I see many posters commenting that $1Mil is not enough to retire on, but I haven't found any posts that explain the reasoning behind such an opinion. Please excuse my naivety, but I'm lost in the shallow depths of my ignorant bliss. Perhaps someone can educate me and correct the error in my thinking. Here's my situation:
ASSETS:
House (no mortgage): $620k FMV
Stock Accounts: $1Mil
EXPENSES:
$560/mth (all necessities, incl. utilities, cell phone, internet)
$440/mth (groceries & gas)
Total=$1k/mth (this has stayed consistent for five years)
FAMILY:
Age 35 and married w/ two pre-teen kids (college fund already saved separately)
Based on our expenses of $12k/yr, our $1Mil savings should not be depleted for 83 years. If we double our expenses to allocate for emergencies, entertainment and occasional travel, our savings should still last 42 years. We live very comfortable; our expenses are low because of the area we live in, not because we are super frugal. I understand my calculation doesn't account for inflation, but I also didn't account for possible future appreciation of income (the savings has grown approx. 40% per year thanks to stock market).
So what am I missing here? Why can't I retire on $1Mil? Thanks in advance for your kind advice.
ASSETS:
House (no mortgage): $620k FMV
Stock Accounts: $1Mil
EXPENSES:
$560/mth (all necessities, incl. utilities, cell phone, internet)
$440/mth (groceries & gas)
Total=$1k/mth (this has stayed consistent for five years)
FAMILY:
Age 35 and married w/ two pre-teen kids (college fund already saved separately)
Based on our expenses of $12k/yr, our $1Mil savings should not be depleted for 83 years. If we double our expenses to allocate for emergencies, entertainment and occasional travel, our savings should still last 42 years. We live very comfortable; our expenses are low because of the area we live in, not because we are super frugal. I understand my calculation doesn't account for inflation, but I also didn't account for possible future appreciation of income (the savings has grown approx. 40% per year thanks to stock market).
So what am I missing here? Why can't I retire on $1Mil? Thanks in advance for your kind advice.