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Is $1million enough
Old 10-20-2006, 09:20 AM   #1
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Is $1million enough

Here's the scoop

45 years old, single, sold the house and now I have $500k in after tax and $500k in tax deferred investments.
I can move pretty much anywhere and I'm frugal in my lifesytle.

Has anyone ERed on this and if so what were your strategies.
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Re: Is $1million enough
Old 10-20-2006, 09:33 AM   #2
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Re: Is $1million enough

The old question of 'how much is enough?' I'm sure it can be done but obviously it depends on your lifestyle and budget. Only you can decide if its enough. Good luck!
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Re: Is $1million enough
Old 10-20-2006, 09:36 AM   #3
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Re: Is $1million enough

You are frugal and mobile, which means that you can almost certainly manage. But I think you'll have to solve one big problem: health insurance. Crack that nut, and you should be home free.
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Re: Is $1million enough
Old 10-20-2006, 09:44 AM   #4
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Re: Is $1million enough

Quote:
Originally Posted by nun
Here's the scoop

45 years old, single, sold the house and now I have $500k in after tax and $500k in tax deferred investments.
I can move pretty much anywhere and I'm frugal in my lifesytle.

Has anyone ERed on this and if so what were your strategies.
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Re: Is $1million enough
Old 10-20-2006, 09:54 AM   #5
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Re: Is $1million enough

Quote:
Originally Posted by brewer12345
You are frugal and mobile, which means that you can almost certainly manage. But I think you'll have to solve one big problem: health insurance. Crack that nut, and you should be home free.
I'm in a position where I can move to Europe which would solve the heathcare issues, but probably limit my spending
power given exchange rate and othe cost of living issues.
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Re: Is $1million enough
Old 10-20-2006, 09:57 AM   #6
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Re: Is $1million enough

Quote:
Originally Posted by nun
I'm in a position where I can move to Europe which would solve the heathcare issues, but probably limit my spending
power given exchange rate and othe cost of living issues.
Again, depends on your lifestyle and location. I think there are parts of Eastern Europe taht are very cheap place to live: Czech (less so), Slovakia, Croatia, etc. I hear the Dalmatian coast is very nice. You could also try Greece. If Malta ever makes it into the EU (put your left foot in, put your left foot out...), its a very pleasant place to live that is pretty iexpensive.

Currencies I wouldn't get too excited about either. It is pretty easy to invest in Euro or other foreign currency denominated stuff.
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Re: Is $1million enough
Old 10-20-2006, 10:01 AM   #7
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Re: Is $1million enough

This has been discussed before. You might want to take a look at this thread: http://early-retirement.org/forums/i...p?topic=1494.0. $1M, without any other assets to rely upon, wouldn't fall within my comfort zone. But, that's just reflects my own situation . . . perhaps you feel more comfortable taking risks than I do. Good luck!

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Re: Is $1million enough
Old 10-20-2006, 10:39 AM   #8
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Re: Is $1million enough

It depends on your lifestyle requirement and how far you are from your ss payments.
Live on $40k, in Thailand, live like a queen, in France, live like a nun.
If you feel comfortable enough to live on $40k before taxes (w/o ss), yes you can.
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Re: Is $1million enough
Old 10-20-2006, 10:51 AM   #9
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Re: Is $1million enough

Like others have said, it depends on your lifestyle and where you want to live. According to the us census the average family income is 45K, in your case being single using the 4% SWR it gives you 40K a year, I'll yes you can. Good luck.

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Re: Is $1million enough
Old 10-20-2006, 10:56 AM   #10
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Re: Is $1million enough

nun,

In my opinion, it's MORE than enough.  With 40K a year, you can live ANYWHERE you want in the world.

The real question is whether you want to do it.  Only you have the answer.

From http://www.washingtonpost.com/wp-dyn...101901137.html
In 2006, the U.S. government drew the poverty line at $20,000 annually for a family of four, or a little more than $1,600 a month.

You are single, 1/4 of the above family.  Your income is 40K, twice as much.  What are you worrying about?  Plus in your very first post, you stated that your current monthly expense is $1,500.

Best of luck and congratulations on your wealth.
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Re: Is $1million enough
Old 10-20-2006, 11:05 AM   #11
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Re: Is $1million enough

Quote:
Originally Posted by nun
Here's the scoop

I'm frugal in my lifesytle.
Yeah, but what makes ya happy? When do you feel like you're having an adventure? What excites you?

Just hunkering down and living frugally wouldn't do much for me. But you can have a lot of fun on the cheap if your personality allows it. What's calling out to you? If you're contemplating ER to escape from something, that's bad. ER to go have some fun, that's good!

1. Solve the hospitalization insurance problem
2. Listen to yourself and determine how you want to spend your time.
3. There are lots of fun adventures to have involving part time work or volunteer work that provides room and board.
3. Don't run away from anything. Run towards what you want.
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Re: Is $1million enough
Old 10-20-2006, 11:49 AM   #12
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Re: Is $1million enough

I am sure you could do it with less....get a working spouse or a government pension or even better marry somebody with a government pension

seriously, lots of people live on nothing more than social security....albeit, their health care is less of an issue...
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Re: Is $1million enough
Old 10-20-2006, 12:02 PM   #13
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Re: Is $1million enough

Quote:
Originally Posted by nun
Here's the scoop

45 years old, single, sold the house and now I have $500k in after tax and $500k in tax deferred investments.
I can move pretty much anywhere and I'm frugal in my lifesytle.

Has anyone ERed on this and if so what were your strategies.
Presuming that this post is not a put-on . . . OP would probably gain a lot of useful info from Bob Clyatt's book (Work Less, Live More), although the book is a little lite on the health insurance question
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Re: Is $1million enough
Old 10-20-2006, 12:27 PM   #14
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Re: Is $1million enough

Quote:
With 40K a year, you can live ANYWHERE you want in the world.
Not in the northeast (US) .... 15% federal and 5% state taxes leave you with 32K; healthcare will run 1k/mo ; a studio apt with utilities another 1k/mo; forget the car you can't afford the insurance (1k/year) .... Leaves you about 5-6k to eat, cloth and entertain yourself for the year.

Not my idea of FIRE.
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Re: Is $1million enough
Old 10-20-2006, 12:34 PM   #15
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Re: Is $1million enough

Brewer,

A couple of addition to what you've said from a EU standpoint (as you know I'm French). There are some cheap places to live in eastern europe, that's correct, but not any longer on the dalmatian coast or in croatia. Prices have gone up as it it undoubtedly very nice. As far as Malta is concerned, it is a EU member state since 2004 though the currency does not seem to be the Euro (malta pounds) yet. As far as currencies are concerned I would not purchase Euros at the current exchange rate. Equivalence of products and services is around 1.1 and I would only start to by Euros from thereof. As you know I do the opposite and keep purchasing USD (better say stocks or assets denominated in USD) with my Euros as long as the Euro is above 1.1. I've been doing that for two (3?) years now and keep building up the position. But I've also a longer standpoint as I will not necessarily remain in Europe.
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Re: Is $1million enough
Old 10-20-2006, 12:46 PM   #16
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Re: Is $1million enough

Quote:
Originally Posted by tryan
Not in the northeast (US) .... 15% federal and 5% state taxes leave you with 32K; healthcare will run 1k/mo ; a studio apt with utilities another 1k/mo; forget the car you can't afford the insurance (1k/year) .... Leaves you about 5-6k to eat, cloth and entertain yourself for the year.

Not my idea of FIRE.
Not even close. You just took away 20% of his total income. He will be in 15% bracket but won't pay anything close to your 20% overall even if every penny he pulled out was taxed as regular income. Don't forget the standard deduction and the initial 10% bracket.

Also, keep in mind 50% of his nest egg is already taxed. Since he says he just sold his house and we recently came out of a fall there are probably very few capital gains in that chunk of money right now. I'll bet he pays closer to 1.5%-4% on the taxed funds he withdraws initially, gradually increasing as the years go by.
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Re: Is $1million enough
Old 10-20-2006, 01:01 PM   #17
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Re: Is $1million enough

If he wants to live WELL on $40,000 a year, I think Sorth Central America is a much better bet. Either Argentina or Ecuador (can really live well in Ecudor) or perhaps even Panama.

I think the key work here is "WELL" Of course this would necessitate learning a new language. But many do.
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Re: Is $1million enough
Old 10-20-2006, 01:22 PM   #18
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Re: Is $1million enough

Go for it. You will have to move away from where you made that kind of money. Spend some time looking for a low cost place to live. I want to live frugal near a warm beach until I get bored with it, then move on to whatever looks good. Both Panama and rural parts of the Southwestern US have a dollar denominated currency with English as a second language. Somewhere latitude meets elevation with your favorite weather. Medical care is most expensive in the US. Maintaining your good health is your next good investment. Choose a place that is conducive to healthy food and exercise. I liked a previous post about living within walking distance of a Super-Walmart (eye care, haircuts, and bank besides groceries and hardware). I would want proximity to a library. Plan B is to try ER and if you don't like it, you can go back to work doing anything until you are ready to retire. You are FI (financially independent) whether you stop working or not. If I read the 2006 Fairmark tables right, $40k income, Single filer with 8450 deduc & exemp, owes $4220 on 30,650 and $225 on the last 900. The effective rate is 11.1%, the marginal rate it 25%. As a US citizen you pay US income taxes regardless of where you live. Overseas income has different rules.
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Re: Is $1million enough
Old 10-20-2006, 02:05 PM   #19
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Re: Is $1million enough

On an old thread I proposed defining generic ER for a couple 50 yrs of age as $1MM liquid, plus cars and a house all paid for.

FWIW there weren't too many takers at that time though it still seems doable.
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Re: Is $1million enough
Old 10-20-2006, 03:01 PM   #20
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Re: Is $1million enough

Quote:
Originally Posted by poyet
Brewer,

A couple of addition to what you've said from a EU standpoint (as you know I'm French). There are some cheap places to live in eastern europe, that's correct, but not any longer on the dalmatian coast or in croatia. Prices have gone up as it it undoubtedly very nice.
Have to agree. My family is from Croatia and my remaining relatives there are constantly complaining how inflation (especially over the past couple of years) is taking its toll.
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