Originally Posted by medford
thanks for the update, never saw the original post, but happy to see the outcome some 3 years later.
If you don't mind me asking, w/ the house paid for (I assume the rental properites as well?) what are your monthly living expenses? What are the things you find yourself paying for in retirement that you didn't think about 20-30 years ago? I've often wondered myself just how much I'll need for retirement.
I've read alot about something I think is called the theory of 20 or something along those lines, where basically you take your yearly living expenses, multiple it by 20 and that is how much you need in retirement. You take out 5% each year, and even if you started your retirement in the worst time frame for the S&P (It was the early 70s at the time I believe where it took a sharp dive over 2 years) you still ended up growing your portfolio showing that traditional returns, even if you pick the wrong year to start should get you thru assuming you can start limit your self to a 5% withdrawl each year (the historical return would outpace inflation so each year you'd take out a little more money in theory than the year before to overcome the rise in cost)
I'm currently on "pace" to have a little over 1 mil in my 401(k) when I hit 60. I've got a small personal account outside of that that I hope to continue contributing to again some day, plus we'll have my wife's retirement from STRS (teacher's retirement plan). Throw on Social Security (if its still there) as well. The 5% would be 50k a year, plus 5% of whatever my personal accounts are at the time, plus the SS and my wife's pension plan (there are so many changes I haven't even bothered to begin worrying about what that will be yearly at this point). All told, $75 to $100k a year, I'd hope to have my house paid off at that point, perhaps even a retirement getaway somewhere. Inflation will eat into that number from today; I think that would all be enough, we live fairly simple, probably wouldn't start getting all extravagent in retirement.
You're going to be far ahead of me if you are going to have a million. I am withdrawing from my retirement accounts, but I am not withdrawing any principal. If you recall from my retirement threads, I am a believer in Dividend Growth Investing. Not just at the end.... the whole way. So right now I am in the distribution (retirement) phase, so I am withdrawing 75% of my dividend income and reinvesting the rest. Only been in that phase for 2 months.
I am not retired enough to have lowered spending. My wife still works full time and I'm working part time. Nothing has changed. And other than the fact that I have a very big car payment that will someday end, I'm not sure I expect a big reduction.