Fun fact: one million dollars is not enough to retire in many parts of the United States.
The classic retirement rule of thumb is the 4% rule: you should be able to spend 4% of your retirement savings per year. The idea is that safe investments can mostly make up for what you spend, and whatever they don’t make up shouldn’t be a problem in your lifetime. If you plan to retire early, maybe shoot for something a bit more conservative, like 3%.
So by the 4% rule, $1MM in retirement savings is like living on $40k per year. Which is moderately comfortable in some parts of the US and poverty in others.
Stare into space. Get sheet of paper. Plan life on paper. Execute plan by doing things.
My life plan:
Fun fact: one million dollars is not enough to retire in many parts of the United States.
The classic retirement rule of thumb is the 4% rule: you should be able to spend 4% of your retirement savings per year. The idea is that safe investments can mostly make up for what you spend, and whatever they don’t make up shouldn’t be a problem in your lifetime. If you plan to retire early, maybe shoot for something a bit more conservative, like 3%.
So by the 4% rule, $1MM in retirement savings is like living on $40k per year. Which is moderately comfortable in some parts of the US and poverty in others.
Better shoot for $2MM.