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Comment by wsdfsayy | Hacker News Reader

$800k for retirement seems very low...

You must come from a very different world than some of us.

That also seems low to me. in the u.s. you can't count on social security, you're going to be paying for health insurance, and the government safety net in general in non-existant.

I'm personally targeting $2 million to retire comfortably by 50, and I think that's only slightly pessimistic.

For context, I'm 35 and in good health, but I plan on having to pay several thousand a month in health care and housing, and need to be able to endure market swongs.

Retiring now is certainly possible but strikes me as foolish.

Funny enough I meant in the other direction— where I come from you’d be considered rich if you were retiring on $800k CAD, never mind USD.

I can assure you my father retired on much less and largely relies on national and union pensions.

Not to say it’s good to retire on less. He’d happily have more money put away but that wasn’t how life happened. It’s not how life happens for a lot of people.

Hence the “different world” remark.

It implies living on a near-poverty income in retirement. To maintain a median salary you’d want twice that.

If you also owned a home in a low-cost area of the country you could probably still live quite comfortably.

you need to factor in health care, taxes, unforeseen catastrophes, etc.

also retiring to the swamp or midwest or desert is not everyone's cup of tea, particularly if it means severing ties with your community.

"Low" is a relative term, and so we must ask "low compared to what?"

If you retire at 65 and live to 100, you’re supposed to live on $20k a year pre-tax (assuming you’re withdrawing from a pre-tax account like a 401k)?

That isn’t going to work.

$800k does seem a little low, but a lot of that depends on your living situation. Even with $800k you should be able to live off of way more than $20k/year. You can get $20k/year just by buying treasury bonds and collecting interest, maybe even double that potential income if you think that social security will still exist in its current form when you're retire.

More importantly, once you're in your 80s it's probably safe to start whittling away at that principle.

Those numbers seem to assume none of it is invested...

You can get, averaged over several years, something like $50k/year from that.

And if the market crashes when you are retired? What are you supposed to do?

I don’t think it’s sound advice to keep your retirement in stocks when you’re actually in retirement...

You only need to keep "crash /recovery" money around, which is a risk because you don't know how long that is. 5? 10?

But you also don't know how long you'll live for, so to have your money doing nothing for 20/(30?!) years could hurt. My wife's grandmother is 99. That's a long time in low-growth near-cash.

if that money is coming from selling off some equities, it would likely be long term capital gains, which... I believe the first $x000 are taxed at 0%.

Your point about $20k not being much is true, but I also would presume that someone who's saved that much probably would have some social security coming in, at least doubling that.

Depends which country you live in. It’s plenty in some parts of the world.

3% rule -> $24k per year. Pretty reasonable, I'd say.

You’re forgetting taxes. Some will be tax free but not all if it’s a 401k or traditional IRA

mentioned before but i looked this up. at least for the time being, qualified dividends are taxed as long term capital gains.

if your AGI is under $39k (or $78k married couple?), there's 0% tax on long term capital gains (gains from equities sales or qualified dividends). At least at a federal level, there likely wouldn't be any tax due on that $24k pull.

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