Poll: What is your definition of wealthy as defined by Annual Withdrawal Rate?

[Retired Expat]

I disagree with the premise. Withdrawal rate has no relationship to wealth.

I too don’t think “wealth “ is the appropriate term to use here. Call it Security? Living within one’s means scale etc. Made it? Rich?

I would say if one is happily retired and not feeling any financial hardships or “ feeling poor” (ie; their needs and wants are being met at whatever spending level that might be). That they have “Made It”. If they have health and friends and good relationships then I would say they are even rich.

My WR is 1-2%, money is not an issue, I live in a beautiful place and am married to a wonderful woman I still adore. We can and do pretty much whatever we want. So I think I have It Made and am “Rich”! Although I don’t consider myself Wealthy.

 

[Out of Steam]

We were at about 3.6% for 2021, but could go above 4% in 2022--with the difference probably spent on some home things. Depending on how many hours my wife gets in her part-time (remote) job, she may file for Social Security late in the year.

We're certainly not wealthy; probably not even upper-middle class right now.

 

[kcowan]

Looking at the poll results so far, we appear to be a rather parsimonious crowd. Sorry, Robbie.

Wealthy is when portfolio APR > AWR

Parsimonious is when APR >> AWR

 

[brett]

Completely meaningless.

It is when one has the resources to do or buy what one wants in retirement without restraint.

We are pulling down less than one percent of our investments. And part of that is to fund the tax burden.

Does this make us poor or does it make us wealthy?

Perhaps it depends on our other sources of income and on our lifestyle.

 

[MichaelB]

So, we’re a thrifty bunch. Shocking!

 

[marko]

My definition of wealthy, which I read somewhere, is that your grandchildren won't have to work for a living. .

Or that thanks to gramps, YOU don't have to!

 

[marko]

Maybe our former governor of Mass, from an old wealthy family said it best: "We don't make money, we have money "

 

[travelover]

All I know about being wealthy I learned from watching Gilligan's Island.

 

[NW-Bound]

Completely meaningless.

It is when one has the resources to do or buy what one wants in retirement without restraint.

We are pulling down less than one percent of our investments. And part of that is to fund the tax burden.

Does this make us poor or does it make us wealthy?

Perhaps it depends on our other sources of income and on our lifestyle.

I certainly do not buy things without restraint. Still have yet to fly business-class without it being paid by someone else. International first-class? Not even in my dreams. And I mean it literally as I dream about all sorts of weird things, like forgetting to claim the hours worked while doing contracting work and ending up working for free. ARGHHH!

 

[W2R]

It is when one has the resources to do or buy what one wants in retirement without restraint.

Wahoo!! Then I'm wealthy.

But wait - -

- - - I only wear cheap t-shirts and shorts; I spend less than $15/month on clothes.
- - - I don't travel except for hurricane evacuations
- - - I don't entertain at all.
- - - I don't go to events, plays, movies, etc., except free Mardi Gras parades
- - - I don't give gifts at all.
- - - I am driving a 13-year-old Toyota and my home is average value for this area.
- - - I don't own any boats, planes, RVs, motorcycles, jewelry worth more than a dollar, second homes, blah blah blah.

Guess that I'm wealthy but a stingy miserly cheapskate as well. Oh! (looking around). How cool! I fit in just right on this forum. Guess I'll stick around.

 

[ejman]

Last year WR rate was less than 1% probably due to Mr. Covid shenanigans, average over my 20 years of ER is 3.27% per poll's definition. No clue whether that makes me wealthy or not. All I know is that it seems to be more than enough so far.

 

[teetee]

Your firecalc result shows 100% success rate but later you found out you missed a 0 at the end of your saving in the input.

Yeah that is wealthy.

 

[RobbieB]

Yeah 10X. Order of magnitude. I had it all covered before and now I'm 10X -

Time to buy a boat!

 

[GravitySucks]

All I know about being wealthy I learned from watching Gilligan's Island.

Can't discount those investing teachings from Gomez Addams.

 

[Vincenzo Corleone]

I guess this poll is only for those who are already collecting Social Security. By the time my wife and I are ready to claim SS, who knows what our NW (and expenses) will be.

 

[Time2]

If you have a little over $2M in net worth, you are close to being in the top
95% of US households. At that point I'm sure more than 50% of people would say you are wealthy. So, there is 'one' definition of wealthy!
At 4%, $2M puts your income above about 70% of US households. Add SS and if any pensions and you are going above the income of between 75% and 80% of US households and double the median income. No one should be struggling on the US median income and if you have double that, you're doing very well indeed. And if not, " What's your problem?"

 

[FI_RElater]

If you have a little over $2M in net worth, you are close to being in the top
95% of US households. At that point I'm sure more than 50% of people would say you are wealthy. So, there is 'one' definition of wealthy!
At 4%, $2M puts your income above about 70% of US households. Add SS and if any pensions and you are going above the income of between 75% and 80% of US households and double the median income. No one should be struggling on the US median income and if you have double that, you're doing very well indeed. And if not, " What's your problem?"

In net worth? ...hardly. You'd need it in investible assets; most have a large share of their net worth tied up in their house (which doesn't yield any disposable income) and even then it's not "wealthy", might only just getting by (certainly depends upon where you are located/COL)


I'd say that "wealthy" is a wr well below 1% such that dropping so many tens of thousands on something doesn't even trigger a blip on the balance sheet.

 

[Gumby]

If you have the irresistible urge to compare yourself with others, you could use this. https://dqydj.com/net-worth-percentile-calculator-united-states/ Or I suppose a smart phone and a tape measure might suffice for some.

 

[marko]

Everyone here knows that "numbers is hard" for me and I occasionally come up short on logic but in this instance I fail to see any connection between a WR and wealth.

Spending below your means or having a zero WR is great but as several have noted, a pensioned postal worker could qualify.

I think the truly wealthy don't work off a 'withdrawal rate' but have different metric.

For example, if you sold your Rembrandt/yacht/jet and--your accountant--decided to have some of the profit go into your spending pot, how do you account for a WR? If you took some of your wealth to acquire a Rembrandt/yacht/jet, does that count as a 'withdrawal'?

And how to account for a $10MM donation to a university against one's WR?

Apples and Oranges I say, but, I could be mistaken.

 

[DjBrown]

Living of off dividends only with no need for SS/Pension etc.
So I say 1-2%.

We are looking probably at 7-8 Million plus.

 

[freddyw]

My definition of being wealthy is having enough money/resources to not be dependent on another in order to live the lifestyle they've chosen.

 

[Calico]

If you have the irresistible urge to compare yourself with others, you could use this. https://dqydj.com/net-worth-percentile-calculator-united-states/ Or I suppose a smart phone and a tape measure might suffice for some.

 

[Ticker]

Wealthy is anyone that has more money to spend than me, though they undoubtedly stole it.
Poor is anyone that has less money than me to spend, though they were probably just too lazy to work as hard as I did.

I cringe when I see a quote like this. The younger generations hate us because we aren't paying attention to their plight. The unaffordability of decent housing coupled with continuing limited pay while trying to pay off student loans and medical debt is discouraging them from their pursuit of the American dream. Spend a little time on Reddit, especially the antiwork forums, and you'll have a better understanding of the opportunities that you had that don't exist anymore.

 

[travelover]

I cringe when I see a quote like this .........

Cringe away. You might feel better if you recognized that it is a tongue in cheek observation of human nature.

That said, I fully recognize that times have changed and that it is much tougher for kids coming up now than it was. But, some things have not changed. People that work harder, seek further education and don't spend their time on pity parties on Reddit or other social network platforms still do well and succeed.

And get off my lawn!

 

[NW-Bound]

Your firecalc result shows 100% success rate but later you found out you missed a 0 at the end of your saving in the input.

Yeah that is wealthy.

Having a factor of 10X over what FIRECalc says you need?

Then, I am not rich, because I just tried out FIRECalc to see that I have only about 5x.

But I don't think it means I have too much money, only that I am currently not "blowing dough".

Who knows, I may just go banana and start to buy all sorts of toys. Once you do that, the sky is the limit.