Does anyone else get sick of hearing ...

[Bestwifeever]

In TV series "Hart to Hart" (1979-1984), the "self-made millionaires" drive a Rolls Royce and fly private.

And had Max, their chauffeur/butler/manservant (I loved that show).

 

[Keim]

And had Max, their chauffeur/butler/manservant (I loved that show).

Waaiiiitt. Do you mean all the ER millionaires don't have a manservant? What the hell!?! Why have I been scrimping and saving then?

 

[gozer]

In TV series "Hart to Hart" (1979-1984), the "self-made millionaires" drive a Rolls Royce and fly private.

I used to watch that show. I drive Honda's and fly coach. Guess it doesn't have the same ring to it.

 

[tmm99]

1 million is still a lot of money, but according to US infation calculator, if you had 1 million 20 years ago, you would have to have 1.6 million dollars today to buy the same amount of stuff with the 1 million, so 1 million is definitely not what it used to be. So in a way, 1.6 million is our new 1 million.

 

[Mulligan]

I'm not a young dreamer, but I have two comments:

1) One important step to FIRE, IMO, is to learn to ignore what 'everybody else is saying'. You will be trying to march to the beat of a different drummer, the others are just noise.

2) A 40,000 COLA'd pension is worth about a million, as is $40,000 in SS (which a couple might be receiving). Many of those studies don't factor in the 'phantom value' of pensions/SS.

-ERD50

Yep, I agree. I am retired and have the backstop of a nice pension, but I will never be a millionaire. I have everything I want or need and am so set in my ways, I do not think additional money would change it. Either it would go straight to the bank, or it would cause me financial problems down the road, because all I would do is get better versions of what I have that ultimately would have more expensive ongoing costs.

 

[engr]

With most pensions non-cola this makes a huge difference. A lot of $$$ are parked in 401K/IRAs where taxes are due so it's not like you have NW in "cash" like the pre 401k/ira era. My retiree medical is essentially paying cobra. Also have to pay for own eye/dental premiums and deductibles.


Medical premiums = 18K
Medical deductibles =10K
Dental prem/deduct=5K
Eye prem/deduct/glasses=5K
Taxes=20K
Total=50K

This 50K get added to my estimated yearly expenses. Adds up fast.

 

[timwalsh300]

I am a young dreamer with much less than $1 million, and many times I am the one telling people that it really isn't that much money.

Yes, it would put you in a top percentile of Americans for net worth, but a $1 million windfall wouldn't enable any of my peers at work (in their 20s and 30s) to suddenly retire and continue their current spending habits.

My wife and I live very modestly, in comparison, to keep our annual spending below $40,000. But even in our case, a $1 million windfall wouldn't change anything in the short-term. I'd continue working for our medical coverage until we had closer to $2 million or received coverage through some other means.

Having $1 million is a different story for older folks who are within striking distance or already collecting Social Security and Medicare.

Tim

 

[Major Tom]

Having $1 million is a different story for older folks who are within striking distance or already collecting Social Security and Medicare.
Tim

Or for anyone, of any age, who can happily live on ~ 30K/yr or less

 

[pb4uski]

With most pensions non-cola this makes a huge difference. A lot of $$$ are parked in 401K/IRAs where taxes are due so it's not like you have NW in "cash" like the pre 401k/ira era. My retiree medical is essentially paying cobra. Also have to pay for own eye/dental premiums and deductibles.


Medical premiums = 18K
Medical deductibles =10K
Dental prem/deduct=5K
Eye prem/deduct/glasses=5K
Taxes=20K
Total=50K

This 50K get added to my estimated yearly expenses. Adds up fast.

Your numbers are much higher than mine (for a couple). Unless you have significant dental and vision issues to contend with I wonder if you would be much better off just paying for dental work, eye exams and glasses. Mine would be a fraction of your $10k (~$1.5k a year for the two of us for dental and vision costs).

I found that individual insurance was less expensive than my COBRA for similar HDHP benefits.

Don't you mean total $58k? How would you be subject to 35% in taxes ($20/$58) in retirement?

The effective tax rate on my IRA withdrawals will be lower than what I would have paid in taxes while I was working, so I'm ahead of the game there.

 

[photoguy]

Does anyone else get sick of hearing that a million dollars isn't what it used to be or isn't that much money anymore?

No matter how much you have, there's always going to be someone who has more that says the 100k, 200k, 500k, 1M, 2M or whatever "isn't that much".

 

[JoeWras]

I suppose a lot of people with pensions and paid health insurance are sick of hearing from the rest of us how rich they are to have such a thing. Takes a lot of cash equivalent to get the same benefit.

So, that $1M really depends a lot on the other benefits. But I'm repeating what other said above.

Back to Hart to Hart. A lot of people here came from the Motley Fool boards. I used to religiously listen to their radio program in the late 90s. (It is no longer on the airwaves here.) Anyway, they had Stefanie Powers on as a guest one time. There was some severe mix up. They thought they had her on as someone who was a great investor, managing her wealth. Instead, she just talked about bizarre stuff. It was one of the most painful pieces of radio I've ever heard. I also kind of lost my shine for her after that.

 

[clifp]

Anyway, in my opinion, if a single person cannot retire on a million dollars then it is by choice. Either they are insisting on living in a high cost area, or traveling a lot, or living like a rock star, or something like that I guess. I think that a million dollars is quite a fortune for a single retired person who is living a middle class lifestyle in fly-over country and doesn't want to travel extensively.

+1

To quote the great 20th century philosophers Richards and Jagger.

You can't always get what you want
But if you try sometimes you just might find
You get what you need

It seems to me $1 million plus a paid off/inexpensive housing is enough to provides a thoroughly satisfying retirement if you try.

It is frustrating why financial writers make the the rather grim retirement prospects for typical American appear even more dire by saying a $1 million isn't enough, sorry it is.

 

[timwalsh300]

Or for anyone, of any age, who can happily live on ~ 30K/yr or less

Agreed, but like I said, most of my peers at work don't fit that description. They are earning at least twice that much and, I suspect, spending the vast majority of it on houses, kids, cars, gadgets, "going out," etc. So I make the point that they'd be in for a shock if they won $1 million and tried to retire now at age 25 or 35. They will eventually retire with much less than that, thanks to Social Security, Medicare, maybe a pension, and a paid-for home.

Tim

 

[timo2]

A million dollars isn't what it used to be

...but I wouldn't mind having that in my cash account

 

[Mulligan]

Your numbers are much higher than mine (for a couple). Unless you have significant dental and vision issues to contend with I wonder if you would be much better off just paying for dental work, eye exams and glasses. Mine would be a fraction of your $10k (~$1.5k a year for the two of us for dental and vision costs).

I found that individual insurance was less expensive than my COBRA for similar HDHP benefits.

Don't you mean total $58k? How would you be subject to 35% in taxes ($20/$58) in retirement?

The effective tax rate on my IRA withdrawals will be lower than what I would have paid in taxes while I was working, so I'm ahead of the game there.

I was thinking the same thing, unless I misunderstood what he meant. For me, all unsubsidized care:
Health Insurance- plus $100 after HSA tax deduction
Health Insurance Deductible -$5500 ($0 last yr. spent $100, this year)
Dental- 2 cleanings yearly $150 total
Dental Insurance- none as it is worthless for me to purchase
Eye Care- $10 (2 new pairs of readers this year)

So my total cost last year was $50, and this year I am on pace for $160. Retired, but turning 50 in another year, so it may be my turn in the barrel, soon. But I sure don't envision $50k per year anytime soon, I hope.

 

[JoeWras]

Dental- 2 cleanings yearly $150 total

Wow. That's crazy cheap. That almost just covers the cost for 1 cleaning+short exam here, and we are not a high cost area. And insurance is happy and says the charge is in line.

Mulligan, you are finding all the deals in health care, I have to say.

 

[Mulligan]

Wow. That's crazy cheap. That almost just covers the cost for 1 cleaning+short exam here, and we are not a high cost area. And insurance is happy and says the charge is in line.

Mulligan, you are finding all the deals in health care, I have to say.

Joe, it would be $85 but they knock $10 off for paying cash. I probably benefit not only from a low cost area, but probably people just wouldn't or couldn't pay for it if they charged more. I had all the XRays done a year and a half ago, so that bill was higher, $165. My teeth feel fine, and I felt cheap so I skipped the XRays this time. Health insurance is the good ol underwritten plan that is going to probably yanked away from me next year. Eyes, well I am being cheap, but I don't need a doctor to tell me I need to buy glasses. I know that, so I bought the readers. Still have 3 inches left in arm extension, if I don't want to use the readers.

 

[JoeWras]

Joe, it would be $85 but they knock $10 off for paying cash. I probably benefit not only from a low cost area, but probably people just wouldn't or couldn't pay for it if they charged more. I had all the XRays done a year and a half ago, so that bill was higher, $165. My teeth feel fine, and I felt cheap so I skipped the XRays this time. Health insurance is the good ol underwritten plan that is going to probably yanked away from me next year. Eyes, well I am being cheap, but I don't need a doctor to tell me I need to buy glasses. I know that, so I bought the readers. Still have 3 inches left in arm extension, if I don't want to use the readers.

Yeah, add bitewing x-rays and it is over $200 here.

I've never understood vision plans offered at work, so I agree with you there. They seem to be insurance to buy designer frames? Not necessary.

It is important to get the pressures checked every now and then. In LBYM spirit, you can usually get this done at community "health fairs" that many providers pool together to do as a public service for free. Just have to search for them.

 

[Mulligan]

Yeah, add bitewing x-rays and it is over $200 here.

I've never understood vision plans offered at work, so I agree with you there. They seem to be insurance to buy designer frames? Not necessary.

It is important to get the pressures checked every now and then. In LBYM spirit, you can usually get this done at community "health fairs" that many providers pool together to do as a public service for free. Just have to search for them.

This site is helping slowly as there are many responsible people on this forum. But, I have been so fortunate with my health that I take it for granted even though I do live an active healthy lifestyle. Being cheap is just a byproduct as I can certainly afford to pay for it. I told myself I can continue to act like I am young until I am 50, then I will grow up and be responsible. So I have one more year of being a immature cheapo.

 

[BigBangWeary]

A lot of interesting comments and insights. I suppose it really does depend on where you are in life. My plan has always been to try and get to the million dollar mark as soon as possible in order to take advantage of compound interest for as long as possible . I still think it is a lot of money even now. I try to find accurate statistics on the prevalence of millionaires, but reliable numbers seem hard to come by, and as many of you pointed out, a big part of achieving FIRE is ignoring the 'noise' so maybe I shouldn't be so concerned.

As non-Americans and expats, my wife and I do not have SS to look forward to, or any other form of pension. It is sink or swim for us, so this all takes on a different level of importance. Then again, as a member of Generation Y, I wonder how different it will be for my friends in Canada, Europe or the US in 30-35 years time. I wonder how many will be able to rely on anything but their savings.

 

[jollystomper]

One problem I see with the "$$$ isn't what it used to be" attitude is that it discourages a good number of people from even trying to accumulate anything. Even if it is not, it is still nice to have that size cushion to make it easier to deal with a lot of things.

I remember when 401ks first became available at my Megacorp in the 1980s, and the Megacorp literature showed how through contributions and time you could accumulate a million dollars. More than a few folks had the attitude of "it won't be worth much 30-40 years from now, why bother, have fun now" and did not have an intention of trying. I was almost swayed by them, I'm glad I listened to others.

 

[BigBangWeary]

jollystomper I totally agree. The idea that inflation, market crashes, or various bubbles will ultimately decimate your wealth is a strong theme in the mainstream, especially since 2000. I would say it is the main reason most of my peers have not started saving for retirement. It is hard not to start believing this rhetoric when you are just starting out.

I know many blame the financial service industry for suggesting that we always need more than what we have and that retirement is only possible with XXX amount, but I find that we FIRE folks are sometimes guilty of perpetuating this ourselves. I am not an Extreme Early Retirement believer, but I have lived in enough places overseas to know what true poverty is and what having 'enough' can sometimes look like. Anyways, I hope that my number doesn't keep growing and moving further away as I get older. Life is too short (RIP Mr. Gandolfini).

 

[Major Tom]

One problem I see with the "$$$ isn't what it used to be" attitude is that it discourages a good number of people from even trying to accumulate anything.

I think you've hit the nail on the head with that. Although, taken as a literal statement, a million dollars is obviously not worth what it used to be, people who say things like this are making more of a value judgement, by implying that it's not worth even trying to accumulate. It's a very pessimistic and short-term view.

"_________(insert amount here) is not what it used to be"

Translation "It's hard to get ahead, so I might as well not even try."


What a self-defeating outlook.

 

[Andre1969]

In the 1960's, a Millionaire was someone who, along with his wife, packed an awful lot of luggage for what was supposed to be a "three hour tour"!

One thing I've noticed, is that I get closer to the $1M mark, the less it seems to be. When it's far off, just like any goal, it seems lofty and almost unattainable. But, as I get closer to it, it just doesn't feel as "special", I guess. Still, I'm grateful for what I have, and will be very happy when I hit the $1M mark!

As for throwing around the phrase "millionaire", I guess the problem is that it's a very wide range. If you have $1M, you're a millionaire, but if you have $999M, you're also a millionaire. Or, if you have $2M or more, should you be called a multi-millionaire then?

 

[Koogie]

Or, if you have $2M or more, should you be called a multi-millionaire then?

That's what I'm aiming for... multi-millionaire still has a nice ring to it.

Whether being barely a multi-millionaire is enough to retire very early on is another matter.