Posted on 06/26/2017 7:45:52 AM PDT by SeekAndFind
Edited on 06/26/2017 8:44:25 AM PDT by Admin Moderator. [history]
https://www.usatoday.com/story/money/personalfinance/retirement/2017/06/23/is-1-million-really-enough-to-fund-your-retirement/102924076/
What would one do if all you had at retirement age is $1 million? Would you have to keep working? Or could you invest it and somehow stretch it?
bad advice.
you shouldn’t be taking ANY of your principal during retirement... you should be living off the interest or the cash flow generated by the funds.
YES! I’m living proof. Try $200k
RE: YES! I’m living proof. Try $200k
Whereabouts do you live?
Agree!!!
Invest the million $ in utilities, municipal bonds and dividend paying stock funds.
Please explain to me how someone could live off $1 million without touching principal. I am woefully undereducated financially but in my situation that is probably how I will end up.
First...exit California.
Then find a financial advisor and spread your money in a series of ‘buckets” to be drained as you need cash. Make sure all the advisor’s investments are conservative.
You can do it.
Why would you avoid touching prinicpal?
So, if you have $1 million in this example, live off the earnings, then when you pass away, what of the $1 million principle remaining? Do you want to leave money to heirs, to charity perhaps? Do you want to make sure money is left over for a younger wife who is likely to outlive you?
I think it depends on if you want to have substantial funds remaining after you have passed away.
Given that our Federal Reserve is strip-mining the middle class and savers with zero nominal interest rates (and negative real rates) $1 million in a “safe” investment, like a year-long CD, will earn you approx. $5000 per year.
Our financial masters, in a bid to keep their member banks afloat and profitable, and keep massive-government’s social-engineering schemes viable - have made it impossible for anyone who earns wages to retire.
Kill the Federal Reserve - it is an evil organization.
LOL, BS!! A million bucks at a meager 4% return (low risk 80@ bonds, cash and 20 equities is easily attainable. That’s $40, 000 without touching your principal. Add to that SS which in my case comes to a bit over $33,000 annually and you have a net income of $73,000 and that is without additional dividends thrown off from various holdings.
That’s about $6000 monthly. I have two homes, one in NJ (highest or close to the highest tax wise) and a vacation home on Cape Cod. I even have a mortgage (3.5%-30 yr) on that one costing me $810 monthly (other than that we have zero debt). I have NO problem paying the bills except for what I am forced to take from our IRS accts, some of which I don’t use and reinvest.
Even if I upped the withdrawal from IRA’s another $1000 per month my money would last 25 years or more and I am $74 yrs old now. Even if I live that long I still have the homes which collectively today are worth about $775,000 (less approx $150,000 mtg) so there is another $625,000 equity for us to live on.
The secret is to be as debt free as possible and to live realistically.
even 1 million invested very conservatively should generate at least 5%.. or $50,000 a year. That, plus social security, and a paid off home prior to retirement should easily provide a easy life for the remainder of anyone’s days.
IRA rules require taking a % each year from your account beginning at year 70.5. You can reinvest it of course but there is a tax due on this “income”.
Current monthly income sources:
Soc Sec: 1,500 (after paying Medicare)
Mortgage Income held on real estate ($150,000: $720
Rental income (360,000 unvested): 2,800
Leased Mineral Rights (0.00 invested): 300
Total: 5,320
Annual: 63,840
Total invested: 510,000
Debt other than monthly expenses: 0.00
boom!
yep, everyone here should listen to what this guy just said.
he has got it figured out.
Great idea, not going to happen.
You can do fine even with the Federal Reserve. Waste of time to even think about it since it’s here and not going away.
assuming you are actually “retired” and not working any more. You standard deduction alone would cover any income generated by that withdraw.
What you mentioned is really only an issue for those who are still working or still receiving large amount of taxable income when they are forced to start taking withdraws from their IRA.
The answer depends on several major questions:
How much are you going to earn each year on that money?
How is it structured? (tax free or taxed)
What are your expenses monthly
What are you getting from Social Security
Is the house paid off?
I contend that a person who is receiving a upper end SSN payment ($3,000 / month) and has their house paid off, modest bills, and a $1M in a ROTH IRA will do just fine.
Someone who is receiving less SSN ($1,500 / month) is still paying off their house, has significant bills (medical?) and $1M in a bank savings account is not going to do so well.
you shouldn’t be taking ANY of your principal during retirement... you should be living off the interest or the cash flow generated by the funds.
I disagree, your advice is the bad counsel.
Depending on how it is invested, periodic withdrawals are a well-recognized and legitimate retirement strategy.
If all of my money is invested in dividend-paying stocks your method may work, but it is very risky and can lead to great disappointment. It is far superior to invest in low-cost index funds and take periodic withdrawals. There are numerous well researched methods for doing this, but the real key is low cost index funds and avoiding financial advisors who will charge a lot to add little value.
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