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Comment by tw600040 | Hacker News Reader

Pretty sure once you hit 2m it will then be 10m :)

I don't know, $2 million invested at 5% return would equate to a post-tax income of about $75,000 or so per year which meets the threshold level of being able to own your own home (in a region with relatively depressed property values perhaps) and engage in whatever (relatively low-cost) activities you wanted to for the indefinite future, be it gardening or programming or art or whatever.

Of course, that's all predicated on a stable civilizational standard which is not at all guaranteed these days, due to issues like climatic instability, social strife, etc.

5% real return is a scary thing to try to tie the rest of your life to.

Perhaps they can buy an annuity or something that will bank on 7% average annual over a 20-30 year timespan and guarantee 5% real return each and every year.

Does such a product exist? I would be surprised if it does.

(I played with Schwab's annuity estimator and it basically refused to give me an estimate)

Now that I'm back in front of a computer instead of a phone, I looked up: https://www.bankrate.com/investing/annuity-calculator/

It suggests that for an annuity with a 2% annual growth (which at least maybe approximates "flat real rate of return,") for 30 years, it'll give you about 3.7%, not 5%.

Pretty sure a guaranteed 5% real return in perpetuity doesn’t exist. My understanding is that annuities are generally very vulnerable to inflation?

If such annuity existed, people wouldn’t put money into index funds :) They have similar or smaller average expectations there, but with no guarantees and with massive volitality.

The devil's in the details. 2m doesn't convey much. 2m in what? 401k? Then it's inaccessible until 60. If not, then all earnings are going to be taxed and need to account for that. And is that 2m including primary residence or excluding primary residence? Also need to bring in mortgage into consideration..and if you do retire, given that health is tied to work in US that adds extra complexity..

capital gains tax at 15% would mean that if you sell 4% of your holdings a year your post tax income is 3.4% or $68,000. That's around $80,000 pre tax which is surely enough to live a middle class lifestyle in the right location if you can figure out the health care situation. Seems to me the questions are 1. How do you get insurance? and 2. Will the historical market conditions that allow for 4% yearly withdrawal while keeping up with inflation continue?

Well, I live in the UK so the insurance thing is a luxury, not a total essential. Also while $2m is almost certainly more than enough for me to live off I won't have to - because I can still work part time if I want to.

And given it's mid life, well sadly it's only got to last me for 40 years, optimistically.

> invested at 5% return

What are some of the investments that can give me this rate of return. Also, the principle needs to keep growing to account for inflation too yea?

I like 2m ballpark as well. Pays off standard school debts, can purchase apartment or modest house, car, other middle class expenses, live with less fear of healthcare-expense induced bankruptcy, and have flexibility to work less. All without a dime spent on opulent living.

Where's the savings sweet-spot at 35 for the security of not having to work anymore to avoid homelessness and hunger? $2M seems a little low, but not a million miles away.

Depends where/how you want to live.

Retiring at 35 you should be able to get away with a 3.25% SWR [0], which'd give $65k/yr from $2M. But a) that'd be mostly long-term capital gains, which have lower taxes than regular income and b) you wouldn't have to save for retirement. So you'd probably end up with the spending power of someone making ~$80k salary

[0] https://earlyretirementnow.com/2016/12/14/the-ultimate-guide...

At 35 I have somewhat limited liquid savings, but decided this year to just stop taking a wage and selling my time in totality. I’m quickly building up the passive income to survive/thrive through recurring subscription software. I’m surviving and I have complete control of my own time, and am figuring out how to work with others in ways that preserve that for them too (wouldn’t want to work with people entrapped in wage labor by my own control anyway). this feels much more certain and freeing than managing % returns on wage labor investment and “career”

Chances are he simply meant a 3-bedroom in a good Bay Area zip code. And I would agree with him in a heartbeat.

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