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Is $2 million enough to retire comfortably on?

S

SaltyNuts

Platinum Member
Actually, a good bit more than that, but let's just say $2 million. Enough? I'm talking eating out every weekend, 2 or 3 nice vacations a year, etc. In the United States - I'm not talking about retiring in Thailand you wierdos lol.
 
Depends on how long you expect to live.

Hookers + blow budget per day X number of days you expect to live. That tells you what you need.
 
But is it that simple? Wouldn't my friend need to take into account the MASSIVE earnings I make on my stock market investments? Wouldn't that allow my friend more blow and hookers per day, on average?
 
SaltyNuts said:
But is it that simple? Wouldn't my friend need to take into account the MASSIVE earnings I make on my stock market investments? Wouldn't that allow my friend more blow and hookers per day, on average?
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Nope, because if you aren't planning on working, you're going to have to shift a bunch of the 2mil into safer investments. Retiring on 2mil at 18yo is very different than retiring on 2mil at 70yo. Age is key. How many years until medicare kicks in?
 
Depends on a number of things including your financial management ability/skill, your spending and lifestyle, hookers + blow requirements, and how many kids you didn't abandon.
 
A rule of thumb:
1) If you are conservative (or retiring young, or likely to live long), then each year you can spend 4% of what you have saved. Thus, $2M will let you spend $80,000 a year. Yes, that is comfortable for many people in many locations. But, it isn't an excessive or lavish lifestyle either (remember that one cancer medication could easily be half of that amount). The goal in this case is to maintain the $2M, so that you always have money. You will probably will give your heirs quite a big lump sum when you die, but in case something bad happens, you have that $2M cushion at all times.

2) If you are aggressive (or retiring much older than the typical retirement age, or likely to die sooner), then each year you can spend 6% of what you have saved. At $120,000 that is a pretty comfortable life for most people. The goal in this case is to have money for your whole life, but to die penniless.
 
i'm hoping for 40 years before that!

but it would require me to continue to make ATOT minimum wage and get decent market returns while simultaneously living like a single lonely pauper hermit, so i don't know if i'll be able to stick with it.

no M3s or 1000 pistol collection or diesel jeans for me.
 
IronWing said:
Nope, because if you aren't planning on working, you're going to have to shift a bunch of the 2mil into safer investments. Retiring on 2mil at 18yo is very different than retiring on 2mil at 70yo. Age is key. How many years until Paul Ryan fixes medicare?
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Fixed that for you. 😉
 
Heck even 1 mil I think it could be done if you plan smart. With 2 mil, I'd probably retire and move to a lake front place in a jurisdiction that is cheaper to live in (less taxes etc) and bigger property so I can have room for a large solar array, wind turbines etc and go fully off grid as far as energy goes. Basically I'd get a realtor to try to find me the perfect spot. The smaller the township the better, or even better, outside of any jurisdiction altogether. That way my ongoing costs would be cheaper. No hydro bill, no municipal water bill, no gas bill. And no mortgage since I'd buy the property outright. So monthly expenses would be pretty low at that point and can probably live off the interest of the remainder of the money. A small chunk, like 50k would be liquid so it's immediately accessible for misc stuff.

I'd still want internet but it would probably cost several million to run fibre to a place like that so I'd settle with satellite or something.

If I won 1 mil and not 2, I would probably mostly just keep living the same way/place I am now, I'd even keep my job, but it would act as a piece of mind that if I lose my job I'm not screwed. I'd also retire very early. Like at 40.

I'm also assuming Canada, so if you win 2 mil you actually get 2 mil.
 
Its important to know their expenses. If they are used to spending lavishly then likely not - but it is enough to likely provide a higher household income than the average American enjoys. There are many who have blogs\post on various 'extreme early' retirement forums who have given it a go with much less. I'd consider leaving a decent cushion for health insurance when figuring your yearly expenses if you're significantly under the medicare eligibility age as I wouldn't want to bet my lifestyle on ACA staying in the same range of affordability.
 
$2 mill would work great for me right now...I'd drop about 1/2 mill on a nice big motorhome...spend the rest traveling and seeing the country.
 
WhoBeDaPlaya said:
If I got a $2M windfall, I'd still keep working.
Waaay too young to retire just yet.
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If
 
That wouldn't be enough for me by quite a long shot to say comfortably, more along the lines of scraping by.
 
Arguably the important inputs is how much you plan to spend and how long you want it to last at this spending rate.

Assuming a very conservative 3% SWR, 2 million will allow you to spend 60k per year for 35+ years. This is based on a rule of thumb (60000/0.03) If I remember correctly, this will give you a 95%+ chance of not running out of money based on the trinity study (used a more aggressive 4% SWR).

Use these simulators to get a better idea and play around with different scenarios (asset allocation, time horizon, etc)

http://firecalc.com/
http://www.cfiresim.com/
 
what is your spending level?

1million is enough for some people, depending on their yearly spending (and yes, I mean for 30+ years, even retiring early)
even $800k can be enough for some

Is $2 million enough for you? All depends on you.

Can you safely pull out ~3-4% of your cash from mutual funds, per annum, and live off of that each year for x years until you croak? That's what matters.
 
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