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It's been beaten to death but a million in net worth these days barely cracks the top-10% for household net worth. Top-5% is around $1.8 to $1.9 million. A million in net worth with no defined benefit pension split between a house, 401(k)/IRA, and some after-tax savings & investments means you can retire modestly. You can probably survive a few years unemployed without massive pain but it's not like you can stop working.
"The Millionaire Next Door" is a very dated book and doesn't reflect the 2016 reality of income and wealth stratification. It tells a very valuable "spend less than you make" story but that doesn't reflect the composition of the wealthy in 2016 where "millionaire" is merely comfortable, not wealthy by any rational United States definition.
Again, I suggest it's perspective, tell that to a typical middle class drone struggling to pay their bills, raise their kids and educate them, pay for health insurance and save for retirement on $50K- $60K/yr. I'm not going to argue whether or not both your definitions of wealthy are valid, merely how someone with much less perceives it.
It's been beaten to death but a million in net worth these days barely cracks the top-10% for household net worth. Top-5% is around $1.8 to $1.9 million. A million in net worth with no defined benefit pension split between a house, 401(k)/IRA, and some after-tax savings & investments means you can retire modestly. You can probably survive a few years unemployed without massive pain but it's not like you can stop working.
"The Millionaire Next Door" is a very dated book and doesn't reflect the 2016 reality of income and wealth stratification. It tells a very valuable "spend less than you make" story but that doesn't reflect the composition of the wealthy in 2016 where "millionaire" is merely comfortable, not wealthy by any rational United States definition.
I don't see how having more net worth than 90% of your fellow Americans is not a rational definition of wealthy. Or to state it a different way, having 5x as much net worth as a typical retiree.
True - but at the same time, any career public servant with a reasonable pension has the retirement income of a multi-million dollar portfolio. The new 1% are public sector employees with gold-plated pensions & Cadillac health care.
That's quite an exaggeration. Let's take the CalPERS system for example. If you retire at a typical age (say, some time in your 60s) you will get between 60%-80% of your final three years, averaged. Let's say you work until 70 and end your career at $75k/year (we're going with the run-of-the-mill employee rather than the high earner here, as you specified "any career public servant"). You'd get a pension of $60k/year, which based on the 4% withdrawal rule would be equivalent to a $1.5 million portfolio. OK, that's more than a million but not exactly what one thinks of from the term "multi-million portfolio." As has been discussed ad nauseum here, it's more of a top 10% portfolio than top 1%.
Also keep in mind that CalPERS now requires employee contributions of 8% of income so it's not exactly free. Your pension will probably beat the passive income you could've generated from investing 8% of your income in the stock market over the same period, but it's not like it's appearing from thin air.
Maybe it's just me, but a portfolio or pension generating $60k of passive income really doesn't strike me as all that remarkable of a retirement situation for a college educated professional who works for several decades and retires at age 70.
I don't see how having more net worth than 90% of your fellow Americans is not a rational definition of wealthy. Or to state it a different way, having 5x as much net worth as a typical retiree.
Sigh... First of all, it's completely meaningless to compare the net worth of an individual who saved for 30-40 years to "Americans" regardless of age. Almost everyone starts their career with zero or negative net worth (unless they were born into wealth) and builds up wealth over time. So the pertinent percentage would compare to the net worth of retired Americans, not all Americans.
Now, it's true that many Americans retire with close to nothing (I believe it's around 50%). The explanation is simple - they are poor.
I don't see how having more net worth than 90% of your fellow Americans is not a rational definition of wealthy. Or to state it a different way, having 5x as much net worth as a typical retiree.
It is just that... more than 90% of Americans is not the same as competing with 90% of those in your region... like the SF Bay Area.
I don't see how having more net worth than 90% of your fellow Americans is not a rational definition of wealthy. Or to state it a different way, having 5x as much net worth as a typical retiree.
A "relative" definition is not as useful as an "absolute" definition.
For example, a resident of Bangladesh with a net worth of more than 90% of her fellow Bangladeshis might be "realtively" wealthy but in "absolute" terms far from wealthy.
i never understood this desire to compare to others . who cares! your numbers either work for you or they don't . i couldn't care less what median , average or any other percentile others are .
let them live and be well but the only numbers that matter are the ones you live and die by and whether you are happy with the life you lead or wish you had more .
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