Beeroclock wrote: 2. It's a very legitimate question, and any serious retirement planning will go through the exercise to work this out. Several assumptions needed (annual living expenses, interest/dividend rate, tax rate, inflation rate) and you can back-calculate the lump sum needed to be financially independent. Which doesn't mean you will never work again, just that you will never HAVE to work again. Quite a luxury to have this choice.
Interesting. I've had to edit it down to have a chance of getting to any of your points (you raise many!
I take your point about estimating expenses, but heavens it's not easy is it? I mean I sit here in SG, and have to try and predict what my 'running costs' might be if I retired to New England, or indeed England, or 'N E Where'
. Hmmm. Yes yes, I appreciate the way of crossing this psychological rubicon... just take a stab, give it your best go (Q. 'But how can I if I don't know?', --- A. 'Just try, your best!'). Aghhhh!
I think you make an excellent point, about visualising your expectations in retirement.
- Where will you live
- what will it cost
- what will your recurring overheads be
- what will you need for discretionary spending (holidays, 'treats' etc) be?
> Work it all backwards, to reach the lump-sum required to reliably generate the above...
and so on.
It's a difficult thing to sit down and consider if you've always followed a path of 'saving and just getting by'. Suddenly the reality bites...
@Z. Yeah, and I also saw Wall Street get KO'd when the Dot-Com bubble popped. It took down a lot of people... ...