Retirement: How Much is Enough?

A $2 MM net worth is in the top 10% of
the 65-69 age cohort (myroadtofire)

Back in 2005 my friend Phil and I had a conversation about how much we would need to retire comfortably. The assumptions were:

1) we wouldn't have a defined-benefit pension plan;
2) we would be collecting Social Security and participating in Medicare.
3) our house mortgages would be paid off;
4) our assets would be the total of everything in our taxable savings, stock brokerage, 401(k) and IRA accounts;
5) the tax attributes of various assets would be ignored;

We agreed that we would need more than $1 million, but $2 million would be the goal if we still had a few years of mortgage payments.

Without doing actuarial analysis or investment projections, a nest egg of $2 million would allow us to withdraw $100,000 for 20 years, and that would be plenty enough to support a middle-to-upper-middle-class lifestyle.

17 years later, $2 million in investable assets may still be the right number.

The WSJ profiles four (4) retirees who have net worths (including their homes) of $2 million - $4 million. They all spend at least $93,000 per year, and none have cut back substantially because of economic conditions. Some, however, eye the volatile stock market with trepidation.

How much is enough? Some of the people in the article--and your humble blogger--don't know the exact number, but we know that $2 million doesn't get us there.