Retirement investing...

[SC Maintenance]

Retiring at 39 with $500K is a pretty good trick, IMO. I don't know how you do that, if you are going to live awhile. Prices continue to go up. $50K will likely be needed for house and car repairs alone...
If your job is the problem, perhaps look into doing something else?

Yes, this is the elephant in the room. Inflation.

Lets say you can live off your $500K investment - lets call it $35K - 7%. For those not paying attention, CPI over the last 6 months is back up near 4% annualized. So lets say we average 4% for the next decade - many say we are. In 10 years your $500K now has the purchasing power of $337K today.

IMHO - if you want to live off of interest / dividends without touching principal - you need to plan for maybe 2 to 3% max real return - ie after inflation - so you can keep increasing your nest egg by the inflation rate.

 

[ATex7239]

Yes, this is the elephant in the room. Inflation.

Lets say you can live off your $500K investment - lets call it $35K - 7%. For those not paying attention, CPI over the last 6 months is back up near 4% annualized. So lets say we average 4% for the next decade - many say we are. In 10 years your $500K now has the purchasing power of $337K today.

IMHO - if you want to live off of interest / dividends without touching principal - you need to plan for maybe 2 to 3% max real return - ie after inflation - so you can keep increasing your nest egg by the inflation rate.

I would not feel comfortable retiring at that age with that amount of money unless there were other income streams to offset it. Add another zero or ~ 20 yrs then that’s way more manageable.

 

[Pablo]

Back to retirement investing the biggest problem around here is the nut behind the wheel.

 

[LDB]

I retired at ~$5xxK at 66. Plus SS. Plus a little bit of extras. Plus no mortgage or debt, just monthly bills. And no expensive hobby, at least requiring any additional input or ongoing outlay i.e. golf/tennis/bowling/cinema fees etc. My main hobby is meeting/visiting/thanking military and first responders for being there any time I see them. Costs me zero and I often get paid a nice smile and visit. Also hobbies of reading (many many thousands of free books available via Kindle and Guttenburg and public library) and ham radio which I am all set on already.

 

[JeffKeryk]

Back to retirement investing the biggest problem around here is the nut behind the wheel.

I resemble that remark!

 

[JeffKeryk]

@Ws6 I strongly suggest rethinking your plan. I could be wrong, but your current plan most likely requires a lotta luck.
2 things I would consider:

1. Is it the job that is the problem?
2. I would talk with advisors from your HR and Schwab to get more information. Information is power!

A horrible position you might find yourself in is, getting past working years (and opportunities) and being broke. It can happen to any of us.
Best of luck.

 

[Dave Hess]

Yes, his job sounds very high stress and dysfunction place to work.
Time to look for a new job. Mental health very important.

OP didn’t mention his wife’s retirement contributions and savings.

55 is a realistic age to hit $1M but it takes a budget and investing.

Not getting employer’s 401K / 403B match is a BIG No No.

 

[Dave Hess]

Many colleges and universities are trash degree mills handing out pieces of paper.

Lots of sham degrees and the grads working at Starbucks or Chipotle.

55 is more realistic but you have to be extremely disciplined.

Here in Florida I see lots of ‘Executive MBA’ ads on large highway road signs for various degree mill colleges and universities.

Students get these trash degrees and expect jobs paying big $$$$$$ only to find out they wasted their money and have big student loans.

 

[JeffKeryk]

Here in Florida I see lots of ‘Executive MBA’ ads on large highway road signs for various degree mill colleges and universities.

Students get these trash degrees and expect jobs paying big $$$$$$ only to find out they wasted their money and have big student loans.

What about local Community Colleges and Universities?

 

[Astro14]

What about local Community Colleges and Universities?

In general, the ROI on a degree is hugely positive over a lifetime of earnings.

However, the OP has stated that his goal is to retire in 11 years, and that he hats school and thinks it is a rip off.

There is next to zero ROI on education in that short time frame.

Also, there is next to zero chance that his investment goals ($50K/year from his portfolio, that doesn't yet exist) will be met.

 

[SC Maintenance]

I am a big believer in higher education. It’s enabled me to have a job I love. I hope to have the health to work late in life. The fact it pays well is the bonus part but not the reason.

 

[JeffKeryk]

In general, the ROI on a degree is hugely positive over a lifetime of earnings.

However, the OP has stated that his goal is to retire in 11 years, and that he hats school and thinks it is a rip off.

There is next to zero ROI on education in that short time frame.

Also, there is next to zero chance that his investment goals ($50K/year from his portfolio, that doesn't yet exist) will be met.

All true.
It's also true that sometimes we find out we might not have all the answers. Life's trajectory can change; I am but one example. I will shout Community College, and recovery, for as long as I live.

Ya never know...

 

[Sumboodie]

I could easily live on $50K a year in my area once I pay everything off. Could live well, even. That said, I agree with the fear over it being tied up in a single asset.

Plus SS, disability, rentals, etc.

 

[Ws6]

Yes, his job sounds very high stress and dysfunction place to work.
Time to look for a new job. Mental health very important.

OP didn’t mention his wife’s retirement contributions and savings.

55 is a realistic age to hit $1M but it takes a budget and investing.

Not getting employer’s 401K / 403B match is a BIG No No.

Work is what it is. Thats life mate.
I'm single and don't plan on using someone to retire, so to speak.

 

[PWMDMD]

Dividends are paid IF there's money available to pay them. Things may or may not change drastically in the future and that may have an impact on their ability to pay dividends.

 

[Ws6]

Dividends are paid IF there's money available to pay them. Things may or may not change drastically in the future and that may have an impact on their ability to pay dividends.

That's very true.

 

[Dave Hess]

$1M at 55 years old is obtainable….. that’s 16 years from now.

Maybe get side hustle, work OT or a part time job and strictly invest that extra income… ?

There was a time in my working career I was making $20-30K in OT yearly and most of this money was invested in my Vanguard account. I did this for about 12 years and there was nice growth.

 

[JeffKeryk]

There was a time in my working career I was making $20-30K in OT yearly and most of this money was invested in my Vanguard account. I did this for about 12 years and there was nice growth.

Time value of money for the win!

I guess the option I was suggesting is, invest in yourself. Obtain a job you can live with.
The employees at our local Costcos seem pretty happy, all in. There's one guy who spreads so much happiness and good cheer. I asked the 2 gals loading my cart after he swiped them, "Why is he always so happy and good to people?" "Yes, I think it's his wife..."

All good.

 

[Dave Hess]

What about local Community Colleges and Universities?

Both are great if the education is relevant in today’s economy.

A useless degree from Bobblehead University is a waste of time.

 

[rijndael]

We still require a 4 year degree on all of our job postings even though vendor/career certs are more than enough. As a hiring manager, I value honesty, curiosity and being self starter over that 4 year degree.

As long as we (and others) keep requiring the degree, having it opens more doors. It definitely had an impact on my first job.

If nothing else, it proves you can show up for 4'ish years and get work done, even if the book learned skills aren't directly relavent.