$2.5 million to retire (Legg Mason PR story)

[Gerard3]

Legg Mason reports that investors think they'll need $2.5 million for comfortable retirement. Story doesn't say anything about pensions, ss, or the timeline to have $2.5 million. Not much context other than people feel behind. Does this amount ring true to folks here? I guess this is one of those how much is enough stories, but I'm curious as to people first-blush reactions and how it jives with their own experiences. Is there any value to stories like these or are they just PR fodder? Any thoughts?


http://finance.yahoo.com/news/u-investors-2-5-million-143000917.html;_ylt=AwrBJR6VF_5UNDIAnQzQtDMD

 

[David1961]

My first blush reaction is that with a $2.5 million portfolio, if you withdraw at a very safe rate of 2%, that comes out to a little over $4,000 per month.

 

[rbmrtn]

No. Really depends how much you spend.

They surveyed 485 "affluent" investors 58yrs old with $400k saved. If they are spending $100k ( 4% SWR of $2.5mm) I'd be worried too.

 

[bingybear]

It seems to say they need the 2.5M to keep their current lifestyle... and this was a survey of affluent investors. It also notes some are expecting to reduce their life style in retirement (... it also notes many are not doing well at reaching the 2.5M goal.) so... likely fodder. set your own goals...affluent or not

 

[Sunset]

PR fodder, as its too simple to say any number like that.

It varies tremendously by how debt free you will be in retirement and your spending requirements and desires. Plus the healthier you are the cheaper life is going to be.
Plus your SS and pension collection status.

 

[W2R]

Legg Mason reports that investors think they'll need $2.5 million for comfortable retirement. Story doesn't say anything about pensions, ss, or the timeline to have $2.5 million. Not much context other than people feel behind. Does this amount ring true to folks here? I guess this is one of those how much is enough stories, but I'm curious as to people first-blush reactions and how it jives with their own experiences. Is there any value to stories like these or are they just PR fodder? Any thoughts?


http://finance.yahoo.com/news/u-investors-2-5-million-143000917.html;_ylt=AwrBJR6VF_5UNDIAnQzQtDMD

All I can say is that I'm happily retired, and that sure sounds like a lot of money to me. YMMV depending on what you are used to!

 

[Jack_Pine]

Of course it depends on spending and duration among other things but as a general target for the general public I don't think it's a bad number. At least it's a conversation starter.

Our target number is a little over that. First few years will be at 4% SWR for a few years and then down to a right around 2. We feel pretty good and will adjust spending as needed.

 

[Gerard3]

Thanks all for your quick replies. PR fodder, it is. Even so, this one was particularly void of context other than stating it was a survey of "affluent" investors. There seems to be a lot of these fairly useless stories going around. No wonder even people in the story worry so much about money.

 

[Walt34]

There seems to be a lot of these fairly useless stories going around. No wonder even people in the story worry so much about money.

In the news industry the companies are trying to cut way down on employees and use freelancers as much as possible. So now you have all these formerly employed writers who are desperate to come up with something - anything! - that they can sell and pay for tomorrow's dinner.

They're doing the same thing with photographers - that was clear when National Geographic let go it's last full time photographer. It's also why your local news station is so eager to have you "share" your photos - for free of course - of the latest big wreck on the interstate. That way they won't have to pay a photographer to get the images.

 

[Dreamer]

If we had to have that much money, we would never be retired.

 

[nuke_diver]

Yes please note the partial quote

The U.S. portion of the Legg Mason Global Investment Survey was conducted among 458 affluent investors with a minimum of $200,000 in investable assets not including their home

Sample sample size and not a diverse selection either. I know a lot of people who would fit that category (paying for kids going to private schools, buying new cars every couple of years etc) but this is just another one of those "you'll never be able to retire" articles that come up ever other day it seems

 

[ejman]

$2.5 million? pfft! a mere pittance. Clearly $72.3 billion is not enough as Mr Buffett keeps on working!. Full disclosure, I ER'd 12 years ago at way less that $2.5 million and it has been a wonderful ride, even with major market calamities but who is counting?

 

[jim584672]

Wall Street wants you to believe the lie that millions are needed, after all they get fees for each product they create.

 

[Ready]

I would not feel comfortable retiring early on $2.5M. I want to delay SS until 70 to maximize the benefit, so for me the $2.5M would need to last more than 20 years before any relief from SS kicks in. Even at 3% SWR that is only $75K per year, which is far too low to live on in Southern California.


Sent from my iPad using Early Retirement Forum

 

[Choices]

We are so close to retirement that we have a good idea of what we will need. I worry about my kids' generation. With all these big numbers thrown out why would anyone even try to save for retirement? It has got to be plenty scary especially for those who are not making much now and dim prospects for the future.

 

[Independent]

investors surveyed said they spend, on average, one hour and twenty minutes each day thinking or worrying about money.

Good grief, where do they find these people?

 

[Derslickmeister]

I wish I could get paid for writing worthless crap like this, hey, I think I just stumbled on to my part time retirement gig...

 

[photoguy]

If you look at the prior poll here:

http://www.early-retirement.org/forums/f28/poll-how-much-income-do-you-need-to-retire-74379.html

The median amount of income is right at 75k. Given a 3% w.r. that puts you at $2.5M (assuming no pension/ss).

So it matches pretty well with the survey i think. Of course, most of america would probably look at the folks posting here as "affluent" or "wealthy".

 

[youbet]

If you look at the prior poll here:

http://www.early-retirement.org/forums/f28/poll-how-much-income-do-you-need-to-retire-74379.html

The median amount of income is right at 75k. Given a 3% w.r. that puts you at $2.5M (assuming no pension/ss).

So it matches pretty well with the survey i think. Of course, most of america would probably look at the folks posting here as "affluent" or "wealthy".

+1

While I admire the folks able to have a joyful retirement on less than $20k (for a couple), that's not us. $75k is more like it and if you don't have a pension or substantial SS, it takes 2.5 mil to count on that amount, inflation adjusted, over the long haul.

The article is just stating the obvious.

 

[petershk]

Yeah. so arbitrary.
It's like saying "is 3000$ a month enough for rent?
Well... if you want to rent a house in rural Georgia you can probably get a nice big house with tons of land. If you want to rent a house in downtown San Francisco... you can probably get a nice small bedroom .

I actually think that these articles present the information completely wrong. The question shouldn't be "how much do you need to retire" the question is primarily "how valuable is time to you and what are you willing to sacrifice to spend it how you like."

Some people couldn't imagine retiring with that little, some people can't imagine they we would spend that much . My main takeaway from this forum and many like it is if you are willing to be flexible and thoughtful about what you REALLY need, it's probably a lot less than you think. If you aren't then it's probably a lot more than you think.

 

[Major Tom]

Even at 3% swr that is only $75k per year, which is far too low for me to live on in Southern California.

fify

 

[Fred123]

In the news industry the companies are trying to cut way down on employees and use freelancers as much as possible. So now you have all these formerly employed writers who are desperate to come up with something - anything! - that they can sell and pay for tomorrow's dinner.

They're doing the same thing with photographers - that was clear when National Geographic let go it's last full time photographer. It's also why your local news station is so eager to have you "share" your photos - for free of course - of the latest big wreck on the interstate. That way they won't have to pay a photographer to get the images.

Or generated by an algorithm: http://mobile.nytimes.com/2015/03/0...rithm-wrote-this-how-would-you-even-know.html

 

[Koolau]

I saw no mention of other sources of income. If two professional folks retire together, have pensions and (at least eventually) have SS, they might well knock down $100k/year without saving a dime. Now, for many of us, that $100k might be more like $20K to $60k, depending upon work history and other factors. Most folks, spending no more than $100k can get by on much less than a $2.5 mil nut (assuming the usual other sources of income.) Still, if you DID have $2.5 mil in your stash, it could be lots of fun. YMMV

 

[MikeWillRetire]

If I wanted to retire at age 35, I would have wanted $2.5 million.
If I retire at age 62, then I won't need anything because of my pension and social security.

 

[Big_Hitter]

2.5M seems pretty ample; but as everyone pointed out, there are a lot more factors to consider