Who needs a million $ cash to retire

[workmyfingerstothebone]

I keep seeing these articles and posts where the census seems to be people need 1, 2, 5 million $ cash for retirement.
Honestly 80% of the population will never get there ( i made up the 80% but you pick your own percentage).


I suspect individuals would have something like $200K plus social security and maybe work part time if needed, lucky ones (myself included) will have a pension and some passive income. We might reach a million $ cash around age 80 but I'm not waiting that long to retire....



Wondering how many on here retired with 200K single or 400K married and how your retirement is turning out. No cash millionaires need reply, jk lol

 

[gwraigty]

Maybe you'll find some useful answers here in this recent thread:

Did Anyone Retire with "Only" .75M$ Saved?

 

[Aerides]

You might want to take a read through this thread.

http://www.early-retirement.org/forums/f28/did-anyone-retire-with-only-75m-saved-98252.html

While the numbers aren't the same as you list, the responses probably are.

tl;dr we all know many people who retire comfortable on small savings, no debt, small pensions, SS, etc, and make it work.

The larger savings numbers become more of a need for Early retirement.

 

[Katiek]

Having a pension that can support your ongoing financial needs (or most of them) changes the need for savings I know I won't have a meaningful pension, so I need to plan some way to support myself in the future.

 

[wrigley]

We have 2 military pensions, 2 401k's, 2 SS, 1 ESOP and my wife currently has 29 years with the federal government. I think we should be just fine once we decide to retire.

Mike

 

[razztazz]

I keep seeing these articles and posts where the census seems to be people need 1, 2, 5 million $ cash for retirement.
Honestly 80% of the population will never get there ( i made up the 80% but you pick your own percentage).


I suspect individuals would have something like $200K plus social security and maybe work part time if needed, lucky ones (myself included) will have a pension and some passive income. We might reach a million $ cash around age 80 but I'm not waiting that long to retire....



Wondering how many on here retired with 200K single or 400K married and how your retirement is turning out. No cash millionaires need reply, jk lol

You're pretty much correct but how did you arrive at 200 thou for a typical social security?

 

[GravitySucks]

Median networth minus home of American 60 to 64 is ~$106k. Somehow most retire.
https://dqydj.com/net-worth-by-age-calculator-united-states/

 

[karen1972]

I didn't, my parents did, i actually retired before my father did. They had roughly $300k, plus they live on a $500k farmette they never plan on selling which generates enough in rent to pay property tax and utilities. Dad passed a few years ago but with no debt, they were left with insurance, food, and transportation which SS covered. I doubt she will ever blow thru that $300k. Even with updates to the house, extra trips, etc she is hard pressed to spend anything close to $10k a year above SS.

My mom was 10 years younger than my dad, so our only real concern was if dad ended up going to nursing home long term that he could burn thru the nest egg quickly. On the plus side we had the farm which we wouldn't want to force mom to sell but at least there is that as a safety net and she could have likely sold the land and still kept the house which is not an option most have.

 

[joeea]

I keep seeing these articles and posts where the census seems to be people need 1, 2, 5 million $ cash for retirement.

Can you provide a link to an article that says you need that much cash?

I know of many that talk about assets at that level, but never cash.

 

[workmyfingerstothebone]

You're pretty much correct but how did you arrive at 200 thou for a typical social security?

That's about what I'm seeing with the people we know, 200k to 250k per person.

 

[RetireBy90]

We have 2 military pensions, 2 401k's, 2 SS, 1 ESOP and my wife currently has 29 years with the federal government. I think we should be just fine once we decide to retire.

Mike

Thanks to both of you for your service. We also have 2 military pensions, 1 county pension for DW 2nd act. However, my goal for early retirement (I count my 62 as earlier than I had planned) was to have $1.2M so I could draw 4% from other sources. I figured what we spent prior to retirement and added in extra for medical and travel. I'm happy to report 9 months in it is working for us



Certainly don't NEED over $1M but I didn't work for 40 years and save so we could make ends meet. I want to enjoy our golden years". ha

 

[workmyfingerstothebone]

We have 2 military pensions, 2 401k's, 2 SS, 1 ESOP and my wife currently has 29 years with the federal government. I think we should be just fine once we decide to retire.

Mike

Exactly what i'm discussing, with 2 pensions, 2 ss, and 1 esop , and 2 401k's with 200k each retiring should be quite doable.

 

[scrabbler1]

That's about what I'm seeing with the people we know, 200k to 250k per person.

My dad retired in 1994 at age 63.5 with a small pension and SS and about $250k and a house which had just been paid off. My mom was still alive but with a terminal illness which would sadly take her life just over a year later, a month before turning 60.

My dad has been doing well in the last 25 years although his $250k has shrunk by about 1/3 (which is not too bad for 25 years retired). He knows my brother and I will support him if he outlives his money. My brother is not retired but is wealthier than I am.

 

[RetireBy90]

Exactly what i'm discussing, with 2 pensions, 2 ss, and 1 esop , and 2 401k's with 200k each retiring should be quite doable.

In general, I wouldn't be worried about them out on the street or eating cat food, but you have to total the numbers and then compare that to your spending. 400K at 4% is $1,600 per year or about $1,333 per month. So you would need to look at spending or budget and compare the monthly income to your budget. My buddy starting drawing an IBM pension 25 years ago, but no COLA so what started as We In the Money is now worth considerably less.



Don't want to rain on parade, but without doing the numbers you can't really be too comfortable. IMHO

 

[Moemg]

Exactly what i'm discussing, with 2 pensions, 2 ss, and 1 esop , and 2 401k's with 200k each retiring should be quite doable.

You are assuming that both stay alive .

 

[scottmn4]

My parents are both retired (ages 70 and 68) and both collected SS at age 62. They have around $340K in savings and are only needing to pull about $15K annually from their savings, on average, each year to maintain their standard of living. They do have a lake home that is valued at close to $1M they could always sell if they need additional funds, but I don't believe that will be necessary. Having that lake home is great and it is an asset they can use in the future, if needed, but it certainly does increase their current annual spend with the taxes!

 

[Running_Man]

A couple with one earner with a full retirement age SS of 2500 per month and 250K in the bank will be able to have $55,000 in income free of federal taxes, if both were to claim at FRA. If they would spend down 144K to get higher earner of the couple to age 70 they would have $54,600 and 4K from portfolio for $58,600 in income also free from Federal taxes, move to a midwestern state with no SS tax and you have nearly 5K a month to spend. Average Median Household Income for 2019 in the US is $60K, so after tax a couple would be easily in top 50% for income.

Does not help in retiring early though........

 

[ShokWaveRider]

It ALL depends on one's own after tax expenses. Our RE Taxes alone are in excel of $500 a month, equal if not more some months than our Food Costs. That is before ANY other expenses, add home maintenance, Medicare + Supplement and everything else and that escalates rapidly. Unless folk are living very frugally and certainly not what we consider a stress free comfortable level, one will need a lot more to augment their income. Remember people average SS payments at FRA are not $2500 a month but more like $1500 (Google is your friend). So far this year our mandatory expenses in NW Florida have totaled ~$16,200 as of June so far. That does not include any Mortgage, Car or loan payments if applicable.

This discussion can go on forever, Why not start a thread about $1.5m, Maybe even $2m? Some here are not at SS age or have chosen not to take it..... yet, so they do not have the luxury of SS + Nest Egg as of yet.

 

[gwraigty]

It ALL depends on one's own after tax expenses.

<snip>

This discussion can go on forever, Why not start a thread about $1.5m, Maybe even $2m? Some here are not at SS age or have chosen not to take it..... yet, so they do not have the luxury of SS + Nest Egg as of yet.

Agree on both counts. I had hoped (in vain, obviously) that my post #2 and Aerides post #3 would have nipped this in the bud, quickly. But, no.

 

[CyclingInvestor]

My mom retired in 2007, 71yo with $50k in savings, paid off house, and a near max SS courtesy of my dad. I told her to let me know if she ever needed $$, but when she passed away 10 years later she was up to about $100k in savings.

 

[cyber888]

I'm aiming for $1 mil - stocks and cash and a paid home and no debts. I think $200K in cash in case I retire during a recession or something and will need to let equities rise before withdrawing any .. so a cash buffer would be nice. It's just myself and DW, no kids, and we live in the South.

 

[HI Bill]

If you look at all of the articles that list retirement assets for 65-year old folks, it appears that more than half of Americans retire with less than $200K in their retirement accounts (GAO says Americans between 55 and 64 average $107,000). These 'average' folks typically live off that and SS. Of course, it's possible. But with that level of assets, they're not going to be retiring at 55 or earlier, most likely.

This forum is the "Early Retirement" forum. Not the "On Time" or Average Retirement Forum. Folks here who want to retire early, typically shoot for 50 to 55, but some as late as 59 or so... To retire that early (that many years before pension or SS kicks in, you really do need 25X your annual spend saved up.

My folks retired with less than $400K in retirement savings. But they had STRS (California State Teacher's Retirement System) benefits, rather than SS, and it paid substantially more, given their work history. It was doable, but that level of assets has limited my dad's travel, especially after the divorce.

 

[FIREchief]

I keep seeing these articles and posts where the census seems to be people need 1, 2, 5 million $ cash for retirement.

I believe that your question is somewhat rhetorical, but I will offer an answer.

Question: Who needs a million $ cash to retire?

Answer: A person who a) can't or won't work anymore, b) has no pension, c) has only meager SS earnings, d) doesn't have wealthy family ready to step in to subsidize their living expenses and e) wants to live a reasonable lifestyle in a safe/simple residence in a reasonable or low cost of living area.

If this person has $20K in annual SS payments and is covered by Medicare or other low cost insurance, then a 4% withdrawal rate will allow them to maintain a style of living similar to a typical "middle class" person in the USA.

Change any of those (and perhaps other) variables, and the answer changes.

(I suspect I've given more thought to this answer than was put into the original question. )

 

[24601NoMore]

Question: Who needs a million $ cash to retire?

Answer: A person who a) can't or won't work anymore, b) has no pension, c) has only meager SS earnings, d) doesn't have wealthy family ready to step in to subsidize their living expenses and e) wants to live a reasonable lifestyle in a safe/simple residence in a reasonable or low cost of living area.

ITA - but especially points B and E, which make all the difference in the world..but then there are (based on posts on this and similar questions lately) apparently large differences in what people consider a "reasonable" lifestyle. We've always lived relatively frugally, but there's no way on earth I could get by on $20-25K/yr as some here apparently do. Heck, just my car expenses (for 2 'reasonable' vehicles - nothing fancy) and property taxes are $20K+. I consider our lifestyle "reasonable" but you sure need a heck of a lot more than SS + a reasonable SWR to pay for it all..and as I've said in other posts, a pension and your level of basic expenses makes all the difference in what you need in the kitty to cover the gap if you RE..

 

[Gumby]

Just to keep the roof over my head is almost $30k per year:

Property tax $13,000
Home insurance $3,500
Utilities $6,500 (electric, natural gas, water, cable and phone)
Maintenance & repair $6,500 (1% of value)


There is just no way we could survive on a 4% draw from a million dollar portfolio.