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For those saying $3MM net worth at age 45 would not be nearly enough to retire...
Posted on 3/26/25 at 10:58 am
Posted on 3/26/25 at 10:58 am
Saw more than a few people on the OT thread this morning state or imply that retiring at 45 yo with $3MM in net worth would be "bold."
For those that share this belief (not saying it's wrong), I have some questions to obtain additional context.
Do you not own your own home outright in this scenario? Either way do you count it as part of the $3MM?
Are you single? Have a family? Is this money just to take care of you or do you have minor children and a spouse to support in your 40s?
If you do have a spouse does that $3MM figure include their capital as well or are you assuming separate finances as some do in case of divorce?
What is your current monthly spend that $10K (4% rule) in passive income wouldn't suffice? I get that $10K per month in 20 years won't be worth nearly as much, but are you spending that much now?
For those that share this belief (not saying it's wrong), I have some questions to obtain additional context.
Do you not own your own home outright in this scenario? Either way do you count it as part of the $3MM?
Are you single? Have a family? Is this money just to take care of you or do you have minor children and a spouse to support in your 40s?
If you do have a spouse does that $3MM figure include their capital as well or are you assuming separate finances as some do in case of divorce?
What is your current monthly spend that $10K (4% rule) in passive income wouldn't suffice? I get that $10K per month in 20 years won't be worth nearly as much, but are you spending that much now?
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Posted on 3/26/25 at 11:00 am to PNW_TigerSaint
Those people are doomsday morons. Even is you invest conservatively and make and draw 4% a year you are drawing $120k a year without touching your principle.
Posted on 3/26/25 at 11:02 am to PNW_TigerSaint
I think a lot of people who are able to amass $3 million by the time they’re 45 have come to expect a lifestyle that could dip into that. I think they’ve come to expect a lifestyle that doesn’t imagine sitting at home and watching PBS not saying that’s a good idea. I just think it is what it is
Posted on 3/26/25 at 11:21 am to VABuckeye
quote:
Those people are doomsday morons. Even is you invest conservatively and make and draw 4% a year you are drawing $120k a year without touching your principle.
Depends on your intended lifestyle I guess, but that’s not a very comfortable retirement. And what if a big part of the $3mm is in real estate or some other non-liquid assets? You need liquidity for a comfortable retirement.
Posted on 3/26/25 at 11:25 am to PNW_TigerSaint
quote:
Saw more than a few people on the OT thread this morning state or imply that retiring at 45 yo with $3MM in net worth would be "bold."
How many of those folks are in, or have been, in the position to dig in on the numbers to truly evaluate the scenario? I'm guessing close to 0.
Posted on 3/26/25 at 11:29 am to PNW_TigerSaint
Depends on too many factors to make any kind of judgement.
debt service?
children in the house?
passive income streams?
3M could be more than enough or not even close. No way to answer with such limited information.
debt service?
children in the house?
passive income streams?
3M could be more than enough or not even close. No way to answer with such limited information.
Posted on 3/26/25 at 11:32 am to mmmmmbeeer
You could live, but I don't think well. That's just me, and your investment risk would have to go down so much to ensure that. I am 47, plan on working 20 more years. Might cut it down to 15. Target is the following:
65k pension
96k SS (not counting on this but that would be combined income for wife and I)
228k interest income (targeting 5.7 million in assets, 4% draw)
At worst have just under 300, more likely somewhat over per year. Leave a nice inheritance for the kids. Travel and enjoy.
65k pension
96k SS (not counting on this but that would be combined income for wife and I)
228k interest income (targeting 5.7 million in assets, 4% draw)
At worst have just under 300, more likely somewhat over per year. Leave a nice inheritance for the kids. Travel and enjoy.
Posted on 3/26/25 at 11:47 am to PNW_TigerSaint
Most people who have that net worth at that age are very high earners. They are probably also moderately high spenders. It's all relative.
Psychologically, even if they aren't a big spender it's very hard to go from a large income to a much smaller fixed one.
My wife and I will be above that at 45 with our mortgage paid off, but I definitely wouldn't feel comfortable retiring. Is it because I feel like we'll starve? No. It's because I like to have the flexibility to spend more if I choose.
Psychologically, even if they aren't a big spender it's very hard to go from a large income to a much smaller fixed one.
My wife and I will be above that at 45 with our mortgage paid off, but I definitely wouldn't feel comfortable retiring. Is it because I feel like we'll starve? No. It's because I like to have the flexibility to spend more if I choose.
Posted on 3/26/25 at 11:47 am to PNW_TigerSaint
quote:
What is your current monthly spend that $10K (4% rule) in passive income wouldn't suffice?
The 4% rule, although conservative, was figured for a 30 year retirement. A 45 year old is hopefully going to have a 40+ year retirement. This person would be safer with a 3%-3.5% withdrawal rate, which would be $8750 a month. If that feels ok, then go for it.
Posted on 3/26/25 at 11:54 am to FortunateSon
And are you not able to draw on social security yet? And that is pre-tax? Seems awfully tough to live and have it be enjoyable. How are you paying for medical insurance?
Posted on 3/26/25 at 11:57 am to PNW_TigerSaint
quote:
Saw more than a few people on the OT thread this morning state or imply that retiring at 45 yo with $3MM in net worth would be "bold."
It really depends on what that $3M represents and where they live. Is it their share of some undivided property they own with their siblings, but their siblings are balking at dividing and refuse to buy them out or sell? Retiring in that scenario is a no-go.
Is it in some sort of investments bringing in a 5% annual return? If so, that's going to be about $127k after taxes (depending on the state). That doesn't suck for most places, but you aren't going to be affording a home in LA, NYC, San Fran, etc much less retiring (renting would mean eventually seeing that marginal income dwindling).
If both you and your spouse would be retiring off that, it's going to be a very modest retirement. If you have kids, even moreso (but you would have the opportunity to homeschool).
Posted on 3/26/25 at 12:16 pm to Bard
I think people focus on the wrong thing- total retirement. Is 3M enough to slow down, turn down a few files, quit working with people you don’t like and putting up with some BS that is chipping away at your quality of life? It sure is…if you aren’t an out of control spender and have expenses planned and controlled.
Is it enough to quit and starting traveling everyday for the rest of your life? Probably not.
Is it enough to quit and starting traveling everyday for the rest of your life? Probably not.
Posted on 3/26/25 at 12:23 pm to VABuckeye
quote:
Those people are doomsday morons. Even is you invest conservatively and make and draw 4% a year you are drawing $120k a year without touching your principle.
You are assuming all $3M net worth is $3M in the market? Because net worth is a lot of things outside the market.
Without any context to the $3M net worth, hard to make any real judgements.
Posted on 3/26/25 at 12:25 pm to VABuckeye
quote:
Those people are doomsday morons.
I was one of them, and yes retiring at 48 with $3million is bold. It is doable, but not without risk.
Taking out $120,000 year is great now, but you need to go into the future with that number. Inflation is a thing. The buying power of $120,000/yr going into the future
2035 - $89.246
2045 - $73,241
2055 - $57,241
There will also be medical insurance and expenses floated by the individual until at least 65
You are going to need solid returns on that $3 million, but it is doable. There is going to be not as much wriggle room and a more simple life, that might be fine though for some.
Posted on 3/26/25 at 12:29 pm to Boss
I’m shooting for $4 million at 50 and hanging it up
Posted on 3/26/25 at 12:30 pm to PNW_TigerSaint
47 and my net worth is approaching 3 million. When I hit that number later this year/early 2026 I’m retiring.
Own my home, no car notes, no debt. I don’t require a selfish assholish lifestyle which is why I’ve accumulated what I have. It’s more money than I’ll ever spend.
Own my home, no car notes, no debt. I don’t require a selfish assholish lifestyle which is why I’ve accumulated what I have. It’s more money than I’ll ever spend.
Posted on 3/26/25 at 12:41 pm to DarthRebel
quote:
I was one of them, and yes retiring at 48 with $3million is bold. It is doable, but not without risk.
True.
Right now our monthly number in retirement will allow us to live our current lifestyle and travel. Travel every month? No, but I wouldn't do that anyway. Two nice trips a year and some weekenders thrown in is fine with me. My wife thinks I enjoy the trip planning as much or more than the actual trip.
Fingers crossed, our health holds so we can reap some benefits from working and putting it away.
Posted on 3/26/25 at 12:45 pm to PNW_TigerSaint
$3MM "net worth" at 45, I wouldn't be overly comfortable with that and I plan on a budget oriented retirement.
$3MM in my retirement accounts is a different discussion. I'd probably feel just fine giving it a go if I had that in my retirement accounts.
$3MM in my retirement accounts is a different discussion. I'd probably feel just fine giving it a go if I had that in my retirement accounts.
This post was edited on 3/26/25 at 12:47 pm
Posted on 3/26/25 at 12:50 pm to PNW_TigerSaint
There's no such thing as too much money but 3MM would be enough for me to retire and I live in an expensive city. People on here love fear porn. I'm 45 and am retiring at 50 to 52 as soon as I have my 'number'. If I need to work I can get a part time job at Home Depot or Lowe's or Publix or something for play money. The whole point of maxing all retirement accounts is to retire early not keep working.. What it the point? You might not even get to enjoy that money.
Posted on 3/26/25 at 12:52 pm to ronricks
I take it you will be withdrawing from investment accounts until 59 1/2 to avoid penalties?
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