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Old 06-19-2013, 12:38 PM   #21
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In TV series "Hart to Hart" (1979-1984), the "self-made millionaires" drive a Rolls Royce and fly private.
I suspect even back in the early 80s that if a self made millionaire drove a RR and flew around in private jet that they wouldn't have been a millionaire for very long. Hollywood fallacy.
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Old 06-19-2013, 12:47 PM   #22
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A million dollars is a significant sum no matter how you cut it. Most of us on here assume that it would be needed for retirement. However, if we assume that pensions, ss, rentals, part-time work will substitute in retirement, that money can continue to grow to a tidy sum.
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Old 06-19-2013, 12:53 PM   #23
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Something else to consider, if you accumulated a million dollars years ago, you were indeed very rich since more people had pensions and did not need to rely on the money to fund their retirement.
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Old 06-19-2013, 01:38 PM   #24
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I think people realize the impact of inflation. When I hear people remark that someone "must be a millionaire" it suggests to me that they are not, and do not realize that having $1m is not an astounding feat in 2013 for people in mid or late career.
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Old 06-19-2013, 02:00 PM   #25
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Well, a million last year is only worth $986K this year, so "they" are right.
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Old 06-19-2013, 02:54 PM   #26
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In TV series "Hart to Hart" (1979-1984), the "self-made millionaires" drive a Rolls Royce and fly private.
And had Max, their chauffeur/butler/manservant (I loved that show).
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Old 06-19-2013, 03:09 PM   #27
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And had Max, their chauffeur/butler/manservant (I loved that show).
Waaiiiitt. Do you mean all the ER millionaires don't have a manservant? What the hell!?! Why have I been scrimping and saving then?
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Old 06-19-2013, 03:32 PM   #28
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In TV series "Hart to Hart" (1979-1984), the "self-made millionaires" drive a Rolls Royce and fly private.
I used to watch that show. I drive Honda's and fly coach. Guess it doesn't have the same ring to it.
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Old 06-19-2013, 04:33 PM   #29
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1 million is still a lot of money, but according to US infation calculator, if you had 1 million 20 years ago, you would have to have 1.6 million dollars today to buy the same amount of stuff with the 1 million, so 1 million is definitely not what it used to be. So in a way, 1.6 million is our new 1 million.
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Old 06-19-2013, 04:40 PM   #30
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I'm not a young dreamer, but I have two comments:

1) One important step to FIRE, IMO, is to learn to ignore what 'everybody else is saying'. You will be trying to march to the beat of a different drummer, the others are just noise.

2) A 40,000 COLA'd pension is worth about a million, as is $40,000 in SS (which a couple might be receiving). Many of those studies don't factor in the 'phantom value' of pensions/SS.

-ERD50
Yep, I agree. I am retired and have the backstop of a nice pension, but I will never be a millionaire. I have everything I want or need and am so set in my ways, I do not think additional money would change it. Either it would go straight to the bank, or it would cause me financial problems down the road, because all I would do is get better versions of what I have that ultimately would have more expensive ongoing costs.
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Old 06-19-2013, 05:58 PM   #31
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With most pensions non-cola this makes a huge difference. A lot of $$$ are parked in 401K/IRAs where taxes are due so it's not like you have NW in "cash" like the pre 401k/ira era. My retiree medical is essentially paying cobra. Also have to pay for own eye/dental premiums and deductibles.


Medical premiums = 18K
Medical deductibles =10K
Dental prem/deduct=5K
Eye prem/deduct/glasses=5K
Taxes=20K
Total=50K

This 50K get added to my estimated yearly expenses. Adds up fast.
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Old 06-19-2013, 06:09 PM   #32
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I am a young dreamer with much less than $1 million, and many times I am the one telling people that it really isn't that much money.

Yes, it would put you in a top percentile of Americans for net worth, but a $1 million windfall wouldn't enable any of my peers at work (in their 20s and 30s) to suddenly retire and continue their current spending habits.

My wife and I live very modestly, in comparison, to keep our annual spending below $40,000. But even in our case, a $1 million windfall wouldn't change anything in the short-term. I'd continue working for our medical coverage until we had closer to $2 million or received coverage through some other means.

Having $1 million is a different story for older folks who are within striking distance or already collecting Social Security and Medicare.

Tim
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Old 06-19-2013, 06:37 PM   #33
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Having $1 million is a different story for older folks who are within striking distance or already collecting Social Security and Medicare.
Tim
Or for anyone, of any age, who can happily live on ~ 30K/yr or less
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Old 06-19-2013, 07:39 PM   #34
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With most pensions non-cola this makes a huge difference. A lot of $$$ are parked in 401K/IRAs where taxes are due so it's not like you have NW in "cash" like the pre 401k/ira era. My retiree medical is essentially paying cobra. Also have to pay for own eye/dental premiums and deductibles.


Medical premiums = 18K
Medical deductibles =10K
Dental prem/deduct=5K
Eye prem/deduct/glasses=5K
Taxes=20K
Total=50K

This 50K get added to my estimated yearly expenses. Adds up fast.
Your numbers are much higher than mine (for a couple). Unless you have significant dental and vision issues to contend with I wonder if you would be much better off just paying for dental work, eye exams and glasses. Mine would be a fraction of your $10k (~$1.5k a year for the two of us for dental and vision costs).

I found that individual insurance was less expensive than my COBRA for similar HDHP benefits.

Don't you mean total $58k? How would you be subject to 35% in taxes ($20/$58) in retirement?

The effective tax rate on my IRA withdrawals will be lower than what I would have paid in taxes while I was working, so I'm ahead of the game there.
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Old 06-19-2013, 08:01 PM   #35
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Does anyone else get sick of hearing that a million dollars isn't what it used to be or isn't that much money anymore?
No matter how much you have, there's always going to be someone who has more that says the 100k, 200k, 500k, 1M, 2M or whatever "isn't that much".
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Old 06-19-2013, 08:08 PM   #36
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I suppose a lot of people with pensions and paid health insurance are sick of hearing from the rest of us how rich they are to have such a thing. Takes a lot of cash equivalent to get the same benefit.

So, that $1M really depends a lot on the other benefits. But I'm repeating what other said above.

Back to Hart to Hart. A lot of people here came from the Motley Fool boards. I used to religiously listen to their radio program in the late 90s. (It is no longer on the airwaves here.) Anyway, they had Stefanie Powers on as a guest one time. There was some severe mix up. They thought they had her on as someone who was a great investor, managing her wealth. Instead, she just talked about bizarre stuff. It was one of the most painful pieces of radio I've ever heard. I also kind of lost my shine for her after that.
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Old 06-19-2013, 08:11 PM   #37
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Anyway, in my opinion, if a single person cannot retire on a million dollars then it is by choice. Either they are insisting on living in a high cost area, or traveling a lot, or living like a rock star, or something like that I guess. I think that a million dollars is quite a fortune for a single retired person who is living a middle class lifestyle in fly-over country and doesn't want to travel extensively.
+1

To quote the great 20th century philosophers Richards and Jagger.
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You can't always get what you want
But if you try sometimes you just might find
You get what you need
It seems to me $1 million plus a paid off/inexpensive housing is enough to provides a thoroughly satisfying retirement if you try.

It is frustrating why financial writers make the the rather grim retirement prospects for typical American appear even more dire by saying a $1 million isn't enough, sorry it is.
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Old 06-19-2013, 08:14 PM   #38
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Or for anyone, of any age, who can happily live on ~ 30K/yr or less
Agreed, but like I said, most of my peers at work don't fit that description. They are earning at least twice that much and, I suspect, spending the vast majority of it on houses, kids, cars, gadgets, "going out," etc. So I make the point that they'd be in for a shock if they won $1 million and tried to retire now at age 25 or 35. They will eventually retire with much less than that, thanks to Social Security, Medicare, maybe a pension, and a paid-for home.

Tim
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Old 06-19-2013, 08:19 PM   #39
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A million dollars isn't what it used to be

...but I wouldn't mind having that in my cash account
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Old 06-19-2013, 08:38 PM   #40
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Your numbers are much higher than mine (for a couple). Unless you have significant dental and vision issues to contend with I wonder if you would be much better off just paying for dental work, eye exams and glasses. Mine would be a fraction of your $10k (~$1.5k a year for the two of us for dental and vision costs).

I found that individual insurance was less expensive than my COBRA for similar HDHP benefits.

Don't you mean total $58k? How would you be subject to 35% in taxes ($20/$58) in retirement?

The effective tax rate on my IRA withdrawals will be lower than what I would have paid in taxes while I was working, so I'm ahead of the game there.
I was thinking the same thing, unless I misunderstood what he meant. For me, all unsubsidized care:
Health Insurance- plus $100 after HSA tax deduction
Health Insurance Deductible -$5500 ($0 last yr. spent $100, this year)
Dental- 2 cleanings yearly $150 total
Dental Insurance- none as it is worthless for me to purchase
Eye Care- $10 (2 new pairs of readers this year)

So my total cost last year was $50, and this year I am on pace for $160. Retired, but turning 50 in another year, so it may be my turn in the barrel, soon. But I sure don't envision $50k per year anytime soon, I hope.
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