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Okay, here's the scoop...

 1. I figure I need $100K/year taxable income, in todays
    dollers, to live comfortably for the rest of my life.

 2. I'll probably live to around 90... maybe 95.

 3. I'm now 46, single, no kids, and
    I have the following assets:

      a) $1 million in after-tax savings
         (invested in individual stocks)

      b) $500K in tax-deferred savings
         (invested in stock mutual funds)

      c) $500K in stock options & bonuses that
         I expect to collect in about 2 years.

      d) $200K inheritance that will come my way
         some day (estimated value of my portion
         of a trust my father established for his
         wife... I collect when she dies... that
         will be in about 15-20 years).

      e) A home worth $250K, no mortgage.

      f) Another home worth $150K, no mortgage, that
         I bought for my dependent mother to live in.
         [I'm filing as "head-of-household" for the
         first time this year.] She has very few assets
         and perhaps another 15 years of living in her.

 4. I figure to continue working full-time for the
    next 2 years, and then work half-time for about
    another two years... current income tops $110K/yr
    and will continue growing these next few years.

 5. My general plan is to only tap my after-tax assets
    until around age 60 or 65 whereupon social security
    and my tax-deferred assets would start to help out.

Does this sound feasible? Have I grossly miscalculated?
I'd love to hear any thoughtful comments...

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rpreuss, you are not almost there, you are there. Aside from the thought that you may be overestimating what you'll get from Social Security (about $1300 a month in fact), you've pretty much done it. If you stay away from fancy women, you won't need $100K a year anyhow. I figure I can do it on $25K easy.
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rpreuss: You may wish to review The Retire Early board here on TMF (in Speaker's Corner) and "intercst's" Retire Early Home Page at


The rough rule of thumb for the inflation adjusted safe withdrawal rate is 4%, which suggests that one needs investable assets worth 25x first years desired income. 100k * 25 = 2,500,000, so you are close and will be even closer as you collect your options and bonuses.

You stated assumptions are closer to a 50 year payout, and in that case the safe withdrawal rate drops a little, somewhere around 3.4%, IIRC, but you can look it up.

In addition, depending on how you count the value of your home and the second home, you may be even closer, but different people use different methodologies WRT this issue.

Not that it is my place to tell you how to live, but your 100k number may be high; there have been threads on The Retire Early board about how a 25k retirement income is more like a 75k salary. I do not know how closely you have reviewed your proposed budget, and you appear to have most of your housing expenses covered because you already own your home (still have taxes, insurance, and maintenance), but if you looked more closely and decided 80k would suffice, even at 3.4% (50 year horizon), you would need roughly $2.35MM in investable assets, which is not far from your two year from date estimate -- 1M + 500k + 500k + two years investment performance + any additional savings.

I suggestt hat you do read the things I have suggested and then you can refine your personal analysis.

Hope this helps. Regards, JAFO
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Rule of thumb, back of the envelope calculating says that you need 20 times annual living expences to retire Foolishly. In your case 100k X 20 is 2 million. You're there, congradulations.

Only two pieces of advice. #1--don't count on inheritence, if you get it, think of it as a nice bonus. Don't factor that into any retirement planning. #2--why mutual funds? Unless individual stocks are not an option, it's most unFoolish.

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<< I have the following assets:
a) $1 million
b) $500K
c) $500K
d) $200K
e) $250K,
f) $150K.>>

Your name wouldn't be Rockwell by any chance? <g>
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Does this sound feasible? Have I grossly miscalculated?
I'd love to hear any thoughtful comments...


Well, Bob, $2.2million of liquid assets invested at 5% pays you $110,000/yr. That's not rocket science, is it?

Of course you have the taxes to pay on it, and the market to worry about, and where to invest it, etc. but you can always pack groceries at the local A&P to make up any shortage. Ed
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Thanks everyone, particularly JAFO31, for your replies.

I'll investigate the "retire early" links as I
expect they'll help me figure out how best to
organize my finances.

BTW> You may be interested to know that the million
buck figure is an estimate of the value of my stock
portfolio (net of margin debt and estimated tax
liabilit)... last July it was only $200K... so as
you can see, I've been very lucky lately.

Best of luck to all of you!
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As one who has been retired for 11 years I can say the magic formula is to live off income and continue to grow capital. With your current asset base that should not be a problem and a 100K+ plus taxable income is perfectly feasible. Rising interest rates will make taxfree municipal bonds an increasingly attractive option. The taxman is your biggest enemy so tax mitigation should be part of your planning especially after 70 1/2 if you have any non-Roth IRA's. At that point, if you have no dependants, you need to plan how to keep your residual assets out of estate tax liability - perhaps start a Motley Fool Foundation for less fortunate investors! Enjoy it while you can - you can't take it with you. - Matthew
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