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The ultimate goal is 25x your annual spending, including a tax-sheltered retirement account - that's f-you money. Until you get there, 6 months to a year. Or f
by jogjayr 9y ago
The ultimate goal is 25x your annual spending, including a tax-sheltered retirement account - that's f-you money.
Until you get there, 6 months to a year. Or for maximum safety, however much you'd need to pay for expenses and max out your annual medical + home insurance deductibles until you could find a new job. This covers the worst-case scenario of job loss + medical emergency + house burning down.
- edraferi 9y agoWhy 25?
- hueving 9y agoMaybe the assumption is that you can earn 4% pretty easily on it and live on that.
- jogjayr 9y agoFor a longer version: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... tl;dr You can generally withdraw 4% of your investments on average every year taking into account gains and inflation Assuming you're invested in a broad-based portfolio of stocks, bonds and real-estate. So if you have 25x your annual spending invested, there is a high likelihood of being able to live off just investment returns in perpetuity.