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Comment by fgonzag | Hacker News Reader

At least in the USA it is in no way FU money unless you are over 60 or something. Assuming you invested it all and didn't spend a single cent, that's 12K a year from interest (generous 7%). You can probably spend 30-40K for 30 years if you decide to dip into the principal. But if you are young, you will have to get a main income source.

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"Safe withdrawal rate" is usually pegged at 3.5% to 4%. On an initial lump sum of $1MM, that's $35K-40K/yr, not $12K per year. (I'm not sure where the 7% came from in your post.)

Good scenario modeling tool: cFIREsim: http://www.cfiresim.com/#

You can login as HNHN : HNHNHN and look at the scenario I modeled using the information in this thread. That has a 100% success rate from now until 2080, assuming a 3.5% annual spend ($35K to start) AND ignoring any new money being added (from his mathematics or other work).

It's not Maserati money perhaps, but it's absolutely a secure retirement for someone currently living on $25K/yr.

> On an initial lump sum of $1MM, hat's $35K-40K/yr, not $12K per year. (I'm not sure where the 7% came from in your post.)

The original poster calculated the value off the $1.8MM (not the tax-deductible number), and simultaneously made a place value error ($12k/year is 0.7%, not 7%, of $1.8MM).

You put a decimal point in the wrong place. 7% of 1.8M is 126K, not 12.6K. Really it would be more like 77K from 1.1M once you factor in taxes, but for most people that's more than enough to live on without ever touching the principal.

Some serious math errors here if you think 7% of $1.8M is only $12k / yr. (Even accounting for taxes.)

You probably can't live on it solely but together with the pension it gives you the freedom to find a job you like even if it's low pay.

Pension doesn't pay out until 55

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