"I would be interested in hearing the amount others on this board think critical mass is defined as for me critical mass would be having cash, bonds and equities north of $2 million dollars."
Based on very detailed analysis using Vanguard Navigator, Quicken Financial Planner and Financial Engines, for me, I believe critical mass is about $1,600,000 at age 50. Of course, $2,000,000 is a nice round number that would give a little more safety margin.
Four things to consider in determining critical mass that may be overlooked: 1) If you quit working, you no longer have to pay the social security tax ($10,000 approx), 2) You will no longer be putting earned income into savings/investment...for me...I am now putting about $20,000 of earned income into investments, 3) You will have to pay your own health insurance...I have budgeted $10,000 for that, 4) In PA where I live, you do not have to pay local income tax on investment income.
If you subtract out social security, investments of earned income and local taxes that you will not be paying if you quit working, you may find, like I did, that your critical mass is well under $2 million.
I would also be interested in hearing what others consider to be critical mass...and at what age that is...and how they determined the number. |
