Can I live on a 10 million retirement?

[JeffKeryk]

My understanding is very few Americans (like 3 or 4%) have $1M in savings.
About 1% have a net worth of $10M. I have not seen a $10M savings number.

If you dig a little deeper, you find CA has the highest number of millionaire households in the U.S., with 1.14 million households having one million or more in investible assets. This is nearly double the 650,216 millionaire households in TX, the state with the second-highest number.

IMO, this does not bode well for much of our country.

 

[Leo99]

I'm not going to have to worry about it because I'm retiring on a lot less than $10M in 2 years. I live a simple life. I could life my life comfortably on $500 per week. The wife and I spend a boat load of money on non-essential things like dinner, drinks, and gambling.

There is some very biased advice coming from the investment community painting a very rosy picture of retirees sailing on yachts and vacationing around the world and painting beautiful art at their mountain chalet. I play golf with some wealthy retirees. They play golf at the local course, they go on a trip once or twice a year. Their health is failing or their spouse passed away so any plans to travel the world are no longer their plans.

 

[Lubener]

I read an article and almost fell out of my chair that this was even a topic. Of course 99% of people could live well on that.

Now back to reality, do you think 1 million is still enough to live comfortably in retirement when you include SS?

Yes, one million is sufficient. Unfortunately many are used to luxuries, desire material items and would require more to live that lifestyle.

 

[Warstud]

Ask a CPA

 

[supton]

My understanding is very few Americans (like 3 or 4%) have $1M in savings.
About 1% have a net worth of $10M. I have not seen a $10M savings number.

What is “$10M savings”? I mean, I could have $10M in the stock market, but if I had $10M there about a year ago, I’d have what, $7.5M now?

Reason I ask is, is that $10M in low or no risk holdings, or $10M in stuff that has perceived value? There’s a difference, and some people think they have it made, only to realize that their holdings are not well diversified, when the market takes a dump suddenly things aren’t so rosey…

 

[atikovi]

Don' forget taxes We may be paying maybe $2-3K Federal annually

I didn't.

You should be able to live off the $40,000+/year interest (currently) alone. That's assuming the house is paid for, medicare covers medical bills and you get some SS. Your expenses would basically be down to food, utilities, taxes, insurance and transportation, and a little something for entertainment.

And I was thinking more of property taxes. You won't have much earned income to be taxed after you retire.

 

[Aredeeem]

Been retired for six years. We’re ok. 2 socials, two pensions, one part time job that yields $1000 gross a month. We watch our expenses. . Could be worse, could be better. Bills are paid, bellies are full. Great medi-gap plan. We’re ok.

 

[JeffKeryk]

What is “$10M savings”? I mean, I could have $10M in the stock market, but if I had $10M there about a year ago, I’d have what, $7.5M now?

Reason I ask is, is that $10M in low or no risk holdings, or $10M in stuff that has perceived value? There’s a difference, and some people think they have it made, only to realize that their holdings are not well diversified, when the market takes a dump suddenly things aren’t so rosey…

100% true for higher risk portfolios.
But I would argue that a low risk portfolio will have a very hard time ever getting to $10M. Let's just say I know someone who lost more than the $2.5M in your scenario. It's a nice problem to have; you still have $7.5M!

What makes sense, to me, it to get to a point in either value or your age, when it is time to call it a day and pull back.

 

[Dave Hess]

My understanding is very few Americans (like 3 or 4%) have $1M in savings.
About 1% have a net worth of $10M. I have not seen a $10M savings number.

If you dig a little deeper, you find CA has the highest number of millionaire households in the U.S., with 1.14 million households having one million or more in investible assets. This is nearly double the 650,216 millionaire households in TX, the state with the second-highest number.

IMO, this does not bode well for much of our country.

Very, very few people of the ‘average American worker’ has $1M saved for retirement the day they leave workforce.

It takes decades to save up / invest and hit that $1M mark.


$10M is just a silly daydream number from Suze Orman.

 

[BAJA_05]

Seriously --- some people have just tooooo much time on there hands. Donate 80% of that money & you could/should still live comfortable.

 

[Snagglefoot]

One of the issues going on is boomers are waiting for their parents to croak so they can inherit their dough or at least sell their parents house and divvy up the money.

 

[JeffKeryk]

Very, very few people of the ‘average Americas’ has $1M saved for retirement the day they leave workforce.

It takes decades to save up / invest and hit that $1M mark.


$10M is just a silly daydream number from Suze Orman.

To get to the $10M mark, you have to "go big or go home". And have a lotta luck.
This is where I differ from the typical balanced portfolio approach.
To me, balanced is a mix of conservative and high risk products. The conservative (aka balanced) is your safety net and the high risk offers an opportunity to lose $3M in value (paper loss) and still have $7M.

The people who laugh at the TSLA price drop will never have $10M. Or $7M. Do they even have $1M in savings?
Each to their own. But just understand that to get to whatever number takes a lifetime of contributions. It does not happen overnight.

 

[atikovi]

Seriously --- some people just tooooo much time on there hands. Donate 80% of that money & you could/should still live comfortable.

Most people don't work hard all their lives to give it away. Maybe after they are dead, but not before.

 

[Pablo]

One of the issues going on is boomers are waiting for their parents to croak so they can inherit their money or at least sell their parents house and divvy up the money.

You know that was my plan .............my dad will be 100, mom 99 and I will be mid 70's - sudden;ly not practical

 

[JeffKeryk]

Most people don't work hard all their lives to give it away. Maybe after they are dead, but not before.

Maybe you are right, I dunno. But I have found that some people who have struggled and then done well are willing to work with others because they know the other side of life.

 

[jetman]

Spending habits? on depreciating assets, etc
Health?

 

[Dave Hess]

To get to the $10M mark, you have to "go big or go home". And have a lotta luck.
This is where I differ from the typical balanced portfolio approach.
To me, balanced is a mix of conservative and high risk products. The conservative (aka balanced) is your safety net and the high risk offers an opportunity to lose $3M in value (paper loss) and still have $7M.

The people who laugh at the TSLA price drop will never have $10M. Or $7M. Do they even have $1M in savings?
Each to their own. But just understand that to get to whatever number takes a lifetime of contributions. It does not happen overnight.

I know someone in the $10M net worth range and he likes to say….. “To win big, you have to bet big.”
The guy is a business owner / real estate and made some risky bets that paid off.

He also says…. “______ morals and values are much more important that a Diamond encrusted Rolex, Maybach, Bugatti, McLaren, Ferrari, G700, mega yacht, etc… “


Many people dislike ‘normal’ wealthy people that are successful…… but they really enjoy following trash celebrities, trash pro athletes, trash musicians, trash actors, trash social media influencers, etc….

 

[supton]

I didn't.

And I was thinking more of property taxes. You won't have much earned income to be taxed after you retire.

In NH at least, property tax can be pretty high. I live in a low tax area and I could see myself paying a kilobuck a month, in retirement, for property tax.

Really have to think about the total picture though—as you’re apt to point out, most other states don’t have property taxes like we do.

Anyhow. I do believe SS and 401k withdrawals in retirement are all taxable. If you aim for 100% income replacement, I’m not sure how one isn‘t going to have the same fed+state tax payments each year? Maybe if you time it just right, pay off the mortgage and then retire, so as retire on 80% income, then one’s tax load goes down?

[I’m ignoring some of the here—if one saves 20% income for retirement, then one only needs 80% income to hit “100%” replacement. If one saves 20% and is putting another 10% towards mortgage… then it’s like 70% replacement, right? loads of numbers to mess with here. And of course… if you do it right… perhaps you can have more income in retirement! which would just be downright awful…]

 

[Passport1]

$1million is not that hard. $10million is. Just choose your relatives carefully.

 

[atikovi]

You know that was my plan .............my dad will be 100, mom 99 and I will be mid 70's - sudden;ly not practical

Don't laugh, there are some 60 and 70 year olds still living in their parents basement waiting it out.