Poll:Is $1 Million still a relevant number nowadays for 2 retirees?

[Tiger8693]

You "must" mean, Big Swinging Dude.

 

[street]

I think 4MM net worth is the bare minimum for a single person in their 50s to retire in the US, with some spare room for handling surprises (realestate and/or medical).
I understand the cost of living is different in different parts of the country. But one's true spending is different from col.

Interesting Lol!
I disagree and it that has to be a joke. Right?

 

[Markola]

"Big swinging ..."

I thought BS Detector.

 

[teetee]

I think 4MM net worth is the bare minimum for a single person in their 50s to retire in the US, with some spare room for handling surprises (realestate and/or medical).
I understand the cost of living is different in different parts of the country. But one's true spending is different from col.

Here is my justification of my 4MM net worth requirement number.

No future SS or pension is considered, 4MM net worth is as it states, everything I own minus everything I owe.

500k for buying a house, and it's associated recurring charges (tax, insurance, maintenance and repairs),

500k for medical bills, health insurance and long term care premiums, meds, and / or nursing home living costs,

3MM to cover the market fluctuations (if it goes down 70% like in 2008 I won't lost sleep over it).

I left the COL or spending style out of the consideration since they are not going to be the same for everyone everywhere. I just do the rough estimate using today's number that I feel comfortable with. I do understand if I get to live longe enough to be in my 50s, there is a chance the money will need to stretch to my 90s. That means there will be need for 3 cars ( assuming replacement once every decade until I am 80 ) and my estimate for that is around 100k for the purchase and associated expenses.

The purchase total of the three cars I owned in the past 20 years added up to $13k. Call me soft but I don't want the hassle of visiting the mechanic except for the regular maintenance and inspection when I am older.

For those think the number is not real. You are right. Most people in the US don't have 1MM at their retirement age, let alone 4MM. That is the reality. Good thing we are talking about what we think is the the minimum to retire in this thread. I don't want to be like my parents who did what they feel like with money and now can barely make it with the social benefits. I think the FI part of FIRE needs to cover anything that can induce the emotional stress, not just the math at this point in time and leave out the future risks.

"Expect the best, plan for the worst, and prepared to be surprised" is what keeps me going. I will pretend that I am surprised when I start getting SS at 70. Even if it is just peanuts because of SS shrinkage ( and is no longer a BSD), it won't make any difference to me.

 

[Markola]

^^^^^ Respectfully, your kind of thinking would have most people working for life.

And why not factor in any SS? DW and I project we’ll receive about $66k at age 67. That’s the equivalent to a portfolio of a $1,650,000 assuming a SWR of 4%. That’s a darn big step toward your $4M.

 

[Car-Guy]

Here is my justification of my 4MM net worth requirement number.

No future SS or pension is considered, 4MM net worth is as it states, everything I own minus everything I owe.

Maybe, but it still seems like a lot. IMO, most won't get anywhere near that.

3MM to cover the market fluctuations (if it goes down 70% like in 2008 I won't lost sleep over it).

If I only had a NW of 4m and 3m of that was in the market and 70% of that 3m was lost in a downturn, I'd wouldn't be able to sleep at all. Quick math would say that's over a 50% drop in total NW...

 

[teetee]

^^^^^ Respectfully, your kind of thinking would have most people working for life.

And why not factor in any SS? DW and I project we’ll receive about $66k at age 67. That’s the equivalent to a portfolio of a $1,650,000 assuming a SWR of 4%. That’s a darn big step toward your $4M.

For some people who have net income less than twice the national average (60k), 4MM NW is nearly impossible before their 50s. But it is a separate matter.

Not including SS because I don't know the future. We can't talk about politics here. From my experience the social benefit in this US is affected by who is in power (it shouldn't be but it is) so I am excluding SS to save my old self the headaches even if it means I need to save more now ( delayed gratification is no stranger to me ).

 

[GTFan]

I think 4MM net worth is the bare minimum for a single person in their 50s to retire in the US, with some spare room for handling surprises (realestate and/or medical).
I understand the cost of living is different in different parts of the country. But one's true spending is different from col.

Joining Suze in the ridiculous ER money needed crowd, I see.

You don't need anywhere near that number to retire comfortably in many areas of the US, especially if you're a LBYM and everything's paid for.

 

[GTFan]

Here is my justification of my 4MM net worth requirement number.

No future SS or pension is considered, 4MM net worth is as it states, everything I own minus everything I owe.

500k for buying a house, and it's associated recurring charges (tax, insurance, maintenance and repairs),

500k for medical bills, health insurance and long term care premiums, meds, and / or nursing home living costs,

3MM to cover the market fluctuations (if it goes down 70% like in 2008 I won't lost sleep over it).

I left the COL or spending style out of the consideration since they are not going to be the same for everyone everywhere. I just do the rough estimate using today's number that I feel comfortable with. I do understand if I get to live longe enough to be in my 50s, there is a chance the money will need to stretch to my 90s. That means there will be need for 3 cars ( assuming replacement once every decade until I am 80 ) and my estimate for that is around 100k for the purchase and associated expenses.

The purchase total of the three cars I owned in the past 20 years added up to $13k. Call me soft but I don't want the hassle of visiting the mechanic except for the regular maintenance and inspection when I am older.

For those think the number is not real. You are right. Most people in the US don't have 1MM at their retirement age, let alone 4MM. That is the reality. Good thing we are talking about what we think is the the minimum to retire in this thread. I don't want to be like my parents who did what they feel like with money and now can barely make it with the social benefits. I think the FI part of FIRE needs to cover anything that can induce the emotional stress, not just the math at this point in time and leave out the future risks.

"Expect the best, plan for the worst, and prepared to be surprised" is what keeps me going. I will pretend that I am surprised when I start getting SS at 70. Even if it is just peanuts because of SS shrinkage ( and is no longer a BSD), it won't make any difference to me.

In other words, YOUR personal situation requires 4MM to be able to sleep at night. But you made a blanket statement that is utterly false for the vast majority of ERs here.

 

[FLSUnFIRE]

Reading this thread I'm becoming concerned for Jeff Bezos's solvency. He's slowly stepping back from Amazon and not only does he have a long time horizon but he is also heavily invested in company stock... adjusting the $4M for the concentrated portfolio..... He also has an expensive hobby exploring space.

 

[Car-Guy]

Reading this thread I'm becoming concerned for Jeff Bezos's solvency. He's slowly stepping back from Amazon and not only does he have a long time horizon but he is also heavily invested in company stock... adjusting the $4M for the concentrated portfolio..... He also has an expensive hobby exploring space.

If he's reading this, it probably has him pulling out his hair.

 

[RunningBum]

Some people here are funny. A little earlier in this thread someone showed how $1M with SS should put you at $82K/yr spending, and if you need more than that you don't belong here. Now we have someone else saying $4M minimum. I don't even know which emoticons to use for this. Maybe all of them.

I agree with GTFan, both statements may apply well to the people who posted them, but making them as blanket statements is absurd.

 

[teetee]

If he's reading this, it probably has him pulling out his hair.[emoji23]

Nah it is all good. Mocking strangers is part of the online norm. That actually reminded me I need a haircut.

 

[Car-Guy]

^^^^^^ Maybe he did read it...

If he's reading this, it probably has him pulling out his hair.

 

[RunningBum]

Nah it is all good. Mocking strangers is part of the online norm. That actually reminded me I need a haircut.

I think he was talking about Bezos, which is pretty darned funny if you imagine him pulling out his hair!

 

[Out of Steam]

Some people here are funny. A little earlier in this thread someone showed how $1M with SS should put you at $82K/yr spending, and if you need more than that you don't belong here.

In our last full year without a Social Security check, removing Roth conversions, we won't be a lot above that.

We're deferring some expenses, such as new furniture and replacing a car, but we're not eating ramen noodles either.

 

[aaronc879]

That $4MM minimum is a crazy statement. I will retire well before ever becoming a millionaire. I will have no pension, I will have no more than a mid five-figure inheritence and I will only get around $12K/yr from SS. I will still need well under $1MM to retire in my 50's. If I said no one should need more than $1MM that would be as bad as saying no one can retire on less than $4MM. It's different for everyone.

 

[Major Tom]

In other words, YOUR personal situation requires 4MM to be able to sleep at night. But you made a blanket statement that is utterly false for the vast majority of ERs here.

+1

I don't have the slightest problem with teetee's figures as they apply to his situation. I can't, for the life of me though, figure out why he concluded that, if $4M was the bare minimum for him to be able to sleep at night, it was also the bare minimum for any single person in their 50's in the US, to be able to retire.

How the heck do you go from "this is what I need" to "this is what everyone needs"?

I considered giving a breakdown of my budget, and how I am comfortably retired with a current portfolio of $1.15M and modest SS on the way in a few years. However, some would say (or at least think) "I wouldn't want to live that way". Well of course you wouldn't. You're not me!

 

[Andre1969]

I'm starting to think that $2M would have been more than enough as a starting point for me, and that I would have been able to do it, back in 2018. One thing that kept me in the workforce longer was buying a house in September 2018. The house was $630K, but I put 25% down. At the end of that month, I had something like $1.762M in investible assets.

As of yesterday's market close, I'm at around $2.375M. Now, this is a quick and dirty calculation, but here goes. My take home pay, since that month I bought the house, has totaled to around $109,000. I've also put around $60,000 into my 401k, in the past ~2.5 years. For health insurance, I'm going to go a little cheap here. Let's say that, if I was retired, I'd have to pay an extra $500/mo, on top of the portion I already pay? So that would come out to around $15,000 in health insurance.

Now, subtract those numbers from the $2.375M, and I get $2.191M. Of course, that doesn't take into account market gains, from that extra $60K that was invested in my 401k, plus, money that the $109K and $15K would have made. So, I dunno...let's be optimistic, and say that's another $100K total. That would still put me at roughly $2.091M today. So, I'd still be up around $329K, compared to September 2018, if I had retired.

Now, if I was to back test that, to say, September of 2000 and see where I was 2 1/2 years later, I might not be so optimistic. Or, September 2007...although I did bounce back from the Great Recession much quicker than I did from that 2000-2002 period.

So, as they say, timing is everything, I guess!

 

[ejman]

I think 4MM net worth is the bare minimum for a single person in their 50s to retire in the US, with some spare room for handling surprises (realestate and/or medical).
I understand the cost of living is different in different parts of the country. But one's true spending is different from col.

Interesting funny/sad comment. I guess I'll have to hop on that time machine and tell my 50 year old self I shouldn't retire on far less than $4MM. Back in the real world I have had a fantastic retirement here in beautiful SW Oregon on 7 acres wanting for nothing with a minimum $3k a year pension and started SS at 62 as the only extra income. I have more than twice the NW I had when I retired but I'm still nowhere near $4 MM net worth.

 

[aleabo]

+1

I will say that net worth is a meaningless yardstick (to me), since one could have a lot or a little tied up in a house and expensive cars, etc.

+1 Net worth absolutely meaningless thing. Important how much you saved and your expenses

 

[aaronc879]

+1 Net worth absolutely meaningless thing. Important how much you saved and your expenses

Obviously not meaningless. If two people each have $2MM in liquid investments
but one rents and one has a $1MM house then the one with the house can sell the house and have a $1MM more to spend.

 

[aleabo]

I'm starting to think that $2M would have been more than enough as a starting point for me, and that I would have been able to do it, back in 2018. One thing that kept me in the workforce longer was buying a house in September 2018. The house was $630K, but I put 25% down. At the end of that month, I had something like $1.762M in investible assets.

As of yesterday's market close, I'm at around $2.375M. Now, this is a quick and dirty calculation, but here goes. My take home pay, since that month I bought the house, has totaled to around $109,000. I've also put around $60,000 into my 401k, in the past ~2.5 years. For health insurance, I'm going to go a little cheap here. Let's say that, if I was retired, I'd have to pay an extra $500/mo, on top of the portion I already pay? So that would come out to around $15,000 in health insurance.

Now, subtract those numbers from the $2.375M, and I get $2.191M. Of course, that doesn't take into account market gains, from that extra $60K that was invested in my 401k, plus, money that the $109K and $15K would have made. So, I dunno...let's be optimistic, and say that's another $100K total. That would still put me at roughly $2.091M today. So, I'd still be up around $329K, compared to September 2018, if I had retired.

Now, if I was to back test that, to say, September of 2000 and see where I was 2 1/2 years later, I might not be so optimistic. Or, September 2007...although I did bounce back from the Great Recession much quicker than I did from that 2000-2002 period.

So, as they say, timing is everything, I guess!

I'm going through similar calculations and let's yours since you provided
So, $109K - $25 in 401 gives you $84K. Assuming one needs 75% of pre-retirement income you need $63K. But you need to pay for health insurance (as you calculated additional $15K). So. you need $78K. Lets say $80K. If 1969 year of your birthday - you can't take realistically more than 3% from your saving. What is $72K. Looks like you need to wait
My numbers close to yours and I'm 10 years older and still reluctant to pull trigger

 

[ncbill]

+1 Net worth absolutely meaningless thing. Important how much you saved and your expenses

Yes, and that's why I disagree with this part of their post:

"I understand the cost of living is different in different parts of the country. But one's true spending is different from col."

But living in a HCOL are might mean property taxes of $12,000 versus $2,000 in my area for the same size home.

So, ceteris paribus, retiring outside a HCOL area usually means more moolah can go towards discretionary spending,

 

[RetiredAt55.5]

The reason why I said net worth is meaningless (to me), is that you can't apply the 4% withdrawal rate (or whatever your WR is) to your NW to calculate your annual income.

Maybe I do need a $4M net worth if I have $2M of houses, cars, and a boat.