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That's not really the same thing. Incrementally saving the money over years to have millions because you think you need that in order to secure retirement is a lot different than moving along without millions and being given a windfall every year.
I can understand the pile generating if you are investor, but then again, you can't take it with you so unless you feel obliged to have your kids hit the lottery when you go, it's not necessary to have millions to retire, it's more a matter of it's necessary to have millions to give to your family when you go, no?
Edited to add: I don't live in an undesirable area by a long shot. I have a paid off condo, can enjoy everything in the city via subway/bus and all that comes with that. I'm well over 10 years away from being able to retire but I can say with certainty that like my friends, I will not have anything close a million when I retire. Like most of my siblings, I am a saver. I've taken Investing 101 courses and tried to understand it but I can't. Call me dumb if you wish, but that is the way it is. Coming from a poor background, it's difficult for me to believe that a paid financial advisor or consultant has my interests in mind and not his/her own commission plus the fact that I can't afford to put at risk any part of what I have because that's all I have.
saying blindly someone needs millions to retire is ridiculous . we all earned different incomes when we worked and lived different lifestyles and that does not change just because you retired .
everything we do beyond that tent in a camp ground is a lifestyle choice . we all can find cheaper ways of living as well as more expensive ways . we choose to live the way we do or we would all be living golden girl style in cheapsville with multiple roommates .
our lifestyle needs x-amount to live the way we choose , for us here in ny it takes multiple 7 figures saved to generate enough income FOR US . after all 1 million is no better than a 40k pension and that is less than most in america earn.
when generating your your income yourself poor sequences can leave you with a buck left at the end of 30 years so most of that money has to be kept as dry powder .
how long your money lasts can vary by as much as 15 years just based on the order markets ,rates and inflation work in combo and come in .
but that does not mean you or anyone else needs that much . your lifestyle and expenses are all based on your personal choices .
Edited to add: I don't live in an undesirable area by a long shot. I have a paid off condo, can enjoy everything in the city via subway/bus and all that comes with that. I'm well over 10 years away from being able to retire but I can say with certainty that like my friends, I will not have anything close a million when I retire. Like most of my siblings, I am a saver. I've taken Investing 101 courses and tried to understand it but I can't. Call me dumb if you wish, but that is the way it is. Coming from a poor background, it's difficult for me to believe that a paid financial advisor or consultant has my interests in mind and not his/her own commission plus the fact that I can't afford to put at risk any part of what I have because that's all I have.
If you can't trust others then you need to learn to trust your self by becoming educated on what you want to accomplish. Then you'll learn to pick a professional who can help you.
I hear the same thing about other Professionals like us RE Agents. I personally have always put my clients interest before mine and that has paid off tremendously. I'd much rather have long term success, referrals and happy clients over a quick buck. I realize there are many people who don't but there are many Pro's who do.
It's your job to find the ones that put your interest above theirs. Becoming educated certainly helps.
That's what I've done with my Financials. Thank goodness for the internet.
But I do realize there are Pro's who would do a much better job than I could ever do.
saying blindly someone needs millions to retire is ridiculous . we all earned different incomes when we worked and lived different lifestyles and that does not change just because you retired .
everything we do beyond that tent in a camp ground is a lifestyle choice . we all can find cheaper ways of living as well as more expensive ways . we choose to live the way we do or we would all be living golden girl style with multiple roommates .
our lifestyle needs x-amount to live the way we choose , for us here in ny it takes multiple 7 figures saved to generate enough income . after all 1 million is no better than a 40k pension and that is less than most in america earn , when generating your your income yourself poor income poor sequences can leave you with a buck left at the end of 309 years so most of that money h as to be kept as dry powder
but that does not mean you need that much .
I live in NY too. Am not arguing, I'm just trying to understand why some people think they need millions to retire and if you don't have that, you are in for serious trouble. Not saying that you are taking that position but a lot of people here and elsewhere do and that can be scary for someone living modestly, doing the best they can and knowing that there's no chance they will hit the million mark at any point in their lives.
why would you wonder why people want more money to live on ?
don't use your idea of a lifestyle to judge what others want . if we had 2x or 3x the income we do i would still find a way to upgrade our lifestyle with more trips , more expensive cars which i love , i would love to live in manhattan , etc etc .
with each million generating 40-50k , that is not a lot of money here by any stretch of the imagination .
looking at others and comparing their lives to yours makes no sense. if you know nyc , we live in bay terrace in bayside in queens . the median income is well over 100k for a household. we have been here for 35 years and this is where we choose to live .
Last edited by mathjak107; 07-09-2018 at 07:32 AM..
When people say that they need mega cash in order to retire, is the reason for that to have cash to pay medical bills? Or to travel? Or finally buy that boat you've always wanted?
The answer will vary according to the goals of any one retiree. My idea of retirement is not to just subsist, but to travel and do things we don’t have time for now.
I order to do this, our retirement plan is to replace 85% of our pre-retirement incomes. SS payments and one pension gets us halfway there. It takes 2.5 million (assuming we stick together the no more than 4% withdrawal in any year) to get the rest of the way.
Hopefully we’ll have at least 10 healthy years for travel. If not, then those funds will get spent on medical care. All we can do is plan and hope it works out how we intend.
why would you wonder why people want more money to live on ?
don't use your idea of a lifestyle to judge what others want . if we had 2x or 3x the income we do i would still find a way to upgrade our lifestyle with more trips , more expensive cars which i love , i would love to live in manhattan , etc etc .
with each million generating 40-50k , that is not a lot of money here by any stretch of the imagination .
looking at others and comparing their lives to yours makes no sense
Agreed. I think 1 million as some sort of one size fits all number is dumb. No financial planner would support that method of determining retirement funds.
the ones who say it or keep repeating the fact that this is what they hear are usually those the least knowledgeable about retirement planning and they really should learn at least the basics .
they are either parroting what other mis-informed people say or running on believing their own bull and just repeating the same nonsense .
incomes and lifestyles vary when we are working by huge amounts .why would anyone think retirement is any different and wonder why others want more money
I was aimless in my 20s and accumulated student loan debt and didn't get a decent paying job with benefits until I was 26. I definitely didn't start making the most of my money until I was 26.
I gave probably 20k over the years to a crisis oriented friend who didn't have his financial act together (most would say major mistakes).
I gave thousands to a church when I was an active member (some would say major mistake. In any case, it was money not available for investing)
I lost about $11,000 buying and selling stocks during the financial crisis.
And I was sub optimal in my mutual fund selections over the years, moving from fund to fund at inopportune times.
Despite all my mistakes, I've got a nice stash put away. Of course, if I say how much it is, then I'm bragging, so I'll skip the details on that.
Yet, I have traveled to South America 4X, Mexico, & Europe 2X. These were mostly not "1st Class" trips (one one week trip to Europe was semi-luxurious) but weren't bottom of the barrel, either. Travel can be pretty cheap if you are flexible and not interested in the usual tourist packages, especially if you travel off peak. Travelling for longer periods generally comes out cheaper by the day than trying to do a lot in a short period of time. In short, there are lots of blogs out there these days that show lots of travel hacks. I'm definitely not an expert.
By the way, I highly recommend travel to Latin America. I don't want to glamorize poverty, but those folks actually know how to be happy with a lot less. That's because they put more emphasis on family, friends, and community than 'standard of living'.
I have earned a below average income for my area ever since I've been working full time. That has been partially offset by excellent benefits and the fact that I haven't been unemployed in 21 years (but also received a 12% pay cut in 2011 and it took 6 years to get back to that pay level).
The biggest financial mistake most people make is having kids out of wedlock. 40% of kids are born outside of marriage these days. Most of them are born into unstable relationships. That's probably the #1 factor behind the shrinking middle class, IMO.
Not buying anything more than a "basic car". The horror! A basic car is all you need. I'd do without one if it was reasonably convenient to do so. The real problem is people watch too much TV and therefore have inflated expectations of "decent place", "basic car". They think these things will make them happier than is actually the case, as study after study has proven.
I do live a fairly basic lifestyle. Live like a monk? The hyperbole is beyond annoying.
Bottom line, as I've said before, is to accumulate wealth, you have to think the standard way of doing things sucks. You have to want something different. You have to have a strong "why". I happened to be one of those people who thinks the standard way of doing things sucks, so ignoring what everyone else is doing was easier for me.
I get what you’re saying and there’s a lot good here, but it’s just not all true of everyone either. I don’t care if I have the greatest family and friends in the world, if I don’t have what I require from my standard of living - a perfectly dark, silent, temperature controlled bedroom at minimum to sleep, I’m not going to be happy. That’s just a health thing. I can’t sleep in short of those conditions. I’ll enjoy anything only if I’m rested and ready to meet the world
And no, it’s not true that better cars and better things don’t make people happier. It’s true for some people that they expect a new car to fix everything - it won’t - but I’ve driven around mediocre cars and I have driven a Camaro 2SS collectors edition for 8 years (two models, first was totaled by a drunk, current only has 8,000 miles) and it does make me happier. I feel awesome driving that car every time. It’s fast, it’s beautiful, it turns heads, it makes me happy to see how much kids love it (Bumblebee), and it’s just a joy in general. Driving around a Celica or a MINI wasn’t a joy for me. It felt embarrassing and it felt lame. I want my car to be faster than competing cars because I enjoy driving in a way that feels my style. I want to know I won’t be getting cut off as much (I don’t) because my car is faster and you’re nervous I’ll speed up.
To act like a better lifestyle is somehow not desirable is just nonsense. You can do more with more money and I appreciate every increase in lifestyle. Not a day goes by I’m not thankful that cleaning toilets or vacuuming isn’t my job because housekeeping comes every two weeks. Little things like that - not million dollar boats - make the biggest difference to happiness I find. The less in life I don’t have to do, the better my life is. I want to be doing what I want at all times, and each increase of wealth makes that possible. Ideally I’d have a part time assistant and never fill a tank with gas, never get an oil change, never see the inside of a dry cleaners, heck not even a grocery store. That’s all a distraction from what I want to be doing. So yes, lifestyle does matter, and simple isn’t cheap. Simple is expensive - where your life is simple because the BS is done by someone else on your behalf.
Everyone's situation is different. Two people living in the same city, with the same house and the same lifestyle can need completely different amounts.
I recently worked for the government and because most will retire with 80%+ of working income and receive social security on top of that, they cannot be bothered to save in a 401k. I worked in HR and maybe 1 in 10 contributed to 401k and the contributions were very small. Most that did were <$100.
Where I'm at now, it's imperative that you save on your own but my employer offers healthy matches. I'm putting around $15,000/yr away in my 401k with matches.
My total compensation is/was about the same with both employers. The person who has the first job above could need as little as $0 in retirement savings and receive 70-80k a year between pension and SS. The second person may need 1.5m to afford the same lifestyle.
Then you have people on completely different spectrums of retirement needs. 1m is not a cookie cutter estimate but I disagree with above posters saying needing 1m+ is hoarding money. My example above shows that in some cases it may be needed just to sustain the same level of income as when you were working. A lot of older people I know will not have their homes paid off before retirement so they aren't in a position to see a dramatic reduction in pay in retirement.
If you have a paid off house, a small pension, and SS, then 1m might be way too much. Every situation is very different.
That's not really the same thing. Incrementally saving the money over years to have millions because you think you need that in order to secure retirement is a lot different than moving along without millions and being given a windfall every year.
I can understand the pile generating if you are investor, but then again, you can't take it with you so unless you feel obliged to have your kids hit the lottery when you go, it's not necessary to have millions to retire, it's more a matter of it's necessary to have millions to give to your family when you go, no?
It’s not millions, it’s one million. The OP and the discussion is one million to retire.
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A basic car is all you need. I'd do without one if it was reasonably convenient to do so. The real problem is people watch too much TV and therefore have inflated expectations of "decent place", "basic car". They think these things will make them happier than is actually the case, as study after study has proven. 
