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

[aleabo]

You are assuming zero growth in the assets and no SS.

For me it is absolutely stupid article. But point here that average retirement saving $900K (assuming we can trust this number)

 

[Car-Guy]

Anyone old enough to remember the TV show, THE MILLIONAIRE (Mike Anthony, working for philanthropist John Bearsford Tipton)?

1955 through 1960 - a good TV series... Every week (or show) Michael Anthony would travel to gave away a million dollars to some person that John Tipton had picked out... IIRC is was a tax free gift (I guess they had to fill out IRS form 709 ) and the only catch was the person receiving the money could not tell anyone but their spouse where the money came from. If they told anyone else, any remaining money would be forfeited.

I've got the entire series on DVD's. Recording quality of the DVD's is not the best but very watchable... Some of the episodes have the original TV commercials of the day embedded in them... Some of the TV commercials are are almost as interesting to watch as the show itself.

 

[Dtail]

For me it is absolutely stupid article. But point here that average retirement saving $900K (assuming we can trust this number)

Fair enough.

 

[Koolau]

Not to according this article
https://money.yahoo.com/boomers-sav...even-years-in-ideal-retirement-160528666.html

Boomers on average have $920,400 saved for retirement, the Charles Schwab survey of 2,000 Americans aged 55 to 75 with at least $100,000 in investable assets found. But they expect to spend $135,100 per year to sustain their ideal lifestyle in retirement, meaning their savings would run out after seven years.

I'm actually surprised at the size of the $920K figure. DW had an employee at her small business. She was planning to retire about age 61 and was ecstatic that she had $60K in the bank. Her husband did have a pension that would start upon his retirement and they both would be entitled to some SS. BUT my point is that many folks (my parents included) did just fine on much smaller amounts than the 'vaunted' $1MM (I think mom and dad had $250K - and they thought they were gold. They SAVED money on their SS) Of course, their very last dollar (almost) went to the "home" when the last one passed CA. 2000. I marvel and feel blessed that they came out even at the end. So I did not have to help Mom navigate the nether world of Medicade. (Yes, I had to sell their house to cover Mom's expenses - fortunately, she wasn't even aware of it, due to the Alz AND my having POA -Don't leave home without it!)

My point: Folks make due when they must. Mom and Dad 'spent' more on supporting their church - by the way, that would have been an issue with Medicade - than on most of their other expenses combined - until they ended up in Alz units at the home. Their retirement (in their home of the past 15 years) was not MY retirement, but they lacked for nothing. I thank God I was close by to help them as they slipped away, but money was not the issue. YMMV as always.

 

[audreyh1]

But I still like to have a lot of money. I am an active investor, and find it fun. And the number at the bottom left corner of the Quicken screen is my score, for me to see if I am doing well or not.

Such a great song. I was always amazed that it was in 7/4 time, yet sounded so natural. And even cooler the middle transition to 4/4 and back again.

Hadn’t seen the video. Thanks!

 

[Time2]

I'm actually surprised at the size of the $920K figure.

I think the line has a caveat.
"Boomers on average have $920,400 saved for retirement, the Charles Schwab survey of 2,000 Americans aged 55 to 75 with at least $100,000 in investable assets found."
So all boomers that don't have $100,000, were not included in the average. At least as I understand it.

I found 2020 numbers.
55 to 74 yr olds have an average of $217,932. Found here, https://dqydj.com/retirement-savings-by-age/
Their chart data came from the Federal Reserve Survey of Consumer Finances. But I can't find that chart, dqydj may have performed the calulations from the data available on this site.
https://www.federalreserve.gov/econres/scfindex.htm

 

[street]

Not to according this article
https://money.yahoo.com/boomers-sav...even-years-in-ideal-retirement-160528666.html

Boomers on average have $920,400 saved for retirement, the Charles Schwab survey of 2,000 Americans aged 55 to 75 with at least $100,000 in investable assets found. But they expect to spend $135,100 per year to sustain their ideal lifestyle in retirement, meaning their savings would run out after seven years.

Interesting!
I live in a very rural area and was raised in a small town less then 400 people. People in my world the generation before me and most in my generation live on and retire with less then 1M. They are happy people also.

I beleive it all comes down to expenses and how conservative you live to be able to live on 1M. I have no problem being able to do it because it is in my genes and a frugal up bring.

Big spenders would be in trouble thou.

 

[NoiseBoy]

I answered the poll with what I think I would want as my portfolio value at retirement if I did not have the two modest pensions which are key pieces of my actual RE plans. I did include Soc Sec in my mental calculations. I voted before looking at the results. I chose $2M - $4M which is the most popular answer so far. It's a bit on the high side for what is strictly necessary to support my actual 5 year spending average but, without a pension, I voted as if I would want plenty of "extra" in my plan.

 

[Tiger8693]

Not to according this article
https://money.yahoo.com/boomers-sav...even-years-in-ideal-retirement-160528666.html

Boomers on average have $920,400 saved for retirement, the Charles Schwab survey of 2,000 Americans aged 55 to 75 with at least $100,000 in investable assets found. But they expect to spend $135,100 per year to sustain their ideal lifestyle in retirement, meaning their savings would run out after seven years.

I'm not sure, but I think the caveat in this study is the "..Americans aged 55 to 75 with at least $100,000 investable...". Surveys I have read which take full population (not excluding those under $100k investable assets), shows people in their 50's and up have on average less than $200k saved for retirement.

 

[Retch The Grate]

Haven't bought XO in a year. But I do buy Don Julio 1942 which costs the same -

Just gotta have that good stuff every so often!

Ah that's my favorite tequila.

 

[Koolau]

I think I read this book shortly after it came out - I think it was even before I FIRE'd.

https://www.amazon.com/Get-Life-Dont-Million-Retire/dp/1413300847

IIRC it pointed out that folks on MC with SOME SS (especially a couple with SS) and some "decent" savings COULD make it with little trouble. Admittedly, it's 15 years later and there's that pesky inflation. So EARLY retirement - probably not without at least a $Mil. But for the folks profiled in the book, it wasn't such a stretch.

The folks profiled lived - or chose to live in low COL areas (it's truly amazing to think I could "go back where I came from" and rent a decent place for $500/month which is considerably less than I'm now paying for HOA dues.) When retired, you don't HAVE to keep two cars. You can shop for air fares to go see the kids/GK (and stay with them - if you dare)

Medical supplements to MC are almost required, but can be tailored to budget. Unless you really MUST leave something to the kids when you die, you can deplete your savings between 60 to 90 and be relatively convinced you'll be okay. If one or even both of you end up in a care home, there's Medicade - but you need to know how to navigate.

Doing stuff in retirement does NOT need to cost a lot. Even here in Paradise, there are lots of free (or inexpensive) things to do - especially for kamaʻāina.

Every aspect of life includes choices. If you want to retire without a ton of money, it can be done - just don't be disappointed you can't eat out three times a week or live on the beach. Choices are what help make life worth living so YMMV.

 

[street]

I would guess by the poll taken, that those numbers are close to what people here have in portfolio's also. Even thou that wasn't the question asked, but my guess is the numbers shown are where people are at financially here.

 

[Koolau]

I would guess by the poll taken, that those numbers are close to what people here have in portfolio's also. Even thou that wasn't the question asked, but my guess is the numbers shown are where people are at financially here.

Yeah, I think we've had a poll or two and those numbers are, generally, about the same. But, realistically, that's about what you'd expect. IIRC, we clustered in the 1 to 3 Mil range with several folks actually in the 5 to 10 range. I recall being surprised, but not too surprised.

I'm no good with the search function, but I'm sure someone could find if interested since YMMV.

 

[2017ish]

Relevant? Yes. But, at least on our case, nowhere near enough to have retired. (Our desired spend rate was/is too high to have quit our enjoyable jobs with anything close to one million)

 

[EvrClrx311]

In today's dollars $2.5M is probably the sweet spot for us (upper middle class, having grown up in a HCOL area) or about $80,000-100,000 in annual spending in retirement, assuming mortgage is paid off.

Of course that's in today's dollars, and I'm 38... so in 20-25 years I would expect that will be about $5M to meet the same standard. Methodically working towards that, is the plan... cut that down to maybe $3-4M if social security still exists when we get there. I'm going to guess this figure is about in line with what $1M represented in the 80's/90's when the idea of "millionaires being set for life" seemed to hold (in my childhood).

That is to say... for me, $2.5M is the current and $5M is the future $1M as I used to know it.

 

[Koolau]

In today's dollars $2.5M is probably the sweet spot for us (upper middle class, having grown up in a HCOL area) or about $80,000-100,000 in annual spending in retirement, assuming mortgage is paid off.

Of course that's in today's dollars, and I'm 38... so in 20-25 years I would expect that will be about $5M to meet the same standard. Methodically working towards that, is the plan... cut that down to maybe $3-4M if social security still exists when we get there. I'm going to guess this figure is about in line with what $1M represented in the 80's/90's when the idea of "millionaires being set for life" seemed to hold (in my childhood).

That is to say... for me, $2.5M is the current and $5M is the future $1M as I used to know it.

I think a million in the 80's/90's was already sounding maybe a little bit puny - having lived through the incredible inflation of the late'70s and early '80s. At the same time my 401(K) was stagnating, costs were climbing so fast that I started to stock up on stuff - to avoid the next month's or next week's increase!

I'd say you are probably right about $2.5 currently (expanding with inflation - or better). I wouldn't write off SS just yet, though I think folks your age are going to take a hit. I certainly did when I was your age. That was when they "saved SS" by taking more payroll taxes out AND delaying full SS retirement. That really worked, didn't it? Well, I think I'm fully grandfathered in now, but "watch your back jack." As always, YMMV.

 

[rodi]

All this talk about whether $1M is still relevant... If it's not relevant to you, I'll be happy to take that irrelevant $1M off your hands.

I'm helpful that way.

 

[Koolau]

All this talk about whether $1M is still relevant... If it's not relevant to you, I'll be happy to take that irrelevant $1M off your hands.

I'm helpful that way.

Next time I have an extra $Mil, I'll remember your post!

 

[Sniggle]

I think it is, because if you work to achieve $1 million, in most cases you will race past that 1st million as that money works for you. Whether it is enough really depends on what other income sources there are, and how you want to live in retirement.

Also, 1 million after tax is different than 1 million pre-tax (401K). 1 million in a Roth IRA might do nicely.

 

[daylatedollarshort]

Interesting!
I live in a very rural area and was raised in a small town less then 400 people. People in my world the generation before me and most in my generation live on and retire with less then 1M. They are happy people also.

I beleive it all comes down to expenses and how conservative you live to be able to live on 1M. I have no problem being able to do it because it is in my genes and a frugal up bring.

Big spenders would be in trouble thou.

I grew up in the Midwest and I doubt most people I knew from there would have even had $100K let alone $1M at retirement. It doesn't cost much to live there either, though, so a retiree household with a mortgage free house, Medicare and SS checks is probably fine. Or at least fine compared to their friends from the bowling team who also aren't buying Gucci underwear or flying off to Bora Bora for the weekend, either.

 

[street]

I grew up in the Midwest and I doubt most people I knew from there would have even had $100K let alone $1M at retirement. It doesn't cost much to live there either, though, so a retire household with a mortgage free house, Medicare and SS checks is probably fine. Or at least fine compared to their friends from the bowling team who also aren't buying Gucci underwear or flying off to Bora Bora for the weekend, either.

That is true!

 

[Koolau]

I grew up in the Midwest and I doubt most people I knew from there would have even had $100K let alone $1M at retirement. It doesn't cost much to live there either, though, so a retiree household with a mortgage free house, Medicare and SS checks is probably fine. Or at least fine compared to their friends from the bowling team who also aren't buying Gucci underwear or flying off to Bora Bora for the weekend, either.

Talk of the midwest reminds me of my best bud back in the Midwest. I've mentioned his "situation" before. We w*rked at the same place. While I saved and (sorta invested) and ended up with more than 1 $Mil, he is half a $Mil in debt at age 76! He's quite happy with his race cars and decent mortgaged-to-the-hilt new house. His wife tries, but can't quite out spend him (she buys crafts, clothes, and makes my friend trade off her car, etc.)

So, our original question was whether you could retire on 1 $Mil ('scuse me, "Is $1 Mil still a relevant number nowadays for 2 retirees?".) My friend can retire on negative half a million! Full disclosure, he has a very modest pension and his/hers SS. His gift is finding ways to get credit I think but YMMV.

 

[RunningBum]

Another recent thread uses the correct term. $1M is a milestone. What's relevant for retirees may be $950,000, $1,148,327, $500,000, $3M or any other number. $1M may be that number, but it would either be by chance or by rounding.

 

[watchman3135]

I read 5k per month net for a married couple is considered a happy retirement as long as you don't live in expensive states. Of course it greatly depends on lifestyle.

 

[anothercog]

I'm in the Suze Orman camp, i.e., $1M is not enough for early retirement and that number should be $5M. But that is me. I'm sure I could get by on less but it would be a lower standard of living with more worry about running out of money and probably not being able to help out my 3 kids in young adulthood or elderly parents.