Is $1M the new benchmark for retirement savings?

[ua_guy]

I posted the link to a quick read from USA Today below. $1M is used as a benchmark for retirement savings, and then over/under is estimated based on location within the US. It's estimated just 16% of people have more than $1M in savings and other assets when they retire. That's a lot less than I would have thought.

Personally, I don't feel like $1M is remotely enough to reach my goal, but I can see/believe the possibility of $1M supporting a basic lifestyle in a variety of places within the US. $1M is nothing to scoff at, but I'm thinking more like 4 or 5 million to retire comfortably.

https://www.usatoday.com/story/money...1.46%20million.

[Petunia 100]

16% is more than I would have thought. Something like 50% of retirees have no retirement savings at all.

I will never have a million, but that won't stop me from being retired happily and comfortably.

[disneysteve]

Most people will never have anything close to $1 million. Then people in this group are wildly abnormal (in a good way ).

[Fishindude77]

$1mil Is not that tough to achieve if you start young in a job with a good 401k and just keep contributing for your entire working career, but very few will get there.
Most can't stay employed long term so have periods of no contribution and / or tap into the 401k as if it's a savings account.

I'm confident quite a few of the employees at my former business are going to retire with $1mil or more. It becomes pretty obvious in time who the smart ones and savers are.

Draw $40k from your $1mil 401k, another $25k from SS and you can live pretty decent and have some fun around here if you've got everything paid for.
It would be much tougher in many of the HCOL areas of the country.

[Petunia 100]

$1mil Is not that tough to achieve if you start young in a job with a good 401k and just keep contributing for your entire working career, but very few will get there.

Sure. If, if, if. The devil is always in the details.

[Atretes1]

1 Million has always been my benchmark. I have 700k invested now. I am retiring at 56 with a pension. I am hoping to have 1.5 or more invested in 7 years when I retire.

[Drake3287]

Agree, without the pension I have I'd be worried about only having 1 million dollars for retirement. When most of us were young a million dollars was a lot of money and of course that's no longer true, especially if it needs to last potentially another 25 years. At the same time most retirees tend to be more conservative with investing so you're not going to be getting those large investment gains like experts always advertise.

[ua_guy]

One topic I don't think I ever see discussed in detail is individual versus joint/couple retirement benchmarks. When articles like this reference $1M as a benchmark, is that $1M for each person in a married couple? Or would it apply as $1M saved between both partners?

When retirement planning as a married couple, do you plan for the possibility that you might someday separate, even if you have no intention of doing so?

[myrdale]

When retirement planning as a married couple, do you plan for the possibility that you might someday separate, even if you have no intention of doing so?

I have a good friend (John) who's parents are going through this now.

John's father had retired from the air force, and then retired again from UPS. John's mother is a retired nurse. She is the one who I may have mentioned years ago here stole John's identity and maxed out $20k of credit cards in his name. The house they have lived in for close to 30 years is upside down because of John's mother continually borrowing against it. I've heard his father express aggravation about the situation on a few occasions. His mother put a tracker on his father's car and claims it is proof that he was recently committed adultery. I don't know any facts of the matter there. Either way she immediately kicked him out and filed for divorce.

John's father is now sleeping on his couch. John's mother is going after him for everything. Before the divorce they were already in a financial mess, now it looks even worse from the outside.

I had an uncle who owned a welding shop. He was widowed around 50. Around 70 he remarried. He built a new $300k brick house (2000 time frame). Three years later they were divorced and he gave her the house. His joke was she made the best three year investment he'd ever seen.

We had an engineering contractor who at around age 70 had his wife committed to a nursing home, got divorced, then remarried. She had extreme dementia, shouting, wouldn't eat, other stuff.

All that to say, I don't think anyone "plans" on getting divorced after a decades of marriage.

I think Dave Ramsey doesn't recommend per-numptual agreements. But in my eyes they are not a bad thing.

[Petunia 100]

One topic I don't think I ever see discussed in detail is individual versus joint/couple retirement benchmarks. When articles like this reference $1M as a benchmark, is that $1M for each person in a married couple? Or would it apply as $1M saved between both partners?

When retirement planning as a married couple, do you plan for the possibility that you might someday separate, even if you have no intention of doing so?

That's a good question. IMO, the answer should be yes.

[disneysteve]

One topic I don't think I ever see discussed in detail is individual versus joint/couple retirement benchmarks. When articles like this reference $1M as a benchmark, is that $1M for each person in a married couple? Or would it apply as $1M saved between both partners?

When retirement planning as a married couple, do you plan for the possibility that you might someday separate, even if you have no intention of doing so?

I think a lot of financial data is flawed in this regard as they often don't specify if they are talking about individual or joint figures. $1 million for a single person is different than $1 million for a couple.

Do I plan for divorce? Absolutely not. That said, we've handled our finances as a single unit since getting engaged 35 years ago. From then on, everything was joint. Of course, my wife has retirement accounts that are solely hers, including her IRA which I largely funded as a spousal contribution. It's important for both partners to have money in their own name, not only in the case of divorce but also premature death. This is especially true if there is a pension involved that ends when the person dies. Same for SS benefits. Couples planning needs to cover all contingencies. You can't plan based on one partner's pension and/or SS benefits if those dollars won't be around after they die.

[ua_guy]

I think a lot of financial data is flawed in this regard as they often don't specify if they are talking about individual or joint figures. $1 million for a single person is different than $1 million for a couple.

Do I plan for divorce? Absolutely not. That said, we've handled our finances as a single unit since getting engaged 35 years ago. From then on, everything was joint. Of course, my wife has retirement accounts that are solely hers, including her IRA which I largely funded as a spousal contribution. It's important for both partners to have money in their own name, not only in the case of divorce but also premature death. This is especially true if there is a pension involved that ends when the person dies. Same for SS benefits. Couples planning needs to cover all contingencies. You can't plan based on one partner's pension and/or SS benefits if those dollars won't be around after they die.

So do you think the $1M benchmark applies to an individual, or a couple?

I don't plan to divorce either. Even though my spouse and I manage our finances jointly, we each have a retirement account in our name, we both contribute and manage those account jointly. But we've always saved as if the benchmarks and goals are on an individual level. Maybe we'll end up with twice what we really need, that would be nice. Or, if a situation arises where we do split, we've outdrawn the situation and both have money in our name and theoretically, neither of us will have to catch up on retirement savings if something like that happens before retirement.

[disneysteve]

[QUOTE=ua_guy;n750841]

So do you think the $1M benchmark applies to an individual, or a couple?[quote]
I think it all depends on spending needs and other resources (pension, SS). I think most couples could retire nicely on $1 million plus SS considering that very few actually reach that level of wealth.

But we've always saved as if the benchmarks and goals are on an individual level.

We've always approached it as a team but my wife also never had a career. She has worked in the past but also not worked for much of our marriage. Even when she did work, I earned several times more than her.

[Randomsaver]

Fortunately for me, I already have my retirement condo so even if I don't meet $1M, whatever I have is net of payment/reduction from purchasing a retirement property.

[GoodLiving]

Most people will never have anything close to $1 million. Then people in this group are wildly abnormal (in a good way ).

I'm definitely abnormal and made this happen having never hit 6 figures (except the year my sick days were paid out). Granted, I also had some inheritance and lawsuit money that felt like blood money to me so I just put it away. I'm still feeling a bit cautious about pulling the plug since my spouse spends more than I, they also like to solve problems with spending more money, it's the engineering mind always looking to improve. This summer, my plan is to semi-retire and it's just the strangest thing. 91 days until my summer break which begins the part time employment. For me, it's always been slow and steady wins the race.