Article: Worth $4 Million -- and Unable to Retire

Apparently my sympathy button is stuck in the "off" position at the moment! sniff!
 
Mansions and yachts are out. The mMillionaires who want to retire before age 65 or 72, find they must live in three- and four-bedroom homes and drive mid-priced four-door sedans and mini-vans.
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:rolleyes:
 
During the dot-com boom, I remember reading many articles like this.
There is a big diffrence between 2M and 10M. Still... if these people can't live the middle-class retirement, how are people who have "only" a few 100K going to retire?
 
Just hyperbole to make the $2million retirees feel smug about their situation and post about it on message boards.
 
TeeRuh said:
at least the author had no motive or hidden agenda ...
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Heh heh - maybe, or maybe not - what's the new buzz stuff - think outside the box:

circa 1980 Louisiana was automating and I had the misfortune of buying a good old 68 Camaro SS from a guy at work. Downtown to change titles/registration - the office a hand drawn cartoons put up all over the office - apparently allowing employee's to vent their frustration at trying to get the new computer system up and running - at the window the sweet young thing was explaining to me how it was impossible for me to retitle the car as the computer was down and I should come back another day at the computer's convience and not mine - when a little old lady(gotta lov em) came up behind her a tapped her on the shoulder - and TOOK OUT A PAPER FORM and (drum roll please!) a no 2 pencil! :D

No 2 pencil - 25 times expenses(preferably multiplyed out longhand) - you don't like the answer! - Duh. - change expenses!

aka - if required - get out of the box! And look around - the view may change!

heh heh heh - remember the Bear - agile, mobile, and hostile. :D I don't care you don't like no 2 pencils - I have a Curmudgeon certificate - naner, naner. :rolleyes:
 
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It's funny to refer multi-millionaires as middle class. I guess that the bar may have been raised in ways that an upper class may require billions. I am tired to see articles that having millions is not enough to retire. If not millions, perhaps we should seek billions. If not billions, we should seek trillions. If not trillions, seek :confused::confused:? (may be help?).
 
"Just a generation ago, a person with $2 million or more in liquid assets would have had enough for a secure retirement. But not today. Combine longer life expectancies and the rising costs of health care, food, transportation and property, and you have financial challenges ahead for the mMillionaire."

Do they really believe this stuff? Sure, rising health care cost and general inflation is a problem for everyone but I think I can manage just fine on a 2 mil portfolio.
 
Just read the article----major eye roll---. Oh please. DH and I are just fine with our money funding the same lifestyle we had while we were w**king. We did not have to downsize and even if we had to it would have been worth it. It is about gaining the time and freedom to live your life. I guess it is a different mindset about what is important, stuff or time. If Mr 4MM can't get it together that is his problem. It makes no sense to me that he would have to downgrade his lifestyle.

What is it with all of the doom and gloom articles suggesting people stay in harness and w**k until age 70 for fear of running out of ones retirement nest egg. My MIL lived off the money her husband left her for thirty years until her death at 91. Her money was managed well and she continued to LBYM. Her life was comfortable but not extravagant. Works for me. Now that it has passed to us we will do the same, manage it well and LBYM. Oh and ignore the doom sayers.
 
Yahoo finance is a total joke--isn't that where Kiyosaki a-clown gets space to write his dribble, I mean drivel? Oh, and Suze, too. Great.
 
Dawg52 said:
...
Do they really believe this stuff? Sure, rising health care cost and general inflation is a problem for everyone but I think I can manage just fine on a 2 mil portfolio.
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Well, 4% SWR on a 2 mil portfolio produces 80K per year. That certainly isn't poverty but I wouldn't call it being rich, either.

For a person living in a low cost part of the U.S., with no debt or unusual expenses, it's pretty nice. For someone who lives in a high price area and has extra medical expenses, kids still in college, home mortgage, etc it can be just one step above dog food.

Some of my friends have been forced into early retirement because of downsizing, they did not want or expect to retire just before their peak earning years. Yeah, they could have saved more in the younger years, but it would have required really major sacrifices in order to save enough to make a difference when you are forced into ER at 50-55. I don't feel like I need to bail out these people, but I do feel sympathy for them.
 
What Gearhead_Jim said.

Didn't we see an article just a month or two ago on this forum that "you're nobody here if you are worth less than $10m", referring to New York City? Seemingly you cannot even get a date with a reasonable looking girl if you're not worth at least that much. Sheesh!

Remember that the converse of the 4% SWR is that you need 25x your living expenses to be FI. Many coastal families are making (and spending) $200k+ per year, which puts their required portfolio at or North of $5m.

Bear in mind that the recent controversy over Bush vetoing government health care for children in "moderate income" families was tied to an income level of $60k. Such an income requires an asset base of $1.5m given 4% SWR. So, that's "moderate income" for you.
 
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Gearhead Jim said:
Well, 4% SWR on a 2 mil portfolio produces 80K per year. That certainly isn't poverty but I wouldn't call it being rich, either.
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Yes, that is being rich. $80k income per year, for life, without having to lift a finger!!!!

Its almost twice the median household income. All those median and below households, people have to work hard to earn that money. Furthermore, median household income in the US is amongst the highest in the world.
 
I agree with Cattusbabe and Sarah.....no sympathy in my heart for these mMillionaires!
Sounds like they need to find some cheap hobbies and connect with their inner chi....layoff some of the consumption and $100/plate dinners and you will be fine!
 
The cost of being rich just keeps going up and up. Just check out the Forbes "Cost of Living Extremely Well" index. The index clearly shows that the cost of being rich is racing ahead of the normal cost of living as measured by the CPI....

The chart below shows the Forbes "Cost of Living Extremely Well" index in yellow and the CPI in purple. Check out the article : The Cost Of Living Extremely Well Index - Forbes.com.

jody_423_350.gif
 
Hmmm. My plan still calls for me to retire at 52 in a three bedroom house with a hair under $2M. I better call that wealth management firm and find out what is wrong with my spreadsheet.

Hey, unclemick, can I be a junior curmudgeon? I don't have a number 2 pencil, but I can do longhand multiplication...

2Cor521
 
unclemick said:
No 2 pencil - 25 times expenses(preferably multiplyed out longhand) - you don't like the answer! - Duh. - change expenses!
Click to expand...

I'm doing mine in crayon... :p

MasterBlaster said:
The cost of being rich just keeps going up and up. Just check out the Forbes "Cost of Living Extremely Well" index. The index clearly shows that the cost of being rich is racing ahead of the normal cost of living as measured by the CPI....

The chart below shows the Forbes "Cost of Living Extremely Well" index in yellow and the CPI in purple. Check out the article : The Cost Of Living Extremely Well Index - Forbes.com.

jody_423_350.gif
Click to expand...

This must be the "cost of keeping up with the Jones'" chart...:duh:
 
First they scare everyone in to thinking you have to have a cool Mil to retire. Most will retire and live well on less, a lot less. I see my relatives doing that all the time. Most did not have high paying jobs, had modest lifestyles, raised their kids and are now retired, comfortable and by their own admission "living good." It is more about meeting expenses and having enough left over to do the things you like to do. I call that financial security. Not every one wants the "Lifestyles of the Rich and Famous". Most of us would be satisfied with maintaining our current standard of living in retirement. That standard is different for everyone.

Now some financial guru's are upping the ante. Now you need millions more. I think these articles assume that every one wants to live in a McMansion (sp) in a golf course community and travel three times per year. That is not everyones idea of retirement. Another thing I take issue with is the notion that your expenses increase as you age. That is flat wrong. Sure health care gets more expensive but if you have coverage, Medicare, you are covered for most things. Again I look at my late MIL. Her expenses over the thirty some years she was widowed stayed manageable. Inflation had to be considered sure, however when she got in her late 70's and 80's she was not as active as she was, less dinners out, less travel. She did not remodel the house, hardly drove her car so there was less wear and tear. When she needed to have services in the home, house keeper, caregivers etc. the money was there to pay for that stuff. It just shifted from entertainment and travel to support care. That is usually what happens. Most of her issues later in life were medical. She had good coverage and was able to pay the premiums. But then again if you are not paying for trips and the like then you can maintain your medical insurance premiums.
 
SecondCor521 said:
Hmmm. My plan still calls for me to retire at 52 in a three bedroom house with a hair under $2M. I better call that wealth management firm and find out what is wrong with my spreadsheet.

Hey, unclemick, can I be a junior curmudgeon? I don't have a number 2 pencil, but I can do longhand multiplication...

2Cor521
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It sounds like you mis-read the article. It says folks with 2 mil bux find themselves retired with middle class amenities like three bedroom houses and minivans, and not with mansions and limo's like you might expect from millionaires. In fact, it sounds like you'll be retiring in a similar fashion to the folks referenced in the article. Perhaps you're drastically overestimating what you need to retire and should be considering RE sooner and with less? Otherwise, you'll be just like the folks in the article!
 
Gearhead Jim said:
Well, 4% SWR on a 2 mil portfolio produces 80K per year. That certainly isn't poverty but I wouldn't call it being rich, either.

For a person living in a low cost part of the U.S., with no debt or unusual expenses, it's pretty nice. For someone who lives in a high price area and has extra medical expenses, kids still in college, home mortgage, etc it can be just one step above dog food.
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Well I'm single with no kids. So $80 per year is a very nice retirement. But you are correct. Someone living in NY with 2 kids in college probably would be challenged with a 2 mil portfolio. But I was taking the quote at face value. "A person", meaning one.
 
youbet said:
It sounds like you mis-read the article. It says folks with 2 mil bux find themselves retired with middle class amenities like three bedroom houses and minivans, and not with mansions and limo's like you might expect from millionaires. In fact, it sounds like you'll be retiring in a similar fashion to the folks referenced in the article. Perhaps you're drastically overestimating what you need to retire and should be considering RE sooner and with less? Otherwise, you'll be just like the folks in the article!
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Actually, before I posted above I just read about the first two lines of it and mentally filed it in the "puff piece" category, with a cross reference under "trying to scare me".

I know a few millionaires proper and at least a few folks clearly on their way. Most if not all of those people are very much "millionaire next door types". Heck, I'm one of those.

I'm fine with my house and a decent Honda or Toyota sedan. I'd rather live that lifestyle and retire at 52 than have a limo and McMansion and retire at 75 (and be dependent on an inadequate social security, as the article intimates).

My requirements for a $2M at age 52 are based on my actual spending over the last six months, as tracked religiously in Quicken, inflated by an historically average CPI index. The age 52 is determined by taking my current actual investment balances and inflated by an historically average rate of appreciation.

Actually, I may be overstating my needs somewhat, but I'll post a different thread on that.

2Cor521
 
Didn't we see an article just a month or two ago on this forum that "you're nobody here if you are worth less than $10m", referring to New York City? Seemingly you cannot even get a date with a reasonable looking girl if you're not worth at least that much. Sheesh!

Yep- That's exactly why they won't date me. :)
 
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