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I seriously hope you're joking and you're just being provocative right? In what world or lifestyle $2.5M after-tax is just a "head start" or "a chance to retire

I seriously hope you're joking and you're just being provocative right? In what world or lifestyle $2.5M after-tax is just a "head start" or "a chance to retire at 60 vs 65"? By investing it in traditional index funds, at a relatively safe withdrawal rate of 4% it would allow you to pull $100k a year in perpetuity (adjusting from inflation each onward year), most of which taxed at a ridiculously low rate, or none at all.

cimmanom 9y ago
Expecting reliable 7% returns seems extremely optimistic to me (I'm fairly certain our 100-year growth rate cannot and will not be sustained). Certainly the market hasn't returned that much during my lifetime. If the stock market returns 4% instead of 7%, you'd need $10M in the bank to keep up with 3% inflation and return $100K/yr. $5M for $50K/yr. And one typically moves one's assets into lower-risk/lower-return investments as one approaches retirement. Given my family's longevity, I need to plan for survival till about 100 y/o. With increasing costs over time due to aging-related costs (even if I spend $50K/yr now, paying for assisted living or home aides plus of course medical care could easily bring that up past $100K). And an assumption that social security will not exist in any meaningful form by the time I reach retirement age. Yes, 60 vs. 65 was an enormous exaggeration, but right now I intend to save nearly $100K for every year of planned retirement. $2.5M would cover 25 years of retirement. At $50k/yr in savings, that leaves me with 2 years of work for every year before 75 I want to retire. So: I still need to work another (2/3 * (75 - $current_age)) years (minus savings too date, of course). Without the $2.5M, the equation would be (2/3 * (100 - $current_age)). So it allows for retirement ~17 years earlier than originally planned. And yes, saving that much is unrealistic for the vast majority of Americans. I suspect we're headed for an enormous retirement-related social/economic crisis in the next few decades.

cimmanom 9y ago

Expecting reliable 7% returns seems extremely optimistic to me (I'm fairly certain our 100-year growth rate cannot and will not be sustained). Certainly the market hasn't returned that much during my lifetime. If the stock market returns 4% instead of 7%, you'd need $10M in the bank to keep up with 3% inflation and return $100K/yr. $5M for $50K/yr. And one typically moves one's assets into lower-risk/lower-return investments as one approaches retirement. Given my family's longevity, I need to plan for survival till about 100 y/o. With increasing costs over time due to aging-related costs (even if I spend $50K/yr now, paying for assisted living or home aides plus of course medical care could easily bring that up past $100K). And an assumption that social security will not exist in any meaningful form by the time I reach retirement age. Yes, 60 vs. 65 was an enormous exaggeration, but right now I intend to save nearly $100K for every year of planned retirement. $2.5M would cover 25 years of retirement. At $50k/yr in savings, that leaves me with 2 years of work for every year before 75 I want to retire. So: I still need to work another (2/3 * (75 - $current_age)) years (minus savings too date, of course). Without the $2.5M, the equation would be (2/3 * (100 - $current_age)). So it allows for retirement ~17 years earlier than originally planned. And yes, saving that much is unrealistic for the vast majority of Americans. I suspect we're headed for an enormous retirement-related social/economic crisis in the next few decades.