Article - 35% of Millionaires won't be able to retire

[USGrant1962]

Well, in February something put a big wrench in our spending. DW found a new apartment complex right on the beach 3 miles from where she grew up.
The rent is $5K per month. The view is priceless.
I am 84, and she is 78, and we get $80K a year between SS and pensions, so we can afford it.
We lived in a +55 MHP, and it is like a ghost town. Here other than the ocean, we see cyclists, joggers, dog walkers, and all sorts of folks.

Sounds like a "you only live once" situation. If I was your age, I would go for it!

 

[Samsung4321]

I have never spent that much in a year in my life. I will spend $12,XXX this year and I could have spent less. $40K/yr would be livin' large by my standards.

We spend $A25,000 / y in Australian Capital Territory, run 4 bed home on 1,000 m^2, 4WD vehicle, fancy hospital insurance, all utilities and rates, digital services, just enough food avoid death by bloating - and pay 0% income tax, 10% GST. Not dissimilar.

Also: the roofing is of vibrated concrete tiles - which will be removed and sold on whenever the house is demolished.

Fun of counting the millions reduces compulsion for expenditure on 'entertainments'. Been there enough.

 

[aaronc879]

Seems impossible to me.

Only because you are used to being rich.

 

[COcheesehead]

Is a new class emerging? The anti entertainment elite? LOL.

 

[jollystomper]

From one of the sources used for the article: https://www.im.natixis.com/us/resources/2022-millionaire-report-doc

To get a better fix on the level of security that this big number can provide, we tapped the 1,617 individuals who already have accumulated $1 million or more in investable assets who participated in the 2021 Natixis Global Survey of Individual Investors. We found that on the surface most (79%) say they will be financially secure in retirement, but deeper down they are far less confident. In fact, millionaires were nearly as likely to say it will take a miracle to achieve a secure retirement (35%) as investors overall (40%). One key reason may be that the million-dollar mark may not be as significant as it once was.

While the source also highlights some steps that should be taken, It is interesting that the notion "get a handle on your expenses so you know what you will need in retirement" is never mentioned in that source paper.

 

[Car-Guy]

Only because you are used to being rich.

You must have me confused with someone else.

Just curious, how do you get your Internet service, if you care to share?

 

[Samsung4321]

Is a new class emerging? The anti entertainment elite? LOL.

4K YouTube, books, ... beamed into home from around the world and solar system, ...

Hunger improves the figure, the bank balance and the taste. Best achieved at home.

 

[MercyMe]

You can live below your means while working or live below your means in old age.

+1
Wow... words to live by.

 

[Samsung4321]

You can live below your means while working or live below your means in old age.

Or LBYM while working AND in old age.

 

[aaronc879]

You must have me confused with someone else.

Just curious, how do you get your Internet service, if you care to share?

I way overpay for internet. It just went up to $85/mo. I pay it because it is 95%+ of my entertainment.

 

[daylatedollarshort]

Is a new class emerging? The anti entertainment elite? LOL.

We're pro-frugal entertainment ourselves, like free concerts in the park, hiking, rush tickets, college events, beach parks, free museum passes from the library, seat filler memberships, reciprocal museum and garden free entry programs, Facebook specials and a bunch more. If I'd known how much cheaper retired life was going to be, we could have retired much sooner than we did.

 

[RetiredAt49]

We're pro-frugal entertainment ourselves, like free concerts in the park, hiking, rush tickets, college events, beach parks, free museum passes from the library, seat filler memberships, reciprocal museum and garden free entry programs, Facebook specials and a bunch more. If I'd known how much cheaper retired life was going to be, we could have retired much sooner than we did.

Don’t forget senior citizen discounts at select restaurants [emoji16]

 

[NW-Bound]

If they’ve bought a huge house like in that picture they probably have no savings at all anyway.

I noticed the same photo. One would have to be at least a decamillionaire to live in these homes.

 

[NW-Bound]

I can spend more than $200k/year, but do I want to? Do I need to?

Nope. It would not make me happier.

 

[W2R]

I can spend more than $200k/year, but do I want to? Do I need to?

Nope. It would not make me happier.

+1

All that more spending would do for me is either:

1) give me more *STUFF* to maintain and clean, or else
2) drag me away from my beloved Dream Home to travel to some place I'd less rather be, or
3) force me to endure experiences I wouldn't like very much, or
4) something along those lines.

 

[NW-Bound]

Well, spending more does buy some happiness. Up to a point.

For me, that point is below $200K/year (way below), unless inflation runs rampant.

 

[Gumby]

Real rate of return required over 25 years, 4% withdrawal, present value 1, draw down to future value 0:

= RATE((92 - 67), 4%, -1, 0) [ negative = in / into fund ]
= 0%

Which is same as 1 / 25 = 4%.


Nominal rate of return required:

= (1 + 7%) * (1 + RATE((92 - 67), 4%, -1, 0)) - 1
= 7%

Which is same as inflation rate.


Future value = present value nominal rate of return required:

= (1 + 7%) * (1 + RATE((92 - 67), 4%, -1, 1)) - 1
= 11.3%

And?

 

[Samsung4321]

If they’ve bought a huge house like in that picture they probably have no savings at all anyway.

I noticed the same photo. One would have to be at least a decamillionaire to live in these homes.

"4% of $1 million is only $40,000 yearly"
https://www.cnbc.com/2022/12/02/35p...-wont-have-enough-to-retire-report-finds.html

$1M investable (does not include 'entertainment investments / indulgences').

Aus: Age Pension $A40,000 / y. If Assessable Assets < $A419,000 (home not included). So find a home that has small maintenance costs and yet can sink excess millions into it. Voilà - free CPI indexed pension for life, earnings on remaining investable assets and home capital gain - all tax free.

 

[Samsung4321]

And?

If inflation persists need to look for such yields / returns to avoid depleating capital before popping off.

 

[Gumby]

If inflation persists need to look for such yields / returns to avoid depleating capital before popping off.

Most retirement calculators assume that you will deplete capital when and as necessary; FIRECalc certainly does. You may not want to deplete capital, but that is your own particular peccadillo.

 

[Samsung4321]

Most retirement calculators assume that you will deplete capital when and as necessary; FIRECalc certainly does. You may not want to deplete capital, but that is your own particular peccadillo.

FIRECalc calculates the probability of capital depletion based on interpolation. Many extrapolate that to the future - their peccadillo.

My calculation is a mathematical certainty - not a 'future reality'.

 

[Souschef]

Sounds like a "you only live once" situation. If I was your age, I would go for it!

We did!

 

[daylatedollarshort]

If inflation persists need to look for such yields / returns to avoid depleating capital before popping off.

Do you have any kind of inflation protected bonds there? We come out ahead with high inflation here in the U.S. because Social Security is adjusted for inflation and we have a lot of inflation adjusted bonds, plus a fixed mortgage and capped property taxes, so a big chunk or our expenses aren't impacted by inflation.

 

[Gumby]

FIRECalc calculates the probability of capital depletion based on interpolation. Many extrapolate that to the future - their peccadillo.

My calculation is a mathematical certainty - not a 'future reality'.

Actually, it is only certain if inflation is constant. It probably won't be. The only thing I am absolutely certain of is that you didn't get my first post. But that's okay. It's your life and your money so you should do as you will with it. I wish you nothing but success.

 

[Samsung4321]

Actually, it is only certain if inflation is constant. It probably won't be.

We can stick our necks out on that and boisterously claim it definitely won't be constant. With better than FIRECalc probability.

The only thing I am absolutely certain of is that you didn't get my first post.

The "And?" one? I saw it. I read it. It certainly did not get me.