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/
well, sure,
if you have a 100 million stashed away, no problem, spend down some of your principle.
As of 2016 the first $5,450,000 you leave to your heirs is tax free.
The question is not how would you live. The question is how much of what you have do you wish to spend? I am going to spend all of my principal. Think of your principal as funding an annuity.
You can draw down the principal while collecting earnings and by doing the math you can smooth the flow to essentially equal payments. The math is the same basic math as a fixed mortgage payment except in reverse.
The next question is how and where to invest. If you want minimal risk and fluctuation then you will seek one type of investment if you do not mind a level of risk and therefore some possible fluctuations you may invest differently.
Living off 1 million at retirement is simple.
Apartment rental near beach on east coast - 1500 month.
Apartment rental near warm climate for winter - 1300 month.
Social Security - 2000 month
Military disability - 2000 month
Wife’s SS - 2000 month
Don’t touch the million.
This is a great article on spending your principal.
If the pay wall blocks you try googling “retirement spending WSJ” and follow a google link to the article. The WSJ allows you several free hits using Google.
Why not touch the million?
Avoid anything from a city in NY, NJ, Ca, ...
Most people earn plenty enough over their lifetimes to pay for a comfortable retirement.
The problem is... most spend it along the way and thus have nothing at the end.
Are you a chain smoker? that just cost you 2 million plus over your lifetime.
Eat out once or twice a day? millions more.
heavy drinker? millions more.
I could go on and on.
I am not certain you understand, and your definition of principle does not appear to be the one most people use.
Start by going to https://www.bogleheads.org/wiki/Getting_started where you will find an enormous amount of very good information and resources on a website devoted to the advice of Jack Bogle, who popularized the low-cost index fund.
Then Google the "Trinity Study".
After you have absorbed this stuff, we may be able to have an intelligent conversation.
Meanwhile, best of luck.
Having money for your retirement is better than not having any. The time to think about this should be the first day you get a job but we all know those first years until established it is difficult to save.
But certainly by the time you are in your 30s you should be planning on your retirement.
Money is only one aspect of any retirement.
Where you are going to live after you retire. Where you must live to earn money might not be where you would want to live if given a choice. Use your vacation time to visit areas you think you might want to live (reality and a dream may not be the same).
What are you going to do once you retire. You would be surprised at the number of people who are not mentally prepared for the end of their working life. If your job describes who you are, you really need to think about what you are going to do once you no longer work. Think of a hobby you can start now, and enjoy more later.
Stay healthy. If you find it difficult to stay in shape while young, you will find it almost impossible to get in shape when you are in your 60s and a life time of abuse begins to take its toll on your body.
Get and stay out of debt. Pay off your home. As you get closer to retirement begin replacing major appliances as well as a new roof. Paying for these repairs while still working is better than using your retirement funds later.
IF you have perfect timing you would run out of principal at the time of your death. Since that is highly unlikely, The question then becomes do you mind running out of principal before you die or would you rather have some principal left after you die? Take your pick. I will spend earnings and principal as if i will I’ve to age 90. I will most likely die well before then and therefore leave some principal. If I live longer? Then I run out of money and join the 90% of my countrymen who I had previously been supporting.
There is no reason not to spend the principal except for a desire to leave it behind.
Stupid premise.
I'm 59. Not ready to retire. But I've far exceded my dreams already.
Don't wait till retirement to begin your dreams. Do it now. Today.
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.
You put a period where a colon should be.
bad advice:
you shouldn't be ........
So you have $6,000 monthly of very secure government provided money. You have still not provided any basis or logic to explain why you chose not to spend the principal.
Why not touch the million?
Less money at work means less income.
It gets more expensive to live every year.
Bad combo.
I then went to a wealth advisor that took into account retirement annuities, home equity, house and car payments and various other sources of income including the 401K and IRA accounts. He also factored in health liabilities and health insurance premiums.
The wealth management advisor told me I was 175% funded to maintain the level of comfort we enjoyed before retirement.
That was 10 years ago and we have more discretionary funds after paying the bills now that we did when we were both working. We haven't touched the 401K yet and are still putting money into savings monthly.
Shop around for advice and pay attention to your own situation instead of buying into some industry formula that may or may not fit you. The annuity sellers base their business on your fear to take the retirement leap.
This is the most uninformed thread I have ever seen on Free Republic.
Of course the vast majority of Americans will “retire” and do just fine without $1,000,000 in investable assets. It happens every day.
Everybody’s situation is different - some people have pensions, some have social security, some have families, some have more the $1,000,000 in investable assets, some work until they’re older and don’t need $1,000,000 to live comfortably after stop working.
These clickbait articles are worthless and do more harm then good.
It depends on Where you Live....if your House is PAID OFF...whether you go out to dinner 4-5 times a week...etc. Of COURSE you can retire with one Million Dollars.
So how does not touching the million help with “It gets more expensive to live every year.”?
We’ve been retired completely for 5 years. We travel extensively in the US and internationally and go to LV several times a year. We party hardy with friends, go out to eat often,have fun hobbies and so forth. Every day is Saturday. We read articles saying you need X millions to retire...you don’t. Most people retire with much less yet have a great time. As you get older infirmities or illness can interfere with your ability to enjoy life together. Every day is a blessing. If you want to experience something, do it. Don’t put it off. I’ve never seen a hearse with a trailer hitch.
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