How much do you need to retire?

It depends on how much you need to live on! So the first step would be to see how much you have spent in the past year, or longer, to get an idea. The 4% rule, states that you can live off of 4% of your invested assets and that you will not run out of money. For example, if you have $1 million invested, each year you can pull out $40,000 without having to touch the principle, on average. Certainly if it’s a down year it’s recommended to not take out as much as 4%, and you can take out a little bit more in good years. Personally, as I am more conservative and risk-averse, so I would not want to pull out more than 3%, especially since I have had to retire early due to my health, and I’m also concerned about inflation and I must admit a little fearful in general. The more typical physician might live on about 100 K a year, (aka FATFIRE) so you would need about $3 to $4 million if you were living off of only invested assets for that. It’s good to take into account any additional income you might have that you can add to this number, for example from Social Security, a pension, a part time job, or other investments such as rents or income from real estate. 

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