I've been contemplating what our number "nest egg" is. People always say 25x expenses or 4% withdrawal rate. Maybe 33x expenses or 3% withdrawal rate for early retirees.
So assuming we need $40k/year to live on, a little more than we do now, we need $1M or $1.3M to retire. I go back and forth on whether we should count SS as part of the $40k, especially if we retire early. Or should we just assume we'll have to provide all of that income in retirement.
Another assumption for us is that $40k is a paid for home. Right now that seems so out of reach, but if we moved we could very well have a paid for home.
So I guess the question is when can we retire? My gut says 10 years at 45. Why? Because I think our house will have appreciated enough and we can sell it for a lot more, while paying down principal. And we'll have had 10 years of saving and investing which might bring us to surpassing our nest egg number of $1.3M. Currently we are at about half that number but the next half should go faster since our investments will start to generate more savings and our income should increase to allow us to save more while we curb our spending.
What was your nest egg number?
In an aside it's day 11 of my detox/cleanse and it's been both easy and hard. Hard not eating out and preparing exact meals. Easy in that meal planning is done for me and the food is quite filling considering it's fruit and veggies mostly. I guess I'm done 7 lbs.
Nest Egg
November 16th, 2014 at 04:27 am
November 16th, 2014 at 04:35 pm 1416155738
November 16th, 2014 at 06:35 pm 1416162909
http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/
November 16th, 2014 at 06:59 pm 1416164380
Your annual expenses could go up if there is a badly timed stock market correct/crash right before you retire or in your earliest years of retirement. Also, if you plan to do any travel, that will up your expenses as well.
November 19th, 2014 at 02:42 am 1416364969