<p>@dstark, I do not understand your inflation calculation (i.e., 2.3x; it seems to assume that the total effect of inflation will be felt in the first year).</p>
<p>For 80k withdrawal, inflation adjusted, $2.4M should be fine.</p>
<p>Btw, whoever sold your grandmother that annuity should be barred from the business.</p>
<p>IxnayBobās number seems a lot more doable than dstarkās! :-)</p>
<p>Actually, I called the manager of the bank when I found out about the annuity. A couple of weeks after the annuity was purchased. </p>
<p>Told the manager I was licensed in the finance business. Was going to report the bank to the proper California authorites if they did not cancel the annuity. The annuity was cancelled. Did take 3 weeks to cancel.</p>
<p>2.4 million is fine. I thought I was asked how to never touch the principal. Forever. In order to do thatā¦the principal has to grow every year to keep up with rising living costs. </p>
<p>In my example, of real returns equaling inflationā¦principal decreases every yearā¦ Income decreases every yearā¦costs riseā¦the retiree will run out of money if he starts at 2.4 million and lives more than 30 years.</p>
<p>I do have to redo my calculationā¦may be wrongā¦I got 3 hours sleep. :)</p>
<p>You need to generateā¦80,000 plus the inflation rate percentā¦forever.</p>
<p>@dstark, glad to hear that they canceled it, but in a fair and ethical world, it should never have been sold. When I become dictator, things will be different >:) </p>
<p>Re never touching principal, assuming that my children launch well (which I think is likely), I hope that the very last check I write will be the first one to be returned for lack of funds. </p>
<p>That was my question dstark ā I just didnāt like the answer! :-)</p>
<p>IxnayBob, :). </p>
<p>My two oldest have launched. They are doing very well and should be self sufficient going forward unless they get sick or make poor decisions. </p>
<p>I told my oldest not to expect an inheritance. She is fine with thisā¦for now. :)</p>
<p>MIne are launched too, but now it costs $$ to visit them, we have engagement party, rehearsal dinner expenses, etc. It doesnāt stop-- just the target of the $$ seems to change.</p>
<p>I told my kids, no inheritance and not wedding money help either. In our culture, the boy side pays. They better condition their future in-laws to that reality. :D</p>
<p>Walkingtessieā¦ Yeah. Your scenario you need the principal to keep growing. IxnayBob, doesnt. </p>
<p>Editā¦ Nevermind what I wrote here in the middle of this post. </p>
<p>Jym626, and DrGoogle, :).</p>
<p>Whatever your number turns out to be, remember that a sad percentage of people will be relying on not much more than social security. If youāre thinking about retirement, youāre probably ahead of the game. </p>
<p>My mother was unwise financially, and her social security alone would have left her choosing between food and medicine. I did not mind sending her money every month, but I feel good that it is unlikely I will need financial support from my kids. </p>
<p>I have a sense that there is going to be some real social upheaval when a large number of people hit retirement, without the old defined-benefit pensions, and discover that they didnāt save nearly enough on their own.</p>
<p>Dr. Google,
Not sure what culture you are from, but in our culture the brides side pays most, the grooms covers the rehearsal dinner, alcohol/flowers, and my job is to shut up and weir beige.</p>
<p>āI have a sense that there is going to be some real social upheaval when a large number of people hit retirement, without the old defined-benefit pensions, and discover that they didnāt save nearly enough on their own.ā</p>
<p>Which is when those who advocate socializing 401Kās will start to get some real traction.</p>
<p>And thatās part of why I think, why even bother to save so much?</p>
<p>I get flack for this when I mention it, but my kids will get 2x what I would have spent on a wedding if they have a small civil ceremony instead. My kids are honest, so they wonāt āgameā this offer. An informal party for friends and/or relatives is still within the spirit of the offer. </p>
<p>I hate weddings and what Iāve seen them do to couples and their families. Better to start married life with a small nest egg than with the memories, positive and negative, of a day and the months of planning, arguing, compromising, etc. </p>
<p>jym, my kids were surprised when I told them. They said American culture the brides side pays and Indian culture thereās dowry. I had to teach them in my culture, getting a wife is like getting a cow and get to milk the cows(not literally), but getting married is like getting all the benefits, extra set of helping hands, eyes, ears, bears your children, etcā¦ and everything. Why would a cow wants to be paid, it provides plenty of benefits to anyone? Itās a different mindset and culture for sure. </p>
<p>That reminds me of the saying āwhy pay for milk when you get it from the cow for freeā.</p>
<p>Funny, DrGoogle. Well I guess it makes sense that a pig would have to pay a cow to marry itā¦</p>
<p>I hope my kids donāt have big weddings, that whole mess seems like such a waste of time and money, just for one day. But I have a feeling it will be up to their wives.</p>
<p>There is a thread on CC about weddings and keeping costs down. I think planning well can have a wedding be nice w/o outrageous costs. H and I had a really nice wedding - church, then later restaurant (we had almost the whole place; evening band was open to public - they played until midnight) was very nice and fair price per plate; cake served 300 and we had the top and 10 slices left. Mom was seamstress and she insisted on making dress, 4 bridesmaid dresses, and her dress. In-laws paid for rehearsal dinner (which included family on both sides and a few others in bridal party). Dad thought the flowers were the only thing that was high cost, relatively speaking. Now there are lower cost options there too, but not 35 years agoā¦lol.</p>
<p>People of faith look to marriage being a union, not the thoughts of the secular world where it just may not last, 50/50 and all that. We had a HS graduation party for both DDs; this second one also included celebrating our anniversary and grandparentsā 60th. </p>
<p>Some people do not have solid family situations, but their attitude can be one to strive for a solid family including a worthy spouse.</p>
<p>Hope my DDs will find Hs that has the commitment and the love to be a true life partner. In the mean time, they are on their college/career adventure, and H and I are on the adventure to be ready for retirement.</p>
<p>Another thing about costs at retirement. I was watching a couple on H & G āHouse Huntersā, who bought a 3 BR condo at Myrtle Beach; went over their planned budget (budget was $350,000) - monthly association fees were based on sq foot, so they pay over $1,000 a month. There was a 2 BR condo in the same building (not as great of views, but had views), with association fees about $650, that was under budget. The couple were probably 45ish, no kids, so I guess they donāt have the concerns some of us do. However, for us, having the house price difference and association fee difference invested over the years would probably put someone in more comfortable and much better shape for retirement.</p>
<p>We also have started our DDs on the plan to only borrow for things like a home; drive cars one can afford. They are getting some opportunities for travel now when they have the time and program. One may get that with the military too. Also one is experiencing a different part of the country (AK). They have the energy DD and DM do not :)</p>
<p>Speaking of weddings, I have been invited to the wedding of the woman who works for us one half-day a week, housecleaning. I like her very much, and Iām honored that we were invited because I know she did not invite all her employers. But the wedding is at a very fancy place. I looked at their wedding package, and the menu is incredible, multicourse menu with very elaborate dishes. The minimum is 100 guests, so this has to be costing a fortune. She actually makes a very high hourly rate ($25/hour) and she recently asked for a raise, saying that others are paying more. But her fiance is a day laborer, undocumented (she is a citizen, naturalized, her relatives are all in another country). The wedding registry has only about 30 items, none more than $50. We are in a much higher income/asset bracket, and I can tell you that I would never consider using such a place for any party - itās really over the top.</p>
<p>Sorry for the tangentā¦</p>
<p>I donāt know, SOSconcern, Iāve seen some non-religious couples last a long time, and plenty of religious ones get divorced. Having faith doesnāt seem to stop people from cheating, being selfish, or finding that younger woman more desirable than the old wife. It seems more important to have chosen the right person, as opposed to being religious. My fairly non-religious union has lasted over 26 years. I think the important thing is to do what the couple actually wants (not their family) and what their budget can afford. Spending tens of thousands of dollars on a highly stressful event when you just want the day to be over, is not for everyone. Last thing I really wanted to do was walk down the aisle in a church while my squadron mates were snickering about me wearing a dress, but it was conventional, so I did what was expected. It was nice, small, inexpensive, and all anyone remembers was what a great party there was afterwards.</p>