Is one million enough?

[KneeDeep&Sink'N]

I know there is no crystal ball, but if the average Joe retired in two years at 55 and he wanted to maintain a comparable style of living that he enjoys today. (Let's say he probably would want or need something between 65,000 - 70,000 at todays rate.) Would he have to try and figure an inflation rate of 4 - 6 percent yearly increase in the cost of living when he uses a formula to compute how much he would need over the next 30 years.

Would one million in liquid assets be enough? I always thought it would be in the past, but now I am kinda wondering?

Yeah, I know, I am clueless in regards to this and need to be talking to a financial planner. Before I do, I would like to get some views or comments on what you think would be the magic number for a person who is not debt laden. By the way this average Joe would be selling his house with about 6 years left on the mortgage and would be building a "retirement" home in the $200,00 range. (The land will be paid off by then.) Thanks- Craig

[fishnlab]

Too many variables....
Does "average Joe" have any interest in leaving any money when he's gone?
How long will "average Joe" live?
Is "average Joe's" current home with 6 years remaining worth $10M or $100K?

Assuming Joe had $1M cash, I think Joe could pull about 4% per year off the top and maintain the $1M balance. This would give Joe $40K per year.

Possible to get by, but remember that Joe's expected health expenses will likely increase in the next 15 years.

I would encourage Joe to work until he is 59 or 60. The house will be paid off, and his current investments will have grown significantly, getting him much closer to his $65K per year goal.

[Mr. Breeze]

Isn't the never have to worry amount $10 mil nowadays? If your 50 and live to be, say 80 or 90.

[Wedge]

Keep your TCLEOSE certification up......we are going to need some veterans out there soon I have a feeling. Have you ever thought about consultant work? In your line you should be able to help some private companies and smaller municipalities for a nominal fee.
I have 6 months left for my flat twenty year stint in my line of work....I will have that retirement made and happy about it. Here is my question....if I take it the day I leave I will get about 35 percent of 56 percent of my highest three years salary. This is due to my young age....38. When I turn 50 it goes up to about 50 pecent of my original highest three years salary with no more penalty. Now....here is the dilemma; If I leave it locked in until I am 50 I can draw 45000 more over a life expectancy of 78. If I remember right, my draw off of the 55k retirement account investment will be about 650k and health insurance even if I leave in June with twenty years and 38 years old. I suspect my next career will have some aggressive investing opportunities (I hope). So....if I live off of the new salary and reinvest the annuity check from the first retirement I should be able to retire in style at 63. I darn sure hope I have this figured right.

[bill]

Is a million enough?

You can ask 20 different people and get 20 different answers.

What are your plans to keep busy? If you work 8-12 hours a day now...what will be used to replace that time? Sure, there are the quick and easy answers but long term?

Don't rush. I don't believe in "magic". (Just a FWIW and a MHO)

[Pocketfisherman]

A Million is enough if you can draw about 33K/yr and live off of it. That is about as high as you can go, and still keep the principle intact at the current average rates of return. About 2.5 million will let you draw down about 65K/Yr.

[bluefin]

I'm not a math major but I'm thinking $1mil will draw an easy $60k/yr. $2mil would draw $120k/yr or ten thousand a month based on 6% return. A lot of folks in this current stock boom are getting around 8 to 10 percent returns. Note, my savings account is getting 4% (for whatever that's worth LOL)

[BondBroker1]

Right now you can get about 5.75 to 6% on AAA rated securities (bonds) you would want to allocate the largest percentage of your portfolio in this type of investment. To cover your inflation worries you would want to allocate a smaller portion of your portfolio to growth. This can be achieved through investment in stocks or highly leveraged CMO bonds. I’ve always been a big fan of bonds and CDs because these are investments that have a contractual agreement to give you all of your initial investment back when they come to maturity. If you invests heavily in stocks or mutual funds you run the risk of losing some of your initial investment. Is $1MM enough to retire on if you want to have 65 to 75k per year? With no risk you will be able to get about 60k per year at current. If you take some interest rate risk with a portion of your portfolio you could easily get the 65 to 75k per year that you are looking for and still have no risk to your initial investment as long as you hold your investments to maturity.

[Fubar]

is it enough? it's a start.