Another neat milestone is that our estimated retirement income today has now surpassed $50,000 per year using the 4% rule.

For those of you that don’t know the 4% rule it is based off of a bunch of studies of what would be an absolutely safe withdrawal rate from a diversified stock & bond portfolio that would survive even the worst downturns (retiring the day before the great depression) and still have the retiree never run out of money.

This means that if my family of 7 could survive on $50k a year we would be financially independent and never need to earn income again and could just live off our our nestegg.

Now yes the market has been on a very huge runup this year and well for the last decade which is why this update is coming just 6 days after my nestegg just crossed $1.2M for the first time, but again the 4% rule is the based off of the unluckiest investor in the world who retired right before a massive market crash and they still survive. In almost all scenarios the retiree ends up having their portfolio greatly increase in size at the end of their life despite withdrawing 4% every year.

What does this mean for us? I’m not sure as there are a few caveats that we need to figure out. The first being that the vast majority of my money is tied up in retirement accounts that we can’t access for another 19 years without paying a penalty so we’d have to account for that piece.

I know we could live off $50k a year if we needed without too much struggle, but also am not sure we are ready to fully retire at this point as both of our work schedules coincide pretty well with our kids schedules so the only benefit of retiring fully would be to spend individual time outside of our kids and to be honest I’m not sure either of us have any great plans for what we would do with that time, so for the time being we will keep the spigot of additional money flowing in.

The other big wild card is health insurance which is ultimately probably going to be the biggest and most costly item we need to figure out before we pull the plug completely.

So right now this doesn’t affect us too much other than to give us confidence that no matter what happens with our work we are sitting

Taxable Account- $71,065.52
Private Stock $72,000
Traditional Rollover IRA – $44,844.64
My Roth IRA – $309,696.78
Wife Roth IRA – $197,579.94
Wife 401k – $4,744.59
Traditional 401k – $554,514.71

Roth/Traditional % = 40.40% (tax free)

Total Retirement Nest Egg $1,254,446.18
Retirement Salary (4%) $50,178