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Mentor
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Mentor
Your premise is false. It’s simply not true that this is the widely accepted number.
If anything, you are perpetuating a fake echo chamber effect around this number.
Yes. I only just started claiming SS and it’s about 5k/mo. But fuel bills, higher prices all around and the general expense of living in NYC make me cautious. I would move to a warm, sunny locale, Europe, Central America - if I could convince my wife to do so, and live a lot cheaper and probably live a little longer. But she wants to be near the kids.
If you talk about need;
- $2M/80k for lean
- $3M/120k for optimal
- $5M/200k for safe retirement that can absorb the poor market scenarios
But if you talk about wants;
- 10M will add business class travel and international travel to your retirement
- 20M will add a lavish home
- 50M might add yacht …
My point is that WANTs are endless. Plan for what you need and go from there
Not for nothing, but churning a few credit cards annually for signup bonuses can add international business class trips to your retirement with little to no additional spending
$10M has become the widely accepted benchmark for financial independence because 50+ years of inflation has debased the currency.
Subject Expert
It weighs them by their weight in the overall economy and therefore the average budget. Obviously some people lean more heavily on these things but also others obviously lean less on them.
Because of Biden Economics and Inflation
this is wrong, period. this is a falsehood with a lot of presumption that you will continue to live in exactly same VHCOL area optimized for high earners w/o the earning part. You dont HAVE to retire where you made most of your money! for the rest of america half that amount is fairly good.
Also, research spending guardrails strategy, that works way better than some fixed 4% swr.
lastly this is so wrong that there is a joke subreddit around a similar conversation about $5M NW called r/gregfire.
I’d rather work longer to retire where I want to as opposed to making life or family sacrifices to retire earlier.
Seems like this thread is just a way for people to brag about how rich they are
I retired ten years ago in my 40s with about 1.3 in net worth, a nice house in NE and a modest mortgage at 3%. I was divorced and had one kid in college and one in private school and managed to pay the bills and the tuition on RE and market earnings and basically treading water (not losing net worth). But then I remarried, had another child and a younger partner that wants much finer things. So 65 it is ¯\_(ツ)_/¯ but I am confident I can do it at much less than 5M.
Mentor
You realize you retired with nowhere near enough money, but got lucky with market returns?
Good luck with your new life too.
I think of $10M as the generally accepted number for FAT fire, not fire. Agree with most that it should not be necessary for fire. I am targeting $10M but I also want to buy a plane and get a pilot's license...and take on other expensive hobbies when I feel like it.
Out of touch with reality.
$10M for chubby FIRE
$20M for fat FIRE
Yeah, I think for chubby fire that spending sounds right. We spend too much unfortunately but a lot of the spending is kid related.
Coach
Adding to the chorus: $10M is absolutely not "the number"
Seems like no one mentioned consulting with a financial planner. Most people just throw out a number that feels good. $10M?
A good financial planner will brain storm with you and plug numbers into retirement calculators based on your lifestyle.
How much do you have now?
How much are you saving?
What kind of return are you getting now?
What kind of return with more conservative investments in the future?
Current & future of many/ALL living expenses like:
House payments
Home remodeling
Utilities
New cars
Do you have LTC insurance? If not, add in $X for Future long term care.
Do have dependents?
How much do you like or want to travel?
How's your health and future health care needs?
Add in multipliers for inflation for all.
Etc., etc.
If the financial planner & calculators says you'll die with money still in the bank, then you know or have hit your retirement magic number. Mine says I'll die with more money than I've got now based on my lifestyle. And that's starting with a lot less than $10M. Everyone is different though. You could be realistic or be extravagant. Been on a yacht much? No? Then why buy one in retirement? Etc., etc.
One thing that has not been discussed here is when you intend to retire. Retiring at 65 with $10M is a lot different than doing so at 35 with them same amount.
Conservative in early years should allow the portfolio to grow nicely…then you ramp up your distributions gradually.
This is a really good question. The ten million figure seems less about actual needs and more about online echo chambers pushing extreme targets. Most people do not need anywhere near that amount for comfortable financial independence. A realistic plan depends on lifestyle, location, health, and spending patterns, not arbitrary round numbers.
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Are these amounts (such as $5M) standard/recommended for what is in your savings account or your net worth? Also, is it recommended to have your house paid off by retirement and have the $5M in savings?
Mentor
Strong disagree, mortgage debt is perfectly fine.
While some will pay it off, others don’t see any benefit, and could very well be optimizing by keeping low rate debt that benefits them.
My FI number is $1.6m. People that are targeting for $10m are just living drastically different lives than me so I ignore it.
You can have a pretty great lifestyle in most parts of the US on $400k/year. At $10m, not only will you get a nice yield, but your portfolio should continue to grow to (at a minimum) keep pace with inflation (most likely continue to stack). Taxes are also more favorable (dividends / cap gains vs. ordinary income).
25x expenses is the benchmark
Subject Expert
Not for early retirement.
https://vimeo.com/1012841798?fl=pl&fe=sh
Coach
My family has a HHI of $450k before bonuses. While we save a lot of that money now, I suspect I will be more expensive in retirement. More vacations, more eating out, more money for activities and hobbies.
Hiiii
just another arbitrary round number like the 6’s for dating