According to a 2024 Northwestern Mutual poll, most Americans believe they will need around $1.46 million to retire comfortably. However, those considering early retirement in expensive areas like coastal California may require significantly more.
A recent post on the Bogleheads forum sparked a discussion about whether $5 million would be enough for a modest life in high-cost locations. Responses varied, with some suggesting it could provide a comfortable life, while others pointed out that expenses like housing and education could quickly eat into that budget.
Financial planning is a personal matter, and what is considered enough money for one person may not be sufficient for another, depending on lifestyle and financial goals. Suze Orman recommends having $5 million or more saved before considering early retirement, taking into account potential future expenses.
Determining the ideal retirement nest egg requires a personalized approach that considers factors like cost of living, desired lifestyle, and potential health care expenses. It’s essential to research expenses in your desired retirement location and be realistic about your financial needs.
Overall, retiring early in an expensive area like Coastal California can be challenging, but with careful planning and a frugal mindset, it can be possible. Consider additional income sources, lifestyle adjustments, and strategies for managing expenses to ensure a comfortable retirement.
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