5 ms·
1m isn't enough to really retire in in silicon valley
by bagels 1y ago
1m isn't enough to really retire in in silicon valley
- throwawayq3423 1y agoOr in any big city tbh.
- Scoundreller 1y agoCleveland not big enough for you???
- throwawayq3423 1y agoCities like Cleveland have reasonable pricing built into their appeal. Without it, there isn't much left.
- loire280 1y agoSure, but if you're 10+ years into your career and have been financially conservative (i.e. have a positive net worth), a lump sum of $1m could be enough to retire to a lower-cost location.
- andrewmcwatters 1y agoHell, roughly $600,000-800,000 is enough to lean FIRE, the last time I checked.
- usaar333 1y agoSure, if you are single with no family and wiling to live outside California.
- quickthrowman 1y agoIf I retired at 40 I don’t think I’d want to remove more than 2% a year from the principal amount, which is.. $12,000-$16,000 a year. How is that possible? Even with a fully paid off house, you still have property taxes, utilities, maintenance. Even 4% a year which is recommended for a 30 year retirement, you’re only taking out $24,000-$36,000 a year.
- hervature 1y agoYou are supposed to invest and keep the money working for you. Adjusted for inflation, S&P 500 returns 6.5% a year. That alone gets you above the poverty line. Recall, this is inflation adjusted so your $600,000 is growing with inflation and the poverty line income also grows over time. This does not account for any swings.
- loeg 1y agoYou can't actually draw down 6.5%/yr, though, because of sequence of returns risk. The number that is actually safe (historically) is something like 3.5%.
- quickthrowman 1y agoKeep in mind that almost all of the FIRE advice available online has been written in a bull stock market that is almost 2 decades long (COVID drawdown is a blip on the 2008-2025 chart). Past performance is not indicative of future returns. Do you know anyone still running a risk parity 60% UPRO/40% TMF (3x long S&P 500, 3x long 20-year Treasury Bonds) portfolio? That portfolio composition had massive returns, until the Fed started hiking rates. The annual implied volatility of SPX is around 15-20%, if you want to withdraw 6.5% a year at 40 and have to restart your career at 55, be my guest. A 40% drawdown on 600k is -240k which puts you at 360k, 6.5% of which is $23,400. Starts getting pretty tight if you need to sell assets for cash which reduces your future returns.
- deanmoriarty 1y ago> Keep in mind that almost all of the FIRE advice available online has been written in a secular bull market that is almost 2 decades long Most of the reasonable FIRE advice (e.g. https://earlyretirementnow.com/ https://earlyretirementnow.com/ quality) suggests a ~3-3.5% withdrawal rate, which has been measured using historical data way before the current secular market. Is your take that even such withdrawal rate wouldn't work anymore, moving forward?
- daemonologist 1y ago
- dmoy 1y agoLean fire on $600k-$800k is taking an extreme gamble on the cost of health insurance continuing to be subsidized way beyond Medicaid levels. Which you might be fine with, but it's a pretty big risk. Unsubsidized healthcare in a lot of places in the US costs $10k-$20k per person per year. For early retirement that eats up like $400k-$500k per person.
- dom96 1y agoThis is why you don't retire in a country with private healthcare
- ghaff 1y agoMedicare isn't that much cheaper than exchanges although the cost decreases over time as you aren't earning significantly any longer. And lots of issues associated with moving countries.
- HNdev1995 1y agoMy parents live in the UK which has free healthcare. The situation is dire. The waitlist for chronic pain surgeries are 3-4 years long. Lots of people, including my parents, have resorted to flying out to other cheaper countries to get treatment.
- igor47 1y agoIs chronic pain an outlier here, or representative of wider trends? My uninformed prior is that surgery is not a good approach for chronic pain, and that the NHS is more likely to cover surgeries with a more clear-cut cost/benefit ratio
- ljf 1y agoFor things like hip replacements, cancer treatment and other physical ailments the NHS is pretty awesome. Some stuff it fails at I am sure, but as you say that is in part down to the way that it prioritises care based on results.
- deleted 1y ago[deleted]
- mathiaspoint 1y agoIf you're willing to be fiscally conservative, go to a cheaper location, and continue working on side projects you don't need the payout at all. The question everyone seems to be asking is "is the payout worth spending the first ten years of your career in the West Coast startup scene." Ten years is quite a lot of time to spend somewhere you don't actually want to live.
- okdood64 1y agoThe converse(?) is also true; how easy is it to leave somewhere you've made roots (family, friends, community) in for a decade or two?
- KaiserPro 1y agoprobably right, but I'm not in SV. So its enough to pay off the mortgage and provide enough monthly income to not care what job I'm doing
- ohdeargodno 1y agoTake a million, go live literally anywhere that isn't Silicon Valley, remote work for a company that interests you, or your own project. There's very few currencies in the world in which 1M isn't enough to retire. USD isn't one of them.
- occz 1y ago>There's very few currencies in the world in which 1M isn't enough to retire. USD isn't one of them. Unless you're planning on retiring as cheaply as humanly possible, 1M is not enough to retire for the large majority of the currencies in the world.
- ryandrake 1y ago$1M is enough to "Ramen Retire" in most of the US. If you're willing to eat noodles and make some lifestyle sacrifices, it's kinda sorta doable.
- ponector 1y agoFor majority of the world population 1M is amount they will never earn through their entire life. And they live just fine. I'm sure anyone can have a really nice retirement with one 1M, just not in the US.
- baq 1y agoDon’t retire in Silicon Valley then