Is $1 million enough?

**disneysteve** · 03-12-2014, 10:24 AM

Using a 3-4% withdrawal rate, $1 million would give you an annual income of $30,000-40,000, not counting Social Security. If that's enough for you, then you'd be all set. Personally, I don't want to retire on 40K/year so no, $1 million isn't nearly enough. I'm shooting for more like $2.5 million.

**Retired To Win** · 03-18-2014, 06:55 AM

How much is enough depends on how much you want or need to spend. DisneySteve wants to spend around $100,000 a year which is how he comes up with a $2.5 million retirement fund goal. So, in today's dollars how much do YOU want to spend?

Remember, wanting to spend more means having to work longer. And time is life. You say you will/could retire in about 30 years. What spending would you be willing to eliminate to be able to retire in 20 years and have an extra 10 years of free life?

That's a question I deal with often on my saving advice blog (http://www.retired-to-win.savingadvice.com) because it's been a big issue to me.

**Eagle** · 03-18-2014, 10:20 AM

Following. This subject really interests me.

**lorraineb** · 03-18-2014, 10:30 AM

I think it depends a lot on where you live. In most places in the US it would be plenty to live on, but there are areas where it wouldn't be close to enough. A lot depends on the lifestyle you want to live in retirement as well.

**ua_guy** · 03-18-2014, 10:38 AM

How much money needed for retirement is different for each person. If you're still 30-ish years out from retirement, it would be good to put together a dream now, and then work towards it. Think about what you want to do, where you want to be, and then mock up a budget in today's dollars to determine what "living the dream" looks like. There's too much to consider to list here. The question of "how much" isn't a dollar amount or a finite answer, but rather an evolving process as you study the subject more and learn to focus your lifestyle on that goal.

**Blessed** · 03-18-2014, 11:08 AM

Originally posted by disneysteve View Post

Using a 3-4% withdrawal rate, $1 million would give you an annual income of $30,000-40,000, not counting Social Security. If that's enough for you, then you'd be all set. Personally, I don't want to retire on 40K/year so no, $1 million isn't nearly enough. I'm shooting for more like $2.5 million.

It is for us. Then we get the added bonus of pension and social security. We personally are happy to have dh retire much younger even if it means less $.

**disneysteve** · 03-18-2014, 11:16 AM

Originally posted by disneysteve View Post

Using a 3-4% withdrawal rate, $1 million would give you an annual income of $30,000-40,000

Originally posted by lorraineb View Post

I think it depends a lot on where you live. In most places in the US it would be plenty to live on, but there are areas where it wouldn't be close to enough.

Exactly. Our property taxes right now are about $8,000/year, and that's today, not in retirement 15+ years from now. If we were only earning $40,000, that would be an awfully big chunk of our income. We couldn't afford to stay in our very modest home. 15 years from now, 40K absolutely wouldn't be enough to even keep our house.

**Blessed** · 03-18-2014, 11:35 AM

Originally posted by disneysteve View Post

Exactly. Our property taxes right now are about $8,000/year, and that's today, not in retirement 15+ years from now. If we were only earning $40,000, that would be an awfully big chunk of our income. We couldn't afford to stay in our very modest home. 15 years from now, 40K absolutely wouldn't be enough to even keep our house.

I will not complain about ours again. Yours are double. One reason I dont worry also is I know we are not staying in this area. The thing I do worry about is retiree healthcare radically changing.

**feh** · 03-19-2014, 05:58 AM

Originally posted by sweetdreams View Post

Whenever I hear about my friends talking about retirement and money, they all say that they want $1 million. Is $1 million really enough to retire on or by the time that I am ready to retire in about 30 years, will I need more than that?

As others have said, it depends on your expenses, at what age you retire, if you have a pension, etc.

That being said, I think the chances of $1M being enough in 30 years are very, very slim.

**KTP** · 03-19-2014, 06:12 AM

$1 million today might be enough, in 30 years though that would be like retiring on $300,000 to $400,000.

Our number is $1,300,000 to $1,400,000 which is quite a bit lower than DisneySteve but still above your one million figure. At a 4% SWR, $1,400,000 gives you $56,000 a year.

There are some big benefits from needing a lower income aside from needing a smaller nest egg to supply that income. The first is you will pay virtually no federal tax depending how you arrange things. The second is you will qualify for the most subsidy on healthcare and even qualify for subsidized copays.

**BuckyBadger** · 03-19-2014, 06:24 AM

We're looking for a much larger number. I feel like I'm shooting for $3.5 mil.

It's so high for a number of reasons. We'd like to retire around the age of 50, so we're going to have to draw on this money for a LONG time. That fact and the fact that I'm conservative lead my safe withdrawal rate to be much less than 4%. I'm aiming for more like 2.5%.

Also, we like to do some things that aren't cheap, so we'd like to make sure that we have enough money in our retirement years to let us keep doing those things.

**disneysteve** · 03-19-2014, 06:51 AM

Just to clarify, the $2.5 million figure I mentioned assumes no Social Security. If SS continues to exist in it's current form or something close to it, we won't need to save nearly as much.

**BuckyBadger** · 03-19-2014, 06:57 AM

Originally posted by disneysteve View Post

Just to clarify, the $2.5 million figure I mentioned assumes no Social Security. If SS continues to exist in it's current form or something close to it, we won't need to save nearly as much.

That's a good point. I'm also not counting on full SS because it's so many years in the future. I fully believe that we'll get *something* but I'm not sure how much, so I'm not planning on anything. I also figure that at some point it's going to be means tested and then we'll be punished for being good savers.

If we do get something substantial, it'll just let us live a little more luxuriously or donate more. Probably split it in half toward those two things.

**bjl584** · 03-19-2014, 07:53 AM

$1 million won't be enough for me. I still have 25 years or so before I can retire. I'm looking more at $2.5 to $3.

Is $1 million enough?