Do you really need 2.5 million to retire well?

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Caligal
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Re: Do you really need 2.5 million to retire well?

Post by Caligal »

Nova1967 -

There were 14000000 (14 million) people aged 65-69 in the US according to the 2012 census. The net worth percentile rank you posted was for age 65 - 70. 10% would be 1.4 million or less than .005 of the entire US population at that time. Quite believable. Someone has to keep all of the advisors busy. :happy
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Re: Do you really need 2.5 million to retire well?

Post by Trader/Investor »

Nova1967 wrote:
bradshaw1965 wrote:
Nova1967 wrote:2.5 million in retirement, your talking less than 2% of the U.S population.
I was a little surprised but at retirement age it looks like it barely cracks the 90th percentile

Net Worth Percentile Rank : A net worth of $2,500,000.00 for ages 65 to 70 ranks at the 90.72%
Median Net Worth : $255,500.00
Mean Net Worth : $1,079,674.00
Net Worth 25th - 75th Percentile Ranges : $78,800.00-$713,600.00
http://www.shnugi.com/networth-percenti ... th=2500000
I don't buy it, No way does 10% of the retired population over 65 have over 2.5M in investment assets. Maybe in wealthy enclaves like Hilsborough, Ca, Greenwich CT or Beverly Hills but not among the entire US population. Closer to 1 million in investment assets might be believable,
He is talking about net worth NOT investable assets. 5% of U.S. households have investable assets of only $1,000.000. So I can only imagine how much fewer have investable assets of 2.5 million

http://www.zerohedge.com/news/2014-01-1 ... e-they-are
spammagnet
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Re: Do you really need 2.5 million to retire well?

Post by spammagnet »

Lieutenant.Columbo wrote:
saladdin wrote:Median household income for my county is 32k and I see happy people all the time. 50k a year is living like a king.

Anyone arguing that 2.5m is needed for a joyful retirement has lost grasp of reality.
what country do you live in?
I'd guess the US. Did you misread county as country?
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Lieutenant.Columbo
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Re: Do you really need 2.5 million to retire well?

Post by Lieutenant.Columbo »

spammagnet wrote:
Lieutenant.Columbo wrote:
saladdin wrote:Median household income for my county is 32k...
what country do you live in?
I'd guess the US. Did you misread county as country?
:oops: I did misread it!
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!
BlueCable
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Re: Do you really need 2.5 million to retire well?

Post by BlueCable »

The Article wrote: Investors surveyed by the global investment management firm said they will require an average of $2.5 million in retirement to enjoy the quality of life they have today.
If I define "retiring well" to mean "quality of life that I have today" as the article suggests, I think I'd need $60,000 in income, so $1.5M. Expenses today are closer to $50k including mortgage, but I'd need a bit of a buffer so I won't have to worry during retirement. Worrying does not imply retiring well. I think retiring no later than early 60s would be required for "retiring well."

With two social security benefits, we could cut that number at least in half to $750k. Being a millennial, I'm not planning to have SS benefits at this time. It seems likely that we'll get about 70% of the present benefit, but I'm not including that into my plan until I reach retirement age and have some certainty around it. A larger than expected SS benefit will mean either earlier retirement or more luxurious lifestyle.

I actually expect to have much higher quality of life in retirement than my working years. How much quality can I wring out of an extra 40 hours of life each week? Seems like a lot. Otherwise, wouldn't we all keep working until we are thrown out the door? The truth is, I'd probably have an equivalent quality of life on $40k income in retirement, even if I needed to cut back on some of the luxuries I enjoy now. We'd do more road/camping trips instead of our current "fly somewhere for a long weekend" vacations.
flyingaway
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Re: Do you really need 2.5 million to retire well?

Post by flyingaway »

If you have a cancer and there is a potential treatment in a different place, say Mayo Clinic, that your insurance does not cover. Do you want to go to get the treatment on your own? I think that is the time you wish you had at least $2.5MM in your portfolio.
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VictoriaF
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Re: Do you really need 2.5 million to retire well?

Post by VictoriaF »

flyingaway wrote:If you have a cancer and there is a potential treatment in a different place, say Mayo Clinic, that your insurance does not cover. Do you want to go to get the treatment on your own? I think that is the time you wish you had at least $2.5MM in your portfolio.
It's a great point, and I'd like to add to it. Even if Medicare covers Mayo Clinic, there will be treatments NOT covered by any insurance. These could be experimental genetic treatments, possibly provided outside the U.S. Thus, having extra assets can make a qualitative difference in one's quality of life, and a quantitative difference in the length of life.

Victoria
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jabberwockOG
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Re: Do you really need 2.5 million to retire well?

Post by jabberwockOG »

You likely need 2.5M or more if accumulating expensive possessions and toys, residing in an expensive city, new cars, high end dining, CC memberships, expensive travel is what you feel is required to live "well" ....that stuff can be great fun, but at this point it has little draw for us...been there done that.


With paid off home and cars, and zero debt we retired at 60 yo with significantly less than 2.5M and live very comfortably in a small town in a amazingly beautiful but relatively LCOL area. Our lives are filled to capacity with sunrise and sunset walks, inexpensive travel to visit family and friends, playing music, daily workouts and exercise class, lifelong learning center art and music classes, books from the wonderful local library, cooking great meals at home, casual entertaining.
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Re: Do you really need 2.5 million to retire well?

Post by Trader/Investor »

jabberwock wrote:You likely need 2.5M or more if accumulating expensive possessions and toys, residing in an expensive city, new cars, high end dining, CC memberships, expensive travel is what you feel is required to live "well" ....that stuff can be great fun, but at this point it has little draw for us...been there done that.


With paid off home and cars, and zero debt we retired at 60 yo with significantly less than 2.5M and live very comfortably in a small town in a amazingly beautiful but relatively LCOL area. Our lives are filled to capacity with sunrise and sunset walks, inexpensive travel to visit family and friends, playing music, daily workouts and exercise class, lifelong learning center art and music classes, books from the wonderful local library, cooking great meals at home, casual entertaining.
Nice post!!
EnjoyIt
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Re: Do you really need 2.5 million to retire well?

Post by EnjoyIt »

jabberwock wrote:You likely need 2.5M or more if accumulating expensive possessions and toys, residing in an expensive city, new cars, high end dining, CC memberships, expensive travel is what you feel is required to live "well" ....that stuff can be great fun, but at this point it has little draw for us...been there done that.


With paid off home and cars, and zero debt we retired at 60 yo with significantly less than 2.5M and live very comfortably in a small town in a amazingly beautiful but relatively LCOL area. Our lives are filled to capacity with sunrise and sunset walks, inexpensive travel to visit family and friends, playing music, daily workouts and exercise class, lifelong learning center art and music classes, books from the wonderful local library, cooking great meals at home, casual entertaining.
Sounds like my kind of life. I want to be in your shows one day.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
B0bL0blawsLawBl0g
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Re: Do you really need 2.5 million to retire well?

Post by B0bL0blawsLawBl0g »

EnjoyIt wrote:
jabberwock wrote:You likely need 2.5M or more if accumulating expensive possessions and toys, residing in an expensive city, new cars, high end dining, CC memberships, expensive travel is what you feel is required to live "well" ....that stuff can be great fun, but at this point it has little draw for us...been there done that.


With paid off home and cars, and zero debt we retired at 60 yo with significantly less than 2.5M and live very comfortably in a small town in a amazingly beautiful but relatively LCOL area. Our lives are filled to capacity with sunrise and sunset walks, inexpensive travel to visit family and friends, playing music, daily workouts and exercise class, lifelong learning center art and music classes, books from the wonderful local library, cooking great meals at home, casual entertaining.
Sounds like my kind of life. I want to be in your shows one day.
Same here. Nice post jabberwock!
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telemark
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Re: Do you really need 2.5 million to retire well?

Post by telemark »

VictoriaF wrote:
flyingaway wrote:If you have a cancer and there is a potential treatment in a different place, say Mayo Clinic, that your insurance does not cover. Do you want to go to get the treatment on your own? I think that is the time you wish you had at least $2.5MM in your portfolio.
It's a great point, and I'd like to add to it. Even if Medicare covers Mayo Clinic, there will be treatments NOT covered by any insurance. These could be experimental genetic treatments, possibly provided outside the U.S. Thus, having extra assets can make a qualitative difference in one's quality of life, and a quantitative difference in the length of life.

Victoria
I should probably shoot for $5MM then. Because what if it happens twice?
protagonist
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Re: Do you really need 2.5 million to retire well?

Post by protagonist »

flyingaway wrote:If you have a cancer and there is a potential treatment in a different place, say Mayo Clinic, that your insurance does not cover. Do you want to go to get the treatment on your own? I think that is the time you wish you had at least $2.5MM in your portfolio.
And what if you only have $2M, and you want to retire, but you feel uncomfortable retiring without the extra $500K just in case you get cancer and need some expensive treatment at Mayo Clinic in the future....

So you decide to work hard and save another year, or 3 years, or five, or ten, and during that time you have a heart attack or get a run-of-the-mill cancer and die with $2.4M in the bank instead? You almost made it to retirement!!! You almost won the bet, but you played double or nothing and lost.

I had a life-threatening event a year ago that came out of the blue at age 63. I retired at 55. I could have easily died last year, despite the fact that I had literally no risk factors and a very healthy lifestyle. I felt like I was 35 and was fairly convinced I would make to at least 90.

It made me re-evaluate (or I should say reinforce and make painfully real) my whole view of risk. Life is a gamble, no matter how you play it. Would you rather risk dying, sitting on top of a pile of toys that you spent most of your life working hard to enjoy and never get to enjoy them? Or would you rather continue to work hard to cover every possible contingency, like coming down with some rare disease that will cost you your life savings to treat with unknown results (or the market crashing, or whatever is your greatest fear regarding money)?

I guess ultimately that is up to you.

Either way, the world is a stage and we are but players.
Last edited by protagonist on Mon Sep 19, 2016 8:18 pm, edited 1 time in total.
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telemark
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Re: Do you really need 2.5 million to retire well?

Post by telemark »

protagonist wrote:
telemark wrote:...
Just to be clear, flyingaway wrote that, not me.

And what if you only have $2M, and you want to retire, but you feel uncomfortable retiring without the extra $500K just in case you get cancer and need some expensive treatment at Mayo Clinic in the future....

So you decide to work hard and save another year, or 3 years, or five, or ten, and during that time you have a heart attack or get a run-of-the-mill cancer and die with $2.4M in the bank instead? You almost made it to retirement!!! You almost won the bet, but you played double or nothing and lost.

I had a life-threatening event a year ago that came out of the blue at age 63. I retired at 55. I could have easily died last year, despite the fact that I had literally no risk factors and a very healthy lifestyle. I felt like I was 35 and was fairly convinced I would make to at least 90.

It made me re-evaluate (or I should say reinforce and make painfully real) my whole view of risk. Life is a gamble, no matter how you play it. Would you rather risk dying, sitting on top of a pile of toys that you spent most of your life working hard to enjoy and never get to enjoy them? Or would you rather continue to work hard to cover every possible contingency, like coming down with some rare disease that will cost you your life savings to treat with unknown results (or the market crashing, or whatever is your greatest fear regarding money)?

I guess ultimately that is up to you.

Either way, the world is a stage and we are but players.
That's my take on it, too. Memento mori.
stoptothink
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Re: Do you really need 2.5 million to retire well?

Post by stoptothink »

protagonist wrote: Life is a gamble, no matter how you play it. Would you rather risk dying, sitting on top of a pile of toys that you spent most of your life working hard to enjoy and never get to enjoy them? Or would you rather continue to work hard to cover every possible contingency, like coming down with some rare disease that will cost you your life savings to treat with unknown results (or the market crashing, or whatever is your greatest fear regarding money)?
This. We'll likely retire very early (aiming for 50, in 15yrs). With currently ~$40k in annual household expenditures, including mortgage and childcare which will be gone within the next few years, I think we'll "retire well" based on our standards even with significantly less than $2.5M.
protagonist
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Re: Do you really need 2.5 million to retire well?

Post by protagonist »

telemark wrote:
protagonist wrote:
telemark wrote:...
Just to be clear, flyingaway wrote that, not me.

And what if you only have $2M, and you want to retire, but you feel uncomfortable retiring without the extra $500K just in case you get cancer and need some expensive treatment at Mayo Clinic in the future....

So you decide to work hard and save another year, or 3 years, or five, or ten, and during that time you have a heart attack or get a run-of-the-mill cancer and die with $2.4M in the bank instead? You almost made it to retirement!!! You almost won the bet, but you played double or nothing and lost.

I had a life-threatening event a year ago that came out of the blue at age 63. I retired at 55. I could have easily died last year, despite the fact that I had literally no risk factors and a very healthy lifestyle. I felt like I was 35 and was fairly convinced I would make to at least 90.

It made me re-evaluate (or I should say reinforce and make painfully real) my whole view of risk. Life is a gamble, no matter how you play it. Would you rather risk dying, sitting on top of a pile of toys that you spent most of your life working hard to enjoy and never get to enjoy them? Or would you rather continue to work hard to cover every possible contingency, like coming down with some rare disease that will cost you your life savings to treat with unknown results (or the market crashing, or whatever is your greatest fear regarding money)?

I guess ultimately that is up to you.

Either way, the world is a stage and we are but players.
That's my take on it, too. Memento mori.
My apologies, tele.... I corrected it.
flyingaway
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Re: Do you really need 2.5 million to retire well?

Post by flyingaway »

protagonist wrote:
telemark wrote:If you have a cancer and there is a potential treatment in a different place, say Mayo Clinic, that your insurance does not cover. Do you want to go to get the treatment on your own? I think that is the time you wish you had at least $2.5MM in your portfolio.
And what if you only have $2M, and you want to retire, but you feel uncomfortable retiring without the extra $500K just in case you get cancer and need some expensive treatment at Mayo Clinic in the future....

So you decide to work hard and save another year, or 3 years, or five, or ten, and during that time you have a heart attack or get a run-of-the-mill cancer and die with $2.4M in the bank instead? You almost made it to retirement!!! You almost won the bet, but you played double or nothing and lost.

I had a life-threatening event a year ago that came out of the blue at age 63. I retired at 55. I could have easily died last year, despite the fact that I had literally no risk factors and a very healthy lifestyle. I felt like I was 35 and was fairly convinced I would make to at least 90.

It made me re-evaluate (or I should say reinforce and make painfully real) my whole view of risk. Life is a gamble, no matter how you play it. Would you rather risk dying, sitting on top of a pile of toys that you spent most of your life working hard to enjoy and never get to enjoy them? Or would you rather continue to work hard to cover every possible contingency, like coming down with some rare disease that will cost you your life savings to treat with unknown results (or the market crashing, or whatever is your greatest fear regarding money)?

I guess ultimately that is up to you.

Either way, the world is a stage and we are but players.
To be fair, I (we) just need $1.5MM to retire. But the thread title is "to retire well". I think $2.5MM is not unreasonable for a family of two professionals to retire. (I considered myself semi-retired at around 45 when we had less than $1.0MM). "Do you really need ..." Different people have different needs.
protagonist
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Re: Do you really need 2.5 million to retire well?

Post by protagonist »

flyingaway wrote:
To be fair, I (we) just need $1.5MM to retire. But the thread title is "to retire well". I think $2.5MM is not unreasonable for a family of two professionals to retire. (I considered myself semi-retired at around 45 when we had less than $1.0MM). "Do you really need ..." Different people have different needs.
I humbly disagree. "Needs" implies survival, and as humans we all have nearly the same needs. Different people have different thresholds for material happiness, or I should say, satisfaction. Those thresholds would be vastly different if born into different cultures, or even subcultures. I do believe that, through exposure to other lifestyles and with open minds, and as realities change for them (often beyond their control), many people can adjust their thresholds and be happy under a new set of rules. Mental flexibility is, IMHO, a big part of the "happiness puzzle". Much more than any number.
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VictoriaF
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Re: Do you really need 2.5 million to retire well?

Post by VictoriaF »

protagonist wrote:
flyingaway wrote:
To be fair, I (we) just need $1.5MM to retire. But the thread title is "to retire well". I think $2.5MM is not unreasonable for a family of two professionals to retire. (I considered myself semi-retired at around 45 when we had less than $1.0MM). "Do you really need ..." Different people have different needs.
I humbly disagree. "Needs" implies survival, and as humans we all have nearly the same needs. Different people have different thresholds for material happiness, or I should say, satisfaction. Those thresholds would be vastly different if born into different cultures, or even subcultures. I do believe that, through exposure to other lifestyles and with open minds, and as realities change for them (often beyond their control), many people can adjust their thresholds and be happy under a new set of rules. Mental flexibility is, IMHO, a big part of the "happiness puzzle". Much more than any number.
flyingaway's earlier example of a cancer and Mayo clinic is a survival need, literally. The question is not whether to have a financial safety margin for potential health needs but how to estimate this margin. telemark's loaded question
telemark wrote:I should probably shoot for $5MM then. Because what if it happens twice?
is well taken. $2.5m may be too much; $5m may not be enough; who knows?

I don't have a formula, and in my own planning I chose a middle ground. I have retired after I became eligible for a good medical insurance and had a financial margin for medical emergencies. If I worked longer, I could have built a greater margin. But I wanted to be free to pursue my interests. It was a right decision for me, and even if I end up needing a treatment that I will not be able to afford, I will not regret my decision to retire when I did. But other people may want to have a greater safety margin: $2.5m, $5m, $25m, or whatever feels right to them.

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
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VictoriaF
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Re: Do you really need 2.5 million to retire well?

Post by VictoriaF »

protagonist wrote:I had a life-threatening event a year ago that came out of the blue at age 63. I retired at 55. I could have easily died last year, despite the fact that I had literally no risk factors and a very healthy lifestyle. I felt like I was 35 and was fairly convinced I would make to at least 90.

It made me re-evaluate (or I should say reinforce and make painfully real) my whole view of risk. Life is a gamble, no matter how you play it. Would you rather risk dying, sitting on top of a pile of toys that you spent most of your life working hard to enjoy and never get to enjoy them? Or would you rather continue to work hard to cover every possible contingency, like coming down with some rare disease that will cost you your life savings to treat with unknown results (or the market crashing, or whatever is your greatest fear regarding money)?

I guess ultimately that is up to you.

Either way, the world is a stage and we are but players.
Hi Protagonist,

I hope you have completely recovered from the life-threatening event and are back to feeling 35. Your point about retiring while you can still be active and enjoy your life is well taken, and is very similar to my own attitude. Like you, I know intellectually that anything can happen at any moment. But I don't think I have internalized this knowledge, I don't truly madly deeply believe that it can happen to me.

And so my question is not whether to pursue one more million at the expense of a fulfilling life, I have already made that choice. My question is how to live in retirement enjoying everything that comes my way, while being aware that it may end abruptly. Now that your emergency is over, what are you doing differently? What should you have done differently during the initial eight years of your retirement?

Thank you,
Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
flyingaway
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Re: Do you really need 2.5 million to retire well?

Post by flyingaway »

For many people, retirement is a one-way ticket. It is impossible to get back to the original positions with similar compensations once retired. True, one's life may suddenly end with an accident or disease. But a retirement of around 40 years in the future is also unpredictable. Think about what has happened in the world in the past 20 years.

Maybe I can compare having more money with delaying social security claim. Why do people delay claiming social security until 70 if they might end up dead before 70?
dbr
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Re: Do you really need 2.5 million to retire well?

Post by dbr »

flyingaway wrote:
Maybe I can compare having more money with delaying social security claim. Why do people delay claiming social security until 70 if they might end up dead before 70?
They do this because it is more likely by a longshot they will not end up dead before 70 than that they will.

You can explore the data yourself to see whether or not a 62 year old person is more likely to live past 90 than to die before 70. I don't actually know the answer to that, but I think you would get the idea. Change it to 85 or 80 or whatever.
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Re: Do you really need 2.5 million to retire well?

Post by flyingaway »

dbr wrote:
flyingaway wrote:
Maybe I can compare having more money with delaying social security claim. Why do people delay claiming social security until 70 if they might end up dead before 70?
They do this because it is more likely by a longshot they will not end up dead before 70 than that they will.

You can explore the data yourself to see whether or not a 62 year old person is more likely to live past 90 than to die before 70. I don't actually know the answer to that, but I think you would get the idea. Change it to 85 or 80 or whatever.
I know the reason(s) why people delay claiming social security, I just want to imply that having a bigger size portfolio (by working one more year) has a similar effect (insurance). With a larger portfolio as longevity insurance, if I fail, at least my children can benefit.
Workinghard
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Re: Do you really need 2.5 million to retire well?

Post by Workinghard »

flyingaway wrote:For many people, retirement is a one-way ticket. It is impossible to get back to the original positions with similar compensations once retired. True, one's life may suddenly end with an accident or disease. But a retirement of around 40 years in the future is also unpredictable. Think about what has happened in the world in the past 20 years.

Maybe I can compare having more money with delaying social security claim. Why do people delay claiming social security until 70 if they might end up dead before 70?
In our case, and the reason most people do, is based on survivor benefits. The older spouse and higher wage earner and higher health risk person (hubs in our case) will statistically die before I do. Thus based on the "couple strategy" it's better for him (and subsequently me) to delay.
dbr
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Re: Do you really need 2.5 million to retire well?

Post by dbr »

flyingaway wrote:
dbr wrote:
flyingaway wrote:
Maybe I can compare having more money with delaying social security claim. Why do people delay claiming social security until 70 if they might end up dead before 70?
They do this because it is more likely by a longshot they will not end up dead before 70 than that they will.

You can explore the data yourself to see whether or not a 62 year old person is more likely to live past 90 than to die before 70. I don't actually know the answer to that, but I think you would get the idea. Change it to 85 or 80 or whatever.
I know the reason(s) why people delay claiming social security, I just want to imply that having a bigger size portfolio (by working one more year) has a similar effect (insurance). With a larger portfolio as longevity insurance, if I fail, at least my children can benefit.
OK, that is a point. The consideration that I would apply there is that working longer has a cost. For some people that cost might be very high in time lost being able to not work. This is a certain cost that can be chosen upfront. For other people working is what they would choose anyway. Delaying SS does not have a cost. If a person wants to take the gamble that they are going to die young and they want to spend all their money now, that can be done SS or not. Such a person would also retire early. These things are also conditioned on the situation of the individual. There are certainly people who can hardly afford to live without taking SS when they can. Delaying SS is a luxury available to those who do not have to sacrifice present spending in the interest of optimizing overall outcome. Retiring earlier is also a luxury available to those who have saved more effectively or who are satisfied to retire on less.
rgs92
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Re: Do you really need 2.5 million to retire well?

Post by rgs92 »

Thanks for that post protagonist; that was very thought provoking and shook me up a little and made me stop and think. I hope you are well.
RoadHouseFan
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Re: Do you really need 2.5 million to retire well?

Post by RoadHouseFan »

$2.5 million? No one needs that much.
fblade007
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Re: Do you really need 2.5 million to retire well?

Post by fblade007 »

flyingbison wrote:I will never have close to a million, let alone 2.5. In fact, I'll be lucky to hit the 500K mark by the time I retire.
You make it sounds like that's not an achievement? I believe that's a great achievement and better then most of the people our there, you should be proud.
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Re: Do you really need 2.5 million to retire well?

Post by flyingaway »

If I had $40K pension, my wife had $40K pension; if I also had $35K social security, and my wife had $35K social security, I would not need $2.5MM.
stoptothink
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Re: Do you really need 2.5 million to retire well?

Post by stoptothink »

flyingaway wrote:If I had $40K pension, my wife had $40K pension; if I also had $35K social security, and my wife had $35K social security, I would not need $2.5MM.
The pensions alone would provide a significant step up in quality of life and financial security over the vast majority of current retirees. Factor in the social security, and most in this country would consider you quite wealthy even if you had $0 in retirement. Based upon our current spending habits, I am pretty confident my wife and I could live well (by our standards) on social security alone in retirement. We certainly are not planning to do that, but I'm not going to feel poor if we don't hit $2.5m by retirement age (which, we very likely will well before). Another one of those threads you'll only see on Bogleheads.
MathWizard
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Re: Do you really need 2.5 million to retire well?

Post by MathWizard »

dbr wrote:
flyingaway wrote:
Maybe I can compare having more money with delaying social security claim. Why do people delay claiming social security until 70 if they might end up dead before 70?
They do this because it is more likely by a longshot they will not end up dead before 70 than that they will.

You can explore the data yourself to see whether or not a 62 year old person is more likely to live past 90 than to die before 70. I don't actually know the answer to that, but I think you would get the idea. Change it to 85 or 80 or whatever.

In case anyone is interested in exploring the data, they can use the SSA Mortality tables:

https://www.ssa.gov/oact/STATS/table4c6.html

On average, of 100,000 males born,
84,125 are still alive at age 62, 73,461 are alive at 70, and 17,735 are alive at age 90.

So the probability of a 62 year old male living to 70 is

73,461 out of 84,125 or about 87%

So the probability of a 62 year old male living to 90 is
17,735 out of 84,125 or about 21%
wrongfunds
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Re: Do you really need 2.5 million to retire well?

Post by wrongfunds »

If Mayo Clinic treatment costs $2M, you are at age 85 and your total assets are $2M, what would you do? What if the experimental treatment only costs $1.5M? Would you pay $1.5M and then try to survive on the left over $500K of assets?

Please do not say the treatment should not cost $1.5M Somewhere along the line, if you have to decide upon your life or your money, what other factors would you consider?

Frankly bringing these type of extra-ordinary cases in to this discussion seems rather specious.
flyingaway
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Re: Do you really need 2.5 million to retire well?

Post by flyingaway »

wrongfunds wrote:If Mayo Clinic treatment costs $2M, you are at age 85 and your total assets are $2M, what would you do? What if the experimental treatment only costs $1.5M? Would you pay $1.5M and then try to survive on the left over $500K of assets?

Please do not say the treatment should not cost $1.5M Somewhere along the line, if you have to decide upon your life or your money, what other factors would you consider?

Frankly bringing these type of extra-ordinary cases in to this discussion seems rather specious.
I was just using that example to show that a nice cushion and contingency in one's portfolio may be worth an extra year of working.
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Lieutenant.Columbo
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Re: Do you really need 2.5 million to retire well?

Post by Lieutenant.Columbo »

wrongfunds wrote:If Mayo Clinic treatment costs $2M, you are at age 85 and your total assets are $2M, what would you do? What if the experimental treatment only costs $1.5M? Would you pay $1.5M and then try to survive on the left over $500K of assets?

Please do not say the treatment should not cost $1.5M Somewhere along the line, if you have to decide upon your life or your money, what other factors would you consider?

Frankly bringing these type of extra-ordinary cases in to this discussion seems rather specious.
what if you retire early, then you reach age 85 with still $2.5M, enough to still live on Earth till age 120, and by when you're 85 the Science of longevity has found out that we could live healthy lives up to age 250 in Mars, and you want to move to Mars, and the trip costs $3.5M, so you can't move to Mars...
Will you regret having retired early? :wink: :oops:

specious too..
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bhsince87
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Re: Do you really need 2.5 million to retire well?

Post by bhsince87 »

Hmmm. I just realized that in the year and half since this thread first started, my wife and I have passed into the $2.5 million club.

And we're both still working.
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randomguy
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Re: Do you really need 2.5 million to retire well?

Post by randomguy »

Lieutenant.Columbo wrote:
wrongfunds wrote:If Mayo Clinic treatment costs $2M, you are at age 85 and your total assets are $2M, what would you do? What if the experimental treatment only costs $1.5M? Would you pay $1.5M and then try to survive on the left over $500K of assets?

Please do not say the treatment should not cost $1.5M Somewhere along the line, if you have to decide upon your life or your money, what other factors would you consider?

Frankly bringing these type of extra-ordinary cases in to this discussion seems rather specious.
what if you retire early, then you reach age 85 with still $2.5M, enough to still live on Earth till age 120, and by when you're 85 the Science of longevity has found out that we could live healthy lives up to age 250 in Mars, and you want to move to Mars, and the trip costs $3.5M, so you can't move to Mars...
Will you regret having retired early? :wink: :oops:

specious too..
Well I am counting on my money doubling in real terms with my 4% SWR so I am hoping I can afford the mars trip.:) Obviously this whole debate is about the definition of well. If have lived up until say 65 on 30k/yr, you obviously don't need 2.5 million to retire well. Been spending 300k/yr up til 65, you probably need a few more bucks. For the upper middle class couple with say 150-200k/yr of income, 2.5 million is a decent guess.
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VictoriaF
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Re: Do you really need 2.5 million to retire well?

Post by VictoriaF »

Lieutenant.Columbo wrote:
wrongfunds wrote:If Mayo Clinic treatment costs $2M, you are at age 85 and your total assets are $2M, what would you do? What if the experimental treatment only costs $1.5M? Would you pay $1.5M and then try to survive on the left over $500K of assets?

Please do not say the treatment should not cost $1.5M Somewhere along the line, if you have to decide upon your life or your money, what other factors would you consider?

Frankly bringing these type of extra-ordinary cases in to this discussion seems rather specious.
what if you retire early, then you reach age 85 with still $2.5M, enough to still live on Earth till age 120, and by when you're 85 the Science of longevity has found out that we could live healthy lives up to age 250 in Mars, and you want to move to Mars, and the trip costs $3.5M, so you can't move to Mars...
Will you regret having retired early? :wink: :oops:

specious too..
Specious is in the eyes of the beholder. There are some known ways to extend one's life and health, and many more currently unknown ways will appear in time to extend our lives. For example, in 1979, Ellen Langer, a Harvard psychologist, took a group of men in their late 70s to early 80s to a New Hampshire retreat, where she has recreated for them the life in 1959. After a week in the retreat the men's vital signs became significantly younger than before the retreat. What if similar retreats appear to provide a rejuvenation service not as a scientific experiment but as a commercial service? Would it be worth the price? How much time (and money) would one be spending in such retreats?

Earlier today on NPR there was an interview with a Microsoft researcher who is treating genetic medicine as an information science problem. I have not caught the name of the researcher, but I am focusing on the principle, not on the details. Today, it's relatively affordable to get your genome synthesized, but you can't do much with it. Tomorrow, it may be possible both to synthesize the DNA and repair it. How much would you pay for that?

Victoria
Last edited by VictoriaF on Tue Sep 20, 2016 1:04 pm, edited 1 time in total.
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protagonist
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Re: Do you really need 2.5 million to retire well?

Post by protagonist »

VictoriaF wrote:
Hi Protagonist,
Hi Victoria.
I hope you have completely recovered from the life-threatening event and are back to feeling 35.
37. I have aged approximately 2 years this past year.
Now that your emergency is over, what are you doing differently?
I am more careful about dietary and exercise discipline. And more cautious about my health. I also am more acutely aware of the value of time and of those that I love.
What should you have done differently during the initial eight years of your retirement?
Nothing major that I can come up with. I've been doing it pretty well.
Thank you,
Victoria
You are welcome,
protagonist
surfhb
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Re: Do you really need 2.5 million to retire well?

Post by surfhb »

schmitz wrote:
surfhb wrote:My spending is at $2000 a month, and thats in Orange County, Calif.

Yeah....most people don't need 2.5M, they only think they do :sharebeer
I also live in Orange County. Would you mind sharing your monthly expenses? I know I can't get mine down to $2000 but maybe I could get close, which would be amazing.

If you rather not share, I totally understand.
$700 - Rent
$200 - Food
$100 - Gas
$1200 - Everything Else

I don't own a home, have kids and drive a 23 year old truck....totally understand that most people wouldn't live my lifestyle. Me and my girlfriend just basically hang at the beach when we're not at work. Pretty boring stuff but we're happy.

Right now I'm concentrating on saving and making up for bad financial choices in my early years.
MI_bogle
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Re: Do you really need 2.5 million to retire well?

Post by MI_bogle »

Obviously a subjective question, what does retire "well" mean? The linked article said the people they surveyed chose that as the number to keep their current standard of living after retirement. It's always worth considering the population surveyed. Pet peeve of mine when news articles don't include link to the survey. I tracked it down though.

Just who did they survey?
"The U.S. portion of the Legg Mason Global Investment Survey was conducted among 458 affluent investors with a minimum of $200,000 in investable assets not including their home"
4% rule of 2.5 million is 100K per year, pre-tax. I don't think it's outrageous that "affluent investors" think they need 2.5 million to retire at their current level of consumption


If they survey had instead asked the question of a representative sample of the US population, I suspect the answer would be much, much lower.
itstoomuch
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Re: Do you really need 2.5 million to retire well?

Post by itstoomuch »

flyingaway wrote:If I had $40K pension, my wife had $40K pension; if I also had $35K social security, and my wife had $35K social security, I would not need $2.5MM.
Each $40k represents approx a nest egg of $1.143 million @ 3.5% wr (withdrawal rate)-ip (initiation point); $1.000 million @4.0 wr-ip; $1.333 million @3.0%wr-ip.

Each $35k (SS) represents approx a nest egg of $1.000million @3.5%wr@ip; $0.875million @4%wr-ip; $1.166million @3%wr-ip.

At a 3% wr-ip, this person would have an equivalent initial nest egg, for life, no remainder to heirs, of $5,000,000. Of this $5million; 47% would be inflation protected (SS) and 100% would be protected against bear Markets. BUT, this plan would lag severely on any future bull markets above the initiation values. OP, would not need $2.5MM because OP has infact 2x required $2.5MM amount to live well.

YMMV
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foreverihope
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Re: Do you really need 2.5 million to retire well?

Post by foreverihope »

surfhb wrote:
schmitz wrote:
surfhb wrote:My spending is at $2000 a month, and thats in Orange County, Calif.

Yeah....most people don't need 2.5M, they only think they do :sharebeer
I also live in Orange County. Would you mind sharing your monthly expenses? I know I can't get mine down to $2000 but maybe I could get close, which would be amazing.

If you rather not share, I totally understand.
$700 - Rent
$200 - Food
$100 - Gas
$1200 - Everything Else

I don't own a home, have kids and drive a 23 year old truck....totally understand that most people wouldn't live my lifestyle. Me and my girlfriend just basically hang at the beach when we're not at work. Pretty boring stuff but we're happy.

Right now I'm concentrating on saving and making up for bad financial choices in my early years.
you are living it right for sure, but when you sell that old rust bucket( love and old one, my old boat made everyone not get close) the insurance will most likely be cheaper for full than one way due to safety improvements.
hoops777
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Re: Do you really need 2.5 million to retire well?

Post by hoops777 »

About 95 pct of couples in America do not have 2.5 million dollars at retirement age.I guess someone thinks only about 5 pct of people can retire WELL.
Like everything else it depends on how you live your life and spend your money.I am also assuming we are not talking net worth,but actual investments and savings that can be spent.
Sometimes I have to say this forum is totally divorced from most of America,which is fine,but I am often a little surprised at some of the numbers I see that people NEED to live well.
Last edited by hoops777 on Tue Sep 20, 2016 6:21 pm, edited 2 times in total.
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LarryAllen
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Re: Do you really need 2.5 million to retire well?

Post by LarryAllen »

surfhb wrote:
schmitz wrote:
surfhb wrote:My spending is at $2000 a month, and thats in Orange County, Calif.

Yeah....most people don't need 2.5M, they only think they do :sharebeer
I also live in Orange County. Would you mind sharing your monthly expenses? I know I can't get mine down to $2000 but maybe I could get close, which would be amazing.

If you rather not share, I totally understand.
$700 - Rent
$200 - Food
$100 - Gas
$1200 - Everything Else

I don't own a home, have kids and drive a 23 year old truck....totally understand that most people wouldn't live my lifestyle. Me and my girlfriend just basically hang at the beach when we're not at work. Pretty boring stuff but we're happy.

Right now I'm concentrating on saving and making up for bad financial choices in my early years.

That's awesome! I am envious. Keep it up!
hawkfan55
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Re: Do you really need 2.5 million to retire well?

Post by hawkfan55 »

If you fill out the Optimal Retirement Planner, https://www.i-orp.com/, it will give you your retirement "Total Plan Value". Most people on this board probably exceed 2.5 M in "Total Plan Value" when taking into account SS, Pensions and Retirement Investment Portfolio. SS and Pensions are valuable. :happy
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Ged
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Re: Do you really need 2.5 million to retire well?

Post by Ged »

2.5 MM ? No you don't need that. My wife and I have income from pensions and SS which will be about 80K when we start taking SS. That's enough to live a dignified retirement in even a HCOL state if your house is paid off.

Our savings are going into things like foreign travel, nicer grade cars and likely a nice bequest for our children.
Rodc
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Re: Do you really need 2.5 million to retire well?

Post by Rodc »

rocko wrote:FYI:
http://www.nbcnews.com/business/consume ... ll-n321466

It seems like a large number for most people. If true, it sure seems like Bogleheads are best equipped to reach - and help others reach - that goal.
If one simply read the article it says "Of course, most people won't need to save $2.5 million to have a comfortable retirement."

Not sure how many pages worth of replies are needed to answer the question: "Do you really need 2.5 million to retire well".
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
Rodc
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Re: Do you really need 2.5 million to retire well?

Post by Rodc »

hawkfan55 wrote:If you fill out the Optimal Retirement Planner, https://www.i-orp.com/, it will give you your retirement "Total Plan Value". Most people on this board probably exceed 2.5 M in "Total Plan Value" when taking into account SS, Pensions and Retirement Investment Portfolio. SS and Pensions are valuable. :happy
Indeed they are.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
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TheTimeLord
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Re: Do you really need 2.5 million to retire well?

Post by TheTimeLord »

Ged wrote:2.5 MM ? No you don't need that. My wife and I have income from pensions and SS which will be about 80K when we start taking SS. That's enough to live a dignified retirement in even a HCOL state if your house is paid off.

Our savings are going into things like foreign travel, nicer grade cars and likely a nice bequest for our children.
Seems like to answer the question fairly across situation you need to assign values to income streams. In your case your income streams roughly equate to somewhere between $2 MM and $2.4 MM.
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hiddensee
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Re: Do you really need 2.5 million to retire well?

Post by hiddensee »

Many couples live well on $48k/year, especially without house payments, so if you adjust your mental state to theirs you need $0 to retire well.
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