First million is enough

[latexman]

After reading thousands of SS posts here, I've come to the conclusion that there is no "best age to begin SS". It depends on too many factors (health, marital status, Survivor's benefit, Spousal benefits, etc.). For those in good health, with a partner who might benefit from Survivor's benefits, it's generally a good idea to wait at least until FRA, and age 70 if you can.

Agreed. It is not easy to quantify one's health, especially before one has all the data (i.e. at death). So, while living, one can only make their "best guess at what age to take SS".

 

[RobLJ]

I often think along the lines of the OP because I realize I'm hanging out with the "fast crowd" here, even though our nut horde is more than sufficient and puts us firmly in the top 10% (apparently) of Net Worth.
I probably wouldn't have considered ER without the example of my paternal grandfather, who was a rural mail carrier in extreme Southern Oklahoma. He was also a beekeeper and used that money to save, to buy an acre in Colorado from a Texas family he knew that had a large ranch property by Redstone (near Carbondale and 60 miles from Aspen). One of the prettiest places in America, in my opinion. When I was 6 he took me to the ranch where we stayed in a bunkhouse while he framed the cabin he built, probably for less than 5k since he was hauling reused lumber behind the pickup (I still remember the drive from Oklahoma even though I was 6).
He did all this, then retired at 62 on his pension and beekeeping money, and lived 4 months in Oklahoma in a 1000 sq foot run-down Depression-era house and 8 months in the Colorado cabin (not winterized) until he died at 92.

He always had 3 hundred dollar bills in his wallet since as a young married man in Oklahoma he experienced multiple bank failures.

But he was wealthy, because other than property taxes for the Colorado cabin and food and gasoline, he had almost no expenses.

He would consider me a very wealthy man.

I still dream about that cabin in Colorado and the backpacking site we used to hike to. Paradise.

I'm encouraging DW to spend our money now, while we can still hike and enjoy it. So we blew 15k on a hike in Scotland in the HIghlands this June to celebrate our 40th anniversary.
The 3rd million may never ever come, and that's fine. Perhaps when we are both drawing SS since it will cover more than our expenses.

Kinda tongue in cheek post in response to the "first million is the hardest" thread. I somewhat felt left out with others posts on their good fortune in accumulating more millions.
But I'm here to say that we've never gotten close to the second but have comfortably stayed within the first million over our fourteen years of retirement. We've traveled a lot and now have a condo in Louisiana and a cabin in Colorado. Our 1+million should last us the rest of our lives and leave a significant inheritance to our 2 sons.
Would more $$$$ change our lifestyle? Probably not.

 

[skyking1]

Great thread folliver.
This is where we're at. We've never made big money and I always did a lot of spending as I went along. I don't have any regrets about that.
I owe our current state of affairs to The frugal nature of my darling wife.

 

[street]

I'm pretty sure we could easily make it on 1M and SS. We live very simple and very rural and my hobbies/activities I do really don't cost anything or just ¢. Gas for us is the money hog because I drive a lot other than that a few flies for fishing, license for hunting, few things I get for the ranch doesn't cost hardly anything.

Most of the things I do are free just need energy and time to go have fun doing them.

After thinking about the question asked. I came back after looking at our numbers from 8 years ago to this month I retired. We had just short of 3/4 of a million we had in cash. liquid accounts to live on. In 8 years, those couple of accounts are down 56K from 8 years ago. So, basically, we only drew 56K from that stash to live on including SS. So, I don't believe we will ever need investments to live on. 8 year run and only spent 56K still close to 3/4 million there. A million we could do and if we run out, we run out life would go on.

We have spent a lot of money in remodeling, buying land, bought an auto and will be buying another auto in the next three weeks. I bought a lot of toys and things I really didn't need but I could, so I did.

 

[Stormy Kromer]

I'm pretty sure we could easily make it on 1M and SS. We live very simple and very rural and my hobbies/activities I do really don't cost anything or just ¢. Gas for us is the money hog because I drive a lot other than that a few flies for fishing, license for hunting, few things I get for the ranch doesn't cost hardly anything.

Most of the things I do are free just need energy and time to go have fun doing them.

You sound like me.

I wouldn't live different if I had 10x more. Except give more away.

 

[Free2BMe]

I could have written your post. Exactly how me and my wonderful husband feel.

 

[street]

I'm pretty sure we could easily make it on 1M and SS. We live very simple and very rural and my hobbies/activities I do really don't cost anything or just ¢. Gas for us is the money hog because I drive a lot other than that a few flies for fishing, license for hunting, few things I get for the ranch doesn't cost hardly anything.

Most of the things I do are free just need energy and time to go have fun doing them.

After thinking about the question asked. I came back after looking at our numbers from 8 years ago to this month I retired. We had just short of 3/4 of a million we had in cash, liquid accounts to live on. In 8 years, those couple of accounts are down 56K from 8 years ago. So, basically, we only drew 56K from that stash to live on including SS. So, I don't believe we will ever need investments to live on. 8 year run and only spent 56K still close to 3/4 million there. A million we could do and if we run out, we run out life would go on.

We have spent a lot of money in remodeling, buying land, bought an auto and will be buying another auto in the next three weeks. I bought a lot of toys and things I really didn't need but I could, so I did.

Update

 

[mathjak107]

while it takes us about 160-180k a year in income to live a middle class lifestyle here in queens it does take multiple 7 figures to provide that…

the good news is that despite being 9 years in to retirement we are way ahead of the curve .

our balances are higher then the day we retired as well as calculations tell us we can safely draw almost 100k more then we are .

so we don’t think twice anymore about spending .

we pretty much can do whatever we want .

we recently bought a new high end car , just booked two nice trips and are going to look into renting for 3 months in hilton head .

so having a lot of dry powder is nice to be able to do all these things one may normally not do.

if suddenly one was given 50k a more a year with the stipulation that they had to spend and enjoy that money , most would have no problem doing so .

in fact if it continued for a while it would just become part of the lifestyle .

if it suddenly stopped many would be very upset..

so while it’s said money may not buy happiness, it does buy choices in life as well as having more may avoid a lot of financial misery

 

[LateToFIRE]

while it takes us about 160-180k a year in income to live a middle class lifestyle here in queens it does take multiple 7 figures to provide that…

the good news is that despite being 9 years in to retirement we are way ahead of the curve .

our balances are higher then the day we retired as well as calculations tell us we can safely draw almost 100k more then we are .

so we don’t think twice anymore about spending .

we pretty much can do whatever we want .

we recently bought a new high end car , just booked two nice trips and are going to look into renting for 3 months in hilton head .

so having a lot of dry powder is nice to be able to do all these things one may normally not do.

if suddenly one was given 50k a more a year with the stipulation that they had to spend and enjoy that money , most would have no problem doing so .

in fact if it continued for a while it would just become part of the lifestyle .

if it suddenly stopped many would be very upset..

so while it’s said money may not buy happiness, it does buy choices in life as well as having more may avoid a lot of financial misery

I suspect that's not a "middle class" lifestyle relative to most NYers, just a middle of the range for the people you might compare yourself to. But, I admittedly suffer from a similar cognitive bubble, which is to say that my current lifestyle seems awfully expensive for what I seem to be getting for it - which is mostly aggravation at the moment. I can respect you for staying, but personally, I can't relocate soon enough!

 

[mathjak107]

I suspect that's not a "middle class" lifestyle relative to most NYers, just a middle of the range for the people you might compare yourself to. But, I admittedly suffer from a similar cognitive bubble, which is to say that my current lifestyle seems awfully expensive for what I seem to be getting for it - which is mostly aggravation at the moment. I can respect you for staying, but personally, I can't relocate soon enough!

median and average incomes vary greatly from neighborhood to neighborhood.

sure , life in the hood can be had for very little , life in manhattan can far exceed anything we can afford .

our area has a median income of 110k and more than one third are over 150k

homes start at a million .


many many years ago the new york times looked in to the difference between a middle class income vs a middle class lifestyle and the two are miles a part .

the numbers are considerably higher today then when this article was written

as the ny times said


There is no single, formal definition of class status in this country.

Statisticians and demographers all use slightly different methods to divvy up the great American whole

into quintiles and median ranges. Complicating things, most people like to think of themselves as middle

class. It feels good, after all, and more egalitarian than proclaiming yourself to be rich or poor. A $70,000

annual income is middle class for a family of four, according to the median response in a recent Pew

Research Center survey, and yet people at a wide range of income levels, including those making less than $30,000 and more than $100,000 a year, said they, too, belonged to the middle.

By one measure, in cities like Houston or Phoenix — places considered by statisticians to be more typical of average United States incomes than New York — a solidly middle-class life can be had for wages that fall between $33,000 and $100,000 a year.

By the same formula — measuring by who sits in the middle of the income spectrum — Manhattan’s middle class exists somewhere between $45,000 and $134,000.

But if you are defining middle class by lifestyle, to accommodate the cost of living in Manhattan, that salary would have to fall between $80,000 and $235,000. This means someone making $70,000 a year in other parts of the country would need to make $166,000 in Manhattan to enjoy the same purchasing power.

Using the rule of thumb that buyers should expect to spend two and a half times their annual salary on a home purchase, the properties in Manhattan that could be said to be middle class would run between $200,000 and $588,000.

On the low end, the pickings are slim. The least expensive properties are mostly uptown, in neighborhoods like Yorkville, Washington Heights and Inwood. The most pleasing options in this range, however, are one-bedroom apartments not designed for children or families.

It is not surprising, then, that a family of four with an annual income of $113k or less qualifies to apply for the New York City Housing Authority’s public housing.

 

[Andre1969]

I was curious to look up real estate in Queens. I found this place, in Bunkersville, for $840K...
https://www.redfin.com/NY/Flushing/9014-Polo-Pl-11374/home/20888028
Close enough to 704 Hauser Street you could probably hear George and Weezy having a shouting match on a hot summer night just as clearly as Archie Bunker could.

In my opinion, that's a lot of money for that type of house. Not too many people are going to retire to that house, with savings of just $1M, unless they have an awful lot of other income from SS/pension/etc., or some other extreme circumstance.

But, if you've been living in that area for awhile already, I imagine you could get by for much less. For instance, that house sold for just $150K way back in 1997. I have no idea how much other expenses would be, such as car insurance, groceries, utilities, and so on. And according to the Redfin estimate, homeowner's insurance seems awfully high.

I imagine parking would be a pain, too. Interesting tidbit: Last year, I was at a car show in Hershey, PA with some friends. Someone overheard me say "Glenn Dale" as I was talking about my old house in Glenn Dale, MD. He thought I meant "Glendale," the neighborhood in Queens. Well, we chatted for a bit, and "All in the Family" came up. He said that when he was younger, his parents looked at houses in that neighborhood. According to him, the alleys were only 84" wide.

Just imagine trying to get a car in and out of that! These days, even your typical small car is about 69-70" wide, and that's not counting the mirrors. The biggest cars and most light-duty trucks top out around 80 inches. And again, that's without mirrors. I don't know if it's still the case, but it used to be that if a vehicle was wider than 80", it had to be classified as a medium duty truck.

I'd guess the vast majority of residents just park out on the street.

 

[Bigdawg]

^ location dependent for middle class is spot on. My DD and her husband make almost exactly what my DS and his wife make. DS and his wife are in San Diego. They are barely scraping by renting a 2/1 house for $3300/month. DD and her man own a 3/2 house here in Southern MD. Their mortgage is exactly half what the others are paying in San Diego for rent. DW and I choose to live on the water (Chesapeake Bay/Potomac River) so our housing costs are much higher (property tax and lot value). We could live up the road/off the water for half price (lot value and prop tax).

 

[mathjak107]

I was curious to look up real estate in Queens. I found this place, in Bunkersville, for $840K...
https://www.redfin.com/NY/Flushing/9014-Polo-Pl-11374/home/20888028
Close enough to 704 Hauser Street you could probably hear George and Weezy having a shouting match on a hot summer night just as clearly as Archie Bunker could.

In my opinion, that's a lot of money for that type of house. Not too many people are going to retire to that house, with savings of just $1M, unless they have an awful lot of other income from SS/pension/etc., or some other extreme circumstance.

But, if you've been living in that area for awhile already, I imagine you could get by for much less. For instance, that house sold for just $150K way back in 1997. I have no idea how much other expenses would be, such as car insurance, groceries, utilities, and so on. And according to the Redfin estimate, homeowner's insurance seems awfully high.

I imagine parking would be a pain, too. Interesting tidbit: Last year, I was at a car show in Hershey, PA with some friends. Someone overheard me say "Glenn Dale" as I was talking about my old house in Glenn Dale, MD. He thought I meant "Glendale," the neighborhood in Queens. Well, we chatted for a bit, and "All in the Family" came up. He said that when he was younger, his parents looked at houses in that neighborhood. According to him, the alleys were only 84" wide.

Just imagine trying to get a car in and out of that! These days, even your typical small car is about 69-70" wide, and that's not counting the mirrors. The biggest cars and most light-duty trucks top out around 80 inches. And again, that's without mirrors. I don't know if it's still the case, but it used to be that if a vehicle was wider than 80", it had to be classified as a medium duty truck.

I'd guess the vast majority of residents just park out on the street.

rego park is no where we would choose to live .

we are in bay terrace in bayside queens .

very very different neighborhood.

but the point is not even geographic areas but it can get right down to neighborhoods requiring substantially more for that proverbial middle class lifestyle , which has little in common with middle class incomes.

middle class incomes here would barely buy a coop apartment , forget about a house here .. it would be a high stress life sweating every bill.

even rentals here are 3k a month .

just looking at some basic expenses for here we show a side from rent

auto insurance on one car 2200 , umbrella 700 , renters insurance 400

medicare x2 plus supplement plus drug plan and deductibles on my drugs and dental insurance is about 10k .

long term care insurance 10k .

that isn’t even the tip of the iceberg of a full budget …

people are paying 500-800 a month for gas and electric in the winter on a house

cable and internet is at 2400 a year .

food is very high , two of us run about 250 a week

but this is where our 6 grandkids are and this is where we are , at least for now

 

[wmc1000]

Absolutely.
We crossed over to one million right at retirement, as I stated in the other thread, I never thought I would be a millionaire.
So blessed and thankful.

+1 that was us too! Was always in awe of having cash and investments total $1,000,000 which was reached right as retirement started. While it did dip below that number sometimes during the first year of retirement, our expenses were low enough that the overall growth pattern has been upwards!

 

[Chuckanut]

I recently checked out one study of the cost of living in various major cities. Yes, I know these studies have a lot of variables and the choice of which variables to consider can make a big difference.

In any case, my home town is smack in the middle of a megalopolis whose cost of living is 42% higher than the national average. WOW! The inland city where my child moved to a few years ago is 10% under the national average.

I can believe the above numbers. My child bought a house (granted an older one in a 'blue-collar' neighborhood, nothing fancy) for significantly less than the down payment she would have needed to get a similar house where I still live. I estimate that the down payment here would need to be 2x the cost of the house in the new home town in order for the payments to be affordable.

High housing costs (purchase and rental) are driving up prices and taxes quite a bit. Maybe it's time to move to Oklahoma.

 

[skyking1]

@mathjak107

but this is where our 6 grandkids are and this is where we are , at least for now

That is really all that is important and needs to be said. The concept of moving to LCOL is right out the window for you.
My brother and his wife went from a 1400 SF house on a double lot with gardens in central Washington to a 770SF condo in Seattle that is 4 blocks from two of his children and grandchildren.
It's like he threw a dart at the map to land between them
This was a huge culture change for both of them, neither had lived in a city before. They are making out OK though. Apparently huge doses of grandbabies are theraputic.
For us it is also a non-starter. We grew up rural, both of us, and a move to the city is not in the cards for us. Our cost of living is a happy coincidence with a lifesylye choice, not at all a necessity. We are not in a LCOL state but all the family is here and we too cannot imagine leaving this state for less expensive digs.

 

[old medic]

my hobbies/activities I do really don't cost anything ...... a few flies for fishing, .

If you have extra money.... save some by tying your own...

 

[street]

If you have extra money.... save some by tying your own...

I thought about that I have a friend that does. A fun hobby for him.

 

[old medic]

I thought about that I have a friend that does. A fun hobby for him.

I enjoyed making my own. Unfortunately the majority of my hobby stuff went into storage when we moved. Can't wait for the house to get done and reorganize everything.

 

[scrabbler1]

When I was putting together my ER spreadsheets in 2005-2008, in preparation for eventually leaving my job and retiring in late 2008 at age 45, one unbreakable condition to do this was to build into my budget a small but sufficient surplus or cushion, so that if I decided to go on a small spending spree once in a while, it wouldn't bust my budget.

When all the pieces finally fell into place in the fall of 2008, I chose an ER date of late October. I had about $600k in taxable, enough to generate the income I needed to cover my anticipated expenses, plus the aforementioned cushion, and another $234k in a rollover IRA.

This was during the near-bottom of the 2008-09 market crash, something which actually helped me out a lot in my short-term and long-term ER. I am enjoying the benefit of that market place today, thanks to being able to buy 20% more shares of a bond mutual fund at bargain-basement prices.

My portfolio rebounded and in early 2020 I broke the $1M mark. I just broke (again) the $1.9M mark with $1M in taxable. My day-to-day lifestyle hasn't changed. I have adjusted my taxable portfolio over the years to ensure I retain that regular cushion in case I go on a small spending spree once in a while, which has happened.

Ironically, the ACA, which didn't exist when I ERed, has turned upside-down the incentives to have a higher income because I can get cheaper HI when I keep my income low.

I've been doing a mild BTD in the last 6 months to boost my overall day-to-day enjoyment, but nothing which will bust my budget. I doubt it will slow down my progress toward reaching the elusive $2M mark.

 

[Rianne]

There's an article in Salon, I can't find it now. It talked about the stock market dropping 50%. I quickly plugged in the numbers and my various calculators and realized we could get by just fine spending 50% less than we spend. We could take great vacations driving a few hours away. During Covid, we cut our spending drastically and were just fine.

 

[mathjak107]

anyone who plans their initial draw based on some momentary market high is not being realistic.

we spend 80% of all our investment time somewhere between the last low and last high

 

[Dtail]

When I was putting together my ER spreadsheets in 2005-2008, in preparation for eventually leaving my job and retiring in late 2008 at age 45, one unbreakable condition to do this was to build into my budget a small but sufficient surplus or cushion, so that if I decided to go on a small spending spree once in a while, it wouldn't bust my budget.

When all the pieces finally fell into place in the fall of 2008, I chose an ER date of late October. I had about $600k in taxable, enough to generate the income I needed to cover my anticipated expenses, plus the aforementioned cushion, and another $234k in a rollover IRA.

This was during the near-bottom of the 2008-09 market crash, something which actually helped me out a lot in my short-term and long-term ER. I am enjoying the benefit of that market place today, thanks to being able to buy 20% more shares of a bond mutual fund at bargain-basement prices.

My portfolio rebounded and in early 2020 I broke the $1M mark. I just broke (again) the $1.9M mark with $1M in taxable. My day-to-day lifestyle hasn't changed. I have adjusted my taxable portfolio over the years to ensure I retain that regular cushion in case I go on a small spending spree once in a while, which has happened.

Ironically, the ACA, which didn't exist when I ERed, has turned upside-down the incentives to have a higher income because I can get cheaper HI when I keep my income low.

I've been doing a mild BTD in the last 6 months to boost my overall day-to-day enjoyment, but nothing which will bust my budget. I doubt it will slow down my progress toward reaching the elusive $2M mark.

You will get there and then can say you are a multi-millionaire, which does have a nice ring to it.

 

[FLSUnFIRE]

And yet W2R and myself (just 2 examples) still track it with no spending problems.
Just playing AJA - I do like your posts.

I'm in the club! Maybe an update post from me soon... been a very expensive spring for FLSunFIRE. Not sweating it (other than literally) but in addition to SORR there is SOER that hit me pretty solidly.

 

[jim584672]

I'm in the sub-million club when I retired in 2014. It helps to have free and clear housing and car, a waiting frozen pension and decent Social Security. Income low enough to get $0 health coverage and pay hardly any income taxes. Spending is a bit above the Federal Poverty Level.