Poll:Is $1 Million still a relevant number nowadays for 2 retirees?

[Koolau]

I'm in the Suze Orman camp, i.e., $1M is not enough for early retirement and that number should be $5M. But that is me. I'm sure I could get by on less but it would be a lower standard of living with more worry about running out of money and probably not being able to help out my 3 kids in young adulthood or elderly parents.

Never a big fan of SO (though she's against consumer debt and for LBYM.) My take is she doesn't really believe in ER - at least not in the way I do. If you need $5mil, fine. Go for it. I needed a lot less and am quite satisfied with my ER. As in all aspects of our lives, YMMV.

 

[RunningBum]

I'm in the Suze Orman camp, i.e., $1M is not enough for early retirement and that number should be $5M. But that is me. I'm sure I could get by on less but it would be a lower standard of living with more worry about running out of money and probably not being able to help out my 3 kids in young adulthood or elderly parents.

Not a lot of Suze Orman fans here. I've only heard/read a little bit of her, and I put her in the category of "entertainer" as opposed to someone who should be listened to for financial advice. The snippets I get from this forum confirm that.

You profile says you are in the SF bay area, so if you want to stay there it's not surprising your number is higher. Everyone's number is different, but I'll be damned if I'm going to let some entertainer who spouts a lot of nonsense tell me what my number should be.

I don't find her entertaining either.

Just saying, you have a right to give your opinions here like anyone else, but if you're going to quote Suze Orman don't expect too many people to take you seriously.

 

[anothercog]

Not a lot of Suze Orman fans here. I've only heard/read a little bit of her, and I put her in the category of "entertainer" as opposed to someone who should be listened to for financial advice. The snippets I get from this forum confirm that.

You profile says you are in the SF bay area, so if you want to stay there it's not surprising your number is higher. Everyone's number is different, but I'll be damned if I'm going to let some entertainer who spouts a lot of nonsense tell me what my number should be.

I don't find her entertaining either.

Just saying, you have a right to give your opinions here like anyone else, but if you're going to quote Suze Orman don't expect too many people to take you seriously.

I mentioned SO’s name as she took a lot of heat for the $5M number as a target for ER. I agree with that number for me and my circumstances but not because I believe she is a financial savant, though she does offer a lot of advice that aligns with FIRE.

To the OP’s question, I don’t think the $1M saving target is as comfortable a retirement goal as it was 20 years ago when I read The Millionaire Next Door. As Yogi Berra said, “a nickel ain’t worth a dime anymore.”

 

[CardsFan]

To defend Suze, a little, back 10-20 years ago, her advice was very LBYM. I think she suffers from spotlight fatigue.
JMHO

 

[UnrealizedPotential]

1 million for 2 retirees. Hmm. Sure, in some states of the US. In a lot of the world it would be a slam dunk, but certainly not all of the world. But all the US states, I would say it would depend on many factors. But I am not even close to 1 million yet, and I personally do not know anyone who has that much, so yes it is still a relevant number to a lot of people in general, but for 2 retirees is up for debate.

 

[Amethyst]

Hobbies, as I am very aware, can absorb every dollar you throw at them; but I have a hard time imagining a 76-year-old woman, unless a socialite, spending an inordinate amount on clothing.

T His wife tries, but can't quite out spend him (she buys crafts, clothes, and makes my friend trade off her car, etc.)

.

 

[Major Tom]

But I am not even close to 1 million yet, and I personally do not know anyone who has that much, so yes it is still a relevant number to a lot of people in general, but for 2 retirees is up for debate.

Surely it depends on what their annual spend is? I mean, if you're going to talk in very broad terms, a stash of $10 million is up for debate too, if you don't know how much a person, or couple, spends.

 

[JustKickItForward]

I agree - if you just want to be sure you can survive, then absolute,y: two people CAN easily survive on what 1 million provides. Billions of people get by on less. The question is: do you WANT (need) more to be happy.

Yes, but billions of other people also do not live in HCOL areas.

 

[JustKickItForward]

...But I am not even close to 1 million yet, and I personally do not know anyone who has that much, so yes it is still a relevant number to a lot of people in general, but for 2 retirees is up for debate.

There could be more people out there with $1m NW than you think.

My thoughts - in the current US (without COVID, of course) - for two people, let's say they save $16000/yr ($1,333/mo) and get some employer match of $4000/yr - this is $20000/yr. Let's say they ramped up their earnings from age 20-30 and start on this journey starting at age 30 and do this for 35 years (until age 65). This equals $20000x35 = $700,000. Now, granted, we are $300,000 short, but, things to consider as well: 1) home equity? 2) in the 35 years, some luck and work will result in investment gains. 3) the couple has some savings from age 20-30.

Add 1), 2), and 3) to the $700,000, that is $1mil ? So, OK, this is the ER forum, so maybe I digressed, but just saying $1mil is be relatively easy to reach for most couples - it simply take a some planning and dedication because it is very easy to inadvertently lose or use money air marked for retirement in a 30-35 years timespan.

 

[HI Bill]

$1M would be more than adequate for the majority of Americans, IMHO. Most retire with far less than that. But the important part is what fixed income (SS, pensions) do they have, what is their annual spend, and how much has to be 'made up' with the withdrawals from the $1M?

My parents had STRS (California's State Teacher's Retirement System) instead of SS . Together, they had less than $300K in investments, but STRS benefits far exceeded what they would have received from SS. In their LCOL area, with low "Prop. 16" property taxes and a paid off house, they had no problem financially. Until they divorced.

 

[Gumby]

There could be more people out there with $1m NW than you think. ...

According to this post https://www.early-retirement.org/fo...-1-and-0-1-households-107377.html#post2543467 there are15,298,070 millionaire households in the United States, or roughly 11.89% of all households.

 

[kgtest]

According to this post https://www.early-retirement.org/fo...-1-and-0-1-households-107377.html#post2543467 there are15,298,070 millionaire households in the United States, or roughly 11.89% of all households.

15MM millionaires of 45MM claiming SS...
a HUGE assumption that these 15MM are also claiming SS which probably not...

Roughly 75MM of the US population is 55 or older... so again..

a HUGE Assumption that at least 15 of between 50 and 70MM people who MIGHT be retired, about 20-30% of of those potential retirees are millionaire's based on my back of the envelope calc and 2019 census data... or roughly 2 or 3 of every 10 retirees today.

Seems plausible. In 10 years the 1MM will def be prob 2 or 3MM so I am hoping I retire with 1MM or we might need to stock up on cat food and dryer sheets.

 

[MarieIG]

I read 5k per month net for a married couple is considered a happy retirement as long as you don't live in expensive states. Of course it greatly depends on lifestyle.

I could totally see this, and consider with a paid off house and reasonable medical costs.

Even some HCOL areas allow breaks for example on property taxes to those who have lived in their homes for a long period of time (California) or those having lower incomes and/or seniors.

 

[Time2]

To defend Suze, a little, back 10-20 years ago, her advice was very LBYM. I think she suffers from spotlight fatigue.
JMHO

I see Suze has a net worth between $40M and $75M, maybe she has lost perspective of what the little people can prosper on.

 

[Koolau]

I could totally see this, and consider with a paid off house and reasonable medical costs.

Even some HCOL areas allow breaks for example on property taxes to those who have lived in their homes for a long period of time (California) or those having lower incomes and/or seniors.

Very true. I've explained before that, for instance, here in the Islands, there are many advantages offered to the kupuna (elders.) Bus passes (on Oahu) are something like $35 for a full year vs $2.75 per ride (full fare.) Already low real estate taxes are lowered further for kupuna. "Low cost" housing is offered to qualifying kupuna (wait lists DO apply.) Medicare/Medicade is obviously available just like other states. Etc.

I think $5k/month would be very doable here, though I wouldn't want to give up my cars and other aspects of my lifestyle. Still, it's possible. I know folks doing it. YMMV

 

[ncbill]

I could totally see this, and consider with a paid off house and reasonable medical costs.

Even some HCOL areas allow breaks for example on property taxes to those who have lived in their homes for a long period of time (California) or those having lower incomes and/or seniors.

My recently-deceased relative took advantage of the property tax break here...cut in half if you're over 65 with an annual income under $30,000.

They were laid off at age 60 & so had to cash in their pension to make it to SS at age 62, which was their sole income for the rest of their life.

Sadly, they entered their forced retirement with a mortgage (& HELOC) which absorbed most of that income, so they had a very mean retirement...that's why I'm an advocate of not retiring with a mortgage.

 

[Hamlet]

You must live large and/or spend a lot.... which is fine if that is what you want.

We have many early retirees here who retired voluntarily and comfortably on a lot less than $3-4M.

For me there are two big uncertainties that keep me working even though we probably could retire now if we were careful with our money--

1. I have two young daughters ( 7 and 9 ). I have no idea what college expenses for them will look like in 10 years.
2. Health care. Maintaining access to employer-based health care for a family of four is a giant benefit when there is no reasonable way to predict what health care costs are going to look like in future years.

 

[Markola]

As Roger Whitney, the Retirement Answer Man says, retirement need not be an on/off toggle switch, in which you go from 100% work to 100% reliance on investments. It can be a dimmer switch with regard to spending and earning. So, yeah, the income from $1 million can really help as one factor in designing a post-career life.

 

[RetireeRobert]

As to the original question, is $1 million still a relevant number for retirement planning, the answer is "no".

 

[Major Tom]

As to the original question, is $1 million still a relevant number for retirement planning, the answer is "no".

Well gosh then, that's settled it hasn't it?

 

[Markola]

As to the original question, is $1 million still a relevant number for retirement planning, the answer is "no".

Ha. That will be unwelcome news to the millions of retirees like my mother who are happily and securely retired with less than half a million $.

 

[RetireeRobert]

Ha. That will be unwelcome news to the millions of retirees like my mother who are happily and securely retired with less than half a million $.

I agree and know many have done it "happily" with far less than a million.

Whether it is viable or not depends a whole lot on personal circumstances. Like marital status, family size, age(s), health, available pensions, and not the least important--one's own outlook at what constitutes a "secure and happy retirement".

I myself retired at 54 with three kids then ages 7, 10, and 17 and a wife whom I wanted to keep, and keep happy! If all I had were my own assets and no available pension, I would never have retired at age 54 with less than $1 million. But I know others who could make the choice and be happy with far less than $1 million.

 

[watchman3135]

I still say it is and I'm purposely going to omit pensions in my examples. If you have one, great.

One million today at even a conservative 3% is $30k a year. Add in SS for one person at say $2,000 per month and say you live in a relatively affordable state with no state tax on SS or Retirement income and have low property tax, I'd say $54K is enough to live on for many.

Now say the spouse also gets SS at $1,500 per month and you use a 4% withdrawal rate on the million. Now your at $82,000 per year. If you can't live on that, I'd say your in baller territory and need to find another forum or adjust.

Then you'll get the argument of what $1M will be 20 years from now. While SS has sometimes small COLA increases, and while the past market returns are in no way a prediction of future returns, If you went with the conservative 3% withdrawal, with the future predicted returns of 5% - 6%, you're nest egg will still slowly grow.

Remember, California and NY isn't all off America. It's just some of the most expensive to live. Everything else is just excuses and bragging.

 

[watchman3135]

To add to my previous comment, There are ER sites, one I won't name where he almost is on a bragging rampage of $3M is the new $1M. I get the feeling from reading his blogs at nauseum that he was a high income earner, saver investor and lives in one of the most expensive cities in CA. Hey good for you but none of this helps the average FIRE or normal aged retiree that made a average US salary.

Add in Suze Orman's recommendation of needing $5 Million Or More To Retire Early and it all looks pretty bleak but none pertains to you as an individual. It's all about your individual spending and needs. If you live in a small 3 bd. rm. home in TN or WY that is paid off and your property taxes are $1,500 per year and you drive a 9 year old Honda Accord and eat at home, you're not going to need nearly as much as someone who lives in San Francisco and replaces his\hers Tesla Model S or X every 3 years and dines out every other night.

 

[ArmchairMillionaire]

If you live in a small 3 bd. rm. home in TN or WY that is paid off and your property taxes are $1,500 per year and you drive a 9 year old Honda Accord and eat at home, you're not going to need nearly as much as someone who lives in San Francisco and replaces his\hers Tesla Model S or X every 3 years and dines out every other night.

+1.