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Old 08-31-2021, 04:32 PM   #81
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just in case this isn't obvious..... if you live in a state like Texas and you have a paid off home worth more than $1 million your not necessarily rich.... because the property taxes alone will put you in the poor house....

so if you live in a neighborhood with million dollars homes I bet there are a lot of people that don't have any money at all... living month to month on the pay check
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Old 08-31-2021, 04:44 PM   #82
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Originally Posted by nwsteve View Post
DW & I were discussing the current debates in the media regarding if and how bad inflation might become and it triggered me to do this simple check. I graduated from my Masters program at Duke in 1970. The Millionaire Next Door was the rage and there was the TV program The Millionaire. My first job at a Fortune 100 megacorp almost broke the magic five figures.
Out of curiosity, I used the government inflation calculator (https://www.usinflationcalculator.com) to see what that 1970 Million dollars is worth today--7,036,159.79!
Our net worth while healthy and over a Million, it is nowhere near 7,036,159.79. For me, it was a real eye opener just how much inflation can take.
YMMV
From my POV, a million is still a worthy goal but it is not enough to retire on unless you are in your 80's. Of course it depends on your "desired" lifestyle, health, pensions, etc.

With inflation like it is now (and IMO, will be for some time to come) and with fixed interest rates so low (almost non existent) I wouldn't retire at 65 with just a million and SS to depend on, (again depends on "desired" lifestyles).... But, I'm afraid a lot will and "depend" on market returns to fill the gaps...
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Old 08-31-2021, 04:53 PM   #83
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What is the URL of the one you used?
This is the estimator I used the other day.

https://personalfinancedata.com/netw...le-calculator/

If you put in $1M of net worth, but leave the age range at 18-100, it puts that in the 88.15 percentile. Or the top 11.85%.

In reading the fine print, it looks like they used 28,885 individual samples, and the last time the data was updated, it used 2019 data. I dunno where they got the "643,212,160 American households" from though. That's about double the number of people in this country! I'd imagine there are around 120 million households.
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Old 08-31-2021, 04:56 PM   #84
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you can still get ~10% with corporate bonds...but the bond values are thru the roof right now... so a million isn't all bad to have... at least better to have a mil than not
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Old 08-31-2021, 05:07 PM   #85
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sooner or later you begin to notice and take note of how old people in the news and around your social circles people die... I notice a lot of folks make it to around 80 -85 ...
so if a person retires at 65 they can most likely count on 20 yrs of retirement... (family history gets involved too ) so if you have 1 mill at age 65 and you plan out to say 85 thats still $1 mill / 20 = $50K per year draw without doing anything... add on SS and/or pension and what ever else you got and your good to go...
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Old 08-31-2021, 05:53 PM   #86
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In 50+ years? I say not a chance, LOL.
Also not a chance any of us will be around to find out.
Hey! I'm only 53. I might make it to 103.
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Old 08-31-2021, 05:59 PM   #87
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Hey! I'm only 53. I might make it to 103.
I know one male who made 100 and one female who made 105 (and she is till living.)
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Old 08-31-2021, 06:08 PM   #88
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I would take official inflation numbers with a large grain of salt. I can't think of anything from 1980 that is only 3.3 times more expensive than today (other than maybe TVs and electronics).
In 1985 you could buy a small Toyota pickup with extended cab for $7703. The 2021 4-door Ford Maverick truck will start under $20k.
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Old 08-31-2021, 06:18 PM   #89
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Lol, I have to laugh, when mrs 55 and I were first married… we said if we could make 20K we would be on easy Street!
Here we are 44 years later with a 2.7 million net worth! How lucky are we! We are very blessed.
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Old 08-31-2021, 06:33 PM   #90
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From my POV, a million is still a worthy goal but it is not enough to retire on unless you are in your 80's. Of course it depends on your "desired" lifestyle, health, pensions, etc.

With inflation like it is now (and IMO, will be for some time to come) and with fixed interest rates so low (almost non existent) I wouldn't retire at 65 with just a million and SS to depend on, (again depends on "desired" lifestyles).... But, I'm afraid a lot will and "depend" on market returns to fill the gaps...
But it also depends on your spend rate. If I take SS next year at 66+2, our ss will be about $55k/year. $1million at 4% would add another $40k. That is more than we usually spend, including taxes on Roth conversions. Take those out, and it frees up another $15k to spend.

That said, I like having a rather large cushion and we will likely leave a large estate to DS.
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Old 08-31-2021, 06:37 PM   #91
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Originally Posted by nwsteve View Post
DW & I were discussing the current debates in the media regarding if and how bad inflation might become and it triggered me to do this simple check. I graduated from my Masters program at Duke in 1970. The Millionaire Next Door was the rage and there was the TV program The Millionaire. My first job at a Fortune 100 megacorp almost broke the magic five figures.
Out of curiosity, I used the government inflation calculator (https://www.usinflationcalculator.com) to see what that 1970 Million dollars is worth today--7,036,159.79!
Our net worth while healthy and over a Million, it is nowhere near 7,036,159.79. For me, it was a real eye opener just how much inflation can take.
YMMV
Using 4% withdrawal rule, a $1M nest egg is $40,000 a year which may be a struggle since the federal poverty level is $17,420 a year for a family of 2.

However, a $7M nest egg is $280K a year which should be comfortable.

$280K a year really depends on where you live. You may be struggling to pay rent in Manhatten, NY. You may be living like a king on $280K per year in Rural Mississippi or Mexico.
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Old 08-31-2021, 06:45 PM   #92
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But it also depends on your spend rate. If I take SS next year at 66+2, our ss will be about $55k/year. $1million at 4% would add another $40k. That is more than we usually spend, including taxes on Roth conversions. Take those out, and it frees up another $15k to spend.

That said, I like having a rather large cushion and we will likely leave a large estate to DS.
In this context, spend rates and lifestyles are pretty much the same things from my POV.... YMMV.....
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Old 08-31-2021, 09:56 PM   #93
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Using the $1,000,000.00 invested assets example and comparing what it was like to have that amount in 1980 vs. what it is like to have that amount in 2021.

Both are influencing our comments in this thread about how $1,000,000.00 ain't what it use to be, but which is having the larger impact:

(A) The fact that we now work on the assumption that you can only take a 4% rate of return and feel safe that your nest egg will last, while in 1980 we estimated a safe burn rate closer to 10% (heck, passbook savings was paying 6% in 1980); or

(B) that $40,000 in 1980 had the equivalent buying power of $120,000 in 2021 dollars.
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Old 08-31-2021, 10:35 PM   #94
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Lol, I have to laugh, when mrs 55 and I were first married… we said if we could make 20K we would be on easy Street!

Here we are 44 years later with a 2.7 million net worth! How lucky are we! We are very blessed.
We had similar conversations about the same time and ended up with about the same assets. If you told me back then I would never believed it.
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Old 09-01-2021, 09:08 AM   #95
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I’m pretty sure that the vast majority of people anywhere in the US WOULD consider $120k/yr income in retirement pretty much fairly wealthy. Especially since there is no savings or FICA/Med required to be taken from that, and income taxes in overall (like only 85% of SS taxed etc) are lower.
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Old 09-01-2021, 10:13 AM   #96
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I swear I read back in 2020 only 5% of the US population household was above 3MM net worth.

How one even measures someone's private NW from afar always boggled me though.

Both my father and my father in law are outpacing 95% of their peers and I know a lot on this forum are, so maybe I just tend to hangout with that select 5% or that stats are wrong, or people are lieing, or everything is just backwards.

I feel like time and luck have something to do with it, among other choices in life. But if one consistently, gets lucky...over a long period of time...while continually making good choices I feel like the top 5% is achievable by almost anyone.
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Old 09-01-2021, 10:34 AM   #97
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I was about to post to say how salaries have inflated so much lately, but I checked first, and discovered that the median salary for a computer programmer in 2020 was only $85,000, with a max of $120,000. That makes me feel better. I was sure they were all making north of $105K per year these days. I maxed out at $80K per year as an experienced programmer in 2001. Not resenting the current crop of $85k per year programmers. That's lower than I thought it would be. Way to keep those wages down, megacorp, lol!
I'm not sure what "max of $120,000" actually means in this context, but I can assure you there are many thousands of senior software developers who make more than $120k/year. Compensation varies tremendously from city to city, company to company, and industry to industry. Here in metro Atlanta, I'd guess most mid-career software developers are making more than $85k.
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Old 09-01-2021, 10:38 AM   #98
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I'm not sure what "max of $120,000" actually means in this context, but I can assure you there are many thousands of senior software developers who make more than $120k/year. Compensation varies tremendously from city to city, company to company, and industry to industry. Here in metro Atlanta, I'd guess most mid-career software developers are making more than $85k.
I as well as my engineer peers earn well over six figures as a "QA" But...I am a master of my craft, that can in fact develop software if need-be. More of a Test Engineer.

My buddy who is a Software Dev, 7yrs ago was earning roughly 45k as was I, and now I believe with all his options and what-not he is just shy of 200k or maybe just over it...if not now he will be in 3months.

I myself have earned over 1MM just as a QA.
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Old 09-01-2021, 10:53 AM   #99
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I was watching reruns of "Gilligan's Island" last week while we were temporarily confined to our rooms on my Alaska cruise - the crew kept us supplied with food, DVDs, books and adult beverages. It was kind of funny to hear Thurston Howell described as "a millionaire" who clearly could afford anything he and Lovie wanted.

A million isn't what it used to be.
I think the simple notion of a "millionaire" as a wealthy person who can afford to live the good life is still quite prevalent today, especially among those in low-income brackets. My cousin, for example, was talking to me about one of our other cousins a few years back, and he was asking if I knew much about the person this cousin married. Specifically, he asked "Didn't she marry a guy who helps runs his dad's business? They're millionaires, right?" And he said it with such reverence, like being a millionaire was something akin to royalty. My cousin has always been on the lower end of the income scale, probably never making more (and typically far less) than $40k in any year. For people like him, I think "millionaire" seems so far out of reach and so gold-plated, it makes no difference whether someone actually worth just $1MM isn't even in the top 10% of wealthiest people in the U.S. For folks like him, millionaire, multimillionaire, billionaire... they're all rich people living a lifestyle he can only dream about.
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Old 09-01-2021, 12:42 PM   #100
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What Sojourner said !

We are all blessed and fortunate, albeit said that alot of us worked and saved very hard to get to where we are today.... it did not just happen, at least that was/is the case for ms gamboolgal and I.

I graduated High School in 1977 and went to work in the Oilpatch in 1978 as soon as I turned 18 year old and worked the next 43 year in the Oilfields until I retired this year.

I have always thought of money in terms of 1978 Oilfield wages dollars. I think I started roughnecking at about $7.50 per hour in 1978 and it was big big money to a young man from East Texas who's only purpose in life was chasing ms gamboolgal.... ha

A million dollars then was a fantasy number.

We were paid every 2 weeks back then and I remember that it took me a long long time before I made a paycheck that netted over $1,000.

Interestingly when I run the Inflation Calculator for a million in 1977 vs today, we are ahead of 1977 in todays dollars by only a small amount for our Portfolio value.

To this day, viewing one million in 1977 vs $4,475,498 in todays dollars puts it in a perspective that I really "get" and understand.

Now that we are retired, I get to do full-time what I have always enjoyed the most.... and that's chasing ms gamboolgal around the Old 4 Poster Buck Neckid ha !

Lifes A Dance And You Learn As You Go...

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