It depends on where you live. My parents retired in the 1990s with only about $50,000 in investments (dad was already starting to be in bad health). They had a paid-for house and cars, SS  for dad (almost none for mom because of how little she worked) and a K-Mart pension. My grandfather died and left them another $50,000 in investments.

Dad died on New Years Day 2015. Mom recently told me she still has $100,000 in retirement investments. She now gets dad's SS and his pension.

Your investments don't stop making money just because you retire. She lives in southern Missouri, which is cheap, wants for nothing, and goes on vacation twice a year.

I want to retire with a million in investments because I won't have a pension and Social Security will collapse before I retire, but for the older generation, they're okay.

The S&P has averaged 10.13% over the last 100 years. It has averaged 11.35% over the last 40 years.

Given an overhead of .04% to use VOO, I think 9% is pretty likely.

I'm with you. But the county would only allow you to work x number of years then you had to retire in the FRS so you really do not have a choice. Now some guys would retire from the county and if they were young enough go to work for the city Fire Dept.

Draw their retirement from the county and work full time with city. But 55 years old was to old. Some guys retired at 38 or 40 years old with county. They started with Fire svc at 18 or 20 yrs old. You can retire after 20 years. Because it's a high risk job.

Those are the guys the city would hire to work for them. They'd  work for the city till they were 55 or till they reached 20 years and draw another retirement from the city.

Do they would have two retirement incomes coming in which could be over 100k a year

in a lot of places it is.  10% interest = $100k a year.

I called him out, because I hate when people talk shit without taking 30 seconds to look it up.   Say something Funny.   Say something Informative.    Say something Profound.  
Say something Entertaining.  
Are you unable to achieve any of those stated goals?    Then simply remain quiet.    The worst "contributors" are those Slick Willie types, who say nothing at all.

Nobody tracks Net Worth at 60.   If someone does, I'll try to find it tonight.

Could you please tell me where people are getting a 10% interest on their money. Not being smart or doubting you. I want to put my money there. Because my wife is an accountant and she does not know of any place that pays 10% interest or any where near that. I'm lucky to get 2% in todays market. It's a joke.

I know a few guys get 6% on investments but that was from years ago and it was locked in at that rate.

I remember years ago in the 80s people could get 10% heck even 12%  but interests on homes were sky high back then too. I knew one guy because he showed me his paper work he was getting 14% back in the early 80s
But today 10% no way that's a dream

So if you can point me and others to a financial institution that's paying 5% or higher 10% like you mentioned alot of places are paying. Please share those names with us.

I'm not talking stock market either that's a totally different game right there. Stocks pay a dividend per say not interest. You can say you get a 10% dividend but not a 10% interest rate on your return. You can lose your money in the stock market.

A financial institution can give you a fix percentage rate of say 10% for X amount of time then adjust the interest rate after that to the market rate per your agreement.  You won't lose money. Where as if the stock collapses you could lose your money.

The plus though is the highest tax rate right now on qualified dividend is 15%  based on your total dividend income.

Were as

Interest income is taxed like regular income. In other words it's added to you regular income and taxed at what ever tax bracket you are in. It is also used to raise you up into a higher tax bracket.

So tax wise dividend income from stocks has the advantage of being taxed at a lower rate than income from regular interest income that a financial institution pays you. Again because that would count as regular income.

If this makes sense

Now bonds can pay more in interest. But there is no way in hell I'd do that. You can lose everything with bonds. Depending who they are. If you do foreign bonds you pay addition taxes on those because they are out of country.

But not all bonds are bad. You just have to know what your doing. That's a whole other post.

$4-5 million?   You sure as hell could enjoy retirement.  If you retired at 65 and lived to 90 you could pay yourself $160k per year without earning a single penny of interest. 

More like $190k/yr into perpetuity and leave 1.2 million each to my kids when I pass.

He likes to argue about everything, it's his thing and nothing new .

Their are only around 9% of households in the entire US that have a NET WORTH of 1 million or more and that is across all age groups not just retirees. 

http://www.cleveland.com/business/index.ssf/2016/03/us_millionaires_club_adds_3000.html

Average household net worth in America is $80k based on census

https://www.fool.com/retirement/2017/07/03/how-does-your-net-worth-compare-to-that-of-the-ave.aspx

I don't know what you like to do with your money but I like mine to work for me. Low cost index funds will let you mirror the whole market or the S&P 500.  It is likely they will achieve over 7% given a decent length of time. With enough money invested you can pull what you need in up and down years and it will average out.

I could see this happening. If as you said they had everything paid off. Lived in a state with low property taxes and cost of living. You could not do it living in NY city for instance.  Say you were lucky enough to have a cool 1 million and retired at 60 yrs old

You lived say maybe another 30 yrs which would put you at 90 yrs old. What would that be 33,333.00 a year. If you lived conservatively I could see someone doing this.  I know this is all hypothetical based upon having 1 million. But if it was done like you said. I agree with you.

You can live comfortably, but again it depends on what part of the country you lived.

33,333.00 would be like earning maybe 40k or so a year after taxes.  

My property taxes for instance is 1500.00 a year. I was grandfathered in under the old tax code just got my tax bill today

Is this inflation adjusted? That website has AIDS so I didn't read it all.

A million dollars by the time today's 18 year olds are 67 probably wont even be enough to buy the average house.

No hopefully interest rates will eventually come back up and we will be able to earn some interest on our investments one day again.

These low interest rates are stimulating anything. They are hurting the economy.

WHAT?!

Fast food is cheap compared to other means of eating "out", sure. But as far as a means of regular sustanance it is not cheap at all.

My wife and I average less than $50 a week in groceries and we eat GOOD. Steak and chicken etc every night, sandwiches at lunch, bagels eggs bacon etc for breakfast. McDonalds for three meals in one day is at least $20 for me alone.


For context, neither one of us are minimum wage or overweight.

Take that one million dollars and divide it by the number of years you have left to live while retired.

One million dollars when you have income coming in (from W-2 wages, investments, or other sources)?   It's a lot of money.
One million dollars when you have LITTLE income coming in (possibly only SS) and you have 20-30 years left to live?   Not a lot of money.   At all.   

Ummmmm. No.  I said without earning interest.  I used the worst case of $4 million.  At that value with no interest earned at all you could draw $160k a year for 25 years.   And you missed my point, you don't need $4-5 million to retire unless you've carried a shit ton of debt into retirement. 

If you can manage to make just 3% on that million dollars that is $30k of income per year 

How are they hurting the economy?

It's a good thing nothing ever goes wrong in life and we can boil complex financial issues down to one if-then conditional statement.

If you earn 3%.    What if you don't earn or average 3%?      
What kind of investments are we talking about?   A million dollars in a 401k?   Stocks, bonds, real estate?    What are we talking about?
What is the tax treatment of those investments ($30k is GROSS for a 3% return but you may net far less depending on the facts and circumstances and the type of investment)?

Say you do earn 3% and that is pure interest income and you get Social security.   Is $30,000 interest income + whatever your SS benefit would be (assuming you get any) enough to live on in your geographic location?
What are your living expenses?    
Are there any unforeseen expenses that crop up (new children/grand children/disease/car dies/house blows up in a way not covered by insurance/etc...)?

I am NOT trying to discourage anybody from saving, planning for the future, or living within their means but these issues are bit more complicated and require a bit more foresight and planning than I have seen suggested.   

lol--is OP seriously shilling for investopedia academy's "become a day trader" campaign?

minimum wage is a gross of $15K assuming 52 x 40-hour weeks.  i live in a very low-rent area (<80% of the national average), and still pay $7K/yr before utilities for a studio.  that would leave ~$670 a month for utilities, bills, groceries, and fuel.  the article's math is based on $200k/mo deposit, or almost 30% of that (and assumes a magical $5K gift for seed money).

it's absolutely possible to earn your way up the income ladder.  my grandfather worked his way up from immigrant street urchin in the '20s to a millionaire in the '90s.  but don't be stupid--no one is going to become a millionaire at a minimum wage job without so much overtime that it's essentially 2 jobs.

Living your entire life at minimum wage is like Roy going back to the carpet store after beating cancer.

"That's the difference between you and me Morty.  I never go back to the carpet store."    

My aunt makes $24k a year and has managed to save 10% for years.

For a while she made really bad investment decisions and had pretty big losses, but is now iin index funds and doing fine.


Doubt she will ever be a millionaire but shouldn't get stuck living solely on social security either.

Hey, he only charges 1.5% so there's that.

And then you die soon after retiring and never doing anything fun. Saving is good but waiting til your body is self destructing to live your dreams isn't my idea of a plan.

Right. The 190k/yr is what I plan to live off of using my contribution rate, principle, anticipated growth/inflation and continued growth in retirement. When I die, I should have a little over a million each for four kids. (Currently I have three kids and hope to have a fourth in the next year or so.)

Bullshit ... even if you eat the $2 meal or off the dollar menu (which nobody does). Getting off ones lazy ass to make and brown bag a sammich costs only about $.87 for a sustainable lunch...  You can eat for a whole day for what is spent on a single $5-$7 fast food meal.

I plan on living a long time. Worst case it goes to my kids. I still drive a fun used car and have a nice gun collection. I do bring my lunch to work every day and we don't eat out a ton. 

You should seek professional investment advice.   Start with Fidelity investments.  
Last 5 yrs for me has been 15%/yr. 

How many people actually have a cool mil in their IRA?  I bet it ain't that many.

^^^ Truth ^^^

How many you got?  Post the financial statements...

Don't make minimum wage, but I'll be retired soon because of crypto market and bitcoin. Still one of the best investment opportunities of a lifetime and I'm only 35. It's just good luck I guess

you've got a lot of things tangled up above.

let's start here: the Federal funds target rate provides a "base" for our calculations.  the Fed funds target rate varies over time, for several reasons.  the primary reason is that by lowering the target rate, the Federal Reserve can stimulate the economy, because banks can borrow money cheaper and that means you can borrow it cheaper from the bank.  conversely, by increasing the rate, the Federal Reserve can slow the economy and prevent runaway inflation.  these changes to the rate do not have immediate impact to the economy, as it can take from months to years to see feedback from a rate adjustment.  

on average, there is *approximately* a +3% difference between the Federal funds target rate for banks to borrow against, and what you can borrow money for.  this means, for example, if the Federal funds target rate is 1.25%, a long duration collateralized note (for example a 30yr mortgage) underwritten by the bank can be obtained for about 4.25% APR.  if these numbers look familiar, it is because this is basically the situation we are in now.  the bank is pocketing the 3% as the middleman, and for accepting three types of risk (default risk, interest rate variation risk, and pre-payment risk)

aside:
way back in 1980 or so, the Federal funds target rate was 15%, and a 30yr mortgage was going to cost you 18% APR.  note again, about a 3% difference in borrowing costs between what the bank pays and you pay.

now then, suppose you want to loan the bank money.  this is exactly what you do when you have a simple checking account that pays interest, or you purchase a CD -- you are loaning them money for some duration (say, a 1 yr CD).

how much should the bank pay you for your loan?  well, look at it from the bank's perspective for a moment.  they can borrow money from another bank or even the Federal Reserve itself at the Federal funds target rate: currently 1.25%.  there is no reason to pay you any more than this on a short term CD.  in fact, if you look up 1yr CD rates you will find that they are approximately 1.25%.  now then, there are reasons for the bank to pay you more on longer term CD's, because (whether you know it or not) you are committing to accept interest rate risk.  the bank will pay to transfer this risk to you, and they do so by offering a higher APR return.  if there is a period of high inflation, they still have your money for (example) 1.5% but they get to loan it out at (example) 6%.  the spread (4.5%) is theirs to keep, and is better than their typical 3%.  

as you can see, the only way to get more return than the current Federal funds target rate is to accept some risk.  you want no risk?  you get about 1.25% return, take it or leave it.  you want higher returns?  you are going to have to swallow some type of risk.  

the spectrum of that risk ranges from longer duration CD's to bonds to stocks to stock options to derivatives to futures and continues onward to other esoteric instruments.  from left to right, each has higher return potential but increasing risk.  if you want zero risk you are going to have to accept returns that are the same as the current Federal funds target rate, there is no secret sauce here.  if you want higher returns than the current Federal funds target rate you are going to have to accept one or more forms of risk.  

so what do you want?

you could also wait for the Federal funds target rate to be ratcheted up higher.  say, for example, the Federal funds target rate is raised to 6%.  that's good!  you can make 6% on your no-risk deposits.  unfortunately, 30 year mortgage rates are now around 9% and the housing market is dead slow and your house is worth less because there are very few buyers when rates are that high.  moreover, the Federal funds target rate was raised to 6% to counteract inflation so your milk and gas and other staples are costing you more every month.   finally, the company you work for can't afford to borrow money to buy more real estate to expand operations and/or can't borrow money to invest in capital equipment like machine tools or such.  

so what do you want?

then the Federal funds target rate is ratcheted up even higher.  say, for example, the Federal funds target rate is raised to 9%.  that's great!  you can make 9% on your no-risk deposits.  the housing market all but collapses because people can't afford a 12% APR mortgage.  debt investors flock to the US, where they can get 9% no-risk return on highly stable US-backed T-bills.   the dollar gets stronger, which enables US companies to afford greater quantities of offshore resources.  (a strong dollar buys more labor in a weak currency country).  so your company, which can no longer afford to expand it's operations here in the US and is seeing rising domestic labor costs due to inflation, begins to export work to other countries.  and then you and the rest of the folks you work with lose their jobs.  

so what do you want?

ar-jedi

you've got a lot of things tangled up above.  in fact, so much is tangled up that i'm not typing any more.

Interesting. Moving most of it to stocks or staying in cryptos?

click:
http://www.ar15.com/forums/t_1_5/1762727_Get-ready-for-Market-Collapse-2-0-on-Monday.html&page=115#i66980316

ar-jedi

I rarely eat fast food, but it seems like it has gotten fairly expensive for the most part.

My coworker makes dog food from the chicken, beef, and pork that is about to reach the sell by date and marked way down in price to move it.  There is nothing wrong with the meat, just getting really close to the sell by date.  He cooks it that day and makes the dog food and freezes it.   He says it is cheaper that way than even the cheapest canned dog food.


Lots of ways to save money if you are willing to search for deals and sacrifice some.

Moving most to stocks. The gains over the past month have been insane. It's sad when the small group you trade with are not happy with just a 100% gain and are looking for coins with 300%+ in a very short period of time...meanwhile people in stocks are super happy to get 10% a year. This market will only get hotter as adoption levels take off in the next several years. It's no where near a bubble at this point. Institutional money just getting their feet wet. It will make a lot of millionaires since it's a worldwide market with the only barrier to entry is having a computer or smartphone. It will be spectacular to see bitcoin at 50k or 100k before finally blowing up.

50k or 100k?    You think BC is going to hit 50k?

Yes probably 4-5 years. Institutional money and the developing world will drive growth after the segwit2x fork. Blockchain/Smart contract tech will be huge in 5 years. Meanwhile people will keep saying "bubble" and too expensive on bitcoin while it keeps going generally up. The whole crypto market cap is tiny compared to stock bubble caps in the past, yet crypto is worldwide with a much easier barrier of entry.

The crypto currency "craze" has been crazy.

I don't have a huge % in them, but enough to make it interesting.

Just today a guy on CNBC said that sooner or later someone will hack bitcoin, lite, ether, whatever and the crypto craze will be over.  I don't know if it will be that extreme, but like I said:  not a high % in cryptos.

On the one hand you say you see the use of crypto currency growing.   I don't doubt that especially in places like China and India (more so after the currency controls put in place by those nations); assuming neither of those counties suffer catastrophic economic, or socio-economic events (cough China cough).   Specifically, the Chinese government is cracking down on VPNs and could, in theory, severely hinder the use of crypto currency in their country if they so desired (and I bet they would if the RMB was in danger).

On the other hand you said the price/value is going to continue to go up and some people will continue to abstain because they think it's in a bubble.    That might happen.    And if it turns out that BC or some other form of crypto-currency finds its way being used world wide by a rather large swath of people, more so than it is today, I would not think it unlikely that people "invested" in the scheme now would make out like bandits.   But that supposes the currency survives (isn't supplanted by another) and finds its way in world wide use more so than it is today.    Will that happen?   I don't know.

From where I sit, the absolute last thing I want in a currency is wild fluctuation or instability.  An investment with a possible return (as well as a risk of failure)?  Sure.   Currency?  Hell no. 

What am I missing here?     Not a troll post nor am I saying BC is or is not in a bubble.    I'm genuinely curious.  

I don't have a dog in this pony but state actors could bring down cryto-currencies as well.     China has taken an extreme interest in preventing their people from accessing the internet while controlling how they spend their money (currency controls).

On the other side of the Pacific, you have the United States Government.   The IRS considers these to be property for tax purposes rather than currency  (not a small deal).  

If China decides to crack down, hard, that will will have ramifications.   Will that happen?  I don't know.    

What an interesting time to be alive.  

its really not, unless you live off the grid in alaska or the UP of Michigan etc.

J-

likewise and I live a pretty spartan life.

J-

If someone lives a lifestyle based on a minimum wage income, along with saving, they should be fine with 1 million for retirement.