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Can you retire off of $1million easily?

jspeicher

jspeicher

Golden Member
Do you guys think you can retire and live pretty decently off $1milliion? What age would you have to be to do so?
 
if i had a million now, i think i could retire. between investing wisely and not going crazy, i could get by without working another day in my life. i'm only 24.
 
1 million $ is no where near a lot for a lifetime, especially to raise a family. give me 2-3 mil and i'll fair off fine.
 
40....but only if you didnt want to leave much to kids (or even have kids for that matter) and already owned house, car, etc and NO wife/gf/stripper/etc

thats not much of a life though is it...

okay make it 80 but give me the stripper/etc 😉
 
I don't see why not. Proper investing should yield at least 10%, so that's 100k a year off the investment. But even at half that, I think most people can live off 50 grand a year.
 
Well look at it this way....

If you are 30 now and live to be 80, that is $20K a year.

So could you live off it, sure. Would you drive a nice car and have money to enjoy life... probable not.
 
That's assuming you just stuck your million dollars into a checking account and accrued 0 interest over the course of 50 years. If you're that dumb, I'd question how you got the million dollars to begin with.
 
Originally posted by: Marlin1975
Well look at it this way....

If you are 30 now and live to be 80, that is $20K a year.

So could you live off it, sure. Would you drive a nice car and have money to enjoy life... probable not.
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Who the hell retires exclusively off the principle? 😱

Never become a financial adviser.
 
you can retire easily on any sum of money, just depends on how old you are

i would just take your life expectancy, subtract the age at which you will retire, multiply by expected expenditure per year, and multiply by some positive integer constant fudge factor
 
Originally posted by: xirtam
I don't see why not. Proper investing should yield at least 10%, so that's 100k a year off the investment. But even at half that, I think most people can live off 50 grand a year.
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Those same proper investing techniques will also go through down years that return little or nothing. Living solely off of investment interest is a difficult thing to do. People have a tendancy to think "hey I have a million in investments, I can buy this one little thing". The pattern continues and often people go bankrupt trying to live off of investment interest only.

Yes $100k a year will give you a comfortable living in many areas. Other places, you'll be hard pressed to get a house with that and any sort of decent lifestyle. Especially when you consider taxes.
 
Originally posted by: CVSiN
id say prolly no... at 65-70 if you had 1 mil then yes but not as a reasonably young person
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65-70? Way before that. With smart investing (hell, even crappy investing as long as you're not losing money) it wouldn't be hard at all at any age. Remember the topic a week ago about the Lotto winners that were now poorer than before then won the Lotto? That's a dumb way to do it
 
Originally posted by: virtualgames0
No, that's like how much you make if you work minimum wage all your life.
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Yeah, but getting all at once allows you to invest and reap the interest over a lifetime.

I'm 28 and I could easily retire if I had a spare mill. I wouldn't go without working at all, but it would be side jobs and stuff I want to do.

 
Originally posted by: dullard
Yes $100k a year will give you a comfortable living in many areas. Other places, you'll be hard pressed to get a house with that and any sort of decent lifestyle. Especially when you consider taxes.
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How do you define "decent"? Because $100k a year is more than "comfortable" pretty much anywhere in the US, even after taxes.

Very decent apartment, or even mortgage payments on a house - $1500/month
Groceries, plenty of them - $300/month
Car insurance+gas - $110/month
Bills - $200/month
Taxes - let's be very strict and say 50%

All these numbers are MUCH higher than I'd need to live "comfortably" in Seattle, which has one of the highest costs of living. And it comes out to almost $25,000/year in the black after everything is paid for.

Mind you, having a family would put a big dent in this...but people tend to severely overestimate how much they NEED to spend on their kids.
 
If you can put it somewhere earning a straight 5% interest, then that's equivalent of $50k per year. I'd say you could live off that.
 
Originally posted by: jagec
How do you define "decent"? Because $100k a year is more than "comfortable" pretty much anywhere in the US, even after taxes.
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[*]One minor adjustment to your numbers in the higher cost of living areas: Many locations with minimum $500k houses mean $3000-$4000 a month mortgage payments. Lets say that takes $40k immediately. The tax situation is in a lot of flux right now, so who knows what that'll do. But after taxes and housing, you don't have a lot to live off of. Yes you can do it. But there are problems.

[*]The biggest problem I see is that investments go up and they go down. Suppose you had your investments in the stock market in the last 4 years. Net result is $0 in income as the market is basically flat. If you still spent $100k a year, your $1 million investment would now be at $600,000. Then lets suppose we are back at a better stock market from now on with 13% coming in. You are suddenly under $80k a year in income as prices keep going up. Lets suppose in 10 years there is another investment downturn and you hit another 3 year patch of no investment income. Now you are at $300k. See the pattern?

Unless you can cut your spending to nearly $0 on bad years, you'll never be able to keep up with just $1 million invested. Yes you can diversify and try to minimize the bad times. But they do occur and that $1 million will drop with most people running typical lives.

[*]Inflation will make $100k a year in 30 years feel a lot less than it does now.[/b]In 30 years, that'll buy you $41k worth of today's stuff assuming 3% inflation. Put in taxes and you are living a meager life in many areas. If you are lucky and live 50 years, you are down to $23k a year of today's stuff you can buy.
 
I have a product that I could take 5% a year without touching the principal, which is enough money. The only downside is that the stock market would have to outperform inflation to keep the $50k/year adjusted for increase in costs. Certainly doable, but if the market took a big hit and took a long time to recover, the later years might be painful as my purchasing power dropped.
 
It's hard to return 10% every year over a long period of time. So in your down years you may lose money and have draw off principal. You can put in in a fixed income (or low risk) investment and return 5-6% (50-60k a year) which is certainly liveable. But you would want to grow the principal at a rate at least equal to inflation (or else your 1 mil is worth less every year.) 50k a year is fine for a young single person but it's tough to support a family off it.

The bigger question is what would you do all day with no job? I can see retiring off 5 or 10 million and living an active lifestyle, but not with 1 mil. If I got 1 million, and disliked my job, I'd find a job I enjoy and supplement my income by say 30k a year with the investments and live a happy life...
 
i'm 25 now. give me that million and i'd plan an early retirement at age 35. in the meantime i'd keep working and dump as much of my salary into my optional 403b and 457b on top of maxing out the 401k lookalike retirement plan. agressively invest with some of the money, try to buy a few good rental units and pay them off completely. Set those up with a good property manager and work closely with them. Hopefully, the money being dumped into tax deferred retirement plans will be offset by the rental income and i wont have to touch the other money. 10 years later, retire with the options of being able to leave the money in those retirement accounts untapped and compounding tax free until needed and use the initial post tax monies first. stay away from living in places like new york or california where housing and living costs are high and stick to places like columbus, oh.. go bucs? 8)
 
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