Generally charitable foundations figure that you can withdraw 3% per year from your savings and never run out. Remember you have to account for not only good years, but also really bad years, so even though you can average 10% over the long term in the stock market there will be decades that you are negative. There are also bond investments that are safer, but have worse return. And inflation is always eating into your savings so if they don't grow by that much every year (on average) eventually you will run out of money.

3% of a million is only 30k per year. A frugal person can live on that little - but it will be hard. You can make more than that working at McDonald's near me, and nobody would claim that is a living wage.

Now if you want to retire you don't need your nest egg to last forever, only until you die. You can thus withdraw a bit more than 3%, but I'm not sure how much. (and you may have other pension plans to work with). Still if you withdraw 100k/year from this million you will run out of money in less than 20 years (with 12 being realistic) 100k per year is not a great income for a programmer.

> You can make more than that working at McDonald's near me, and nobody would claim that is a living wage.

Or he could scrimp and put four hard years towards making manager at McDonald's. If he gets it, then he can demand they match 44k a year (his passive income at that point) or he walks.

He could then try the same at Wendy's, and walk to retire on 64k a year.

Compound interest is one helluva drug!

The hard part is housing and transportation. If you've managed to pay off your house before retiring and it and its major appliances are in good shape, and if you are someplace where you need a car you have that off too, and you can find a place where property taxes aren't too bad living on $30k/year is actually quite reasonable if you don't have expensive hobbies.

(I'm going to assume that we actually withdraw slightly more than 3% to cover taxes, so that we are getting $30k/year after taxes).

I'm in the Puget Sound area of Washington with a paid off house and until a few months ago a paid off car. My new car is financed for a few months while I wait for some CDs to mature which I will use to pay it off. In the following I'm going to treat it as paid off.

The expenses that arise every month (e.g. food/groceries, some insurance premiums, utilities, prescriptions and OTC health stuff) plus the expenses that are yearly or half-yearly (e.g. some insurance premiums, property taxes) converted to monthly comes to a little under $2000/month.

A new Mac every 5 years, an iPad every 5 years, an iPhone every 4, an Apple Watch every 4, and a new car every 10 works out to be equivalent to around $350/month.

That leaves $1800/year out of our $30k/year, which can cover the occasional need to repair or replace a major appliance.

I do have fairly low property taxes thanks to a pretty good senior discount that Washington provides, but Washington is also a high property tax state. If we pick a low property tax state there are a few were someone without a discount would be paying about $800/month more than I'm paying for a comparable house. In one of those states that would leave us $1000/year for the occasional appliance repair or replacement.

You may need to make sure your house is suitable for this. Mine has a well and septic system which can be expensive to fix if they break. That could require drawing down the principle. We'd probably want to pick a house on municipal water and sewage. Also pick one in a milder climate so that we aren't relying on some expensive high capacity heating and/or cooling system. That should keep heating/cooling repairs down.

We also should take another look at that 3% a year withdrawal. We don't need to never run out. We just need to not run out before we die.

We can bump our monthly withdraw up to $3000 and keep that up for around 60 years. With that we've got $7k/year for our maintenance/repairs/replacements.

Another thing we should probably look at is whether we've already done enough work or whatever else is required to qualify for our country's old age benefits someday. If we will be able to start collecting those when we are 65 for example, and we are getting our $1 million at 30, we can withdraw more now than if we have to have the $1 million get us all the way to death.

>You can make more than that working at McDonald's near me, and nobody would claim that is a living wage.

Hey, good for you. But 30k per year is a very good salary in European countries such as Spain, where the median salary is just a bit over half that.

Shit Americans say...