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

[tmitchell]

In 2018 only 3% of Americans had $1M saved, which is still an incredible figure in so many ways.

https://nypost.com/2019/03/14/the-us-has-more-millionaires-than-greece-has-people/

I still think 1M is a pretty great milestone, but as noted here it all depends on your expenses.

My grandmother was a waitress who invested during the 60's & 70's and she retired early and lived to almost 100. There's NO way she amassed $500k in NW by herself. By the end she was living on fumes, but her traveling & spending days were well in the past and Medicare picked up most of the bills for care (her daughter also took care of her for the final years, along with some occasional help).

So long answer short: yes it's possible. The question is: is $40-50k/year + SS enough for you?

 

[Nemo2]

Out of left field because we're a) Canadians, and b) we're way out in left field anyway:

This year, (no travel), we're in line for approximately 63% of the expenditure amount for the last few years, (which wasn't high anyway). This, minus our CPP/OAS (Social Security type income), means very little outlay of our own money which continues to rise, (when we're gone our heirs/grandchildren are welcome to it).

But.....being, comparatively, so far in left field there's very little we need and even less that we want.

For us it's a mindset...not deliberately 'planned'...just the way it is. We're happy with each other's company, and 'stuff' isn't a factor.

 

[RunningBum]

The poll is missing the "Never relevant" option. Everyone has their own factors on cost of living (expensive area or not), standard of living (expensive tastes or not), whether there's a pension involved, and any other number of things that means there is no single number.

 

[FLSUnFIRE]

This might be an interesting chart to share here... $1M isn't quite what it used to be. Pink line is 33x trailing 12 months expenses and the blue is my liquid NW. Interesting to look at this chart and the impact of life's decisions. Glad I started tracking... never used a budget but the feedback loop kept me mostly on track.


I graduated college in 1997 and started my career in 1998.


FLSunFIRE


* Bonus points if you can tell when I met my ex-wife, got married, got divorced, sold the moneypit house we bought, and bought my current home.

 

[rkser]

As others have said already,

It all depends on what other sources of income the couple has ? + Debts ? + other financial responsibilities ? + LIVING EXPENSES of the couple ? .

So, Yes for some & No for others.

 

[HF63]

I retire at 52 with a lot less than 1 million. I also know that just like real state location, location has a lot to do w/ expenses. My 1 dollar here buys x and in other parts of the world 2x, 3x depending on where I want to be.

 

[audreyh1]

The majority of the US would love to retire with $1 million.

Exactly!

 

[pacergal]

Yes, we could.
Create a budget and live within our means, have been doing that all our working lives.

 

[jollystomper]

When organizations provided retiree health insurance with smaller co-pays at minimal or no cost, I would have said yes. However, these days, I would not feel comfortable retiring with that amount. the reasons I worked to get well beyond $1 million included our concerns over potential health and long term care costs.

 

[Major Tom]

How much will you spend per year, minus the amount provided by social security or pension income? That's the critical number. Multiply it by 25 (or 33 to be conservative). What other people consider necessary is irrelevant.

That's the perfect answer, though a question like this is one of those that virtually begs everyone to weigh in with their opinion, based on their specific personal circumstances. Much as I'd love to think otherwise, I'm not that different from the herd, so here goes.

I retired at age 47 with significantly less than a million. I'm now about to turn 57, and have about a million, thanks to the market. I'm single, and live in cheap rented accommodations in a high COL area. Social Security will be along later, to help out with some extra goodies.

 

[youbet]

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Is $1 Million still a relevant number as a retirement target?

Still? Actually, $1 Million was never a relevant number as a retirement target. As many have already mentioned, your spending needs/desires + your other sources of income play the most significant role. I'm sure $1 Million is a pragmatic target for someone who will have no other source of income and can conservatively live on $40k annually. Or someone with $20k SS and an annual budget of $60k. But if you don't call out these details, there is nothing for the $1 Million number to be "relevant" to.

 

[braumeister]

Some of our newer members assume (quite naturally) that their budget is comparable to most others. What they don't realize at first is that we have a very wide range of members here. Some have portfolios in the six figures, while others are well up in eight figures.

And even that is only part of it. The cost of living in Hawaii is more than twice that of Mississippi, with every other state somewhere in between. Even within the same state the range can be enormous.

So the only reasonable way to look at your needs is the way Gumby expressed it above.

 

[audreyh1]

When organizations provided retiree health insurance with smaller co-pays at minimal or no cost, I would have said yes. However, these days, I would not feel comfortable retiring with that amount. the reasons I worked to get well beyond $1 million included our concerns over potential health and long term care costs.

For an early retiree - sure. But for a retiree who waits until they have Medicare, they should be OK. Certainly better than less than $1M.

LTC is a whole other issue.

 

[Souschef]

The answer is, "it depends". In our case, pensions and SS cover most of our expenses. As we have aged, we have cut way back on travel, where at first we were spending about $ 40K a year.
We do not have to worry about health care costs that much since we are on Medicare.
House and cars paid for, and zero debt.

 

[38Chevy454]

How much will you spend per year, minus the amount provided by social security or pension income? That's the critical number. Multiply it by 25 (or 33 to be conservative). What other people consider necessary is irrelevant.

This is what matters, I agree.

 

[cyber888]

I completely disagree with you about it not being a relevant number. Just look at the many people on this board reporting their "milestone" achievements. I've read hundreds saying, "we cross that $1 million mark". Why say that if it is not relevant. It is. It is a benchmark for the past several years on this board. And I've read thousands of people here over the years 'congratulating' those who got to that $1 million target. And when they do get to that $1 million mark and get congratulated, no one ask them what was their budget or expenses, they are just being admired for reaching that number.

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Still? Actually, $1 Million was never a relevant number as a retirement target. As many have already mentioned, your spending needs/desires + your other sources of income play the most significant role. I'm sure $1 Million is a pragmatic target for someone who will have no other source of income and can conservatively live on $40k annually. Or someone with $20k SS and an annual budget of $60k. But if you don't call out these details, there is nothing for the $1 Million number to be "relevant" to.

 

[ArmchairMillionaire]

I was just wondering how the retirement aspiration numbers have changed for a couple retiring in the next 3 - 5 years.

We are planning on retiring sometime in about 5 years when I reach 55. We reached the $1M mark earlier this year. Right now everything is paid off and even after stashing away $42,250 this year into our retirement plans we have no problem living off ~$22,000 a year and plan to make and save the same amount for the next 4-5 years. Theoretically, with our low cost of living we could retire today but since over 80% of our nest egg is in 401(k) plans and a traditional IRA we're going to wait until 55 when we can access that $$ without a penalty if we need it.
So $1M would be plenty enough for us to maintain our lifestyle and I figure (hope) we'll be around $1.5M by 2025 so 1.5M X 3% would allow us to splurge a little even after allowing for taxes.

 

[foxfirev5]

Yes it looks a million would it easily for us. The rest is going to end up going to the kids. If I based it on this year's expenses a couple hundred thousand would do it ☺

 

[F.I.R.E User]

What about a million in 15-20 years from now?

 

[ArmchairMillionaire]

Yes it looks a million would it easily for us. The rest is going to end up going to the kids. If I based it on this year's expenses a couple hundred thousand would do it ☺

Interestingly enough, our expenses this year are quite a bit higher than the last few years. We decided to put $$ into the house this year to replace the sewer lines and the roof that were both on the verge of failing soon. But we also stayed home for most of the year to partially offset what we put into the house.
I'm rolling over a week of vacation so I'll probably have more opportunity to spend more next year, depending on the whole Covid-19 situation.

 

[street]

I completely disagree with you about it not being a relevant number. Just look at the many people on this board reporting their "milestone" achievements. I've read hundreds saying, "we cross that $1 million mark". Why say that if it is not relevant. It is. It is a benchmark for the past several years on this board. And I've read thousands of people here over the years 'congratulating' those who got to that $1 million target. And when they do get to that $1 million mark and get congratulated, no one ask them what was their budget or expenses, they are just being admired for reaching that number.

I agree with you 1 million is a lot of money and a huge achievement. It may not be to some but it is to many and is a relevant number to me and many more.

 

[Major Tom]

I completely disagree with you about it not being a relevant number. Just look at the many people on this board reporting their "milestone" achievements. I've read hundreds saying, "we cross that $1 million mark". Why say that if it is not relevant. It is. It is a benchmark for the past several years on this board. And I've read thousands of people here over the years 'congratulating' those who got to that $1 million target. And when they do get to that $1 million mark and get congratulated, no one ask them what was their budget or expenses, they are just being admired for reaching that number.

There's a difference between something being relevant and it being significant. Even to someone on this board who has, say, $20M, a million dollars is still not an insignificant figure. A million bucks is a significant amount to pretty much everyone here. However, the retirement goal of saving a million dollars is not relevant to all, as each person's needs in retirement is different.

 

[RobbieB]

A million bucks means you're a millionaire. And that is important!

It's like a touchdown! Goalpost reached! You're in a new category, you're a newly minted millionaire.

 

[RunningBum]

Which may or may not mean you've hit your retirement target. Which I thought this thread was about. I've seen a lot of congratulations on the $1M mark being hit...not sure I've ever seen "Now you can retire!" added to that.

 

[Gumby]

I completely disagree with you about it not being a relevant number. Just look at the many people on this board reporting their "milestone" achievements. I've read hundreds saying, "we cross that $1 million mark". Why say that if it is not relevant. It is. It is a benchmark for the past several years on this board. And I've read thousands of people here over the years 'congratulating' those who got to that $1 million target. And when they do get to that $1 million mark and get congratulated, no one ask them what was their budget or expenses, they are just being admired for reaching that number.

If I were so strongly convinced that I already knew the answer, as you seem to be, I probably would not have asked the question and posted a poll in the first place (you are the OP, if I am not mistaken). Nobody is saying that accumulating $1 million is not a great milestone -- one of which you can be quite proud. Heck, as has been pointed out, most people in this country will never have that much money and most have retired and will retire with much less.

I'd always prefer to have a million dollars than not, but whether that is "relevant" to your particular situation is a question only you can answer. It might be too much, not enough or just right. I'll use my own situation as an example. For the young wife and me, our two pensions plus social security more than pays for our spending, and we live with exactly the same standard of living that we enjoyed prior to retirement. So no amount of savings - whether it be $10 million, $1 million or zero -- is "relevant". Nice to have? Sure, but not necessary.

So if I told you that $1 million is not relevant, how would that help you? It's not relevant for me, but it might be for you. The point I was trying to make at the start of this thread is that you should decide for yourself, based on your own situation. My opinion, based on my situation, is really and truly irrelevant to that decision.