I don't think I am shifting goal posts? Most people don't have enough of their savings in liquid assets to retire early was, I think, the original goal posts. You haven't convinced me that this isn't true...
Your point about housing (and mine) would benefit from actual data. My contention is that for greater than 50% of people in the US, that they cannot, without moving (say the concrete metric here is a move that doesn't require children to switch schools), purchase a home for $200k or less. This is my intuition based on experience with housing markets and a general sense for how the population is distributed in the country, but it may well be wrong.
On the retirement account front, what I'm saying is that most professionals in their 40s will have a large amount in traditional 401k/IRA accounts, and much less in Roth or non-tax advantaged accounts. I believe this is accurate.
I think the confusion in our conversation is that you seem to be talking about what people can do, if they're focused from an early age on accumulating liquid savings, whereas I'm making a descriptive point that most people, even with large net worth, do not have most of it in liquid assets.
> Most people don't have enough of their savings in liquid assets to retire early was, I think, the original goal posts.
This must be a misunderstanding. I never made this claim so now this wasn't the original goal posts. Apologies if I somehow gave off that interpretation. I actually was pretty explicit I think when saying you could save $10,000 (this is cash) via a 401k or other investment vehicle and the math works out to be around $900,000 saved.
> Your point about housing (and mine) would benefit from actual data. My contention is that for greater than 50% of people in the US, that they cannot, without moving (say the concrete metric here is a move that doesn't require children to switch schools), purchase a home for $200k or less. This is my intuition based on experience with housing markets and a general sense for how the population is distributed in the country, but it may well be wrong.
Again, not a claim I've made. I've simply stated that you can buy a house for less than $200,000 and live just fine (this was based on accumulating a million dollars and that there was an assertion that you couldn't live off of that). It's trivially easy to see for yourself on Zillow or via another product that you can buy an affordable enough house and live just fine in most of the U.S..
> I think the confusion in our conversation is that you seem to be talking about what people can do, if they're focused from an early age on accumulating liquid savings, whereas I'm making a descriptive point that most people, even with large net worth, do not have most of it in liquid assets.
Yea that about sums it up. So I'm not sure where you're really going with any of this. I guess it's cool as a general assertion (and I think it would be interesting to discuss) but I'm bewildered as to why it would used as a rebuttal to something I've said. That's why I asked why you were shifting goalposts.
I understood your claim to be that most people on a typical salary in our industry can be financially independent prior to retirement age. My point was merely that this may seem true on paper if just looking at net worth, but that liquidity is important if you actually want to live off savings (ie. be financially independent).
So in my original post I said you could save $10,000/year. That savings can be liquid if you do choose, and even 401ks can be liquid. If you are a typical software engineer in America you can contribute to a Roth 401k and withdraw contributions penalty free. You’re liquid if you want to be.
Then on top of that $10,000 maybe you buy a house or something. You have the rest of your money to do stuff with too.
The financially independent thing really depends on individual circumstances and desires. For some, $1mm isn’t enough. For others it’s more money than they can spend for the rest of their lives.
I went back to my very first comment in the thread. I quoted this:
> > At $1mm you really are independently wealthy in most cases.
Firstly, my working definition of "independently wealthy" is when you can stop working and keep living. I think this is the common definition, but it's possible you're using a different one.
So from that quote and that definition, what I have been saying is that I don't think it is true that "in most cases" people with $1m are independently wealthy. I think that in most cases, those people have most of that $1m net worth tied up in their house and in illiquid traditional retirement accounts, and could not actually live off of just the remaining liquid wealth once those are subtracted. That's really all I've been saying. It's based on just that one quote that hinges on "independently wealthy" and "in most cases".
> Firstly, my working definition of "independently wealthy" is when you can stop working and keep living. I think this is the common definition, but it's possible you're using a different one.
You are independently wealthy in America at $1mm and do not need to work. It takes very little time to see that hit is the general case. You can buy a cheap house, and buy groceries and probably actually grow the principle amount.
Now from here you can say like it’s not enough money for you, or you don’t want to leave California (or wherever) but you can easily live off of that amount of money in the vast majority of America. You can also say that people accumulated that money in some distribution and all of that too. But even if you had that amount in a house + retirement you can sell the house and move to a different location or downsize or something. If you have a million in assets you’re making a choice to work. Period. There might be some thing you don’t want to give up, or some place you want to live. That’s fine, but you’re making a choice after you’ve become independently wealthy.
At this point you are willfully failing to understand my point. It's extremely simple, many mid career people with $1M dollars in net worth are not able to retire, because their net worth is not liquid, and liquidity is necessary to pay for things. If you do not understand the concept of liquidity, then I really can't help you out. Cheers.
> many mid career people with $1M dollars in net worth are not able to retire, because their net worth is not liquid
It really depends on the assets and the choices you want to make. Generally speaking, if you have $1mm worth of assets, you do not need to work. That's it. Period.
If you find that you need to work, you're making some other choice to work because of some factor that's overriding your desire to not work.
The liquidity of the assets is only relevant if you want to talk about specific cases, and even then it's likely not an issue. You can sell your house. You can withdraw from an IRA or 401k. Etc.
Your point about housing (and mine) would benefit from actual data. My contention is that for greater than 50% of people in the US, that they cannot, without moving (say the concrete metric here is a move that doesn't require children to switch schools), purchase a home for $200k or less. This is my intuition based on experience with housing markets and a general sense for how the population is distributed in the country, but it may well be wrong.
On the retirement account front, what I'm saying is that most professionals in their 40s will have a large amount in traditional 401k/IRA accounts, and much less in Roth or non-tax advantaged accounts. I believe this is accurate.
I think the confusion in our conversation is that you seem to be talking about what people can do, if they're focused from an early age on accumulating liquid savings, whereas I'm making a descriptive point that most people, even with large net worth, do not have most of it in liquid assets.