Personal FinanceCanva | Brigitte Theriault from Getty Images Signature and AndreyPopov from Getty ImagesMarc GubertiIs a $10 million net worth the right amount for you to retire? A post in the Fat FIRE subreddit generated a lot of engagement. The Redditor mentions a Financial Samurai blog post that claims $10 million is the ideal amount for retirement.While most people would argue that $10 million is sufficient, it’s good to dive into whether it’s possible to retire and live comfortably with under $10 million. I will share my thoughts, but it is good to speak with a financial advisor if you can.
The Fat FIRE Reddit group discusses whether you need $10 million to retire comfortably or not.
Your personal expenses, location, and other factors determine how much money you really need to retire.
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Location and Lifestyle MatterRon and Patty Thomas / E+ via Getty ImagesMoney gives you more mileage depending on where you live, and your location can shape your thoughts on how much money you need to retire. Sam Dogen, the man behind Financial Samurai, lives in San Francisco. That’s one of the most expensive cities in the world, so it makes sense that Dogen has a higher net worth goal than most people. Someone who is living in a LCOL rural area doesn’t need $10 million to retire. It’s possible to retire on $1 million or $2 million if you live in the right area and are old enough. Operating on a shoestring budget will also reduce how much you need to retire, but it’s better to set ambitious goals that inspire more action.Continuing to Work After a $10 Million Net WorthWorranan Junhom / Shutterstock.comWhile a $10 million net worth can result in most people retiring, some people continue to work after reaching this figure. It’s important to consider how much you enjoy your work. If you don’t enjoy work, you may want to pursue a career or business that you enjoy when you have enough financial flexibility to leave your full-time job. Some people pursue those types of opportunities while they are employed.The Redditor has a net worth of $12 million. That includes $10 million in stocks and ETFs, along with $2 million in home equity. However, the individual has not retired yet due to a low-stress job that provides a steady income. How Much Do You Need at Retirement?A good way to determine how much you need to retire is to calculate your monthly expenses and use the 4% withdrawal rule. This rule states that you should have a sufficient net worth where a 4% withdrawal from your portfolio covers your annual expenses.Here’s how it works in practice. Assume someone spends $10k/mo and wants to know how much