“Do you need $1 million to retire? I certainly don’t. Don’t get me wrong, I’m not saying I wouldn’t love to have it, I’m only saying it’s not necessary for me to have. As it stands, my annual expenses are no more than $30,000. I’m certain that, with a little geographic arbitrage, I could bring that number way down.
However, let’s assume that my annual expenditures will remain the same during retirement. How much will I need to have in savings to allow me to withdraw $30K each year, without jeopardizing my retirement security?
According to the controversial 4% safe withdrawal rule, which estimates the amount you can withdraw annually from your initial investments over a 30 year period of time, that number would be $750,000.
It’s not a million dollars, but I’ll take it. Hey, I’d even gladly accept $500,000.
The question now becomes, how does one get there?”