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I keep hearing about rich people. At 65 years old, what constitutes being rich?
Depends on where you live. Live in a big city and $500,000 saved, you aren't "rich". Live in the middle of nowhere in a state like PA or OH and you are pretty rich, so long as you are debt free. Location, location, location. It is amazing what you can live on in tiny towns in PA. You can buy a nice home for $30K.
Well, I can imagine them and have seen them, but I always say “Too bad I would not want to live here” or something to that effect. But if I was not married, I would live in a more remote and less expensive location for sure.
I don’t wish to be one of those "people" but I cannot imagine a "nice" home anywhere today in America for anything close to $30,000...
Like someone else it all depends on where you live. We bought an old farm house with just under two acres for $55K. The house is a fixer upper we are 45 mins from Asheville, NC a place where many want to live. 20 mins from Lake Lure where Dirty Dancing was filmed. An Hr from Charlotte , NC and an Hr from Greenville, Sc. Three good sized cities to go to if you want too, two smaller town with enough shopping and restaurants and more to do then one would expect. This is a 1940's farm house 950Sf and it's more then enough for us. On the up side we plan to rent it and buy a tiny home to sit back behind this one on the bigger piece of land and use the money to pay it off. After it's paid off it's extra income for us.
We could more than likely retire at age 65. I just don't think that retirement fits my lifestyle. I love what I do and have five weeks of vacation each year. I seldom use that time. My wife on the other hand will retire a lot earlier. For me to say I want to work till age 83 is a goal of having completed 50 years of service at the hospital where I work. We had a couple people hit the 50 years of service mark and I thought that was so cool. We have three more coming up on that length of service.
You never know. In 15 years I might not feel like that. We will be close to our goal in 15 years so maybe my wife talks me out of working. I will let everyone know.
Excellent post. I envy your enjoyment of work. My work situation has deteriorated in the last year (not just me, everyone feels that way) so I'm pretty much counting down to retirement and I'm in my late 40's. Fortunately I've saved like crazy and live simply so I'm going to skip on out of there in 7 years at MOST.
If you have a good sized pension how do you consider that in your net worth? If it is worth 1M in the next 15 years, and you are young, that is a huge amount.
I asked the same question recently.
Upon further recollection, you have to consider it in two different schemes.
You need:
Retirement (I) = Income
and
Retirement (H) = What you leave to your family etc.
With regards to steady retirement income you would need to present value the pension based upon expected lifetime collection, plus any residual for spousal survivor benefit and any other twists.
Should be able to find a calculator on-line that does this for you. (I've seen several).
For example: a 50k pension where you are expected to live another 20 years on average is going to be worth roughly 750k in tersm of 'net worth". But this is meaningless as we really need to focus on income flows.
For example, if we both have 2mil in total assets and mine is cash under a bed and yours is stocks and whatnot...then every time I spend $1 it's coming out of capital while you might be generating 100k a year without touching the 2mil base.
Nothing rich about what I have and I've learned to live on what I have left. My generally good health makes me very rich. I had a tough year and hope I'll never see that again. Now to keep it that way. Prevention is what I work on.
Last edited by jaminhealth; 12-14-2017 at 01:47 PM..
At 50 we are looking at another 30 years (hopefully) with a pension over 50K, plus a reasonable chunk of 401(k), at least 3 other retirement checks, and SS. All of that disappears if we both pass, otherwise I take half the big pension, and still keep the others. When we move the equity will just about purchase the new home. So we figured if we die, equity to the kids, and I left my 401(k) to my sis.
Otherwise, we are just going to have fun!!
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I don’t wish to be one of those "people" but I cannot imagine a "nice" home anywhere today in America for anything close to $30,000...
That's a little town that has NOT grown and this is probably true. We sold my folks family home in 2005 and got $60K, and I look on real estate sites and see it's appriaised at about $90K now.
If you plan to work to age 80 or 83....or switch it to 75 instead....
why would you need $3 million or $5 million for such a relatively short life span left to live?
Don't forget philanthropy. For example, We've funded 2 full-ride 4-year scholarships at our respective undergrad alma maters this year. In years past we've endowed professorships, and participated in major capital fundraising campaigns on campus (new science center, etc).
Then, of course, there have been funds donated to help fund a new wing at a local non-profit hospital.
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