$5m only makes sense if you are spending many times the median family income, or if you think times now are worse than the inflationary 60-80-, the great depression, or the various doldrums and catastrophes in the late 19th/early 20thc.I’m new here, and I suspect that I might catch heat for this.Actually, did anyone actually listen to the podcast where her comment was made. She specifically refer to several existential risks before qualifying with her $5mil comment, it included risk of AI that'll disrupts the workforce (this was back in 2018), the social security crisis, the aging population and high US national debt. She merely suggesting to take these into consideration and also including personal risk such as significant medical expenditure, she would feel more comfortable with $5mil or more fore early retirement.
That would be all well and good if she was talking about that kind of lifestyle, living in Bay area, leaving legacy, etc.
I didn't see any of those qualifiers in the article, did you?
And yes, she absolutely referred to early retirement as 25,30,35 in the podcast, that was the very first thing she referred when ask by the host why she didn't like the FIRE movement.
P.S. Yahoo finance is just going with eyeball drawing headline and reporting, better off going to the original source.
But certainly, if someone who has high income and is 35 or younger and is seriously contemplating a super early (35 or younger) retirement, I do agree that a liquid net worth of at least $5M makes sense. This is a very different situation than retiring early at 55 or even 45. The question is risk tolerance and earnings potential. At 35, you are possibly going to have to live 55 or 65 years on this portfolio. I bet $5M won’t look like such a spectacular amount of money in 2070.
Since TIPS are positive real yield right now, 5m in TIPS would give you 100k plus whatever the equivalent of 5m in 2070 is. That matches the rule of thumb that 2% is forever, multigenerational never-failing levels of spending. One could reasonably expect a 60/40 portfolio to return more than that, and that you can withdraw somewhat more if you are willing to let the portfolio reduce over time.
Statistics: Posted by jackholloway — Sat May 18, 2024 7:16 pm — Replies 208 — Views 18291