Survey finds $880,000 is magic number

[Amethyst]

Actually, these were not unexpected. I just thought it was funny that the article mentioned them when golly, we were doing them all ![/B]

Agh!!! Sorry to hear that. When it rains, it pours!

:

 

[Focus]

"The last thing you want to do in your first year of retirement is to have to put a new roof on the house, replace the heating and air-conditioning system, or buy a new car."

All of which we have been doing...the car is next

Amethyst

You left out what he says after this: "You can blow 100 grand on those things." Sounds way too high! Hope it's not costing you nearly as much.

 

[Focus]

I guess the magic number is going to be different for just about everyone. I know 880k would make me and the DW very uncomfortable at our current ages and lifestyles. However, I do agree with a number of points in the article (e.g. no mortgage or big ticket items to buy (or pay for) and no cc debt going into retirement). I'm not sure the "happiest" are the "master of the middle" but the quote in blue below is pretty much how we live.

"The happiest retirees are masters of the middle. They don't live on the cheap, they're not the most frugal, they don't usually clip coupons, and they don't stay in $49-a-night motels.However, they are not shopping at high-end department stores, not spending $1,000 a day in Europe, either. They have nice houses, not million-dollar homes. They eat in good restaurants, but not in $250-a-meal restaurants. It's really more about not being completely ridiculous with money. Happy retirees aren't necessarily penny wise but they are certainly not pound foolish."

I think many of us here can relate to that.

 

[RAE]

I guess I have to agree with him with regard to the core pursuits, and keeping busy in retirement. I keep plenty busy in retirement, and a lot of that time is spent on my core pursuits (gardening, fishing, camping, traveling, fitness, grandkids). If I did not enjoy these things so much, I probably wouldn't be enjoying my retirement as much as I am. As for money, I do agree with him that once you have enough to live the kind of lifestyle you want to live (and enough to feel secure), adding more probably wouldn't change things all that much. I'm pretty frugal and have been my whole life, and I doubt that would change if I came into a monetary windfall. I'd probably just invest it for now, and some worthwhile charity would likely get it (or most of it, anyway) after I'm gone.........

 

[martyb]

We have less than that amount, but with 2 COLA pensions (one now, the other in 2 yrs) + wife still working and she'll have SS later on, plus we live in Louisiana....think we'll make it ok.

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[NW-Bound]

"The last thing you want to do in your first year of retirement is to have to put a new roof on the house, replace the heating and air-conditioning system, or buy a new car."

You left out what he says after this: "You can blow 100 grand on those things."

Yeah, if the car is a luxury car. I missed that he wrote that. Ridiculous.

One has to have a new roof, or an A/C replacement, but he does not have to have a luxury car. I've downgraded my evaluation of the author one notch.

 

[2017ish]

Interesting. I've read similar before and find them interesting, albeit with a truckload of salt. As others have noted, it is going to be different for everyone.

None of my relatives have ever attained that high a number (inflation adjusted or not), but those who have retired seemed to be happy--my grandma until she was 97, and my mom in her mid-70s now. OTOH, that number is far below what we want before pulling trigger.

Got a chuckle out of this though:

The happiest retirees are masters of the middle. They don't live on the cheap, they're not the most frugal, they don't usually clip coupons

So even with 880K or some multiple thereof, we could never be happy retirees! (And I would have thought my in laws were happy after more than 25 years of retirement--but they still clip coupons whenever they are available....)

 

[daylatedollarshort]

I guess it comes down to who are you going to believe?

Rich, Smart People Use Coupons, Says a Coupon Company - TheStreet

"It's commonly believed that the practice of bargain hunting is reserved for those with less money, but this survey clearly shows that those with higher incomes are savvier online shoppers," explains Regina Novickis, a consumer savings analyst at the company. "Likewise, college graduates are putting their educations to use when it comes to shopping smarter" by using online coupons."

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:

http://www.usatoday.com/story/money/personalfinance/2015/01/31/motley-fool-net-worth-age/22415229/

And another study:

"Consider a 2014 survey of recent retirees by Baltimore’s T. Rowe Price Group.The 1,507 participants, who had a median net worth of $473,000, were living on an average of 66% of their preretirement income. Yet 57% said they were living as well or better than when they were working, and 85% agreed with this statement: “I don’t need to spend as much as I did before I retired to be satisfied.”

http://finance.yahoo.com/news/why-y...-than-you-think-for-retirement-140914778.html

 

[purplesky]

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.

But with 880k saved for retirement you could move to many other locations and retire with dignity.

Thats the point. 880k is a sweet spot financially.

You could still live fairly close to NYC if needed on 880k and land on your feet.

 

[GravitySucks]

They don't live on the cheap, they're not the most frugal, they don't usually clip coupons, and they don't stay in $49-a-night motels.

That's right, I spent $39 a night in Myrtle Beach last month.




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[purplesky]

No offense, but I'm not going to base anything in my life off of a survey of what makes others happy.

I think they mean being happy is just feeling comfortable with the math.

If you don't like what you see in the mirror, no dollar amount will make you happy. If you don't have your health the 880k will not make you happy.

But 880k is enough cash to provide a feeling of "I will be OK" if I get fired or if I am forced to retire early.

 

[haha]

This is a very popular article theme here on ER.com. Like building houses out of discarded corncobs on Mother Earth News.

Junk IMO. I would imagine that almost no one on this board who has any choice would willingly retire on $880,000. And as others have noted, $880,000 is a whole different fish in San Francisco, or Seattle or West LA or NYC or any of about 100 desirable communities than it might be in Peoria.. People say, well you can just move. Sure you can, but you can also decide to drink Old Milwaukee, or eat ramen noodles or drive an old Junker. But most people with any choice would prefer not to do any of these things.


Also who likes to think about money all the time? Maybe a "core pursuit" of people who decide to retire on $880,000 is scheming about whether they can survive whatever might come along to upset their apple carts.

Ha

 

[purplesky]

This is a very popular article theme here on ER.com. Like building houses out of discarded corncobs on Mother Earth News.

Junk IMO. I would imagine that almost no one on this board who has any choice would willingly retire on $880,000. And as others have noted, $880,000 is a whole different fish in San Francisco, or Seattle or West LA or NYC or any of about 100 desirable communities than it might be in Peoria.. People say, well you can just move. Sure you can, but you can also decide to drink Old Milwaukee, or eat ramen noodles or drive an old Junker. But most people with any choice would prefer not to do any of these things.


Also who likes to think about money all the time? Maybe a "core pursuit" of people who decide to retire on $880,000 is scheming about whether they can survive whatever might come along to upset their apple carts.

Ha

WOW. What an arrogant post. Most people would kill to retire with 880k.

880k well diversified is enough to not have to worry about putting food on the table and keeping the lights on. That happy place that allows a person to sleep at night.

You can pursue a hobby on 880k invested properly. Not to mention SS and a pension that some people still have.

880k is a realistic happy place retirement number to start with. Yes 2 or 3 million is better. But 880k is reality.

 

[daylatedollarshort]

This is a very popular article theme here on ER.com. Like building houses out of discarded corncobs on Mother Earth News.

Junk IMO. I would imagine that almost no one on this board who has any choice would willingly retire on $880,000. And as others have noted, $880,000 is a whole different fish in San Francisco, or Seattle or West LA or NYC or any of about 100 desirable communities than it might be in Peoria.. People say, well you can just move. Sure you can, but you can also decide to drink Old Milwaukee, or eat ramen noodles or drive an old Junker. But most people with any choice would prefer not to do any of these things.

Also who likes to think about money all the time? Maybe a "core pursuit" of people who decide to retire on $880,000 is scheming about whether they can survive whatever might come along to upset their apple carts.

Ha

I don't feel like I am qualified to speak for most people, but personally I do have a choice to spend more in retirement but I like being frugal and implementing many of the Mother Earth News ideas. We're getting into sustainable living as a fun hobby that saves money and is good for the environment. I would rather leave extra money to the food bank and an elephant sanctuary in our estate than see the money go to utility companies.

We could play bridge or golf or plan how a greenhouse on the south side of our house could save thousands of dollars off our heating bill over the rest of our lifetime. I am not sure why the green house idea and other sustainable living ideas would be such a crazy choice among all the different hobbies a retiree could pursue.

 

[Amethyst]

About half that, for roof, hvac and car. Another 50 grand for more house repairs and to sell the rental, including selling expenses and depreciation recapture. None of this would qualify as "blowing" I.e. frivolous expense. In fact we are the least frivolous family I know, other than our sense of humor which is quite silly at times, .

You left out what he says after this: "You can blow 100 grand on those things." Sounds way too high! Hope it's not costing you nearly as much.

 

[gauss]

Mr. Moss: I consider a core pursuit a hobby on steroids, something you absolutely love and don't want to live without.
Core pursuits are different for everyone. They can be travel, which is a big one; physical activities such as golf, exercising, hiking; volunteering; visiting family and grandchildren; Civil War reenacting; Scottish dancing; you name it.
When I analyzed the results, it turned out that people in the happiest group had an average of almost four core pursuits. People who were in the least happy group reported an average of fewer than two core pursuits.
If you're in your forties or fifties, just remember that the happiest retirees are really busy, that they have all these important things they want to pursue

I suspect that the multiple core pursuits may be a proxy for social contact or perhaps a desire to be needed by others which have been correlated positively by others to retirement happiness.

I know that in my case when I go out with my retired friends and family who are often 15 to 25 years older than me, they always ask what I have been up to. I mention my plans for the next 2 days and all the meetings events etc. and I suspect that they may be a bit jealous.

-gauss

 

[dvalley]

Well personally since I'm only about half way there I'd be super excited when I get closer to $1M (or $880k). If the house is paid for, the nest is empty and there are no major health issues I think I can ER and live quite comfortably with that amount even in most parts of California. Of course, more will be better but I'd definitely consider the daily grind optional at that point and would pursue other options to keep busy and have a supplemental income.

 

[rayinpenn]

I would imagine that happy working people lead to happy retired people; I find joy in simple things- yesterday we had a pretty sunny day in the 60s here in southern Pennsylvania and Home Depot had their spring mulch sale. I spent the day enlarging beds and spreading 50 $2 bags of mulch. Some people would complain about yard work- Me I love it. At 60 With tired knees I work with a lawn chair and my dog. I work a little then sit and pet the dog a little. - It took all day but my god the place looks great. I feel I earned my dinner!

If you are a person who adapts well and has a bunch of interest I suspect you'll do well in retirement. A few weeks ago my 90 year old uncle did his first parachute jump. I have a picture of him standing on a prattle board and his 80 year old lady friend sitting by his feet.

1) You need to choose to be happy.
2) You need to stay active - walk, run just get up and do it.
3) a positive attitude helps


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[golfersailor]

All I know is 6 years ago when I first retired we had a lot less than the magical number. I did have a pension and I did take SS at 62. Well we were happy then and we are happy now. We were taking one major vacation a year going to florida for a month in winter and now it will be two and the rest of the time we stay home and enjoy our home and our grandkids. I play pickleball, golf, gardening, bicycling and I deliver meals on wheels a few days a week. We sold our sailboat last year just to much work and time. Oh and our nest egg has grown past the magical number. Life is good as long as we both stay healthy, without health the magical number is $00 or $5 million it just doesn't matter.

 

[RunningBum]

I think they mean being happy is just feeling comfortable with the math.

If you don't like what you see in the mirror, no dollar amount will make you happy. If you don't have your health the 880k will not make you happy.

But 880k is enough cash to provide a feeling of "I will be OK" if I get fired or if I am forced to retire early.

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."

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 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.

 

[MRG]

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.
..snip good stuff too....

Your comments 100% spot on for me too.

 

[HFWR]

I enjoy doing Civil War reenactments while golfing in my Scottish dance attire...

 

[marko]

I think they mean being happy is just feeling comfortable with the math.

If you don't like what you see in the mirror, no dollar amount will make you happy. If you don't have your health the 880k will not make you happy.

But 880k is enough cash to provide a feeling of "I will be OK" if I get fired or if I am forced to retire early.

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.

 

[jIMOh]

75% of tax payers earn under $40k per year, right... (15% bracket), so $880k at 4% would suggest they are making about same in retirement (with SS) as they did when working (compared to 75% of tax payers).

 

[dallas27]

880 is probably a fair amount to represents our needs being met with a degree of safety. Not our wants.

Re:haha'd post, pretty rough that you let that out without self editing more.


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