Gilbert Asked, When to Pull the Plug and Go Travel?
How much monehy do you need? Do you agree with the proposition that if you take only 4percent of your gross assets, then you will be able to live on that money until you die?
If you have $1,000,000 you can take $40,000 per year for the rest of your life and never run out of money?
How much money do I need? I am not sure? I do not have health insurance, more or less self-insured, i can afford to pay for any doctors, except for Cancer, and maybe why I refuse, try to limit chemicals touching my body. How much does cancer cost, I guess it is according to how much we want to stay alive, as for me, I guess I am not too concerned about dying, so no health insurance. Hmmm, not totally correct, I have an extreme regiment of exercise, foods, and other.
I am told if I am indigent I can get medicaid, which is maybe the Health Insurance I wanted, but did not get with the new USA healthcare system.
IF we remove the medical from the equation.
I need about 700 USD per month and I am happy as a lark. I can go anywhere, and live anywhere on the planet.
Formulas for Retirement - I will say, follow the money, follow who benefits. Most financial advisors talk investments, and ROI and all this complicated math. I am not sure, what I think you are saying is this math?
x .04 (Four percent interest received from somewhere, hopefully a bank.)
= 40,000 and, the financial advisors, the banks, and everyone also benefits, along with children, and anyone who inherits the money.
This is the best option, if you have accumulated this amount of money, 40,000 dollars is a fortune, 90 percent of the planet only earns about 6,000 USD per year, so stay out of the 15 super rich countries, and life is super super super simple.
I am 60, and expect to live to be 95 year of age, so I have 35 more years, changes according to family.
1,000,000 divided by
= 28, 571 another fortune.
I need 700 per month.
700 x 12 = 8,400
In two more years, I will collect Soc Security and I am a made man. Now, I believe the USA will always fund SS, because if not, it is end of days anyway, the world is bankrupt, and we all get to scramble, if the USA goes down, the world goes down.
I am totally in favor of burying a million dollars in the ground in gold, silver, etc.
As we can see, each formula is different, and the "risk tolerance" is different. Gilbert, I suspect you have way over what is needed, way over. But when we work all our lives, hard to believe we can stop working, we are told daily, by the minute, by the second to work. If we do not work, we are a bum. Well, work is not the measure of a man, and money is not the measure of the man, it is our fruit, our good, how we treat our neighbors
Now, people who are addicted to food, drugs, alcohol, co-dependent,or to buying everything, and anything, to hoarding, to having a bigger pile of something than their neighbors will have problems with any of the above formulas.
People get angry when I want a profile, but anonymous, which you are not, you are great. There is no way an anonymous person can be helped by their friends, because anonymous has no friends. We are all OK, and whether we like it or not, we will go on living our lives, with or without money. I see 4-5 billion people on the planet who want a lot of children, so the children take care of them in old age. You are helping your Father in law, and this means, probably you have someone too.
Gilbert, I believe we are always safe, even when in doubt, sort of faith in a way I believe the world of my friends, family, and others will all work together. To be rich in family, friends, and time is rich, all the other stuff is gravy.
Andy Lee Graham in Tours, France, 2016
Using your number, $40,000 annual withdrawals from $1,000,000 will last 25 years plus whatever interest you are earning on the money. Depending on your age, 25 years may be long enough. However, factoring in 3percent average inflation, in 25 years you will need roughly $80,000 annually to maintain the same buying power.
However, is $40,000 annually the correct number? I think it is very high. While everyone has their own requirements of what they "need" to live (accommodations, food, entertainment...), I think a general, realistic monthly number is $1,000/month, plus travel expense and medical savings. I know many people (couples) living on less than that and I am spending right at it here in the Philippines (not including airfare and health savings). Last year in Panajachel my monthly living expenses were $600 but I was single when I was there so food costs would have been a bit higher.
Using $12,000 annually as a starting point from $1,000,000 (at zero interest because I don't know how you are invested) and 3percent average inflation, the $1,000,000 will last approximately 42 years with your last withdrawal being $40,000 (which is equivalent to $12,000 in 2016). Add in social security payments and you have income for travel and health savings.