Retirement nestegg

[hawkeye]

I read an interesting article a while back that charted out how much you needed to save every month to retire with a million dollars. Of course the older you are the more you had to set aside each month. They made it sound like if you somehow accumulated a million you would be well off. My question, is 1 million enough to retire on???? Figure no debt.

 

[Richard Cranium]

That is a loaded question. I guess it all depends where you live (high tax or low tax state), what your living expenses are and what age you want to retire at.

I certainly don't have the answer, but I'd sure be interested in hearing what "those in the know" have to say.

 

[Budnicks]

That is a loaded question. I guess it all depends where you live (high tax or low tax state), what your living expenses are and what age you want to retire at.

I certainly don't have the answer, but I'd sure be interested in hearing what "those in the know" have to say.

Amen to that note...

 

[hawkeye]

Years ago the real inflation was lower and return on investments was higher. The best you can expect to do today is about keep up with inflation. Divide 1 million by 20 (assuming retiring at 65 and living 20 more years) and you would be living on $50,000 a year. A doable number but certainly not a lavish lifestyle.

 

[Moparsmitty]

The old adage that "nothing is guaranteed" certainly applies to this subject. For a long time the "experts" said that you could spend 4% of your life savings per year to live on after retirement. So if you have a million invested properly (a whole other big subject) you should be able to spend $40,000 a year and theoretically spend your last dollar as you croak from old age. This formula may work for the average person over a long period of time, but most people aren't average. There are so many variables (debt, mortgages, taxes, marital status, pensions, social security, etc. etc.....) that it's impossible to have a one size fits all plan for retirement. The poor economy of the past eight years is a perfect example of how outside forces can severely affect someones retirement plans.
It also depends on what your expectations are in retirement. If you were able to save 1 million and the simple 4% formula worked for you, would you be able to retire like you want on 40K a year? That's a question everyone has to answer for themselves. It's a very complicated subject with no easy answers.

 

[snakeyes]

NO they will take it ,some how they always will get it

 

[Dako]

Where will you be keeping the $1M? It will not last as long if it is under your matress or in some bank account drawing next to zero interest. But if it is invested and averaging, say 6% growth per year, that $1M will be making you $60K annually (8%=$80K, etc)...provided you don't tap into the initial $1M. If you could live within that means, you would have $1M+ every year until you die. Now, if you don't use what it makes in interest each year, it will continue to grow larger than the $1M you started with. Your heirs will thank you...or plot ways to see you in an accident.

 

[ord27]

keep in mind also that your nest egg doesn't have to all be "cash" (stocks, bonds, mutual funds). Don't forget: real estate, small businesses, precious metals....the idea is to have passive income. I am in the restaurant business. When I finally do decide to "pull the plug", I can either pay some people to do what I do and just enjoy the profits, or sell. Selling can be a passive income strategy too: lump sum and incur the taxes, or payments to keep tax liability low

 

[Dennis H]

Also and aside, just came to the realization that I will get hammered just as much in retirement as now if I touch the "pile. Don't think you can turn 59 1/2, wait a year and tap the pile. Still gonna pay you know who. Big time. I'm jammim on a Roth while there is still time...We will paint the residence, supercharge the Challenger and take care of big stuff like that before letting the income go. No going back.

 

[Cranky]

It depends on if you can manage your own investments. Financial planners do well so long as the markets do well and do crappy when the markets are crappy. So far this year I'm making 20% managing my own accounts but this is the first year since 2007 that I'm doing fairly well but I had more money to play with back in 07. I retired in 06 and probably should have worked for at least another year or so but I just couldn't stand it any longer and neither could my body. 1 mil back in 06 was a lot better than what 1 mil is today, that's for sure. During the crunch, all of the stocks I was in came back except for one and that one was a mistake that I should have seen coming but didn't and is the one that kicked my butt. In this day and age...1.5 mil is minimum IMO and make sure ALL of your debts are paid off before retiring and don't take on anymore. And a ROTH IRA is the way to go and make sure it's self directed and NOT managed by anyone (money management company) else. If you won't let a stranger drive your car, why let a stranger 'drive' your money??

 

[Richard Cranium]

I've always said that if you can afford it, age 55 is a good time to retire. At that age, you're still young enough to be able to get around and do things. Unfortunately, I'm not going to be able to retire at 55, but if I can do it, 60 is what I'm aiming for. At that age I will have had 41 years at this job which is more than enough.

 

[Sonny Black]

1. man cannot live by job alone, he MUST have investments.
2. do your own DD...I have 33% my money with an investor & 33% I invest....I beat him every year.
3. also, keep cash 33% on hand for emergency's......you never know....
4. you have @ 62 or greater (for a man I suggest 65years) ---> SS into the mix, I suggest reinvest some of it.:duckie:


I will work (maybe not full time) for as long as I can.
....my grandfather:banana: worked 'till90
my dad :banana:worked 'till 82....both died shortly after. both made $$.... and said, "if you have your health it worth everything you own":icon_winkle:

 

[mopar12372]

10-4

 

[Dennis H]

Survival: $800k California
$200k Florida

 

[CoronetSCO]

This is one of those questions that if you ask 50 people you get 50 different answers. And if you go to a "financial advisor" they are just as varied as many really just want to sell you an investment portfolio and not give you the best advice which would be pying off a higher interest loan or debt over a low interest return investment. Financial and investment laws can vary between here in Canada and in the US and more so with US tax laws (I deal with both). One of the most accurate pieces of advice is that if you want to maintain your current quality of life (travel, recreation etc etc) then plan to have about 70% of your current income and you will be fine. And like several have stated, the cost of living can vary dramatically by region. The good thing is that situation can be a great help if someone falls short. Then a different state move can make up the difference.

Hindsight truly is a wonderful thing so pay close attention to the more senior members from the US on here. They are sure to know best. :read2:

 

[Dennis H]

Can you think of a better place to get advice on jobs, love and retirement than FBBO? WHAT the...

 

[Stumper]

A million bucks doesn't go vary far these days. 6-7 years ago you could count on at least $50k annually in interest to live off of with secure CDs. More if you played the market correctly. These days you get nothing for interest and play Russian roulette in the market with the ever looming threat of the government taking your IRA money to fund their spending addiction. Most people nearing retirement have no faith in SS lasting much longer. Even people I know that retired from the government are losing faith in their pensions remaining solvent through their retirement years.

 

[Ryguytoodry]

You could live off of a million dollars for your whole life.... Think about it. If you put that into a low interest savings account (lets say 1% monthly) you will be making $10,000 just from interest alone per month. I plan on retiring at ripe age of 50 haha. Solar panels, no debt, a savings account since I was 16 that won't be touched until retirement, etc. Are all going to help out a lot. Make sure you have enough to mess around with your toys as well, you won't want to retire and sit around all day. That's how you end up with dementia.

 

[snakeoil24]

This is a really good subject.

1. The Federal Government is going to dip into 401 K funds at some time to service the enourmous Debt.
2. A million dollars will provide you with enough income if you are debt free, Move to a low cost area. if you plan to retire in California, Illinois, New Jersey, New York, Mass or Conneticuit you are dreaming. I am 57 and plan to retire at 62, will collect Social security plus my savings and will be able to retire. The question is what to do with my time to keep active mentally and Physically. I have spent at that time 40 years in the Chemical Industry which like the Industrial economy of our great Country has suffered. But the driving, difficult customers, lower profits and extreme ******* Federal Regulation is going to make me happy to leave!!!!!!!!!!!!!!!!!!! I will move to Florida and build Hemi cars for people and make enough to get by. But living in New jersey with the Blood sucking Liberals makes me want to vomit!!!!!!!!
3. Figure like others said 4 percent max with plus if any Social Security is left.
4. You will have to move your 401K in to foreign shelters to limit the new taxes coming on 401 K money. Hire an investment advisor who charges no more than 1 percent or trust your money with Vanguard Wellington Fund!

5. If the government can figure out how to control the growing debt then a more optomistic future will be possible. The debt is the unknown issue!

 

[2059]

I read an interesting article a while back that charted out how much you needed to save every month to retire with a million dollars. Of course the older you are the more you had to set aside each month. They made it sound like if you somehow accumulated a million you would be well off. My question, is 1 million enough to retire on???? Figure no debt.

No.