Just curious and thought I'd take a little survey. I know we have a thread for SWR but I thought this would be a lot more telling in terms of the variety of lifestyles here (and maybe also bragging rights for lowest expenses ). So, what's your "FI number", e.g. the amount you need to save (or have saved) to consider yourself FI? Would also be curious to know your current annual spending level you're basing it on.
For me, I'm aiming for about $700,000 total (including a paid-off house I expect to be valued at about $250,000). This is based on my annual spending level of about $18,000.
I don't know how some of you can possibly get 700,000 in a reasonable amount of years making average salaries in this country. There is a disconnect I feel sometimes when following the ERE posts/book and then I read people needing 700k or more to reach FI. It would take the average person/salary 15 years or more to reach that kind of total.
I am very lucky because I start receiving a federal pension next year, which will cover my basic, frugal lifestyle in addition to 100k in savings.
I know we have a thread like this somewhere, but I can't search-fu it.
I don't like raw numbers as much as SWR. They can be sort of ... vulgar? Seeing huge numbers discourages some people from trying, OTOH posting low numbers can make people who have achieved ERE second guess themselves out of retiring.
I'm pretty clueless on my own number because I have no idea where I will be living, what I will be doing, so on.
I have not a fixed number, plans and ideas change over time, children nfluence the spendings/savings.
That said, I estimate 700k euro would make us just about FI.
By the end of this year we're probably halfway.
With our current savings rate we have 7 more years to go, although I hope the compounding effect will kick soon (some more). We would be then mid 40. Probably RE instead of ERE for us.
Re: vulgarity of raw numbers: Yeah, I wasn't sure how this would go over. I can see how it might be an uncomfortable or off-putting subject. At the same time, it seems like it might be useful to have the cold hard facts of the amount of money different lifestyles require. Real talk.
@Tylerrr: Correct. As of now I expect to reach my goal at age 35, at which point I'll have been in the workforce about 12-13 years. My salary is also slightly higher than average. I agree this is not the prototypical ERE.
@workathome: To be perfectly honest, it's for one person, but I do consider it quite scalable to include a wife and a kid or two. I spend 18k right now and that's with 6k being mortgage interest that won't exist in retirement, so that's my buffer. Also, a lot of my expenses won't change just because more people live in the house (though of course some will).
So if 6k is just interest (!), you're really more like 12k, so only need about 400k to retire? Or even only 200k if you could consistently pull off 6% returns?
@Spartan_Warrior - Ah, I get it! Thanks, I thought you meant 700k + paid off house. That makes sense. My number then basically the same as yours, though maybe a little cheaper house.
Most direct answer is 55. Because that's a key age in my employer's db plan. If I can get there I suddenly have more than enough.
My longstanding non-glib answer to the question was $1.1M (split between 401k and taxable accounts) to support the equivalent of a median ($50k/yr) pre-tax income when combined with SS and some part-time work from age 55-65. Anything from employer would be a bonus.
I'm currently looking at revising things downward in the spirit of ERE in case I decide to go early. I could probably safely manage a bit over $18K/yr right now (will rise when I take SS). I'd like at least $20-24K gross at a 3% WR, so something between $600K-$750K invested is, at this stage, the lowest I'd freely volunteer to check out at. Owning a home and having an emergency cash fund sit on top of that.
@Toska: Ah, figures there is an existing thread (and I posted in it). I note my non-house FI numbers have doubled... I think it's because I'm now assuming I'm incapable of earning much more than 4% a year on investments whereas my earlier innocent self was more, uh, optimistic.
Hmm, actually, it's because I expected to live on about $3k less. Probably could. Honestly, I want to move out of overpriced Murderland as soon as I retire anyway, so I'll probably head someplace cheaper and turn this place into a rental. Maybe I should recalculate my number based on that assumption. Nevada, here I come!
Curious where some of you lower cost folks are living/planning to live.
tylerrr wrote:I don't know how some of you can possibly get 700,000 in a reasonable amount of years making average salaries in this country. There is a disconnect I feel sometimes when following the ERE posts/book and then I read people needing 700k or more to reach FI. It would take the average person/salary 15 years or more to reach that kind of total.
That's why it's better to speak in terms of percentages. FWIW, $700k @ 4% initial withdrawl rate is $28k/yr. For a single person making a median gross annual income of $47k, it is conceiveable to achieve $700k in 10 years if $28k expresses their expenses and they were tax efficient.
More likely, though, a single person living on $15k/yr only needs $500k banked @ 3% initial withdrawl rate. Number drops to $375k @ 4% withdrawl rate. Not so tough to achieve those numbers with an annual income of $47k if you can hold expenses to $15k.
My number would vary depending on market conditions. For example, I felt comfortable pulling the trigger at 4% (150k) in 2009 when the market was undervalued. That was conditioned on knowing that I probably would earn some money over the next 60 years. I wasn't 100% determined to sit on a beach from thereon. Had I been, I would have aimed for 3%.
Given today's market I would require a lot more.
I think a good rule of thumb is to correct "the number" with Shiller P/E relative to 15. If it's 25 today, I would demand a 25/15 = 66% bigger number or 250k at the 4% rate. Or 333k for the beach lifestyle.
I think correcting for market valuation is a more accurate way to go.
I think my number is $350K, with the paid off house that I live in. That's $14K a year at the 4% SWR. I have a vision of staggered, progressively increasing income: I also have a rental that still has a mortgage, but when that's paid off, that will give me more monthly income as needed. Then my small pension can kick in on top of that (I can trigger that when I want to; likely just a few hundred a month). Then I'll have my social security--not earlier than 65 but maybe a little later if I decide to so that will be another $2000 to $2400 a month, depending on when I pull that trigger. Since I'm a bit older than a lot of people here, I feel OK with the 4%, especially with other sources of money coming behind.
Some of this depends on some family stuff. I actually live in a VERY cheap area (Tennessee), and if I stay here, I could actually probably do it sooner, like at $300K which would really be only a couple more years, if family stuff goes OK. If I go back to Texas, I'll live in a more expensive house and have higher property taxes, so if I decide to do that, I need more like $400K because renting this house here will generate less income. I'd like to get at least 1 more rental to hedge that a bit.
When I finally do decide to throw in the towel, I have in the back of my mind earning some extra spending money with some occasional pet-sitting work.
625k (25k per year) with a paid off house to me is fu money. I reckon we (wife and me) will spend about 25k per year in retirement.
1 million with a paid off house is around the current FI money level.
The reason for the difference is that we have 3 kids and at the moment we spend about 40k per year. If we weren't supporting 3 kids our expenses would be a lot lower.
The problem is that we live in Sydney, Australia and house prices are horrendous. We bought our house for 770k and I reckon it is worth close to 1 million now (4 years of living here). Its crazy.
). So, what's your "FI number", e.g. the amount you need to save (or have saved) to consider yourself FI? Would also be curious to know your current annual spending level you're basing it on.
I note my non-house FI numbers have doubled... I think it's because I'm now assuming I'm incapable of earning much more than 4% a year on investments whereas my earlier innocent self was more, uh, optimistic. 