A Reddit user with a net worth of $7 million is feeling uncertain about reaching a $20 million target for retirement due to cash flow constraints. With a combined income of $600,000 and expenses projected to rise as they anticipate their second child's education costs, the user is advised to reassess their financial goals. Analysis suggests that potentially saving $10 million instead of $20 million could still yield enough income for early retirement, especially considering a 3.7% withdrawal rate. Proper financial planning is emphasized for achieving sustainable retirement living.
The OP's ambitious savings goal of $20 million may be excessive as $10 million could be sufficient for a comfortable retirement given his expected expenses.
With a current spending of $250K and a projected future need of approximately $370K annually due to rising expenses, the OP needs to adjust his financial strategy.
Understanding the correct earnings requirement and expenses is crucial; an accurate assessment could reveal that the OP is already on track for early retirement.
At a safe 3.7% withdrawal rate, $20 million would yield $740,000 yearly, but based on expected expenses, a lower goal may suffice.
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