What is the magic number?
Tonight's US Lottery is expected to exceed 600 million dollars. With early payout and taxes that is still a ridiculous amount of money somewhere in the A-Rod money area.
It got me to thinking. Some of you are working with the primary goal of retiring. You may not hate what you do but the job you are in was a careful consideration of the use of your skills to create as much wealth as quickly as possible to retire.
What's the magic number? If you were to receive an inheritance from a long lost relative, win the lotto, have your mutual funds set record returns, or whatever what is the number that you would be comfortable retiring with without worrying?
$10 million. Let me tell you why.
For another project, I figured out what you could buy with just $10million, and here's what I came up with for a family of 5 (mom, dad, 3 kids, plus some aged parents they have to take care of):
cost of a Bachelor's degree (most expensive, of course) - $100,572 (x3 kids = $301,716)
cost of a year of nursing home - $50,000 (average total $114,383, x2 parents at twice the average = $457,532)
Mercedes-Benz G63 AMG (mom's grocery getter) - $135,205
Nissan GT-R (dad's commuter) - $96,100
Ferrari 458 Italia (dad's "fun" car) - $230,275
Mitsubishi Lancer Evo (son's car) - $38,490
Infiniti M35h Hybrid (daughter's car) - $54,595
Ford Raptor (other son's fun truck) - $45,940
cars total - $600,605
5 million dollar house - $5,000,000
Bavaria Vision 46 yacht - $311,412
country club membership - $120,000
maid and cook annual salaries - $60,000
annual taxes (24.6%) on $10mil - $2,460,000
total - $9,311,265
Yeah, I was pondering what people could buy if the government enforced a $10mil salary cap on citizens of the US - in one year, they could take care of their kids' college education, their parents' retirement home costs, buy a mansion, 6 very expensive vehicles, a yacht, one year's membership at a fancy golf club, keep a maid and a cook on staff, and still pay their taxes to the government, and have $600,000 left over. According to the 2011 tax roll, 7% of the tax paying population makes over $10 million a year. Just let you ponder that one for a while.
usagi while your use of a 10million sound ''good'' there is a flaw if you need retirement money, you won't be able to keep up everything you bought since you won't have made more money and retainly not retire with what would be left over.
You misunderstand me, sir, if I had $10mil I wouldn't buy all of that stuff - definitely no mansion, definitely wouldn't pay for my daughter's college at a $100,000 (even in 14+ years, there will be cheaper options that still generate a diploma), wouldn't buy most of those cars (okay, maybe a GT-R for a "fun" car, but even with $10mil in the bank, I'd still have the slightly used beaters I've always favored for daily drivers), definitely no yachts (not fond of sailing), no country club membership (hate golf), and no maid or cook. No, it was a study I'd done for myself of what someone who would "suffer" under a government enforced annual salary cap of $10mil.
But if I had $10mil in total net worth (investments + property - debts), I'd retire from my daily job. Even now, though, I'm always on the lookout for jobs that would fill the hours after I retire. Like the guy at the major airports who drives from the rental agency to all of the terminals and back again, for 8 hours a day - meet new people all the time, don't have a lot of stress, and no real brain activity. Perfect for a retirement job.
1.8M and I'm done for good. Or at least that's what my 401k says I should have at 55 if I keep doing my 6% and the company match. And I make peanuts.
I think I could consider "retiring" if I received over $2 million after tax winfall right now. If I received $4 million, I certainly would. It really doesn't take that much money to maintain a good standard of living if you can resist running out to buy the mansion and new Ferrari.
If I wanted to "retire" five years down the road I'd need about $7.25 million total to cover the following 65 years.
So I figured that in five years it'll cost about $45,000 for cost of living. Using that as a base and 2.5% inflation I get an equation of f(x)=45000*1.025^x
Now I know that's probably pretty horribly simplified, but it's close enough for me right now. Anyways, finding the area under the graph for that equation from the initial year to year 65 gives me $7,249,460.60.
So, I'd need about $7.25 million dollars to cover me and another person from when I'm 24 until I'm 89.
|All times are GMT -4. The time now is 02:18 AM.|
Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2015, Jelsoft Enterprises Ltd.
Search Engine Optimization by vBSEO
© MCB Network LLC