2 million and retired

[lifeisshort123]

Read this interesting article from the WSJ

https://www.wsj.com/articles/heres-what-a-2-million-retirement-looks-like-in-america-11661702455

It profiles several individuals at various stages of life, but who are all retired with somewhere between $1,000,000-$2,000,000.  I found the article fascinating.  Many of these individuals clearly had relatively good paying jobs, and continued to work for a very long time.

In some instances I found it shocking that they had only saved up $2,000,000 (or less) over that period of time.  Yet, their current spending seems to be lower than what they had prior to retiring.  Proof that when you are retired you will need less, and care about less as well. 

A few takeaways - not retiring until age 81, not for me.
Earning $110,000 and giving away $25,000 is awesome! I also love this lady’s quote “ With two homes, Ms. Hall rarely travels, but she hopes to visit Ireland and Australia next year. Otherwise, she said, she’s more interested in downsizing than spending. “I don’t want more stuff,” said Ms. Hall.”

Sooo true….

I wonder how much more many of the individuals profiled would have had if they lived a mustachian life.  I also wonder if they would care in hindsight….

[iluvzbeach]

Good article but I’m shocked at how much their annual expenditures are.

[Greystache]

I was surprised that most of them still had mortgages after long careers making a good income.
I was also surprised at how much they spent compared to their net worth. One had a big pension, and most were so old that they were looking at less than 20 year retirement, but still...

[Dicey]

I was surprised that most of them still had mortgages after long careers making a good income.
I was also surprised at how much they spent compared to their net worth. One had a big pension, and most were so old that they were looking at less than 20 year retirement, but still...

Having a mortgage in retirement can still be a smart move. It's the people who have mortgages and insufficient assets that are sub-optimal, not the mortgage itself.

[clarkfan1979]

I was surprised that most of them still had mortgages after long careers making a good income.
I was also surprised at how much they spent compared to their net worth. One had a big pension, and most were so old that they were looking at less than 20 year retirement, but still...

Having a mortgage in retirement can still be a smart move. It's the people who have mortgages and insufficient assets that are sub-optimal, not the mortgage itself.

Agreed. I got a 30-year fixed mortgage at 2.875% with a balance of 227K in December 2020. I think I will be 71 years old when it's paid off. But someone might say, why be saddled down in debt for so long? Pay it off and set yourself free. I'm already free, so it's not necessary. When I finally pay off the 2.875% mortgage, I'm thinking our household net worth will be somewhere between 10-15 million.   

[dandarc]

I was surprised that most of them still had mortgages after long careers making a good income.
I was also surprised at how much they spent compared to their net worth. One had a big pension, and most were so old that they were looking at less than 20 year retirement, but still...

Having a mortgage in retirement can still be a smart move. It's the people who have mortgages and insufficient assets that are sub-optimal, not the mortgage itself.

Agreed. I got a 30-year fixed mortgage at 2.875% with a balance of 227K in December 2020. I think I will be 71 years old when it's paid off. But someone might say, why be saddled down in debt for so long? Pay it off and set yourself free. I'm already free, so it's not necessary. When I finally pay off the 2.875% mortgage, I'm thinking our household net worth will be somewhere between 10-15 million.   

At which point you'll be easily able to afford the very expensive luxury that is a house without a mortgage.

[clarkfan1979]

Read this interesting article from the WSJ

https://www.wsj.com/articles/heres-what-a-2-million-retirement-looks-like-in-america-11661702455

It profiles several individuals at various stages of life, but who are all retired with somewhere between $1,000,000-$2,000,000.  I found the article fascinating.  Many of these individuals clearly had relatively good paying jobs, and continued to work for a very long time.

In some instances I found it shocking that they had only saved up $2,000,000 (or less) over that period of time.  Yet, their current spending seems to be lower than what they had prior to retiring.  Proof that when you are retired you will need less, and care about less as well. 

A few takeaways - not retiring until age 81, not for me.
Earning $110,000 and giving away $25,000 is awesome! I also love this lady’s quote “ With two homes, Ms. Hall rarely travels, but she hopes to visit Ireland and Australia next year. Otherwise, she said, she’s more interested in downsizing than spending. “I don’t want more stuff,” said Ms. Hall.”

Sooo true….

I wonder how much more many of the individuals profiled would have had if they lived a mustachian life.  I also wonder if they would care in hindsight….

One of my weird goals was to hit 1 million net worth before paying off my student loans. That goal achieved in 2021. Now in 2022, I still have $24,000 in student loans and our net worth is around 1.3 million.

My payment is $156/month. I'm thinking my payment will go down when they knock off $10,000. There is also a chance it might be completely forgiven because I have at least 10 years of full-time employment at a public institution. This is currently my 12th year of teaching college full-time at a public institution. I still need to fill out the application. The deadline is sometime in October. 

[Dicey]

I was surprised that most of them still had mortgages after long careers making a good income.
I was also surprised at how much they spent compared to their net worth. One had a big pension, and most were so old that they were looking at less than 20 year retirement, but still...

Having a mortgage in retirement can still be a smart move. It's the people who have mortgages and insufficient assets that are sub-optimal, not the mortgage itself.

Agreed. I got a 30-year fixed mortgage at 2.875% with a balance of 227K in December 2020. I think I will be 71 years old when it's paid off. But someone might say, why be saddled down in debt for so long? Pay it off and set yourself free. I'm already free, so it's not necessary. When I finally pay off the 2.875% mortgage, I'm thinking our household net worth will be somewhere between 10-15 million.   

At which point you'll be easily able to afford the very expensive luxury that is a house without a mortgage.

Seriously, when you have a big old army of green soldiers at your disposal, you don't care if you have a puny little mortgage. It's hard to believe it will happen, but it absolutely does. The earlier you start, the faster it compounds and the fewer dollars you will actually need to earn via personal effort.

Seriously, there is a new thread where someone says, "I put all my effort into paying off my mortgage, and I'm ready to start saving for FIRE. How much money do I have to per save per month to retire in ten years?" Alas, without the benefit of compounding, they're going to have to save a huge amount to make their early retirement dreams come true. Cart, meet horse.

[fat-johnny]

Bob Bradley
Savings and Investments: $1 million
Annual Spending: $92,543

I mean.....is there such a thing as the NINE percent rule?!??   If not, how do these people not stay up at night, worrying that they are going to run out of money??

Can someone explain to me?
FJ

[bacchi]

Bob Bradley
Savings and Investments: $1 million
Annual Spending: $92,543

I mean.....is there such a thing as the NINE percent rule?!??   If not, how do these people not stay up at night, worrying that they are going to run out of money??

Can someone explain to me?
FJ

"He said his wife, who works in the wine industry"

+ social security. Also,

"Mr. Bradley’s required withdrawal last year was $38,000," which is about 4%.

[dandarc]

In addition to what bacchi noted he's still working very part time as a consultant and is 73 years old, so should be getting social security now. He doesn't consult much, but when he does he gets paid pretty well "This year, Mr. Bradley spent 10 weeks consulting at a company in Park City, Utah, earning around $40,000 before expenses. "

So with all the other income coming in, the RMD is probably more than they actually would like to draw from the portfolio to make up the gap to meet spending.

[dandarc]

"He delayed claiming Social Security to 70 to secure a larger benefit of $44,000 a year. "

And they've got around $700K in home equity. So that's a source of cash at some point if they need it. These people are not at any risk of portfolio failure.

And the headline was $92K / year spend, but $9200 / month in body of text so more like $110K. You'd think that the WSJ would edit better, but still in a remarkably strong position, particularly considering the odds of needing portfolio to last 30 years or longer is pretty low for them.

[ixtap]

I'm always shocked by these high spend levels. Is working decades longer - even well beyond normal retirement age - so you can spend so much in your old age really worth it?  IDK but it seems very wasteful of both resources (what are they buying??) and your youth and life.

You are assuming most people can think of something better to do with their lives than work. The Calvinistic work ethic is still strong in American culture, so working is often seen as the moral choice, the One True Way to find purpose, etc. Me? I have better things to do with my life energy.

[bacchi]

I'm always shocked by these high spend levels. Is working decades longer - even well beyond normal retirement age - so you can spend so much in your old age really worth it?  IDK but it seems very wasteful of both resources (what are they buying??) and your youth and life.

You are assuming most people can think of something better to do with their lives than work. The Calvinistic work ethic is still strong in American culture, so working is often seen as the moral choice, the One True Way to find purpose, etc. Me? I have better things to do with my life energy.

A VP at a place I worked had a sign in her office, "Hard work brings you closer to God." I looked it up and, beyond our internalizing this belief, there is actually a sub-sect that vocalizes this in obvious terms. It of course also helps the VP's numbers.

[Loren Ver]

One of my weird goals was to hit 1 million net worth before paying off my student loans. That goal achieved in 2021. Now in 2022, I still have $24,000 in student loans and our net worth is around 1.3 million.

We didn't have the amount goal as we retired lean (sub 1 million), but we did retire with both a mortgage and student loans.  Leverage is a powerful thing if used correctly!  Sure we could have used our capital to pay them both off and felt FREE!  Or not and actually been FREE!  We chose the latter.  They will pay themselves off eventually, then we will have even MORE walking around money if we want it.

[BlueMR2]

A VP at a place I worked had a sign in her office, "Hard work brings you closer to God." I looked it up and, beyond our internalizing this belief, there is actually a sub-sect that vocalizes this in obvious terms. It of course also helps the VP's numbers.

Well, sure.  True enough.  Work yourself to death and see God sooner.  :)