First million is enough

[Alex The Great]

Not on Medicare yet. We have a 8k Max OOP, 13k Premiums and a few thousand in uncovered expenses.

Actually this would mean that you have ACA plan without a subsidy, due to hight income correct? If this is a case, then in fact you could retire with $1M and less medical expenses because of the lower income which qualify you for ACA subsidy.

 

[brucethebroker]

For wannabe future retirees: note the common theme of "and having a paid off home" appears in many/most of the posts relating to comfortable retirements with lower nest eggs.

Interesting that while working/accumulating the focus is on a "number" (1M, 2M, etc.) for retirement planning. IMHO, once retired, cash flow is the important gauge of success, not a "number".

 

[mathjak107]

40k on a million plus ss would be a very stressful life here in nyc sweating every unexpected bill

 

[marko]

40k on a million plus ss would be a very stressful life here in nyc sweating every unexpected bill

+1. Between property taxes, state income taxes and excise taxes, I'm left with half of that $40k to actually spend.

 

[mathjak107]

ironically state and city taxes for us are extremely low .

ny does not tax our social security, my wife’s pension , our treasury interest , the first 20k in retirement money and we get a 1600 dollar tax credit for our state partnership plan for long term care .

a six figure income and we paid 900 dollars in nys and nyc taxes

 

[LateToFIRE]

40k on a million plus ss would be a very stressful life here in nyc sweating every unexpected bill

Yes indeed, though I do know folks who have managed it, especially if housing costs capped, either by owning or rent-regulated. Both have their uncertainties though - with owning, property taxes and upkeep constantly under inflation pressure, with rent regulation, potential rent increases, landlord compliance, etc. a constant concern.

 

[mathjak107]

half of all rental housing here is rent stabilized .

but that doesn’t mean cheap . we are at market rents .

stabilized rents can be 6k a month in manhattan … one of my favorite buildings , i wish we could afford , the Chelsea. is 6k a month for a two bedroom .

we also owned stabilized coops in the prestigious 200 central park south. building as investments .

the way it worked out those tenants were at half market .

so rents can be all over the map here .

 

[Alex The Great]

Well, I don't*know about NYC but my annual expenses rarely exceeded $40K in SF Bay Area during career time (and by far the largest part is property tax which was reaching $14K last year). It did not include health insurance premiums. It is yet to see how expenses would round up for the first year of retirement.

 

[iloveyoga]

Lots of good nuggets in this thread. It took me awhile to get it all figured out, but I am comfortable with our cash flow now. Two pensions and two SS are more than enough to cover our regular bills. Paid off house, no car payments. Travel and other extras come from my IRA. I really don't worry about trying to save more at this point. Reading and posting on this board has been very helpful for me.

 

[thod]

I find it interesting that the other thread had some disagreement about whether a house should be part of a net worth calculations (like adding it was cheating or something, or maybe just not useful because you could not spend it.)

This thread is pretty much the opposite, everyone gives a lower Net Worth, but almost always notes they do own their home, so that makes it easier to live on a lower amount.

My takeaway is that 'home ownership' should be included in Net Worth, because it is an asset that does have a 'return'. That return not in something we receive like income, but instead is via fewer expenses.

 

[Car-Guy]

I find it interesting that the other thread had some disagreement about whether a house should be part of a net worth calculations (like adding it was cheating or something, or maybe just not useful because you could not spend it.)

This thread is pretty much the opposite, everyone gives a lower Net Worth, but almost always notes they do own their home, so that makes it easier to live on a lower amount.

My takeaway is that 'home ownership' should be included in Net Worth, because it is an asset that does have a 'return'. That return not in something we receive like income, but instead is via fewer expenses.

 

[JDARNELL]

My takeaway is that 'home ownership' should be included in Net Worth, because it is an asset that does have a 'return'. That return not in something we receive like income, but instead is via fewer expenses.

Right its an implied return. If you didn't have a paid off home you would have to have assets that produced enough income to cover it or far worse have to w@rk and pay the additional taxes on your work to cover the payment.

Some people make the case that it's dead equity but I don't think that is the case. I was in the pay off camp for up until 2020 when I locked in a VA 2.5% 30 yr mortgage. With cola adjusted income I see no need to ever pay it off as NW continues to rise at a pace I cant spend now. We are also finding that our hobbies are settling in and the cost is going down. In retrospect we way overshot the what is enough number.

 

[Andre1969]

This might not be the best way to look at it, but I ignore any home equity for any sort of calculations, until the place gets sold. Then I think of it more like a windfall, sort of like an inheritance.

For instance, right now, I might have about $400-500K in home equity, if Redfin/Zillow are to be believed. But I can't really do anything with that money, without adding to my bills. If I borrow against it, I now have an added monthly payment. And if I sell the house, well, I have to go buy something else. So if I want to downsize at some point in the future, it's definitely something to think about.

I also don't plan on moving anytime soon, and in a perfect world I'd like to stay in this house until I die. So in that sense, the home equity is meaningless.

If you have a paid off house, you don't have the added monthly expense of rent or a mortgage. But, I look at the advantage of a paid off house as the fact that you don't have the monthly expense of rent or a mortgage. The equity really isn't doing anything for you.

And, in the true sense of NW, if you pull out that equity, it doesn't change your NW, because while you might now have that equity turned into money, you also have an equal amount of new debt.

Of course, you can always use equity as leverage to invest, buy other properties, etc, so it definitely has value, and I can see why some people count it as their NW. I just choose not to.

FWIW, whenever we have these types of discussions, I try to use the phrase "invested assets" or something like that, to differentiate from NW which would include equity. But, sometimes I'll still slip up and say NW, anyway.

 

[Cayman]

".... I think what's more important than living "the lifestyles of the rich and famous", is knowing ourselves well enough to know what makes us happy. Often these tricks to staying happy don't cost much of anything at all, for us. ..."

This! W2R I agree that's the ticket.

 

[Stormy Kromer]

I bought $53 of garden seed yesterday. That will keep me busy, entertained, exercised and fed.

I love the simple life here on my farm. I no longer farm it, but I love to watch the crops grow.

Soon I'll be fishing, then hunting in the fall.

I'd be lying if I said I didn't like to see our net worth grow, and it has. It has no impact on our lifestyle or standard of living. It does allow for peace of mind that we'll be able to pay for our health care in our old age and not be a burden on our family or society. We plan on leaving a nice sum to each child and a nice pile to our favorite charities.

A good friend of mine started a business that eventually went public. He did very well. He had everything and did everything. One day I was helping him with some work in his yard and he told me "Never confuse standard of living with quality of life".

 

[Flieger]

Kinda tongue in cheek post in response to the "first million is the hardest" thread. I somewhat felt left out with others posts on their good fortune in accumulating more millions.
But I'm here to say that we've never gotten close to the second but have comfortably stayed within the first million over our fourteen years of retirement. We've traveled a lot and now have a condo in Louisiana and a cabin in Colorado. Our 1+million should last us the rest of our lives and leave a significant inheritance to our 2 sons.
Would more $$$$ change our lifestyle? Probably not. We're enjoying life as much as we can right now. Don't care for air travel anymore whether it's economy or first class. We have everything we want, thankfully our health is pretty good. But I'd trade most of our money for longer better health.
So don't despair if you're enjoying life without your portfolio growing! I'm not gonna worry about it.

I was so glad to see this thread! As a person with just over $1MM (about $1.3M - not NW, retirement savings) I recently posted about upcoming retirement where SS covers 60-70% of "needed" income, with remainder coming from withdrawals. I "quote" needed as I included in the income enough to cover what we want to do, not just essentials. Also as a note, I do not have a paid for house, but include the mortgage, property tax and insurance as part of the cash flow needed from retirement income. In my view, cash flow is what matters most if just looking at making it, not building additional wealth to leave behind. just one man's opinion...

I look forward to hearing more from those that are not multi-millionaire (NW with house or otherwise) and living a great, happy retirement!!

Flieger

 

[Aerides]

Retire at 65 with good SS numbers, a small pension, retiree medical/medicare, small savings? Sure, easy enough.

But this is an ER forum, many of us hope or, or do, retire long before SS is part of our income, and have no hope for pensions or retiree health plans.

That's me:

Reasons we could not have retired (when we did, at 47) on $1m:

Zero pensions - those had long left most private sector jobs before we started working, or were converted to 401k stuff soon after we did.
MCOL area - we don't want to move any time soon as our parents, family, friends are nearby.
Early retirees - we needed to be able to fund not only our pre-SS retirements, but pre-401k distribution time.
Didn't want to worry about money, or be concerned about the price or gas or eggs or whatever

Reasons that weren't part of why we needed more than $1m

Big House - nope, we have a medium (3bd/2bth) house in a typical suburban neighborhood.
Lavish lifestyle - nope, we keep our cars for 10 years. We vacation nicely but infrequently compared to many, and fly coach at present.
Debt - nope, not since our early 30's, house long paid off

So, for early retirees in particular, $1m may well be insufficient even for a modest retirement.

 

[TheWizard]

I find it interesting that the other thread had some disagreement about whether a house should be part of a net worth calculations (like adding it was cheating or something, or maybe just not useful because you could not spend it.)

This thread is pretty much the opposite, everyone gives a lower Net Worth, but almost always notes they do own their home, so that makes it easier to live on a lower amount.

My takeaway is that 'home ownership' should be included in Net Worth, because it is an asset that does have a 'return'. That return not in something we receive like income, but instead is via fewer expenses.

The better question is: when should Net Worth be the main consideration and when should Investible Assets be the main consideration?
Depending on the topic of conversation, one or the other is usually more relevant...

 

[Flieger]

So, for early retirees in particular, $1m may well be insufficient even for a modest retirement.

You are correct in this statement for sure! While this is an ER site, I find so much useful information (even for me as an LR person - Late Retire? ) and really appreciate all of the info here.

Flieger

 

[Surewhitey]

While I was thinking $1mm was enough for us in 2012, living in a VLCOL part of the world. After moving "home" to DFW & fast forward to now with lifestyle creep and 2 DGK's & taking care of her mom, I'm feeling better with the 8 years of additional savings/growth for most anywhere we may live. DW is currently planning to w*rk until 65 or until I reason more effectively with her...

I'm just encouraging her to enjoy the fruit of her labors along the way as we really are fine for now...my being content with our time is more important than asking her to "force ER".

 

[Andre1969]

While I was thinking $1mm was enough for us in 2012, living in a VLCOL part of the world. After moving "home" to DFW & fast forward to now with lifestyle creep and 2 DGK's & taking care of her mom, I'm feeling better with the 8 years of additional savings/growth for most anywhere we may live. DW is currently planning to w*rk until 65 or until I reason more effectively with her...

I'm just encouraging her to enjoy the fruit of her labors along the way as we really are fine for now...my being content with our time is more important than asking her to "force ER".

I know I've mentioned it elsewhere, so sorry for the repeat, but when I started getting serious about planning for retirement, my goal was $1M and a paid off house. But, that was back around 1999 or 2000, and I always assumed it would be inflation-adjusted. I.e., hitting $1M in 1999/2000 adjusted dollars, and not whenever I hit $1M in "raw" dollars.

I did finally hit $1M in early 2015. But, in 1999 dollars, I really needed around $1.4M. And, I still had a mortgage. I probably did hit that inflation-adjusted goal sometime in late 2017. I still had a mortgage, but was paying it down aggressively, and if you subtracted the mortgage balance from my invested assets, I'm sure it came out to my 1999 goal of $1M inflation-adjusted and mortgage free.

I'm confident I could have retired around that timeframe, when I was 47-48. But, by then I realized I didn't want to retire to where I was living at the time, so I knew a move was coming up in the near future. And in September 2018, I went considerably upscale, compared to what I had been living in.

Now, in 2024, that $1M in 1999 is more like $1.862M. I'm well over that now, although I do still have a mortgage. I could pay off the mortgage and still be well over $1.862M, and I'm confident I could still make it on that. But, I've fallen into a bit of OMY syndrome, and like the extra cushioning. Logically, I know I'm at the time > money part of my life, but emotionally, just not quite there. I think it will kick in before too long, though!

 

[LateToFIRE]

I... 'home ownership' should be included in Net Worth...

Let the Games begin!

 

[tmitchell]

Thank you for this and congrats on your awesome retirement! When I pulled the trigger on leaving my job I knew I had "enough" to make a great life. We still rent in our HCOL city and I sometimes wish I had been able to afford a house, but that wasn't in the cards I guess. Even so we are able to enjoy a very blessed and prosperous life.

 

[Al18]

I bought $53 of garden seed yesterday. That will keep me busy, entertained, exercised and fed.

I love the simple life here on my farm. I no longer farm it, but I love to watch the crops grow.

Soon I'll be fishing, then hunting in the fall.

I'd be lying if I said I didn't like to see our net worth grow, and it has. It has no impact on our lifestyle or standard of living. It does allow for peace of mind that we'll be able to pay for our health care in our old age and not be a burden on our family or society. We plan on leaving a nice sum to each child and a nice pile to our favorite charities.

A good friend of mine started a business that eventually went public. He did very well. He had everything and did everything. One day I was helping him with some work in his yard and he told me "Never confuse standard of living with quality of life".

This time of year I always ‘spend’ some credit card reward points on Home Depot and Lowes Gift Cards, that I spend on vegetables, potting mix, fertilizer and flowers and weed and feed for the yard. I look forward to yard work.

 

[LateToFIRE]

This might not be the best way to look at it, but I ignore any home equity for any sort of calculations, until the place gets sold. Then I think of it more like a windfall, sort of like an inheritance.

For instance, right now, I might have about $400-500K in home equity, if Redfin/Zillow are to be believed. But I can't really do anything with that money, without adding to my bills. If I borrow against it, I now have an added monthly payment. And if I sell the house, well, I have to go buy something else. So if I want to downsize at some point in the future, it's definitely something to think about.

I also don't plan on moving anytime soon, and in a perfect world I'd like to stay in this house until I die. So in that sense, the home equity is meaningless.

If you have a paid off house, you don't have the added monthly expense of rent or a mortgage. But, I look at the advantage of a paid off house as the fact that you don't have the monthly expense of rent or a mortgage. The equity really isn't doing anything for you.

And, in the true sense of NW, if you pull out that equity, it doesn't change your NW, because while you might now have that equity turned into money, you also have an equal amount of new debt.

Of course, you can always use equity as leverage to invest, buy other properties, etc, so it definitely has value, and I can see why some people count it as their NW. I just choose not to.

FWIW, whenever we have these types of discussions, I try to use the phrase "invested assets" or something like that, to differentiate from NW which would include equity. But, sometimes I'll still slip up and say NW, anyway.

OMG, It would make life so much simpler on this forum if we could agree to let NW be NW and use another term like "invested assets" to refer to umm... invested assets.