"Retirement is a major milestone in anyone's financial life, yet many people still wonder if they are truly prepared. Even those with seven-figure portfolios can feel uncertain, while others may underestimate what it actually takes to step away from work.A recent post on the Personal Finance subreddit highlights this dilemma. A 54-year-old husband in Michigan explained that he and his wife are debt-free and have built a combined nest egg of three million dollars."
"If they follow the 4 percent rule, their three million dollar nest egg would give them about one hundred twenty thousand dollars a year before taxes. That comes out to ten thousand dollars a month, a little shy of the twelve thousand dollars they expect to spend. They also want to leave a solid inheritance for their kids, so stretching their dollars matters.Their investments alone might not cover everything, but they also have teacher pensions worth eighty five thousand dollars each year."
Couple is debt-free with a $3,000,000 nest egg and one child in college, another graduated. Using a 4% withdrawal rate yields roughly $120,000 annually before taxes, equating to about $10,000 per month versus the $12,000 monthly target. Investments alone may fall short, but teacher pensions adding $85,000 per year materially improve the income outlook and make early retirement more attainable. The husband intends to retire at 55 while the wife may work one to two more years. Upcoming large expenses — a house upgrade to $700k, two new cars, two weddings, and increased travel — will reduce savings and require careful planning.
Read at 24/7 Wall St.
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