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

[cyber888]

I was just wondering how the retirement aspiration numbers have changed for a couple retiring in the next 3 - 5 years.

 

[Gumby]

I was just wondering how the retirement aspiration numbers have changed for a couple retiring in the next 3 - 5 years.

How much will you spend per year, minus the amount provided by social security or pension income? That's the critical number. Multiply it by 25 (or 33 to be conservative). What other people consider necessary is irrelevant.

 

[aaronc879]

What is "needed" varies greatly. Some people Think they need multiple millions to even consider retiring. I will never reach $1 million from working. I will retire before reaching that level. No need for that much IMO

 

[geeky_grrl]

There are so many variables it is hard to give a single number. I retired in my 40s with no pension, an uncertain health care future, and probably social security cuts in my lifetime so I would want a lot more than $1 million. But I also live in a medium cost of living location and like to travel. I could survive on $1 million, but it isn't the lifestyle I would prefer. And if health care costs get worse they could consume pretty much all of my budget at that income.

 

[jfn111]

The majority of the US would love to retire with $1 million.

 

[HI Bill]

It depends on the age at which one wants to retire, how long before one is eligible for SS/pension, and of course, your desired spend rate. Someone retiring at 70, taking SS immediately, and living within their means and receiving the maximum family SS payment might need $0 in investments. OTOH, if that same person wanted to retire at 50, and spend 4X their future SS payment, they'll obviously need a lot more. The ~4% rule still applies, and is a great starting point for most. It includes the assumption that you have a budget, and know how much you'll spend. And that you have a reasonable AA. But better yet, for your individual circumstance, plug the numbers into FIRECALC.

Back in the 1980s, I aspired to saving $1M, and back then, that would have been enough to live on. 4% of $1M is just $40K, which inflation-adjusted isn't all that much.

 

[street]

The majority of the US would love to retire with $1 million.

Yes and a large percentage retire on less then that.

 

[NW-Bound]

The majority of the US would love to retire with $1 million.

Yes and a large percentage retire on less then that.

They do not retire early though. My parents retired only when they were eligible for full SS in addition to their pension.

 

[street]

They do not retire early though. My parents retired only when they were eligible for full SS in addition to their pension.

That is true in all the cases I know of as well. Thanks

 

[Dtail]

As mentioned already, it really more depends on your spending ratio in relation to your investment assets, plus other income coming in such as SS and Pensions.

 

[Andre1969]

It just depends on where you live, your financial needs, what age you retire at, and how much other income you have (SS, pension, income from rental properties, etc). Some people could do it easily.

Personally, I'd rather be in the $2-4M range.

 

[DrRoy]

Some do fine with $1M, others have to get there to go further.

 

[iloveyoga]

That amount works fine for us. The biggest part of the equation is how much you spend.

 

[Toocold]

Only ~10% of households achieve this level, so I'd say it is still relevant.

 

[Car-Guy]

Depends on the individual (or couple) and their circumstances, but to retire in what I'd consider "reasonable comfort" these days, I think you'd need at least 2 million and with zero debt. But that's me.... YMMV

 

[Midpack]

The question is too open, some here are SIRE, others FIRE and everything in between. Beyond spending as others have noted. How much income will Soc Sec provide? How much, if any, income will come from a pension or annuity? Inheritance? Home equity (outside the $1 million)? Do you have any retiree health care benefit? What age are you retiring, and what’s your realistic longevity? Spouse? Dependents? Elderly parents? What’s your risk tolerance? $1 million is more than many retire with, but it’s not enough for many...

 

[Time2]

The majority of the US would love to retire with $1 million.

Yes, but the real numbers are sad.


"According to a 2018 study by Northwestern Mutual, 21% of Americans have no retirement savings and an additional 10% have less than $5,000 in savings."


"A third of Baby Boomers currently in, or approaching, retirement age have between nothing and $25,000 set aside."


The median for all workers in this age bracket "Age 56 - 61: $17,000"

More info here, presented in multiple ways:
https://www.thestreet.com/retirement/average-retirement-savings-14881067



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[ShokWaveRider]

We could not. $3m - 5m is realistic for our standard of living.

 

[Aerides]

I was just wondering how the retirement aspiration numbers have changed for a couple retiring in the next 3 - 5 years.

Depends on a lot. If that couple is retiring at close to normal retirement age, close to SS and Medicare, and has their home paid off - of course, that's a fine looking retirement plan many aspire to and live quite well on. Heck of a lot of people retire at 65 with less than that and are comfortable.

But if that's a couple retiring under 50, then no. Even with a home, unless very frugal.

 

[NgineER]

I'm hoping to retire at 50, with four kids to put through college still. There are too many variables to pull the plug with less invested.

 

[pb4uski]

Yes.

$1 million would provide $40-50k of safe inflation-adjusted withdrawals. SS commonly provides 40% income replacement... so if someone was earning $100k a year then SS would be ~$40k.

So combined inflation-adjusted withdrawals and SS should be able to provide 80-90K of spending... if one is earning $100k and living within their means, after SS taxes and savings they are probably spending $80-90k a year.

Add in a paid off home and they would be golden.

 

[ut2sua]

If the ACA is shot down, with $1mil, you may be able to RE, but it will be very difficult to FIRE living in the US (assuming no pension or other sources of passive income etc.).

 

[F.I.R.E User]

The problem isn’t the income. It’s the expenses. Not everyone has the discipline to save and invest.

Yes, but the real numbers are sad.


"According to a 2018 study by Northwestern Mutual, 21% of Americans have no retirement savings and an additional 10% have less than $5,000 in savings."


"A third of Baby Boomers currently in, or approaching, retirement age have between nothing and $25,000 set aside."


The median for all workers in this age bracket "Age 56 - 61: $17,000"

More info here, presented in multiple ways:
https://www.thestreet.com/retirement/average-retirement-savings-14881067



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[MarieIG]

Could we?

Most of the world retires with less.

Factors include age of retirement, expenses, access to health care/ insurance and other sources of income.

My grandmother (a widow) retired with a tiny nest egg (which she kept in the bank/ CDs); and a small social security check. She lived in a rent controlled apartment in NYC and her health insurance (when I was aware) was Medicare. She loved living in her apartment and had a circle of friends with whom she would socialize. She took occasional trips to visit relatives in Europe or down South; and would also visit us for a week at a time.

When she developed macular degeneration, my mother dragged her kicking and screaming out of her apartment to live with us. It was rough in the beginning but she eventually calmed down. (My mother treated her very well.) She never spent another penny as my parents covered all expenses.

My take on this is watching expenses. So, yes we "could."

 

[Tiger8693]

Yes.

$1 million would provide $40-50k of safe inflation-adjusted withdrawals. SS commonly provides 40% income replacement... so if someone was earning $100k a year then SS would be ~$40k.

So combined inflation-adjusted withdrawals and SS should be able to provide 80-90K of spending... if one is earning $100k and living within their means, after SS taxes and savings they are probably spending $80-90k a year.

Add in a paid off home and they would be golden.

Most people (I know I am making an "assumption" here), with $80k to $100k of income are considered pretty well off. Most of them have that income with expenses that includes a mortgage for some pretty long period.

While I agree that continuing that $80k to $100k of income in retirement W/O a morgage would be awesome for them, I don't understand why it would be a necessity for retirement when they have lived most of their lives with that same income, including a mortgage in their expenses....

Sometimes the "no mortgage in retirement" mantra doesn't make sense. Very nice, but definitely not a requirement IMHO.