First million is enough

[Major Tom]

I apologize for hijacking the thread by introducing the house/no house used in NW calculation.

Threads in this forum tend to be quite good at going off on tangents. I can't speak for others, but I don't think an apology is necessary. Conversational tangents are what people do here!

 

[HI Bill]

"You don't need a fortune and piles of money to retire or be happy in life." True for some. But after scrimping, investing, saving, and LBYM for my adult life (and living in 800 sf condos), I was able to buy a home in Hawaii with a partial ocean view, a scuba compressor, a sports car, and a killer home theater system. I get a lot of enjoyment out of all of these, and my wife has a lot of new purses and jewelry, which she also enjoys. Many live life in low cost of living areas, and are content to do local trail hikes or bicycling. Others like to travel the world or treat their grandkids and family to Alaska cruises. Retirement with a paid-off home, a pension, and SS may be enough for a lot of folks, especially those who retire at the "full retirement age". For those in ER, you have a lot of time on your hands, and spending $ on experience and home improvement can greatly enhance one's life and potentially, happiness. YMMV.

 

[aja8888]

And yet W2R and myself (just 2 examples) still track it with no spending problems.
Just playing AJA - I do like your posts.

I was just kidding around to see who would jump on that line!

I figured W2R would be on me quick as a bunny!

 

[CO-guy]

Yep, it means a LOT of work!! Doing it now, slowly clearing out my deceased Grandmom's house. Mom was supposed to handle it, but then she died. Then it technically should have fallen on my uncle, but he was pretty sick by then, and died a couple months after Mom. So, it's all in my hands now!

And to make things worse, Grandmom and Granddad bought that house back in 1950, and thanks to vivid memories of the Great Depression, had a bit of a hoarding mentality. Back in the early 80's, instead of just getting rid of stuff, Granddad ended up building an addition on the side of the garage, roughly 12x25 feet. And it got pretty well-packed.

I can relate. My parent got sick while I was in college and died shortly after, leaving me to care for two elderly grandparents while finishing my education. My grandfather lived a few more years and my grandmother lived another decade with Alzheimer's disease. As an only child of an only child, it felt like my entire 20s were spent cleaning out houses, settling estates, and navigating home care, hospice, day care, and ultimately long-term residential care. It was a real eye opener at an early age.

 

[Flieger]

I've been FI since 2010 and RE for 14 months now. 57 was a good age to retire for me. DW is 52 and would like to work 21 more months to get her into her yr 55 for grabbing 401k if she wants to. We have only around 700k investable. Here's the thing, we don't need any of it. 2 military pensions along with VA disability more than covers our expenses. DW will get an additional COLA pension at 62 (FERS) and of course we have SS waiting anywhere from 62 to 70. If our 700k was somehow wiped out tomorrow, we would be fine. On 1 May over 11K will be deposited into our accounts. Over 4k of that is tax free. My DFIL (retired Navy Master Chief) told me during our first enlistment, "you won't get rich in the military, but you'll never go hungry, and your bills will get paid". He was right.

With all that being said, my hat is off to all of those who have worked hard to get their millions. Good for you.

Interesting and good info on military (my Dad, Navy Sr Chief - E8) and also for Teachers (like my sister). Neither had high income, but both have/had nice pension and healthcare which made retiring much easier. Thanks for sharing.

Flieger

 

[SJhawkins]

I always get a kick of the folks wondering if they can retire early at 60 with a million dollars.
.
.
.
.
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You get to the end of the post to find out they have a pension starting at 60 that will cover 75% of their needs, when SS kicks in at 70 they won't need to touch what is left of the million.

A little toung and cheek but always a little jealous of those folks.

 

[Dtail]

I always get a kick of the folks wondering if they can retire early at 60 with a million dollars.
.
.
.
.
.
You get to the end of the post to find out they have a pension starting at 60 that will cover 75% of their needs, when SS kicks in at 70 they won't need to touch what is left of the million.

A little toung and cheek but always a little jealous of those folks.

It goes with the 5m investment assets and 100k spending folks also wondering if the finances can somehow work out.

 

[MC Rider]

If you need $1Mil to retire I have to go back to w*rk.


I don't need that much, I am not traveling the globe or anything.
I am NOT going back to w*ork, we have enough.


You get to define "enough" for you.

 

[cyber888]

I agree. Based on my projections and Firecalc, my nest egg will continue to grow after hitting more than 7 figures when I retired, so I need to spend more and be happy. Firecalc says 100% for a 40 year retirement.

Health is the most important thing. I run/walk/jog 4-5 miles 3 times a week. I did 6 miles 2 days ago. I exercise everyday. Only went to the doctor last year for the yearly check up. All's good. Just work on the health and enjoy.

And the thing is - we have No kids, so we better just enjoy the money.

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.

 

[youbet]

I apologize for hijacking the thread by introducing the house/no house used in NW calculation.

Is there a defined relationship between the "house/no house" issue and what age is the best age to begin SS? It seems like the two should be linked somehow.

 

[JDARNELL]

With all that being said, my hat is off to all of those who have worked hard to get their millions. Good for you.

Well if you have military retirement and VA make no doubt about it you earned it. And if you want to go back in I hear they now have that option. For me I am good. I think I will set the next one out as it's good to be in the check of the month club and the goal now is for one day DFAS to do an article about me being the oldest retiree still on the payroll.

 

[FREE866]

It goes with the 5m investment assets and 100k spending folks also wondering if the finances can somehow work out.

So funny. And true!

 

[folivier]

For who asked I retired just before my 56th birthday. I also had retiree insurance until DW and I had medicare, that helped a lot not on expenses but on assurances that we could retire when we did.
My total NW including cabin and condo is still well below 2 million.

 

[marko]

We have this discussion here from time to time.

It really boils down to maybe three things:
Where you live, how old you are and your personal idea what is an "acceptable" retirement lifestyle.

If you live in a HCOL area and have high expectations for your retirement, that's a vastly different financial equation than someone in a LCOL who's idea of living the good life is fishing every day at the local pond.

To each his own, but the point is that how much money is required is highly, highly unique to every individual. As noted, additional revenue streams beyond a certain level of investment income also skew the equation.

Having a million dollars on hand but also having several million dollars "worth" of pension, real estate income or other side income is not the same as having to live exclusively and solely on that one million dollars.

 

[Patience]

To everyone noting the difference between:
1mil
vs
1mil +pension, +Healthcare, +SS +good health, +childless,+RE income


Thank you.

 

[old medic]

Just wait.... I'll toss in the Pension as NW question.

If you need $1Mil to retire I have to go back to w*rk.

Good one,,,

 

[Rianne]

When I calculate NW on Firecalc or FIcalc I enter the # in our portfolio in VG. I don't enter the HSA, iBonds we've had for almost 2 decades, the years of cash savings for expenses, or our home. Maybe those assets are a mental safety net. Our VG portfolio consists of index funds and bonds (CDs and treasuries).

We'll begin DH and my SS in 2025. I started SS in 2022 but I entered the combination SS starting in 2025 as income. That's calculated in Firecalc and FIcalc. The NW + income plays a role in the success of your long-term retirement.

 

[LateToFIRE]

To everyone noting the difference between:
1mil
vs
1mil +pension, +Healthcare, +SS +good health, +childless,+RE income


Thank you.

+1

 

[Alex The Great]

If you live in a HCOL area and have high expectations for your retirement, that's a vastly different financial equation than someone in a LCOL who's idea of living the good life is fishing every day at the local pond.

Well, I live in HCOL area and I don't even go fishing. Just wondering around: hiking, biking. Do I qualify?

 

[mathjak107]

we can’t seem to walk out the door here in queens without it costing something

 

[HI Bill]

Is there a defined relationship between the "house/no house" issue and what age is the best age to begin SS? It seems like the two should be linked somehow.

I don't believe they are linked, at least not generally.

Including a house in NW is correct, according to the definition, but the house's value shouldn't be used in FIRECALC unless you plan to sell it and live off the proceeds. It should be considered an asset that could be sold if you run low on $ or no longer need to live there and need to spend the proceeds of a sale on long term care (tricky if there's a spouse who doesn't need LTC).

A few here disagree, but you should not include the NPV (net present value) of SS in FIRECALC; SS should be listed as additional income on the year you intend to take it [If you include the NPV of SS in FIRECALC and you have a bust before you start taking SS, you've lost the Sequence of Returns Risk gamble, run out of $, and can't yet take SS]. Including SS on the appropriate input shows the income arriving when it's planned, and it helps lower the future SORR once the SS income starts.

After reading thousands of SS posts here, I've come to the conclusion that there is no "best age to begin SS". It depends on too many factors (health, marital status, Survivor's benefit, Spousal benefits, etc.). For those in good health, with a partner who might benefit from Survivor's benefits, it's generally a good idea to wait at least until FRA, and age 70 if you can.

 

[LateToFIRE]

I don't believe they are linked, at least not generally.

Including a house in NW is correct, according to the definition, but the house's value shouldn't be used in FIRECALC unless you plan to sell it and live off the proceeds. It should be considered an asset that could be sold if you run low on $ or no longer need to live there and need to spend the proceeds of a sale on long term care (tricky if there's a spouse who doesn't need LTC).

A few here disagree, but you should not include the NPV (net present value) of SS in FIRECALC; SS should be listed as additional income on the year you intend to take it [If you include the NPV of SS in FIRECALC and you have a bust before you start taking SS, you've lost the Sequence of Returns Risk gamble, run out of $, and can't yet take SS]. Including SS on the appropriate input shows the income arriving when it's planned, and it helps lower the future SORR once the SS income starts.

After reading thousands of SS posts here, I've come to the conclusion that there is no "best age to begin SS". It depends on too many factors (health, marital status, Survivor's benefit, Spousal benefits, etc.). For those in good health, with a partner who might benefit from Survivor's benefits, it's generally a good idea to wait at least until FRA, and age 70 if you can.

90% +1

Agree with most of what was stated, except the last line. There are those for whom SS is simply "icing on the cake." It doesn't make or break their base case plan. So taking it early to have more BTD $$$ sooner might be a rational choice, regardless of longevity factors.

P.S. Personally, I might fall into the above bucket but I'm waiting because right now I'm being eaten alive in taxable income and capital gains. I plan to take it before FRA, as soon as the tax coast is clear.

 

[audreyh1]

Including a house in NW is correct, according to the definition, but the house's value shouldn't be used in FIRECALC unless you plan to sell it and live off the proceeds. It should be considered an asset that could be sold if you run low on $ or no longer need to live there and need to spend the proceeds of a sale on long term care (tricky if there's a spouse who doesn't need LTC).

People just mix up what you can use in FIREcalc which must be investments which can be withdrawn from each year, and net worth which by definition includes real but generally illiquid investments as well.

Also you are correct that income from pensions, SS, etc. should be handled as income streams in FIREcalc, not some NPV calculation.. They reduce the amount you need from your investments to fund your annual spending needs.

 

[Dtail]

I keep track of my NW on a monthly basis, but clearly don't include it for withdrawal % decisions.

 

[tps7742]

BRAVO!!! It's great to read so many posts by forum members who "get it". A happy retirement requires enough money to meet one's basic needs, but for many of us that's about all IMO.

We are having a ball without feeling any driving need to spend a ton of money. 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. Our plan for today is to go for a drive in the neighborhood, in this beautiful summery weather. Cost? Almost nothing. Afterwards, we both have "free" hobbies to keep us busy; he has a house full of ham radios and loves to listen to them, I have a Nintendo Switch and a bunch of games on cartridges that cost nothing to play.

My portfolio isn't growing very fast, but I'm not spending any of it so it's definitely growing more than decreasing. I'm not worried about having enough to enjoy life.

Spoken very well. It’s great each of you have found the simple things in life of a well balanced retirement life that you enjoy.