When Is A Retiree Considered Wealthy?

[Koolau]

Shhhh. If you tell everyone that, then they'll all retire and traffic and restaurants will suck on the weekdays too.

OOOPPPS! What was I thinking?

 

[Andre1969]

I look at these types of surveys/articles because I'm a worrier. I hope to retire soon and I'm still worried about will I have enough and do I need to keep working longer (even though I've planned carefully). I'm not looking at comparisons to try to feel better than others, but for the reassurance that if people at this level are doing ok, then I should be ok too.


I realize that depends on lifestyle and how much one spends but each additional piece of "confirmation" is reassuring.

Same with me. I don't try to compare myself to others to inflate my ego if I'm better off, or feel jealous if I'm not. But more of a reference point, to see if I'm on the right track. And, educational purposes. to see if there's anything I can learn from those who are "doing it right." And, also, what not to do, I guess.

And, I tend to worry about things, as well. I've noticed that I do it more, the older I get. That, and over-analyze things. I remember, back in the late 90's, my stepdad wanted a new car. He went way overboard, researching, over-analyzing, comparing cars, etc, focusing a bit too much on making sure he bought the right car. I remember joking that if he didn't make a decision soon, he'd have to start all over again because the cars would get redesigned!

He ended up with a 1999 Nissan Altima, a car that I hated, personally. It ended up being a good car in the long run, but it was ugly, cramped, uncomfortable, etc. Still, he liked it. But, in the overall scheme of things, it would not have been the end of the world, if he bought something like an Accord or Camry instead. But, he was just so focused on making what he thought was the right choice.

Anyway, he was around 47 at the time. In late 1999, I gave my uncle a ride to the dealership to get his pickup, which had been in for some servicing. While we were there, he suggested we look at the new cars and trucks. That afternoon, I was driving home with a brand new 2000 Intrepid! I might've had buyer's remorse pop up every once in awhile. Not in the sense that I bought the wrong car, but more like, did I really NEED a new car. But, I got over those jitters pretty quickly, and was happy with the car. I was 29 at the time.

But now, here I find myself, at the age of 53, and in need of a car. But, I also find that I've turned into my stepdad, to some degree. Not just making sure it's the right car, but also, the whole new vs used, do I really NEED a new car just yet considering how little I drive, with the way car prices are these days should I just fix the old one, etc. I guess the old saying is true...eventually we turn into our parents!

 

[Badger]

I look at these types of surveys/articles because I'm a worrier. I hope to retire soon and I'm still worried about will I have enough and do I need to keep working longer (even though I've planned carefully). I'm not looking at comparisons to try to feel better than others, but for the reassurance that if people at this level are doing ok, then I should be ok too.


I realize that depends on lifestyle and how much one spends but each additional piece of "confirmation" is reassuring.

That sounds familiar. I never cared about the "Joneses" plan. I am not all that trusting that they knew what they were doing since most live above their means anyway.
I did have a Plan A for how to financially prepare for the future retirement. But I also had a plan "B", "C", and "D" just in case. Fortunately Plan A works well for our lifestyle and should easily see us through. Plan "D" was to use my skills to build a shack and eat pinto beans since I did that many decades ago.
Now my only worry is being left with no family to be my advocate when I am no longer physically or mentally able to take care of myself. For that my Plan A is to go before my wife who has loving children.

Cheers!

 

[MarieIG]

. . .

But, I also find that I've turned into my stepdad, to some degree. Not just making sure it's the right car, but also, the whole new vs used, do I really NEED a new car just yet considering how little I drive, with the way car prices are these days should I just fix the old one, etc. I guess the old saying is true...eventually we turn into our parents!

Ahhhh yes, but it happened to me much earlier . . . Probably due to life events. I had three kiddos before 29 so no new cars for me I used to joke that I was driving Fred Flintstone's junker.

 

[wmc1000]

To repeat myself: I have enough.

I wish they had a category for "blessed."

+1

 

[Koolau]

Ahhhh yes, but it happened to me much earlier . . . Probably due to life events. I had three kiddos before 29 so no new cars for me I used to joke that I was driving Fred Flintstone's junker.

We had our kids late in life. So, I had the Vette, Opal Rallye Manta, a Mazda RX2 (rotary - a real stealth stormer) and '56 Chevy with a Corvette engine early in life. Of course, after the kids, we had a couple of vans. We bought an older van that was low mileage but showing its age. The kids didn't really want to go to school in it. But the kids loved the much newer Caravan that had doors on both sides. They weren't ashamed to be taken to school in that. Ah, memories.

 

[MarieIG]

We had our kids late in life. So, I had the Vette, Opal Rallye Manta, a Mazda RX2 (rotary - a real stealth stormer) and '56 Chevy with a Corvette engine early in life. Of course, after the kids, we had a couple of vans. We bought an older van that was low mileage but showing its age. The kids didn't really want to go to school in it. But the kids loved the much newer Caravan that had doors on both sides. They weren't ashamed to be taken to school in that. Ah, memories.

Sounds like you had some fun cars. My kiddos took a bus to school. I used to wait on the corner with them when they were small so no one scooped them up - so I was unusual for me to drop them off. When they were in high school, I picked them up if they stayed quite late after team practice. Fortunately for them, it was frequently dark by the time they got out, so the kiddos did not have to be embarrassed by their parents. (Mom would have had no sympathy for that in any event. Mom was spending money on school, tutoring and saving for retirement by that time so fancy cars were not in the budget.)

 

[ShokWaveRider]

Unlike some of the nay sayers around here, we like these comparison publications, we like being considered wealthy, even if we do not feel like it. Lets us know we have at least achieved something above the norm. We like being in the upper middle of the pack, certainly fees better than the alternatives. We would not mind being higher, but where we are is good. We certainly do not feel blessed, as we are solely responsible for what we have achieved to secure our comfortable retirement. There is still room for some mistakes, hopefully we will not make any before we Kark it.

 

[brett]

After just about every quarterly review meeting that we have with our investment advisor my spouse asks me the same question.

Would you still be as happy and content if half of our equity disappeared in the market tomorrow? And a follow up....Would it make any change in our lifestyle.

The answer, to our good fortune, is no. In the short term I would not be happy. No doubt. But it would not ruin my life because there is so much more to life. We feel so very fortunate that the decisions we made in life turned out, on balance, to be good ones.

In our early 70's we are far more concerned about maintaining our good health so that we can continue enjoy the lifestyle we have. Even if caught in a downturn and did not recover completely. As long as we 'have enough' I am a happy camper. A life changing health crisis would have a far greater impact on our lives.

I spend far more time thinking about should we consider snow birding or Thailand or Mexico this year or really step out and spend 8 weeks in Tanzania/Zanzibar/Kenya. My NG atlas is open, Google Earth is on tap, and I am busy reading the pros and cons. And....how to convince my spouse that we should do this or something else!

Infinitely more interesting and rewarding to me than pouring over financial returns/performance each and every week/month or seeing how we compare with millions of other people we do not know. Our focus is squarely on how we can use our resources to enhance our lifestyle while we have the health to do the things that we want to do. Or benefit others.

 

[RetMD21]

I don’t feel wealthy either. No private jet- we fly Southwest Airlines using points whenever we can. No yacht - just a kayak. My ranch is 5 acres. House is 30 years old. DW drives an 11 yo car. We stay at Hampton Inns. I do my own yard work, home maintenance. No cleaning service. I live at the same level now as when I got out of junior college in 1975 with 12 bucks.

His borderline super wealthy folks at 16.7 million can't afford a private jet comfortably.

 

[Koolau]

His borderline super wealthy folks at 16.7 million can't afford a private jet comfortably.

Actually, these are the folks that use fractional jets. No need to own a whole jet when you can essentially have one available when you need it. Expensive? Of course, but nothing like buying a $50M to $75M jet.

Also, amazingly, you can purchase a used small jet for $3 mil or less. In this site, I even found an older Gulfstream about $5mil. No problem!

https://www.controller.com/listing/for-sale/220820193/1998-gulfstream-givsp-jet-aircraft

 

[EarlyandLate]

We had our kids late in life. So, I had the Vette, Opal Rallye Manta, a Mazda RX2 (rotary - a real stealth stormer) and '56 Chevy with a Corvette engine early in life. Of course, after the kids, we had a couple of vans. We bought an older van that was low mileage but showing its age. The kids didn't really want to go to school in it. But the kids loved the much newer Caravan that had doors on both sides. They weren't ashamed to be taken to school in that. Ah, memories.

I was driven to school in a vintage Rolls Royce. It always turned heads in the small town where we lived. My parents were not wealthy by any measure. My dad just liked to tinker with English cars. After 12 years of ownership, he sold it for slightly more than twice what he paid for it.

 

[audreyh1]

What it takes to own a private jet or yacht: probably >$50M maybe a whole lot more these days. I remember when a Gulfstream was $5M.

What it takes to regularly charter private jets or rent yachts (which is more common): less, but probably still well >>$10M.

So these would be lifestyle attributes of the uber rich (super wealthy - 99th percentile) who are in that top category of >$16M.

If you say you are not wealthy because you don’t own or charter private jets, well that’s an extremely high bar.

 

[Koolau]

I was driven to school in a vintage Rolls Royce. It always turned heads in the small town where we lived. My parents were not wealthy by any measure. My dad just liked to tinker with English cars. After 12 years of ownership, he sold it for slightly more than twice what he paid for it.

I love the older RR. That "ridiculous" grill with the ornament is just amazing. When visiting England in the early 60's, I saw several such classic RRs. I'd love to have one.

 

[EarlyandLate]

I love the older RR. That "ridiculous" grill with the ornament is just amazing. When visiting England in the early 60's, I saw several such classic RRs. I'd love to have one.

Dad still talks enthusiastically about it all these years later. It was a spectacular car. I'll never forget the way it smelled inside, leather, lambswool and wood.

 

[explanade]

Also, amazingly, you can purchase a used small jet for $3 mil or less. In this site, I even found an older Gulfstream about $5mil. No problem!

https://www.controller.com/listing/for-sale/220820193/1998-gulfstream-givsp-jet-aircraft

What it takes to own a private jet or yacht: probably >$50M maybe a whole lot more these days. I remember when a Gulfstream was $5M.

What it takes to regularly charter private jets or rent yachts (which is more common): less, but probably still well >>$10M.

So these would be lifestyle attributes of the uber rich (super wealthy - 99th percentile) who are in that top category of >$16M.

If you say you are not wealthy because you don’t own or charter private jets, well that’s an extremely high bar.

There are probably costly maintenance or repairs for jets, even if you could afford the capital costs.

Then the expenses of operating and paying crews.

That also goes for boats, don't even have to be yachts.

How much did Robbie say it cost to fuel up the used boat he got, which was nothing like a yacht?

 

[brett]

At one point when we lived on the west coast I was considering the purchase of a sailboat.

A very knowledgeable colleague and long term sailboat enthusiast suggested I reduce the sailboat ownership period experience.

He told me to take a big bag full of money down to the dock and throw it in the water. That is what it would feel like!

His advice....rent on those occasions when you want a boat. You work too many hours and travel too much on business to enjoy your own sailboat. Wait until you retire and have the time. He was right.

Alas, in retirement we ended up in a land locked city 600 miles from the coast!

 

[audreyh1]

There are probably costly maintenance or repairs for jets, even if you could afford the capital costs.

Then the expenses of operating and paying crews.

That also goes for boats, don't even have to be yachts.

How much did Robbie say it cost to fuel up the used boat he got, which was nothing like a yacht?

Yes, I think the carrying costs for the jets would be tremendous, plus you got to pay for pilots and fuel.

 

[Koolau]

There are probably costly maintenance or repairs for jets, even if you could afford the capital costs.

Then the expenses of operating and paying crews.

That also goes for boats, don't even have to be yachts.

How much did Robbie say it cost to fuel up the used boat he got, which was nothing like a yacht?

That's why the fraction jets are so popular. Much of the "monthly" costs are amortized over many people and you basically just pay for each trip. It's costly, but affordable for the just barely 1 % crowd. No one person is sitting there with a jet "waiting" to be used.

 

[RetMD21]

That's why the fraction jets are so popular. Much of the "monthly" costs are amortized over many people and you basically just pay for each trip. It's costly, but affordable for the just barely 1 % crowd. No one person is sitting there with a jet "waiting" to be used.

Stratos Jets gives this cost breakdown:

Initial investment: $350,000
Annual operating costs: 50 hours x $2,000 per hour = $100,000
Annual management fee: Typically around $10,000 per year for a midsize jet
Additional fees: These may include things like fuel surcharges or de-icing fees, which can vary depending on the specific agreement.

So the ongoing fee is only about 16% of your 4% withdrawal amount. This is for a 1/16 share of a midsize jet. If you go with the small jet you can save but you have to live in the middle of the US to reach 48 states. You can be in the lease program and avoid the upfront payment but then you have a higher monthly payment and blackout days. Good options but too many compromises for me to consider Schmidt's folks with $16.7 million to be super wealthy. They are better off than his "merely wealthy" with just $3.2 million but in practical terms I think their lives are not that much different than most upper middle class folks.

 

[COcheesehead]

Unlike some of the nay sayers around here, we like these comparison publications, we like being considered wealthy, even if we do not feel like it. Lets us know we have at least achieved something above the norm. We like being in the upper middle of the pack, certainly fees better than the alternatives. We would not mind being higher, but where we are is good. We certainly do not feel blessed, as we are solely responsible for what we have achieved to secure our comfortable retirement. There is still room for some mistakes, hopefully we will not make any before we Kark it.

I am like you. I grew up in at best a lower middle class family. I remember the early 70’s. My Dad getting laid off work. Funds were scarce. I remember the fear as a kid of not having money.
My parents taught me to save, but also do my best. I took some big risks in life. I wrote a check amounting to most of my savings to start a business at 32. It could have been a disaster, but it wasn’t. I ended earning millions from that risk.
I feel I lived the American Dream. By the scale shown, we are considered wealthy. I am proud of that. I don’t flaunt it, but don’t hide it either. There’s nothing wrong with wealth despite what some would have you believe. My now dead parents would be very proud of what I have done. We live well and our charities (we have no kids) will be better off when it’s our time to pass.

 

[Ronstar]

My nieces husband is a private jet pilot. Has worked for 3 entities. I went on an early certification flight of his in a Gulf Stream IV. I was only passenger. I remember the jet being cleaner than anything I’d ever seen. We went through $20k in fuel in a little more than an hour. Owner would drive to the hangar in his Ferrari and give the keys to my niece to babysit the car until he came back. Sometimes he would fly his handyman to rhe Hamptons to do some work on his house there. Can’t imagine what it’s like to be wealthy enough to live like that.

 

[Koolau]

My nieces husband is a private jet pilot. Has worked for 3 entities. I went on an early certification flight of his in a Gulf Stream IV. I was only passenger. I remember the jet being cleaner than anything I’d ever seen. We went through $20k in fuel in a little more than an hour. Owner would drive to the hangar in his Ferrari and give the keys to my niece to babysit the car until he came back. Sometimes he would fly his handyman to rhe Hamptons to do some work on his house there. Can’t imagine what it’s like to be wealthy enough to live like that.

Just for clarity, I need to correct your figures on fuel burn. A larger private jet (I found figures for Gulfstream G550. Estimated fuel burn was as high as 672 gal/hr (includes take off which is high fuel burn.)

https://www.sherpareport.com/aircraft/fuel-burn-private-aircraft.html

Fuel cost for jet fuel are roughly $2.50/gal.

https://www.airlines.org/dataset/argus-us-jet-fuel-index/

With this info, I calculate about $1680 per 1st hour fuel burn. Obviously, there are a lot of variables in that figure (fuel can get very expensive - likely over $3/gal at times.) I would imagine fuel burn could easily top $2000/hour.

Just correcting the fuel burn cost for this thread which has gotten into private jet travel. My shaky memory suggest private jet costs (total) range from $3000/hr to maybe $7000/hr but I'm pretty much guessing so YMMV.

 

[Ronstar]

^^ Thanks for your insight, but I'll just stick to what I was told.

 

[Koolau]

^^ Thanks for your insight, but I'll just stick to what I was told.

Just another site which describes the Gulfstream IV. If you note the fuel capacity, it's listed as 29,280 lbs. Divide by 6.75 lbs/gallon and you get about 4300 gallons. At $2.50/gallon a full fuel load would cost about $11,000. That fuel load makes the Gulfsteam capable of international flight with perhaps 8 hours or more flight time.

https://www.globalair.com/aircraft-for-sale/specifications?specid=236

My intention is not to be "right" but to put private jet travel into proper perspective. My company put me with 13 other passengers in the Corp. jet (an older Gulfstream) and flew us to a field assignment (an emergency situation.) They did so (because it was an emergency) and the Corp. pilots revealed to us that we flew at a cost per passenger less than 1st class tickets.

As always, YMMV.