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re: Is my retirement thinking flawed?
Posted on 4/21/19 at 8:15 pm to SLafourche07
Posted on 4/21/19 at 8:15 pm to SLafourche07
quote:
Eng08
The low assumption was intentional. I framed it as if I ONLY gained 1% and underperformed in return and pay where I’d be. The fact I should have a higher percentage helps my logic.
quote:
SLafourche07
Early retirement crosses my mind. It’s actually how this all started. I was considering opening a Roth so if I did retire early I could use my contributions in it to bridge the gap until my 401k went into effect.
As for generational wealth I have a 500k life insurance policy. It’s not millions but it’s more than I could likely save before I die.
I just fear of spending my younger years overly saving when I could be enjoying life
4
Posted on 4/21/19 at 8:29 pm to GAFF
Your excess thousand a month savings should be in a Roth now regardless of anything else.
Posted on 4/21/19 at 9:30 pm to GAFF
Yes that’s true, but you should look at the different rates so you know your options.
Also what’s your age currently? That has a big factor in the calculations.
For example I’m mid 30’s and my family has saved well so far for retirement. If I run a few simulation at varying average return rates (2.5, 5, and 6.5) I have like $4 mil, $10mil or $30mil if I work until 65 with a 80%, 50%, and 30% likelihood.
I mean hell - if I catch it right and get the 30% one - I’m quitting early and going fishing. Do I think it’s likely to happen, no. However I know I’m potentially on the right track to change my kids and grandkids lives drastically (if I want to).
Also what’s your age currently? That has a big factor in the calculations.
For example I’m mid 30’s and my family has saved well so far for retirement. If I run a few simulation at varying average return rates (2.5, 5, and 6.5) I have like $4 mil, $10mil or $30mil if I work until 65 with a 80%, 50%, and 30% likelihood.
I mean hell - if I catch it right and get the 30% one - I’m quitting early and going fishing. Do I think it’s likely to happen, no. However I know I’m potentially on the right track to change my kids and grandkids lives drastically (if I want to).
Posted on 4/21/19 at 9:35 pm to GAFF
quote:
I just fear of spending my younger years overly saving when I could be enjoying life
That’s a big reason we are looking to get a affordable house near the beach. I ran a simulation with that purchase in there as well.
I can’t afford the house on the beach, but I definitely can get the one 1/2 mile away and walking distance in the X flood zone.
Posted on 4/21/19 at 11:17 pm to GAFF
quote:
As for generational wealth I have a 500k life insurance policy. It’s not millions but it’s more than I could likely save before I die
This makes me wonder if your calculations are off if you're not already well on the path to saving millions. If I read correctly, you save 10% which is over $12k so you're making $120,000+. Using 4% rule you'd need to have $3 million to replace $120,000 income and that won't be sustainable w/ 1% rate of return.
Does the pension die with you? If so you may want more insurance if family is dependent on your income.
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