Is $1 million really enough to fund your retirement?

The Motley Fool via USA Today ^ | 06/26/2017 | Wendy Connick, The Motley Fool

[SeekAndFind]

https://www.usatoday.com/story/money/personalfinance/retirement/2017/06/23/is-1-million-really-enough-to-fund-your-retirement/102924076/

[billyboy15]

Sure, money cannot buy happiness but it does buy a better brand of misery.

Happiness is whatever a person thinks it is. You mention travel, entertainment, etc. I personally have no interest in travel and my idea of entertainment is reading (3-4books weekly)and music while relaxing in what most would describe as a wet dream of a man cave.

My favorite form of exercise is my 4 mile walk each morning at 5 a.m., something I have done every day for 22 yrs never missing a day, rain, snow or whatever. I retired at age 52 and have cannot remember the last time I was sick even with a cold. Nor do I take any medication. I attribute this to strong genes and the grace of God.

Okay now that I bragged about my good health I’ll probably stand up to take my dog for a walk and fall down the stairs or I’ll trip on the curb outside and crack my skull open

[af_vet_1981]

What I call hoarding is laying up wealth one does not intend to use. Living off interest to leave the principal to children is not hoarding. Impoverishing oneself to qualify for Medicaid so one can leave the wealth to children is wrong on several levels.

Saving for children, lean times or permanent retirement is wise and prudent, so as not to be a burden to others.

Either governments, heirs, or thieves are going to take the leftover possessions. It is important to learn how to use (spend wisely) the wealth one accumulates (saves wisely).

Where our treasure is, there will our hearts be also.

[anton]

Taking $600,000 from the pile and renovating my 8 unit apartment building in the hippest part of town. Will get $1250 a month per unit. 35% expenses, $78000 per year net, property appreciating.

[Obadiah]

Good on you.

[Cementjungle]

The problem is that today one might be comfortable with say $70K per year (investment income, SS, etc.) but in 20 years time will that be enough considering inflation?

There are also "surprises" that come along... medical bills, home repairs, kids' emergencies, etc.

The best answer to the "how much should I have saved" question is "as much as you can possibly manage".

[JimRed]

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?

Put $700,000 down on a well-located, well managed $2,000,000 apartment building with a good rental history and no rent control. A realistic rate of return of say, 8% cash on cash would provide about $56,000 a year income, added to your combined social security. What remains of the other $300,000 after closing costs and putting aside some "fun" money can be producing income in safe investments. You won't be rich, but well-off is quite nice. And you'll always have a place to live!

[JimRed]

...you should be living off the interest or the cash flow generated by the funds.

Or the building/buildings it bought for you.

[Yaelle]

Smart idea. I do like the idea of rent control. Clearly the apt house wouldn’t be around here but who knows which state I will end up in?

[FreedomNotSafety]

Had too look up remoras. Good one.

[aquila48]

I’m of the mind that what one does (legally) with the money they earned (legally and ethically) is their business.

If someone wants to leave a million dollar to his cat that’s his business.

[af_vet_1981]

the mind that what one does (legally) with the money they earned (legally and ethically) is their business.

There is an imbalance in that equation. "Ethically" belongs on both sides.

If someone wants to leave a million dollar to his cat that’s his business.

For both cases, it is a matter of law, and laws can change.

[krunkygirl]

bkmk

[lurked_for_a_decade]

The 2 million lost over a lifetime assumes that you invest the money that would have been spent on cigarettes in an account that earns 7 percent per year compounded annually.

Here is a simple chart
,
YEAR
,
Beginning of Year
,
annual deposits
,
interest
,
End of Year balance

1 0 + 3650 x 1.07 = $3,905.50
2 $3,905.50 + 3650 x 1.07 = $8,084.39
3 $8,084.39 + 3650 x 1.07 = $12,555.79
4 $12,555.79 + 3650 x 1.07 = $17,340.20
5 $17,340.20 + 3650 x 1.07 = $22,459.51
6 $22,459.51 + 3650 x 1.07 = $27,937.18
7 $27,937.18 + 3650 x 1.07 = $33,798.28
8 $33,798.28 + 3650 x 1.07 = $40,069.66
9 $40,069.66 + 3650 x 1.07 = $46,780.04
10 $46,780.04 + 3650 x 1.07 = $53,960.14
11 $53,960.14 + 3650 x 1.07 = $61,642.85
12 $61,642.85 + 3650 x 1.07 = $69,863.35
13 $69,863.35 + 3650 x 1.07 = $78,659.28
14 $78,659.28 + 3650 x 1.07 = $88,070.93
15 $88,070.93 + 3650 x 1.07 = $98,141.40
16 $98,141.40 + 3650 x 1.07 = $108,916.79
17 $108,916.79 + 3650 x 1.07 = $120,446.47
18 $120,446.47 + 3650 x 1.07 = $132,783.22
19 $132,783.22 + 3650 x 1.07 = $145,983.55
20 $145,983.55 + 3650 x 1.07 = $160,107.90
21 $160,107.90 + 3650 x 1.07 = $175,220.95
22 $175,220.95 + 3650 x 1.07 = $191,391.91
23 $191,391.91 + 3650 x 1.07 = $208,694.85
24 $208,694.85 + 3650 x 1.07 = $227,208.99
25 $227,208.99 + 3650 x 1.07 = $247,019.12
26 $247,019.12 + 3650 x 1.07 = $268,215.95
27 $268,215.95 + 3650 x 1.07 = $290,896.57
28 $290,896.57 + 3650 x 1.07 = $315,164.83
29 $315,164.83 + 3650 x 1.07 = $341,131.87
30 $341,131.87 + 3650 x 1.07 = $368,916.60
31 $368,916.60 + 3650 x 1.07 = $398,646.26
32 $398,646.26 + 3650 x 1.07 = $430,457.00
32 $430,457.00 + 3650 x 1.07 = $464,494.49
33 $464,494.49 + 3650 x 1.07 = $500,914.61
34 $500,914.61 + 3650 x 1.07 = $539,884.13
35 $539,884.13 + 3650 x 1.07 = $581,581.52
36 $581,581.52 + 3650 x 1.07 = $626,197.72
37 $626,197.72 + 3650 x 1.07 = $673,937.06
38 $673,937.06 + 3650 x 1.07 = $725,018.16
39 $725,018.16 + 3650 x 1.07 = $779,674.93
40 $779,674.93 + 3650 x 1.07 = $838,157.67
41 $838,157.67 + 3650 x 1.07 = $900,734.21
42 $900,734.21 + 3650 x 1.07 = $967,691.11
43 $967,691.11 + 3650 x 1.07 = $1,039,334.98
44 $1,039,334.98 + 3650 x 1.07 = $1,115,993.93
45 $1,115,993.93 + 3650 x 1.07 = $1,198,019.01
46 $1,198,019.01 + 3650 x 1.07 = $1,285,785.84
47 $1,285,785.84 + 3650 x 1.07 = $1,379,696.35
48 $1,379,696.35 + 3650 x 1.07 = $1,480,180.59
49 $1,480,180.59 + 3650 x 1.07 = $1,587,698.73
50 $1,587,698.73 + 3650 x 1.07 = $1,702,743.15

Every day I see people at the local convenience store dropping 5 to 10 bucks on lottery tickets. Same people all the time. If they put that same 10 dollars away in a savings account and once they have saved 1500 bucks they should invest it in a good S&P 500 index fund from vanguard at the next market drop. Then if they deposit the money they spend on booze, cigarettes, dinning out. etc. into the index fund, this is what they’d have after 50 years. That’s only 10 dollars per day.

Once you get a couple hundred thousand you can create your own index fund by buying individual stocks through a discount brokerage like vanguard. Reinvest the dividends and your return should average greater than 7 percent if you don’t make dumb choices.

You should have 100,000 bucks saved by the age of 34.

It takes about 10 years for your money to double with a 7 percent rate of return.

I put more than 50 dollars a day (average over my life) away per year for 37 years and retired at 56 years of age.

It’s called the miracle of compound interest. It’s eighth grade math! The Marxists in public schools don’t teach it because the want you sucking on the government teet for life!

50 dollars per day for 37 years at 7 percent is about 3.6 million.

[Osage Orange]

The only thing that is good advice....

The secret is to be as debt free as possible and to live realistically.

[genghis]

If i only had 1 mill have to quit country club

[Osage Orange]

Can’t retire on one million buckaroo’s if you are 40 yrs old...and not making that million work for you.

[Osage Orange]

It is not prudent to hoard wealth

Describe what you mean....by that statement.

Thanks!

[DugwayDuke]

TexasFreeper2009 wrote: “But when your eating cat food to survive, don’t go begging to the government to rob those who didn’t blow their money on your behalf.”

“I personally wish to amass enough principal to live off the interest/earnings alone. And then leave the principal to my children so that they can do the same.”

That’s a very good objective. In my case I’ve invested well and I have multiple pensions and annuities and investments.

My annuities and pensions are more than enough for a very comfortable retirement without tapping my retirement investments. I worked hard, maximized my savings, and avoided spending on new cars, vacations, etc. Now, my investment and savings accounts are my ‘fun money’. I do intend to enjoy life.

BTW, I can assure you that if I’m ever forced to eat cat food, it will be premium cat food.

[Yaelle]

I meant rental income not rent control, sheesh.

[af_vet_1981]

Describe what you mean....by that statement.

Thanks!



But godliness with contentment is great gain. For we brought nothing into this world, and it is certain we can carry nothing out. And having food and raiment let us be therewith content. But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

...

Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy; That they do good, that they be rich in good works, ready to distribute, willing to communicate; Laying up in store for themselves a good foundation against the time to come, that they may lay hold on eternal life.

As authorized, but not authored, by King James
1. First Timothy, Catholic chapter six , Protestant verses seven to ten
2. First Timothy, Catholic chapter six , Protestant verses seventeen to nineteen