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$2M is about $80-$100k a year in income, or about $70k a year tax-free, without even touching the $2m principal. That basically puts you in the top 20% of households in the US in terms of income and you don't even have to work. Having $2m to invest actually puts you in the top 1%.
That's if you put the $2M in an account and don't touch it and invest the entire $2M --- and investing is not a guaranteed return of 80-100K yearly. I don't know what the interest rate would be on $2M in a bank account but would it generate that much interest? If so, then you could live comfortably off that interest in a middle class suburb.
Most people are not going to do that, though. They're going to purchase a home or pay off their current home. They're going to go on dream vacations. They're going to buy new car(s) and new clothing. They're going to do things for their children/grandchildren (buy homes, college tuitions, pay off debt, trust funds, etc etc etc)
After all that, how much of the $2M do you think is left? Not much but probably enough to bank, inveest, and put some in a retirement fund.
I'm in my early 50s and 2 million after taxes wouldn't be enough for me to retire on, because 1) I'd like to share with siblings, and 2) in retirement I want to travel more.
To be honest I'd have to think about whether it's worth retiring if I'd have to watch my spending MORE than I do now. One plus of retirement for is doing things I want to do that I can't do now. To retire and still not be able to do them...I might as well bank what's left of the 2 million, and SPEED UP the day I can retire and live like I really want to.
Maybe disperse/use 500-thousand (pay off my mortgage, and share with siblings) -- bank 1.5 million, work another 5-7 years with no mortgage, then retire (I'd have a reduced pension and reduced SS retiring early). Or bank the entire 2 mill let it grow and disperse money out of the growth (not all of it obviously). Decide on which plan is better to speed my retirement day, yet allow me to share.
For me, I'd say 4-5 mill AFTER TAXES would be what I'd need to retire immediately.
I'm in my early 50s and 2 million after taxes wouldn't be enough for me to retire on, because 1) I'd like to share with siblings, and 2) in retirement I want to travel more.
To be honest I'd have to think about whether it's worth retiring if I'd have to watch my spending MORE than I do now. One plus of retirement for is doing things I want to do that I can't do now. To retire and still not be able to do them...I might as well bank what's left of the 2 million, and SPEED UP the day I can retire and live like I really want to.
Maybe disperse/use 500-thousand (pay off my mortgage, and share with siblings) -- bank 1.5 million, work another 5-7 years with no mortgage, then retire (I'd have a reduced pension and reduced SS retiring early). Or bank the entire 2 mill let it grow and disperse money out of the growth (not all of it obviously). Decide on which plan is better to speed my retirement day, yet allow me to share.
For me, I'd say 4-5 mill AFTER TAXES would be what I'd need to retire immediately.
If I was in my early 50's and a $2 million lottery would still not allow me to retire early, I would feel that I was not in financial shape to share my winnings with my siblings.
For me, I'd say 4-5 mill AFTER TAXES would be what I'd need to retire immediately.
If you retired tomorrow with you in your 50's, your looking at another 30 years of life left, with 5 million dollars, even without earning any return on your money, you could spend 166k a year before you run out of money. I think you could retire with as little as 2 million dollars and get by fine. With 2 million dollars, you could spend 66k a year, even with a lousy 1% CD saving account return on your money, it would last you 30 years. Of course a higher return on your investments, your money would last a lot longer.
Also remember social security, I'm sure it will continue to exist in one form or another, the benefits may be reduced becuase more people would be taking out of the system then putting in, but it will be something.
If I was in my early 50's and a $2 million lottery would still not allow me to retire early, I would feel that I was not in financial shape to share my winnings with my siblings.
I don't see those two things as having anything to do with each other. I'd rather share and keep working than retire and not share.
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With 2 million dollars, you could spend 66k a year, even with a lousy 1% CD saving account return on your money,
Let's just say I'd have to do the math. Am I paying off my mortgage out of the 2 mill, or investing the entire 2 mill, and continuing to pay a mortgage?
Don't forget being retired I'd want to take 2 to three 5-thousand dollar trips a year at least. If winning the lottery doesn't get me that, I'd rather share a little bit and keep working, let most of the money grow, and delay a few years until I get a retirement that allows the level of living I want.
He reportedly is paying everyone's rent in the neighborhood for one or two months. While generous, He needs planning both financially and to adjust to the fact life is going to change completely. A letter among the piled up ones at the house had a note saying "let me help you." People are going to come out of the woodwork looking for cash from him. The man is under plenty of stress despite the good fortune.
How come large winners like this cannot remain anonymous? Do they have to go all over the national media? If I won and had to believe me I am wearing a ski mask.....
$2M is about $80-$100k a year in income, or about $70k a year tax-free, without even touching the $2m principal. That basically puts you in the top 20% of households in the US in terms of income and you don't even have to work. Having $2m to invest actually puts you in the top 1%.
Probably closer to $60k/year before tax if invested in a 'moderately conservative' portfolio. But your point is well made
It isn't how much money you have that matters it is what you do with it. By the time this guy has taken the cash option and paid taxes he will have about 35% of the headline figure left or around $130 million. Let us make the assumption that he blows $30 million of family, friends, toys, etc. He still has $100 million left. That should buy him $3 million a year and protect his capital against market swings and inflation.
A letter among the piled up ones at the house had a note saying "let me help you." People are going to come out of the woodwork looking for cash from him. The man is under plenty of stress despite the good fortune.
I wish I would hit lottery for million, first thing I do is out in a wood burning stove and heat my house with all the letters from people begging me for money.
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Originally Posted by D. Scott
How come large winners like this cannot remain anonymous?
It's done this way in most states to prove there is actually a winner. Otherwise people could claim that the government is pocketing the lottery money claiming the winner wants to remain anonymous.
Most people are not, he's also at a disadvantage because he don't speak English, most repeatable investment firms don't cater to non-English speaking Americans. Chances are he'll get hook up with a friend of a friend investment adviser that will bleed him dry over the next ten years.
Personally I could do it, without the so called experts to help me. I'd Re-activate my Etrade account, get a subscription to the Motley Fool and invest accordingly.
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