 40 hours per week, and a decent one will yield real money with both their investment advice and advice on how to legally minimize one's tax burden.

 

[levels x3]

Definitely need more then two million...not going to be enough with inflation averaging 2-3% a year.

Become Bogleheads people, don't waste your money on a financial advisor (Or at the least very little). A little reading and research could save you a ton of money.

Contrary to the comments that followed, I completely agree with this. It is amazingly simple to create a solid investment plan. Saying it's like using WebMD to replace your physician is ridiculous. It takes some reading and so a certain amount of interest, but understanding the principles is easy. It's more of a personality question than anything else. www.bogleheads.org is a great place to start for those so inclined. You can save yourself a lot of money.

For people who know they don't want to do it themselves, sure, get an advisor. Just stick with "fee-only" advisors. www.napfa.org. "Fee-based" or any other type of advisor is just trying to sell you something.

 

[deleted314957]

Right. And given the national debt, if the fed decides to print money to solve it, then the 2 million you save is now worth 1 million.

I plan on working into my 70s, but I think 6,000,000 would keep me living like I am used to without me touching the pricipal and giving my kids a nice chuck of change when I move on to the next level.

I think this is a pretty good ball-park. $6,000,000 diversified stock and bond mutual funds with 60-80% of stock with a 4% annual withdraw rate adjusted annually for inflation gives you $240K yearly and the Monte Carlo gives you about a 95% chance of never running out of money. Of course if you are happy with $120 yearly, $3,000,000 will do it. Basically, every
1,000,000 gets you $40,000/yr.
These figures are generally considered "main stream/reasonable". The Dave Ramsey %14 per year withdraw is an outlier that virtually no one else endorses.

 

[Kilgoretrout 65]

Right. And given the national debt, if the fed decides to print money to solve it, then the 2 million you save is now worth 1 million.

I plan on working into my 70s, but I think 6,000,000 would keep me living like I am used to without me touching the pricipal and giving my kids a nice chuck of change when I move on to the next level.

Working into your 70's? If I had $4 mil at 65 I think I would retire. Hell $2 mil. Lucky kids...

 

[LADoc00]

This is HUGELY dependent on where you retire. I cant emphasize this enough. I ran the numbers for every place I applied.

For me, the low end was 4m in towns of less than 125K in the Midwest and South. For the upper end of my potential practice locations, it was nearly 10m.

I hope every resident understands if they choose a high expense urban coastal area, retirement may NEVER be an option.

 

[LADoc00]

I think this is a pretty good ball-park. $6,000,000 diversified stock and bond mutual funds with 60-80% of stock with a 4% annual withdraw rate adjusted annually for inflation gives you $240K yearly and the Monte Carlo gives you about a 95% chance of never running out of money. Of course if you are happy with $120 yearly, $3,000,000 will do it. Basically, every
1,000,000 gets you $40,000/yr.
These figures are generally considered "main stream/reasonable". The Dave Ramsey %14 per year withdraw is an outlier that virtually no one else endorses.

I guess Mike that really depends on what your life goal is.

Do you want want to leave 2-3m to each of your kids? That way they dont need to worry about student debt, housing costs or the previous costs for your grand kids (I would guess 3m would carry you 2 gens out).

Do you want your wife be comfortable when you die?

There are so many moving parts to this equation not to mention the HUGE X factors like inflation/devaluation of currency.

The long and short of this is: a prudent person will never retire until they are physically unable to perform. There is too much uncertainty, too much future risk, too many incompetent politicians.

 

[deleted314957]

This is HUGELY dependent on where you retire. I cant emphasize this enough. I ran the numbers for every place I applied.

For me, the low end was 4m in towns of less than 125K in the Midwest and South. For the upper end of my potential practice locations, it was nearly 10m.

I hope every resident understands if they choose a high expense urban coastal area, retirement may NEVER be an option.

excellent point, big difference between NYC and Dubuque, IA

 

[turtle1966]

For an average pathologist, what would have been the expected savings during a 30 year career?

How about the same for the next 30 years?

 

[pathstudent]

For an average pathologist, what would have been the expected savings during a 30 year career?

How about the same for the next 30 years?

Savings varies from person to person. Do you have no kids or five kids? Do you live in Manhattan or Santa Monica or Toledo? Will your kids go to state school or will they go to NYU or USC or Stanford? Will you have one marriage your whole life or two or three? You get the picture.

I know how much I will save this year. I know how much I will probably save next year, but predicting the next 30 years is impossible.

I would like to think it will be the same or more, but it probably won't as taxes and prices are going up for sure and compensation is going down for sure. Plus the current adminstration is actively waging a war on the upper middle class or lower upper class so I don't have high hopes for the future, but I still hope.

 

[yaah]

Personally I do not plan on the whole "5% annual rate of return" stuff since that is far from true in the last 5 years. I don't have a specific "number" I just try to save as much as I can and hope it is enough. In reality that is all you can do. Obviously I will reassess when I reach whatever age I am considering retiring, or whatever savings level can lead to a "safe" retirement. I tend to think income will decline over the next several years as cost cutting and reimbursement cuts continue to happen.