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Meh at hitting a million
Old 09-14-2016, 05:57 PM   #101
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Meh at hitting a million

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Originally Posted by Gumby View Post
That depends entirely on how much they spend. Just today I read that the median household income in the USA is $56,500 per year, and if the stories of everyone living paycheck to paycheck are true, they spend it all. That level cannot be prudently supported with a $1 million nest egg.

If you include social security 56k/year should be doable on a million. No?

Edit: Did a quick Firecalc 85% success assuming age 55 retirement with 25K social security starting 10 years later.
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Old 09-14-2016, 06:26 PM   #102
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true, but most people don't retire till SS age either. SS + 4% income off of 1 mil, plus paid off house and reduced taxes = nice retirement. To me anyway. To accumulate a million dollars you have to learn to LBYM- those folks probably have paid for homes and can live nicely on that. We have oversaved I suspect, but hubby won't sleep well otherwise.
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Old 09-14-2016, 08:22 PM   #103
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Yes, social security and/or a pension would certainly swing the pendulum in the direction of success, and it's way better to have a million than not. But I'm still not convinced that most could retire with nothing but a million bucks. If $56k is the median income and people spend all their income, half of them spend more than $56k
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Old 09-14-2016, 11:26 PM   #104
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Originally Posted by Gumby View Post
That depends entirely on how much they spend. Just today I read that the median household income in the USA is $56,500 per year, and if the stories of everyone living paycheck to paycheck are true, they spend it all. That level cannot be prudently supported with a $1 million nest egg.
A household at the income level of 56,500 per year is not going to come close to saving $1 million in retirement accounts During a working career

Unless They live in a van down by the river or follow Mr. mustache And drive a 10-year old. Beater and live in a tiny house for the rest of their lives . Or maybe live in someone's basement

That's a lower middle-class wage Yes the stories of the struggling middle class are true

But typically in this early retirement.org community people will start talking about how the middle-class over spends and they shouldn't buy iPhones and Starbucks And the wonderful phenomenon of shareholder value economics and globalization Low wage Math is somehow ignored

Achieving $1 million in investable assets just isn't a big deal Because that only produces a lower middle-class wage

Get to $2 million and now you're talking solid math
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Old 09-15-2016, 07:45 AM   #105
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A household at the income level of 56,500 per year is not going to come close to saving $1 million in retirement accounts During a working career

Unless They live in a van down by the river or follow Mr. mustache And drive a 10-year old. Beater and live in a tiny house for the rest of their lives . Or maybe live in someone's basement

That's a lower middle-class wage Yes the stories of the struggling middle class are true

But typically in this early retirement.org community people will start talking about how the middle-class over spends and they shouldn't buy iPhones and Starbucks And the wonderful phenomenon of shareholder value economics and globalization Low wage Math is somehow ignored

Achieving $1 million in investable assets just isn't a big deal Because that only produces a lower middle-class wage

Get to $2 million and now you're talking solid math
I guess I'm the exception because I earned $1.045M in my 23-year career ($45,500 average) and had accumulated just over $800k when I ERed in late 2008 (when the markets were down). I have earned zero in wages in the last 8 years while seeing my investible assets rise to nearly $1.4M despite using those assets to live on.

If you are single and have no kids, it is doable. Not so much if you have kids.
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Old 09-15-2016, 09:18 AM   #106
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A household at the income level of 56,500 per year is not going to come close to saving $1 million in retirement accounts During a working career
Luckily, most of us invest our retirement money wisely instead of stuffing it under a mattress. Time in the market can be tremendously helpful.
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Old 09-15-2016, 09:29 AM   #107
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A household at the income level of 56,500 per year is not going to come close to saving $1 million in retirement accounts During a working career
I never made that much in my life yet when I was working full time I was maxing my 401K and ROTH. If I had continued doing that for 40 years i'd likely have well over $1M. Unless you live in a big city with big city costs you can live comfortably on well under $40K/yr. Not everyone wants a garage and possibly a storage garage full of "stuff" that they don't need. I'd be perfectly happy living in my small-ish home and driving a 10+ year old car and travelling cheaply. I understand that not everyone would be interested in that, i'm just saying that the idea that you can't save $1M on an income of $56,500 is very much false.
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Old 09-15-2016, 11:47 AM   #108
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I guess I'm the exception because I earned $1.045M in my 23-year career ($45,500 average) and had accumulated just over $800k when I ERed in late 2008 (when the markets were down). I have earned zero in wages in the last 8 years while seeing my investible assets rise to nearly $1.4M despite using those assets to live on.

If you are single and have no kids, it is doable. Not so much if you have kids.
So how much money did you have each year to live off of after you made your savings contributions?

Yes your numbers are definitely not realistic for the average person
If they were realistic then millions of people would be doing it
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Old 09-15-2016, 11:55 AM   #109
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I never made that much in my life yet when I was working full time I was maxing my 401K and ROTH. If I had continued doing that for 40 years i'd likely have well over $1M. Unless you live in a big city with big city costs you can live comfortably on well under $40K/yr. Not everyone wants a garage and possibly a storage garage full of "stuff" that they don't need. I'd be perfectly happy living in my small-ish home and driving a 10+ year old car and travelling cheaply. I understand that not everyone would be interested in that, i'm just saying that the idea that you can't save $1M on an income of $56,500 is very much false.
No it's very much true that the average American household making 56,500 a year will not save $1 million in retirement accounts

Yes I agree in theory it can be done but it won't be

If you throw in the cost of healthcare and college expense and housing there just isn't going to be enough money left over to save that aggressively .

There's a valid reason why most people in this income range don't save anything close to $1 million

Because life gets in the way
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Old 09-15-2016, 12:04 PM   #110
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No it's very much true that the average American household making 56,500 a year will not save $1 million in retirement accounts

Yes I agree in theory it can be done but it won't be

If you throw in the cost of healthcare and college expense and housing there just isn't going to be enough money left over to save that aggressively .

There's a valid reason why most people in this income range don't save anything close to $1 million

Because life gets in the way
I doubt that the average person with an income of $256,500 wouldn't save a $1M. That doesn't mean you can't do it if you want to. The majority of people spend very little on healthcare pre retirement and college expenses for anyone but yourself are a completely unnecessary expense.
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Old 09-15-2016, 12:06 PM   #111
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Luckily, most of us invest our retirement money wisely instead of stuffing it under a mattress. Time in the market can be tremendously helpful.
True the magic of compounding is incredible

But it takes real income and a high savings rate to really achieve $1 million wealth after you pay for Life

The evidence is out there for everyone to see

The average household is just not able to save that much money after paying for life's expenses
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Old 09-15-2016, 12:13 PM   #112
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I doubt that the average person with an income of $256,500 wouldn't save a $1M. That doesn't mean you can't do it if you want to. The majority of people spend very little on healthcare pre retirement and college expenses for anyone but yourself are a completely unnecessary expense.
We are talking lower middle-class So that would be in the
$55,000 per year range

People that make $256,500 obviously are going to save a lot of money without even trying

That's two different realities and lifestyle
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Old 09-15-2016, 12:40 PM   #113
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Originally Posted by scrabbler1 View Post
I guess I'm the exception because I earned $1.045M in my 23-year career ($45,500 average) and had accumulated just over $800k when I ERed in late 2008 (when the markets were down). I have earned zero in wages in the last 8 years while seeing my investible assets rise to nearly $1.4M despite using those assets to live on.

If you are single and have no kids, it is doable. Not so much if you have kids.
So how much money did you have each year to live off of after you made your savings contributions?

Yes your numbers are definitely not realistic for the average person
If they were realistic then millions of people would be doing it
I basically saved/invested whatever I didn't spend. My expenses averaged about $33k per year, including income and FICA taxes (which were about 50% of my total expenses). I also had a nice chunk of money from my company stock program which was free to us employees.

It's a lot easier to build up savings if you are childfree, for sure.
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Old 09-15-2016, 12:49 PM   #114
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I basically saved/invested whatever I didn't spend. My expenses averaged about $33k per year, including income and FICA taxes (which were about 50% of my total expenses). I also had a nice chunk of money from my company stock program which was free to us employees.

It's a lot easier to build up savings if you are childfree, for sure.
You were definitely fortunate to have the stock lump sum

Unfortunately most Americans will not receive any type of stock rewards
You definitely were a MaxSaver

Yes kids and aging parents are a real killer for some people
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Old 09-15-2016, 01:55 PM   #115
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Who cares about average or most people. $56,500 is what, a little over minimum wage for a married couple household.

Heck my daughter and her husband are 22 years old and together make over $100,000.

Just takes a little bit of work and some time and $1,000,000 is easy for those that want it. If not that is ok but it can be achieved by most people.
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Old 09-15-2016, 01:59 PM   #116
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It's a lot easier to build up savings if you are childfree, for sure.
I'm sure that's true in general but there seems to be quite a few people around here who get more in government assistance because of their kids than what they spend on their kids. Kids don't have to be THAT expensive especially if you aren't paying commercial daycare costs. Education is nearly free, healthcare is cheap unless they have a rare chronic condition, clothes can be second hand, food is minimal if you are just making slightly larger helpings of what you would eat anyway. No kid needs 90% of the toys that they have.
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Old 09-15-2016, 02:03 PM   #117
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Who cares about average or most people. $56,500 is what, a little over minimum wage for a married couple household.
Maybe in Seattle. Minimum wage here is still $7.25/hr. Two people making minimum wage at 40 hours a week is $30,160/yr. Half the jobs I see posted around here are for $8-10/hr.
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Old 09-15-2016, 02:11 PM   #118
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Who cares about average or most people. $56,500 is what, a little over minimum wage for a married couple household.

Heck my daughter and her husband are 22 years old and together make over $100,000.

Just takes a little bit of work and some time and $1,000,000 is easy for those that want it. If not that is ok but it can be achieved by most people.
So your daughters household makes twice the national average
That's kind of the whole point

The thread is about being excited about $1 million Or not being excited about $1 million because you realize that it only produces a lower middle-class wage

So your daughter and her husband will want at least $2 million for retirement
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Old 09-15-2016, 02:16 PM   #119
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The thread is about being excited about $1 million Or not being excited about $1 million because you realize that it only produces a lower middle-class wage
Are you advocating that $1M is not worth celebrating given the lower-middle class wage that it practically guarantees without lifting a finger for the rest of your life?

As I said previously, there's a very large portion of Americans, certainly more than half, that would take that in a heartbeat. Thus I've always thought it was worth celebrating. Then again, I'd tell you life is too short to wonder if you should celebrate something. Overcelebrate life!
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Old 09-15-2016, 02:18 PM   #120
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Personally I think a million is great but all I want to do is walk around the earth with a backpack. I'm glad it was fairly easy to achieve so I can start this journey at a young age next year.
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