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Old 04-12-2015, 01:04 PM   #61
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Originally Posted by daylatedollarshort View Post
Here is a chart on typical net worth by age in the U.S., and this includes housing. The cutoff for the top 70th percentile age 65+ is $334K. Not that many households ever get to $880K, present company excluded:
Typical net worth by age: Where do you stand?
Thanks. People here often post stuff on net worth, but it usually isn't split by age.

The USA piece comes from this Census report https://www.census.gov/people/wealth...0to%202011.pdf

For ages 65-74, the median of the top quintile (presumably, the 90th percentile) of "households" is about $1 million, including home equity but excluding pensions and SS.

It drops to $770,000 for people over 75, but presumably the higher ages have more one person households.

These are 2011 numbers. I'd guess that if these higher net worth households own stocks, their net worth has gone up faster than the CPI since then.
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Old 04-12-2015, 01:18 PM   #62
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Agh!!! Sorry to hear that. When it rains, it pours!

Oh well, c'est la vie I suppose. It probably wouldn't be a good idea to schedule an expensive international dream vacation this year.
Hey - I resemble that remark, LOL. But the money for my vacation was set aside and not included in my "retirement funds". But the expensive medical stuff my kids have incurred has definitely given me some second looks at my budget. (Fortunately, we've saved in other areas enough to cover the medical costs that have *almost* hit the family high deduction threshold.) I guess this is why we build in emergency funds, budgets to replace paid off cars and home maintenance, medical funds, etc, into our overall retirement budget. Thank goodness retirement has meant spending less on clothes, transportation, and utilities.
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Old 04-12-2015, 01:37 PM   #63
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All I said that most here would probably not choose to retire on $880k
+1

Count me in that group. $880k would mean living on $30k annual or so, a tough nut here in the Chicago suburbs unless you have other things going for you. But, if you have other things (paid for house, pension, SS, working spouse, future inheritance, hobby income, sugar daddy, past employment provided benefits, whatever.......) then you aren't choosing to retire on $880k. You're choosing to retire on $880k plus a lot of other stuff.

To me, living on the income from $880k in investments means just that. You show up in town with nothing but a couple of suitcases and begin living on about $30k/yr. Possible? Sure! But is that what you would choose to do? Not me! Probably not a lot of folks who have choices, even if one of those choices is to continue working a bit longer.

I always marvel when folks mention retiring with seemingly tiny resources but later reveal a mountain of resources they just happen to have in their back pocket. Or, if their low income survival is dependent on an unusual lifestyle few would choose.
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Old 04-12-2015, 01:43 PM   #64
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Old 04-12-2015, 01:45 PM   #65
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Firecalc gives $880K invested in a 60/40 portfolio a 100% chance of lasting 30 years with an initial withdraw of $28.5K adjusted by 3% inflation each year.

I think that and SS would provide a comfortable living for many people.

Yep. The $880k doesn't do it. You need extras such as SS. At least for me.
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Old 04-12-2015, 02:08 PM   #66
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You could still live fairly close to NYC if needed on 880k and land on your feet.
Really? Show me where(that's not a complete dump)?
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Old 04-12-2015, 02:12 PM   #67
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Posters often hasten to comment based on just the thread headline.

The OP included this quote.

Quote:
Quote:
"Once families reach a certain level of savings, the amount of monetary increase needed to reach higher levels of happiness slows down. For example, in order to reach a financial level where more money doesn't really buy any more happiness, families need to reach approximately $880,000 in stocks, bonds, or cash assets, such as CDs, according to my data."
And as mentioned, I read the article which then talked about SS and a paid-for home.

My mother has nowhere near $880K, but she's got a nice comfortable modern 3-bedroom home, SS, and pension. She's fine.
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Old 04-12-2015, 02:28 PM   #68
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Posters often hasten to comment based on just the thread headline.

The OP included this quote.



And as mentioned, I read the article which then talked about SS and a paid-for home.
Yep. There's no doubt that resources and individual needs and circumstances outside of "investible assets" are a huge factor frequently ignored.

With the demise of MegaCorp DBP pensions and related benefits (stock options, profit sharing accounts, etc., and retiree health care, I'm confident that for many folks, the size of their FIRE nest egg will become more critical. But for now, pensions, SS, misc retiree benefits, financial and non-financial assets considered outside of the FIRE portfolio are a big factor.

If you want to, and the article somewhat eludes to, say you have $880k plus SS (assume a goodly amount I guess) and a nice paid for home, then it becomes more livable than the $880k alone. Especially if you jump to the conclusion you have no special needs (handicapped adult child living with you for example) and live in a reasonably low cost area.


I can tell you with confidence that if we had our paid for house, our SS and $880k (about $50k total annual income to spend), I would definitely be happier with more. I'm saying that based on reverse engineering our current situation. We spent about double that $50k and some of the things we'd have to give up to get down to $50k would be unpleasant for us. So I assume having enough more than the $880k so that we could spend $100k would make us happier. I guess we'd be exceptions to the data posted in the article. We'd definitely be happier if we had SS, our paid for home and then received an increase over the $880k.


I understand that your mom's situation could be different.

The devil is in the details but our comments tend to be on the generalities.
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Old 04-12-2015, 02:37 PM   #69
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That's not what the article says. It doesn't say $880K is where you think "that's good enough", it's where apparently people say "more than that won't really make me any happier."

And my point is, some survey number is meaningless to me. Your number is meaningless to me. What's meaningful to me is the number I came up with for my situation. I can't imagine letting someone else's number or influence me in any way. Nor their lifestyle. Someone else may decide they'd be just as happy living in some super low cost area with less money. Good for them. That's not what I'd call my sweet spot.

I am happy. I have my health. I have hit my happiness number, so I do get the point of the article that there is a number, and it's not huge for most people, at which you not only don't need any more money, but where it wouldn't really improve your life. Sometimes I think about what it would be like to have 2x or 10x the amount of money, and I really can't come up with much that would make my life any happier. About all I come up with is that I might splurge for 1st class travel (and more travel) and get a class B RV but those things aren't worth me working longer or taking more risks with my investments to get to.
The 880k number is a starting point for financial security.

I think Mr. Moss is just making the point that at 880k saved a family can achieve that first and most important level of feeling happy about their money situation.

The math starts to work for the average family as you get that close to a million.

Mr Moss is really writing for the millionaire next door crowd. Not high income earners.
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Old 04-12-2015, 02:49 PM   #70
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Really? Show me where(that's not a complete dump)?
Apparently Mr Moss wasn't addressing you and your situation. He is talking about the average family.

I guess a very long train ride would be in store for you.
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Old 04-12-2015, 03:09 PM   #71
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Old 04-12-2015, 03:26 PM   #72
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Posters often hasten to comment based on just the thread headline.

The OP included this quote.



And as mentioned, I read the article which then talked about SS and a paid-for home.

My mother has nowhere near $880K, but she's got a nice comfortable modern 3-bedroom home, SS, and pension. She's fine.
Yes Mr Moss says approximately 880k.

People get freaked out about their expensive city with only 880k saved and I would imagine Mr. Moss would advise those individuals to save more than approximately 880k.
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Old 04-12-2015, 03:37 PM   #73
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having 880k in nyc is very different from 880k in houston.

i live in queens , not even manhattan and i would not even have considered retiring if all i had was 880k.
The article does not suggest $880K is what you need to retire! It says, " more money doesn't really buy any more happiness."
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Old 04-12-2015, 03:39 PM   #74
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Besides factors like SS, pensions and mortgage free housing - optimized expenses can be worth more than $880K over a 40 year retirement, without a change in overall lifestyle.

A possible sample (YMMV) -

1. Lawn vs native garden - $500 a year lower water bill - $20K over 40 years.
2. Price shop insurance, high deductible only - $1K a year lower insurance - $40K over 40 years.
3. Monthly energy bill - $350 vs $50, $3.6K yearly, $144K over 40 years
4. Renegotiate cable bill - $100 vs $50, $600 yearly, $24K over 40 years
5. Low cost cell phone carrier - $100 vs $50 yearly, $600 yearly, $24K over 40 years.

There is a $246K possible difference in total retirement funding needed with just those 5 expenses optimized vs not. Add in more and it would not be that hard to even surpass the impact of $880K in savings for some households. Financial assets are just one of many factors impacting overall financial security.
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Old 04-12-2015, 04:10 PM   #75
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Originally Posted by daylatedollarshort View Post
Besides factors like SS, pensions and mortgage free housing - optimized expenses can be worth more than $880K over a 40 year retirement, without a change in overall lifestyle.

A possible sample (YMMV) -

1. Lawn vs native garden - $500 a year lower water bill - $20K over 40 years.
2. Price shop insurance, high deductible only - $1K a year lower insurance - $40K over 40 years.
3. Monthly energy bill - $350 vs $50, $3.6K yearly, $144K over 40 years
4. Renegotiate cable bill - $100 vs $50, $600 yearly, $24K over 40 years
5. Low cost cell phone carrier - $100 vs $50 yearly, $600 yearly, $24K over 40 years.

There is a $246K possible difference in total retirement funding needed with just those 5 expenses optimized vs not. Add in more and it would not be that hard to even surpass the impact of $880K in savings for some households. Financial assets are just one of many factors impacting overall financial security.
To add to the above way to save, a guy I know was pricing caskets and was shocked to see how expensive they were. His plan was to buy one now and store it for the "big day". Rather than spend the cash and put it in storage and buy a cemetery plot on top of that, he spent a lot less for a pre-paid cremation instead. Said he saved thousands.
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Old 04-12-2015, 05:07 PM   #76
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I would say 880k plus paid for house and ss is enough for most couples. I'm single with almost 500k a paid for house, small pension at 65 plus ss of 20k at 62 or 26k at 65. I retired last year at 58 and living off a inherited annuity of 1k plus divs and some capital gains. I making due just fine on 36k a year. The annuity ends when I'm 68. Not everyone lines in the NE or Westcoast. I live here in boring Omaha, but spend 6 month a year in Asia. That's right Ha not everyone has earn a gold spoon, but maybe a silver spoon will do
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Old 04-12-2015, 05:18 PM   #77
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I wonder if a more interesting number would be a "critical mass" number: the amount that you feel that no matter what happens (large unexpected expense, heavy market drop) where you might be out $100-$200K you'd still be ok.

That would also be a number that in good times grows in marked contrast to your withdrawals.

It's a little different from the usual lumpy expenses of a new roof or new car.
That close to a million you are in pretty good shape.

The assumption is that these families in the survey have their financial act together.

They have no CC debt. Emergency fund fully funded. Affordable housing. etc.

With a pension and SS, critical mass could be at 880k because you wouldn't even need to touch it.

Without a pension and just SS I guess maybe around 2 million would be a comfortable number in most parts of the country.
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Old 04-12-2015, 07:32 PM   #78
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You miss that I am all for individual accommodations. Whatever works for someone is perfect, for that person. But not for everyone. I have lived on the coasts for over 50 years. My children are here, my girlfriend is here, and I Like It Here. So do I want to believe some huckster's claim that all I need is $xx, because more will not make me happier? I don't think so. I am 100 per cent sure that having no girlfriend would greatly lessen my happiness, and the one I have is a knockout .


These one size fits all pronouncements cannot be accurate for everyone.

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Old 04-13-2015, 06:55 AM   #79
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The 880k number is a starting point for financial security.

I think Mr. Moss is just making the point that at 880k saved a family can achieve that first and most important level of feeling happy about their money situation.

The math starts to work for the average family as you get that close to a million.

Mr Moss is really writing for the millionaire next door crowd. Not high income earners.
Again, you're reading more into it than what he actually says, and I'm not sure your interpretation is what he really means. And more to my point, putting a number to it from a survey is meaningless to me, and I don't really see how that number is meaningful to anyone. I know that's not the whole point of the article, but it is the point that two separate threads have focused on.

We're both repeating ourselves, so I'll stop now.
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Old 04-13-2015, 07:26 AM   #80
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No one in my family's history has ever had even 1/3 of that in investable assets and they've gotten by just fine.
Same here, although my elders had something I won't have...a pension. They also tended to retire at more "normal" ages than what I want to...around 55-62, although one of my grandmothers went back to work part time/on call to keep herself busy, and finally called it quits for good at 70.

And, a few of my elders aren't doing so hot. I also have a few older relatives, around age 68-72 or so, who barely have two nickels to rub together. They're depending on their own adult kids for help or in some cases <gulp>...their parents! And in one case, the parent, my grandmother's 90 year old cousin only has maybe THREE nickels to rub together

**Edit: in light of some of the more recent comments, I should also add that most of these older relatives who are doing well have/had houses that are long since paid for or, at the most, have only modest mortgages. To hear my Mom complain about her payment, you'd think she took a reverse mortgage on the Taj Mahal or something like that, but around my neighborhood, her monthly payment would get you a crack den apartment, at best.
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