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

[old medic]

For us 2...$1M is a lottery winning pipe dream!
We both fall under the state retirement system, but there is a cash value.
That with savings, 401K and our physical assets, We MAYBE be worth 1/2 a million.
Never dreamed I ever be this rich....

 

[Time2]

My wife and I are also in a dream, we retired older, 61 and 59yrs old. It took us 37 years of saving. We had what I consider middle, middleclass income, meaning, when I took our SS statements, used government inflation numbers, put it all in a spreadsheet, the numbers said our combined inflation adjusted average income for 37 years was $71k. We went through $2M back at the end of 2017. And I don't include our home in NW numbers. I'm in awe, it just doesn't seem possible to be where we are.
Now the problem is, we really don't know how to enjoy it, we still live frugally. I do have to admit, I'm getting better a just making a purchase of something I want and not concern myself over spend 20 or 30 dollars. My wife not so much.

 

[Major Tom]

For us 2...$1M is a lottery winning pipe dream!
We both fall under the state retirement system, but there is a cash value.
That with savings, 401K and our physical assets, We MAYBE be worth 1/2 a million.
Never dreamed I ever be this rich....

It's good to hear from those at the lower NW end of things. It helps, I think, to give a more accurate and realistic picture, if we have representation from all parts of the spectrum.

I tend to beat the drum for those with more modest income and NW. It's the category I fall into, and I also feel we are under-represented here.

 

[Digger1000]

Do I think a million dollars is a lot of money? Absolutely not.

I retired in April 2017 at age 51 with 625k investable assets. Today I have 1.089 million investable assets. I have no pension. I plan on taking SS at 70. My withdrawal rate has been 2.3% annually. I am a renter, I believe my rent is about 63% of my yearly expenses. I am extremely happy, I am living life the same way I always have. And each and everyday since I retired I am happier than the day before that I retired. I actually loved the working part of my bluecollar job but the environment was so toxic that I decided to ride off into the sunset. And what a beautiful sunset it is.

 

[UnrealizedPotential]

For us 2...$1M is a lottery winning pipe dream!
We both fall under the state retirement system, but there is a cash value.
That with savings, 401K and our physical assets, We MAYBE be worth 1/2 a million.
Never dreamed I ever be this rich....

I fall into the low end NW on this site as well. But I have enough for myself and I am happy. When you think about it, it's plain hard to get to millionaire status for a lot of people, so I agree with you that you are doing well. This site is not the norm. We have to remember that.

 

[Gumby]

If you are happy in retirement, the amount of money you have is largely irrelevant. If you are unhappy, more money is unlikely to change that.

 

[Sniggle]

This site is not the norm. We have to remember that.

Indeed. I have to remind myself of that often when reading this site. I would guess there are more folks with $5 million+ in savings on this site than, well, almost anywhere. To most of the world early retirement means retiring before 65....on this site the norm seems to be before 55 (darn, I wish I was one of them).

 

[MRG]

If you are happy in retirement, the amount of money you have is largely irrelevant. If you are unhappy, more money is unlikely to change that.

+1
I watched my FIL, an untreated bipolar person, do both; sometimes in the same year.

 

[Koolau]

I guess my only quibble with teetee's post about $4Mil is it was stated (arguably) as a requirement for everyone. Clearly, it is not and I'm assuming teetee meant for him/her self only. On that basis, it's as valid as any of our "pronouncements" here in cyber space.

I did get to thinking about the equivalent values of my SS and modest pension needed to generate my monthly incomes from them. I could make a case that adding those back-of-the-envelope values to my current stash would probably put me in the $4mil range. Not sure it's instructive since most of us have or will have SS at some point.

In any case, I'm finished beating up on teetee. YMMV

 

[Markola]

This binary, simplistic question drives me crazy. It is posed as if there only exists poverty and work-til-death OR a $1 million+++ portfolio of 60%stocks and 40% bonds, which grows at historic rates and from which all expenses must come, sustainably, for life. Sorry, OP. You mean well but that is a faulty, limiting question, because there are unlimited creative ways to stretch a given portfolio or even lack of a portfolio, such as:

Working a bit but at something more enjoyable. If both members of a couple work part time, the total income starts looking like the equivalent of one small salary.

Moving to a lower cost of living area or even country. A person can buy a condo in Florida in certain older but perfectly fine 55+ communities with plenty of amenities for $75k or so, as my DF has. Panama is not far and has all kinds of programs to welcome American retirees affordably.

Downsizing the house and either buying or renting the new place, depending on what’s cheaper overall.

Renting out all or part of the house, or buying a duplex and living in half.

Significantly changing up one’s consumption and spending. If you’re in debt with anything besides a low interest mortgage, treat it like an emergency and get together an aggressive plan to get rid of it ASAP so that you have more to spend on regular stuff. After that, live on a cash basis.

Study actual Social Security experts, not online fear mongers, and have some confidence that the most popular federal program in existence will continue to exist just fine and will be there to supplement one’s income someday. Go on social security.gov, figure out your projected SS income, then multiply that amount by 25. Together with what you have now, it’s likely to make your equivalent portfolio/net worth quite a lot rosier.

Unless you are the rare individual who has both high financial literacy and emotional control, don’t try to DIY your investments. Get a solid, professional plan together with a planner who can be trusted, like at Vanguard Personal Advisor Services or Schwab or Fidelity. We have and my mother has and we wouldn’t do anything else. Once you have ALL of your goals, ALL of your assets and ALL of your income, present and future, plugged into their expensive, proprietary software, your portfolio spending picture is likely to look one heck of a lot better, because it is more surgically suited to you, than some blunt tool “4% Rule” or other. Go with one of those pros above regarding your specific, unique situation and you might be delighted.

Some people are blessed with a pension. Do the same 25x drill with that income as in the SS point above.

Anyway, you get the picture. If there’s a strong enough will, there’s likely a way to get what you can from whatever portfolio you have and the rest from elsewhere. Ask my 81 year old mother and her spouse, whose portfolio is $435,000, live in a safe, modest condo community, drive a 3 year old Mercedes and can’t even spend all of their income.

 

[street]

Not to belittle OP opinion either, but there are million and millions of people that live very nicely on way less then 4M.

Like so many have mentioned thou, a lot depends on where you live and how you live. I could live as well as I do now, on 1M or less in a portfolio, with no problem, and be a happy camper.

 

[Car-Guy]

I did get to thinking about the equivalent values of my SS and modest pension needed to generate my monthly incomes from them. I could make a case that adding those back-of-the-envelope values to my current stash would probably put me in the $4mil range.

I think some do include SS and Pensions to their NW calculations... Of course how long you will live/collect, how safe are these payments, etc all come into play.

 

[Dtail]

Not to belittle OP opinion either, but there are million and millions of people that live very nicely on way less then 4M.

Like so many have mentioned thou, a lot depends on where you live and how you live. I could live as well as I do now, on 1M or less in a portfolio, with no problem, and be a happy camper.

If a person has 1mm with no pension or Social Security, then a lifestyle of around 40k maximum could be fine.

 

[street]

^ Detail that is right. I would assume if some has saved 1M or have under 1M they would have some SS entitlement, and at the age they would like to receive the benefit. One could do just fine on that income.

 

[MRG]

I think some do include SS and Pensions to their NW calculations... Of course how long you will live/collect, how safe are these payments, etc all come into play.

I don't, but I did estimate the value and surprised to see our nw at that 4MM number. I'm not starting until 70 so the effects haven't really been appreciated.

 

[Vacation4us]

A million dollar portfolio means the difference between poverty and survival for me if life hands me lemons.

DH and I have a prenup, so if the worst happens and I end up on my own I will have to survive on my 1 million dollar portfolio and paid for house. I will have a small SS check of $1300 and a small pension of $1400 a month . That leaves me with an income of 72k before taxes. Not living large but I am pretty sure I won’t have to sell the house currently valued at $900k to make it.

PS We are both happily married living off DH pension.

 

[teej1985]

A million dollar portfolio means the difference between poverty and survival for me if life hands me lemons.

DH and I have a prenup, so if the worst happens and I end up on my own I will have to survive on my 1 million dollar portfolio and paid for house. I will have a small SS check of $1300 and a small pension of $1400 a month . That leaves me with an income of 72k before taxes. Not living large but I am pretty sure I won’t have to sell the house currently valued at $900k to make it.

PS We are both happily married living off DH pension.

Even if you did end up getting divorced, you should still get spousal benefits if they are higher than your own SS benefits.

 

[Vacation4us]

Even if you did end up getting divorced, you should still get spousal benefits if they are higher than your own SS benefits.

DH gets zero SS. He worked for a state agency were no SS was withheld. I don’t believe I am entitled to collect SS on first husband’s record either.

A pickle for me since I was essentially a SAHM during my 18 year marriage to DH #1. My SS record only has 15 years of full time work. The last ten being my highest earnings over 100k. The rest of my record shows income in the 6k-30k range.

 

[Time2]

DH gets zero SS. He worked for a state agency were no SS was withheld. I don’t believe I am entitled to collect SS on first husband’s record either.

A pickle for me since I was essentially a SAHM during my 18 year marriage to DH #1. My SS record only has 15 years of full time work. The last ten being my highest earnings over 100k. The rest of my record shows income in the 6k-30k range.

I think you are out of luck being married, Err, I mean, because of that, you can't collect on your first husbands SS record.

"In order to qualify for this benefit program, you must meet the following requirements:

• Be at least 62 years old and not currently married.
• Be divorced from a person who receives Social Security retirement or disability benefits.
• Have been married to that person for at least 10 years before the date the divorce became final.
• Not be entitled an equal or higher retirement or disability benefits."

https://www.benefits.gov/benefit/4388
Thanks to Gumby for the bullet point help.
Upper right hand corner is the editor view.

 

[Gumby]

In the "Edit" view, you will see LIST between brackets and /LIST between brackets. You will also see an asterisk between brackets for every point in between those two. Those are the bullets.

So, cut and paste the last two bullet points below the bracketed /LIST and delete the bracketed asterisks for those two. Et le voilà.

 

[Time2]

In the "Edit" view, you will see LIST between brackets and /LIST between brackets. You will also see an asterisk between brackets for every point in between those two. Those are the bullets.

So, cut and paste the last two bullet points below the bracketed /LIST and delete the bracketed asterisks for those two. Et le voilà.

Well thanks! But what is edit view? And how do I get there?

 

[skyking1]

To be fair, we have a pension and not insignificant SS coming, but that 1M nest egg is our goal.
I think openSS figures the values of our accounts at another 1M. I could do the math, the pension is about the same or a little more.
The nest egg is for discretionary spend and self coverage for LTC.

 

[free2020]

This binary, simplistic question drives me crazy. It is posed as if there only exists poverty and work-til-death OR a $1 million+++ portfolio of 60%stocks and 40% bonds, which grows at historic rates and from which all expenses must come, sustainably, for life. Sorry, OP. You mean well but that is a faulty, limiting question, because there are unlimited creative ways to stretch a given portfolio or even lack of a portfolio, such as:

Working a bit but at something more enjoyable. If both members of a couple work part time, the total income starts looking like the equivalent of one small salary.

Moving to a lower cost of living area or even country. A person can buy a condo in Florida in certain older but perfectly fine 55+ communities with plenty of amenities for $75k or so, as my DF has. Panama is not far and has all kinds of programs to welcome American retirees affordably.

Downsizing the house and either buying or renting the new place, depending on what’s cheaper overall.

Renting out all or part of the house, or buying a duplex and living in half.

Significantly changing up one’s consumption and spending. If you’re in debt with anything besides a low interest mortgage, treat it like an emergency and get together an aggressive plan to get rid of it ASAP so that you have more to spend on regular stuff. After that, live on a cash basis.

Study actual Social Security experts, not online fear mongers, and have some confidence that the most popular federal program in existence will continue to exist just fine and will be there to supplement one’s income someday. Go on social security.gov, figure out your projected SS income, then multiply that amount by 25. Together with what you have now, it’s likely to make your equivalent portfolio/net worth quite a lot rosier.

Unless you are the rare individual who has both high financial literacy and emotional control, don’t try to DIY your investments. Get a solid, professional plan together with a planner who can be trusted, like at Vanguard Personal Advisor Services or Schwab or Fidelity. We have and my mother has and we wouldn’t do anything else. Once you have ALL of your goals, ALL of your assets and ALL of your income, present and future, plugged into their expensive, proprietary software, your portfolio spending picture is likely to look one heck of a lot better, because it is more surgically suited to you, than some blunt tool “4% Rule” or other. Go with one of those pros above regarding your specific, unique situation and you might be delighted.

Some people are blessed with a pension. Do the same 25x drill with that income as in the SS point above.

Anyway, you get the picture. If there’s a strong enough will, there’s likely a way to get what you can from whatever portfolio you have and the rest from elsewhere. Ask my 81 year old mother and her spouse, whose portfolio is $435,000, live in a safe, modest condo community, drive a 3 year old Mercedes and can’t even spend all of their income.

I agree with the premise of this post, lots of people figure it out. Perhaps they don’t spend time on this website or similar and are freed to worry about something else, arguably worth really worrying about !��

Now, the bolded piece, I couldn’t disagree more as advice to others. That sort of “blunt tool” you mention has worked for a lot more people which is why it’s even a tool. What really triggered me was your mention of the “really expensive software” used by the Fidelity/ Schwabs of the world. My understanding of these sharp tools is that they are carefully curated to keep you/your assets mired in mediocrity while lining the non-fiduciaries’ pockets over the long term. There’s sound (mathematical) reason behind Bogle’s ways. Resulting in those blunt tools. For more people, being approximately correct with blunt tools is likely better than the precisely wrong sharp tools used by those non-fiduciaries.

But your comment that emotional stability being important is true. Perhaps in the context of using time tested blunt tools!

 

[Gumby]

Well thanks! But what is edit view? And how do I get there?

When you are in the box where you are typing your reply, that is the edit view. If you use the list function and hit the final "cancel", it will show all your bullet points with the LIST brackets and the asterisks (which are HTML tags). You should also see the QUOTE tags around anything you are quoting from another poster. You can use the preview button to see how it will actually appear once you hit post.

If you have already posted and you don't like how it appears, there is a button in your post so that you can edit it. The edit window closes after some period of time (I can't recall precisely how much time right now, but I have overridden the time limit so that you can try it with your post.). But if you are still in that time, when you hit that edit button, it opens the edit view box showing your text as well as all the html tags - the things in the brackets. Then you make the changes you want, preview and save.

Edit to add: I just did it below

• item A
• item B

non-bulleted text

 

[Dtail]

I agree with the premise of this post, lots of people figure it out. Perhaps they don’t spend time on this website or similar and are freed to worry about something else, arguably worth really worrying about !��

Now, the bolded piece, I couldn’t disagree more as advice to others. That sort of “blunt tool” you mention has worked for a lot more people which is why it’s even a tool. What really triggered me was your mention of the “really expensive software” used by the Fidelity/ Schwabs of the world. My understanding of these sharp tools is that they are carefully curated to keep you/your assets mired in mediocrity while lining the non-fiduciaries’ pockets over the long term. There’s sound (mathematical) reason behind Bogle’s ways. Resulting in those blunt tools. For more people, being approximately correct with blunt tools is likely better than the precisely wrong sharp tools used by those non-fiduciaries.

But your comment that emotional stability being important is true. Perhaps in the context of using time tested blunt tools!

True.
When all is said and done, the Fidelity tool is not miles ahead of Firecalc as to sophistication.
It does have some extras as to expense inflation manipulation, but in the end it is still a standard Monte Carlo simulator vs. the Firecalc historical sequencing simulator.

One does not have to spend tons of time and be highly financially sophisticated to do DIY investing.
Ask @Old Shooter how much time yearly he spends on his portfolio.