Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Article - 35% of Millionaires won't be able to retire
Old 12-02-2022, 05:58 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Aug 2013
Posts: 1,671
Article - 35% of Millionaires won't be able to retire

I guess everyone is really scared of inflation now.

https://www.investopedia.com/million...edium=referral
__________________
No to consumerism, Living a simple life, enjoying the experience - not the material stuff
cyber888 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-02-2022, 06:02 PM   #2
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 20,067
To quote one of our most illustrious members, "Numbers is hard"

Quote:
A million may seem like a lot, but many people are surprised when they do the math and realize that 4% of $1 million is only $40,000 yearly,...
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 12-02-2022, 06:03 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,888
If they’ve bought a huge house like in that picture they probably have no savings at all anyway.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 12-02-2022, 06:06 PM   #4
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 46,597
From the article,

Quote:
“A million may seem like a lot, but many people are surprised when they do the math and realize that 4% of $1 million is only $40,000 yearly,” David Goodsell, executive director of the Natixis Center for Investor Insight, told CNBC. “This is usually quite a bit less than these individuals are likely used to living on.”
So, these retiree wannabes with not a penny more than $1,000,000 just plain forgot to LBYM when they were dreaming about retirement?

I am pretty sure that just about all of our forum members are more frugal than that.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
W2R is online now   Reply With Quote
Old 12-02-2022, 06:10 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2016
Posts: 6,301
Quote:
Originally Posted by Gumby View Post
To quote one of our most illustrious members, "Numbers is hard"
I laughed at that one too.
COcheesehead is offline   Reply With Quote
Old 12-02-2022, 06:13 PM   #6
Recycles dryer sheets
 
Join Date: May 2019
Posts: 323
They literally had an article just a couple of days ago stating people might be saving too much for retirement.
RxMan is offline   Reply With Quote
Old 12-02-2022, 06:20 PM   #7
Moderator
Jerry1's Avatar
 
Join Date: Nov 2014
Posts: 7,432
Just amazing how all those people who have little to no nest egg end up retiring. At some point you have to learn to LBYM. Also, it’s not like one million, which yields $40K, is all there is. No mention of SS, which if you are a millionaire will likely be around $30K or better. There are folks on this board that retired on that. My budget is only a bit higher at $100K and that’s due to DW working and now getting SS. But I guess they think they can still live on the spend thrift budget they have while they’re working. You either need to LBYM while working or prepare to LBYM in retirement.
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
Jerry1 is online now   Reply With Quote
Old 12-02-2022, 06:21 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Location: Crownsville
Posts: 3,096
Yep, inflation can be an ugly thing. When I first started getting serious about planning for retirement, oh around 2000, I figured I'd be happy with $1M and a paid off house. Inflation-adjusted, of course.

Well, today, that would mean roughly $1.73M, and a paid off house.

In early 2020, I briefly flirted with the $2M mark, and even though I had a pretty hefty mortgage, was really starting to think about retiring on my 50th birthday, in April. Of course, by the time April rolled around, I wasn't anywhere near $2M anymore.

Now, adjusting for inflation, I'd need to be around $2.3M, just to be at that same level.

These inflation numbers may be off a bit; I just plugged them into an online inflation calculator. But, all I know, is that I'm enough below $2.3M now, especially considering additional investments I've made over the past 2+ years, so I'm worse off now, than I was at the beginning of 2020.

Then, throw on the fact that just about everything is a lot more expensive these days. The only thing that went down was my mortgage payment, because I refinanced in September of 2020. But with the way property taxes and insurance are going up, it won't be long before that cancels out the mortgage savings.

I mean, I know I'm doing okay, by most metrics, I guess. But I guess I figured that, being (barely) a multimillionaire would just feel, well, more prosperous!
Andre1969 is offline   Reply With Quote
Old 12-02-2022, 06:24 PM   #9
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 905
$40k is comfortable in small town in USA.
F.I.R.E User is offline   Reply With Quote
Old 12-02-2022, 06:40 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,717
Quote:
Originally Posted by F.I.R.E User View Post
$40k is comfortable in small town in USA.
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.
aaronc879 is online now   Reply With Quote
Old 12-02-2022, 06:41 PM   #11
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 905
Quote:
Originally Posted by aaronc879 View Post
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.
What part of town?
F.I.R.E User is offline   Reply With Quote
Old 12-02-2022, 06:43 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,717
Quote:
Originally Posted by F.I.R.E User View Post
What part of town?
I live in a small town in Wisconsin. Paid off house, single, no kids or pets.
aaronc879 is online now   Reply With Quote
Old 12-02-2022, 06:45 PM   #13
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 905
Quote:
Originally Posted by aaronc879 View Post
I live in a small town in Wisconsin. Paid off house, single, no kids or pets.
What about travel costs?
F.I.R.E User is offline   Reply With Quote
Old 12-02-2022, 06:47 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,717
Quote:
Originally Posted by F.I.R.E User View Post
What about travel costs?
I don't travel often. I went to Florida early in the year and spent $800. Otherwise I haven't gone more than around 100 miles from home all year. My travel costs are not high at all.
aaronc879 is online now   Reply With Quote
Old 12-02-2022, 06:56 PM   #15
Thinks s/he gets paid by the post
Souschef's Avatar
 
Join Date: Dec 2015
Location: Santa Paula
Posts: 3,944
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.
Attached Images
File Type: jpg view.jpg (513.1 KB, 222 views)
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
Souschef is offline   Reply With Quote
Old 12-02-2022, 07:02 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 12,616
Quote:
Originally Posted by W2R View Post
From the article,



So, these retiree wannabes with not a penny more than $1,000,000 just plain forgot to LBYM when they were dreaming about retirement?

I am pretty sure that just about all of our forum members are more frugal than that.
Perhaps I misunderstand what you're saying....... but I'm under the impression than most of our members have budgets in excess of $40k in retirement.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 12-02-2022, 07:18 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2014
Posts: 6,173
Quote:
Originally Posted by youbet View Post
Perhaps I misunderstand what you're saying....... but I'm under the impression than most of our members have budgets in excess of $40k in retirement.
Most, yes, but there seem to be quite a few like aaronc who are happy to hang out in a modest house in a LCOL area, drive an older car, don't want to travel, etc.

I was curious about this part:

"While not everyone needs public assistance in retirement, 38% said they won't be able to retire without it."

How do they define "public assistance"? I make a distinction between SS and Medicare A, which is financed through payroll taxes, and needs-based programs such as Medicaid LTC, Section 8 housing, food stamps, etc. (The concern was that the need to pay off public debt might cause "social programs" to be cut back.)
athena53 is offline   Reply With Quote
Old 12-02-2022, 07:22 PM   #18
Recycles dryer sheets
 
Join Date: Nov 2021
Posts: 351
Quote:
Originally Posted by Gumby View Post
To quote one of our most illustrious members, "Numbers is hard"
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%
Samsung4321 is offline   Reply With Quote
Old 12-02-2022, 07:41 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jul 2011
Location: Reading, MA
Posts: 1,049
Quote:
Originally Posted by aaronc879 View Post
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.
So you probably didn't buy a new F-150 or have your house reroofed this year, I'm guessing?
Or do a lot of international travel?
TheWizard is offline   Reply With Quote
Old 12-02-2022, 07:44 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Back in the Dog House
Posts: 8,505
Quote:
Originally Posted by F.I.R.E User View Post
$40k is comfortable in small town in USA.
I live in small town USA and I get over 40k in SS. I'd sure hate to have to live on that. I think I could pay my basic utility bills, buy food and pay my taxes and the minimums on home/auto/health insurance but I don't think life would be very "comfortable" after that. Of course, YMMV
__________________
I don't know how to act my age since I've never been this old before.
Car-Guy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
An interesting article about millionaires Texas Proud FIRE and Money 18 04-06-2012 10:19 PM
Many of Us Won't Be able to Retire Until Our 80s Retire Soon Life after FIRE 47 06-14-2011 02:37 PM
38, saving 31% gross, living on 33% gross, looking to be able to retire at 48 retire48in2018 Hi, I am... 4 03-12-2008 03:33 PM

» Quick Links

 
All times are GMT -6. The time now is 10:17 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2023, vBulletin Solutions, Inc.