The Simpleton’s were still tagging along in the classroom as teachers. At times they would feel bogged down by the changes and pressures in the classroom, but overall they felt good. They had a life after school. They had so far a successful marriage, career, and they simply felt as in love as they were in their college days.
At times though, they would have a similar discussion as the McCarthy’s considering the idea of getting off the hamster wheel; you know, just stop working and enjoy life together.
The conversation though had different bends and turns than the McCarthy’s.
The Simpleton’s were avid planners. Since the time they started their lives together, they had been tracking their expenses and they knew exactly how much money they would need to simply live. According to their spreadsheet, they only needed about 38K a year to cover all their expenses including food and gas.
So, they started researching how much they would need to save and invest to make that possible. After listening to a podcast by Madfientist where he interviews Michael Kitces they were fascinated with the 4% rule(https://www.madfientist.com/michael-kitces-interview/)
This rule basically says that you need about 25 times your yearly expenses in savings in order to have enough money to retire and very likely die before you run out of funds; as long as you don’t withdraw more than 4% per year.
A basic math calculation would tell you that you need about 1 million dollars in order to withdraw about 40K a year. Considering that the stock market has had an average return of about 7% in the last decades, that would guarantee that any savings you may have would continue growing even if you withdraw only 4% yearly.
The Simpleton’s were mesmerized with the idea, and they could not stop thinking about it.