How much money would you need to tell your boss to take your high-paying job and shove it?
According to an informal survey of Wall Street executives conducted by The Post, the answer is a cool $10 million – at a minimum.
Most experts think a retiree should assume that he or she will need about 80 percent of pre-retirement annual income to live comfortably. In other words, if your current salary is $1 million a year, you should expect to spend roughly $800,000 per year in retirement. The average retirement lasts 20 years.
“If you’re a wealthy individual with a wife and two kids wanting to retire in New York, you would probably need $5 million invested in a municipal bond portfolio, which would spin off $250,000 a year in after-tax dollars,” explained a money manager for high-net-worth individuals at a major investment bank.
“This would be after you purchased your home that you live in and have no mortgage.”
But most Wall Streeters said that $5 million just doesn’t go as far as it used to.
“Usually in a recession, you’d expect that magic number to go down. But this time it hasn’t,” noted a senior banking executive.
“Because interest rates and equity returns have come down – as well as salaries – everybody’s number has gone up even though the cost of living hasn’t.”
One Wall Street businesswoman said it would take $30 million in the bank for her to retire and maintain her lavish lifestyle, which includes a palatial Manhattan townhouse, a weekend home in the Hamptons, two luxury cars and extravagant vacations.
“I’ve an older parent without health insurance coverage,” she pointed out. “If you need round-the-clock nursing care it starts at $560,000 – after taxes!”
Ironically, many of the people who actually hit their magic numbers are the least likely to hang it up anytime soon, according to some Wall Streeters.
“The truth of the matter is those people who are able to achieve the level of success needed to reach their so-called ‘f– you numbers’ are so driven that they can’t really retire even if they have the money in the bank,” said Dan Strachman, a former institutional bond broker who recently started his own money management firm.
As Strachman sees it: “Money is just a way to keep score.”
Why work?
How much does it take for pricey Wall Street execs to pack it in?
Here’s what retirement experts have to say:
* Financial planning pros say most people can live on 80 percent of pre-retirement income. But high-paid executives with expensive tastes will need more.
* Living during a recession – with lower interest rates, equity returns and salaries – doesn’t mean you’ll need less in the bank to retire.
* People who have saved enough to retire probably won’t!