[Shipping up to Boston]

Originally Posted by Blueblaze

Why would 1.5 million be surprising when the average household income today is close to $80k? I thought I was a rich man the day I built my $130K dream home. I was making $30K/year at the time, as a Computer Programmer with three degrees. I thought I was really something, making my age. That's minimum-wage burger-flipper money today! And yet I somehow retired comfortably, despite three stock market crashes, my employer's bankruptcy in the Enron debacle, and a forced move and job hunt 500 miles away in my 50's.

Any fool can retire a millionaire. All it takes it a savings account and a lick of common sense. $80K, with a 3% inflation adjustment per year, and enough sense to save 10% a year at a 5% return, is $2,081,365 by age 65.

Somebody ought to tell the kids to quit begging for government handouts and just get a damned job!

In a perfect world what you say makes sense. Just one part i would offer a different view....in the 50's my grandparents bought their house for 17k, my sibling bought theirs in the early 80's for 56K. Boston mind you. Both sold recently for 1.1 mil and 1.3 mil respectively. You just dont see that kind of appreciation (at least in that region) anymore. A million up north is the starting point and its a bidding war, usually for a postage stamp property. So does that mean in 60, 40 years using that standard....those same homes will appreciate to 15, 20 mil? Of course not. There will be a huge bubble burst. Much harder road for young people...doesnt mean we worked any harder, or less....its just a different playing field. imo

[JMintzer]

Originally Posted by Shipping up to Boston

In a perfect world what you say makes sense. Just one part i would offer a different view....in the 50's my grandparents bought their house for 17k, my sibling bought theirs in the early 80's for 56K. Boston mind you. Both sold recently for 1.1 mil and 1.3 mil respectively. You just dont see that kind of appreciation (at least in that region) anymore. A million up north is the starting point and its a bidding war, usually for a postage stamp property. So does that mean in 60, 40 years using that standard....those same homes will appreciate to 15, 20 mil? Of course not. There will be a huge bubble burst. Much harder road for young people...doesnt mean we worked any harder, or less....its just a different playing field. imo

Exactly. My middle daughter and her husband both have good jobs (both 6 figures +), save like crazy and have a very nice nest egg set aside to buy a home. No student debt for either of them, both funding their 401Ks for retirement...

Unfortunately, they are looking in Arlington, VA, where a "fixer upper" is $750-$1 million...

Yes, they could afford the low end of that, but their mortgage payments would be $6K/month... And that doesn't include remodeling of the very dated homes...

[Stu from NYC]

Originally Posted by JMintzer

Exactly. My middle daughter and her husband both have good jobs (both 6 figures +), save like crazy and have a very nice nest egg set aside to buy a home. No student debt for either of them, both funding their 401Ks for retirement...

Unfortunately, they are looking in Arlington, VA, where a "fixer upper" is $750-$1 million...

Yes, they could afford the low end of that, but their mortgage payments would be $6K/month... And that doesn't include remodeling of the very dated homes...

Our daughter and son in law live in DC where a house that would go for 750 would be considered a slum and the buyer would tear it down and build new.

[manaboutown]

This is a tough question. Many variables need to be considered. One's expected life span, current health, proposed standard of living, inflation's effect over one's remaining life span and the relative cost of living where one expects to retire come to mind for starters. Each case will differ. Some will be able to get by on $1M - $2M; others may need $1M or more a year.

[manaboutown]

Originally Posted by Stu from NYC

Our daughter and son in law live in DC where a house that would go for 750 would be considered a slum and the buyer would tear it down and build new.

In 1967 I bought a house in Alexandria, VA in a nice neighborhood I believe called Rose Hill off Franconia Road on a street named Chevell Court for $27,000. Just checked. Homes on that street now are in the $750K+ range.

A year later I bought a four unit apartment building at 321 C St SE in the Capitol Hill area of DC for $28,000. I wonder what it would go for today? Zillow shows it at about $1.5M.

I have fortunately been able to assist my adult children with housing but my grandchildren aged 15 - 20 are facing very high housing costs in their future.

[JMintzer]

Originally Posted by Stu from NYC

Our daughter and son in law live in DC where a house that would go for 750 would be considered a slum and the buyer would tear it down and build new.

Yup, plenty of those around... I've worked in DC for close to 40 years and the changes in housing prices are staggering. It's also the same in MD, where live. Yet, they sell within a few weeks. Go figure...

[Blueblaze]

Originally Posted by Shipping up to Boston

In a perfect world what you say makes sense. Just one part i would offer a different view....in the 50's my grandparents bought their house for 17k, my sibling bought theirs in the early 80's for 56K. Boston mind you. Both sold recently for 1.1 mil and 1.3 mil respectively. You just dont see that kind of appreciation (at least in that region) anymore. A million up north is the starting point and its a bidding war, usually for a postage stamp property. So does that mean in 60, 40 years using that standard....those same homes will appreciate to 15, 20 mil? Of course not. There will be a huge bubble burst. Much harder road for young people...doesnt mean we worked any harder, or less....its just a different playing field. imo

Yes, and my $130K house in the 80's was just as incomprehensible to my grandfather.

I agree that a thing that can't go on forever, won't. But inflation has no bearing on my point. If you want a comfortable retirement, all you have to do is save for it. Whether or not there will be a functional America for our kids to retire in, is a different subject.

But if I was a 30-something faced with a million-dollar mortgage to live in a dungheap like NY, Boston or DC, I hope I'd have sense enough to move to someplace where they don't confiscate half your income before you get a chance to pay your $5,000 mortgage payment, and then try to save $500 for your retirement after you feed your kids. Choosing where to live has just as much to do with common sense as saving 10% of your income.

[jimbomaybe]

Originally Posted by Blueblaze

Yes, and my $130K house in the 80's was just as incomprehensible to my grandfather.

I agree that a thing that can't go on forever, won't. But inflation has no bearing on my point. If you want a comfortable retirement, all you have to do is save for it. Whether or not there will be a functional America for our kids to retire in, is a different subject.

But if I was a 30-something faced with a million-dollar mortgage to live in a dungheap like NY, Boston or DC, I hope I'd have sense enough to move to someplace where they don't confiscate half your income before you get a chance to pay your $5,000 mortgage payment, and then try to save $500 for your retirement after you feed your kids. Choosing where to live has just as much to do with common sense as saving 10% of your income.

With all due respect, inflation has a great impact on your retirement, sponsored defined benefit retirement plans have become scarce except for ones funded by a government entity and most of them don't look to healthy, SS alone makes for a not very opulent retirement, cost of living adjustments ether from SS or pension plans always seem to fall short of real inflation. Inflation destroys the value of most retirement assets . The stats I have seen look rather dim for a large section of would be retirees, for most it's a failure to plan rather than a failure of plan, but if you plan with a good cushion perhaps at least you hiers will have something to hold on to, and avoid a diet of rice, beans and dog food

[OrangeBlossomBaby]

Originally Posted by huge-pigeons

If you ask Americans, the average answer is an astounding $1.46 million.

That’s per a recent Northwestern Mutual survey of 4,500 U.S. adults, which found retirement cost expectations have spiked since 2020. This year’s average estimate is 53% higher than it was four years ago, when people said they’d need $951,000 to retire.

When it comes to their actual savings, though, Americans are far from achieving their expected retirement needs: Survey respondents reported their average retirement savings is just $88,400 in 2024.

That’s a $10,000 decrease from the average retirement savings recorded by Northwestern Mutual in 2021, when the metric hit its five-year peak of $98,800.

IMO, having $100,000 in your savings when you retire is pretty sad. I know many people the made good money throughout their careers but always seemed to spend more than they made. I think $1.5M is a little low too to retire on especially if you are fully invested. That $1.5M could become $800,000 if another 2008 happens and you might not have to years for your money to come back, all the while taking distributions out of it.

You're comparing apples to lifeboats.

Savings isn't income. Most people have social security income in addition to savings. Also, if you don't owe on a mortgage but own your house, you have equity, in addition to savings, and income.

We absolutely don't have $100k saved up. We took what we got for the sale of our house up north and sunk it into a house in The Villages. We owed for around 6 months to a relative and repaid it in full. And then - we had very little in savings to show for it.

I continued to work part time, he got his pension, then he started work part time after the first year, then I quit, and he started collecting social security, and I'm getting social security too now.

So we have two social security checks, a pension check, and not much in the way of savings. This is how millions of people live. We're living much better than many, because we have no outstanding debts, and we're not "one paycheck from homelessness." We enjoy dining out, we enjoy a house that isn't falling apart, a truck, a car, two golf carts, the taxes and insurance obligations covered, health insurance paid for, dancing, watching TV, having cell phones and other assorted technological gadgets and doodads, a decent wardrobe, and an outstanding neighborhood of great people.

You don't need $100,000 savings to get all that. But you DO need a regular income stream to pay the bills, and some padding in case you need a new roof.

If I wanted to live MORE comfortable than I do now, I'd say - having our current income stream, and maybe $250,000 extra kicking around somewhere would be excellent. But I wouldn't turn down the winning powerball ticket.

[Blueblaze]

Originally Posted by jimbomaybe

With all due respect, inflation has a great impact on your retirement, sponsored defined benefit retirement plans have become scarce except for ones funded by a government entity and most of them don't look to healthy, SS alone makes for a not very opulent retirement, cost of living adjustments ether from SS or pension plans always seem to fall short of real inflation. Inflation destroys the value of most retirement assets . The stats I have seen look rather dim for a large section of would be retirees, for most it's a failure to plan rather than a failure of plan, but if you plan with a good cushion perhaps at least you hiers will have something to hold on to, and avoid a diet of rice, beans and dog food

Inflation has an enormous impact to those of us living off our savings and SS checks. But it does not have any impact on whether a working person, whose income is inflating along with the rest of the economy, can save that scary $1.5m number for retirement -- which, by the way, does NOT include their real estate and SS. I just showed you the math -- which included 3% for inflation -- proving that someone with an average $80K income can easily save over $2M in 45 years. The question is not, is it possible. The question is whether the average wage earner has enough common sense to do it. Given the fact that the average American has less than $1,000 in the bank, obviously, most don't.

My biggest fear is that the generation who refuses to show up at the office to work, and thinks the Gooberment ought to pay for their student loans, is going to look at my nestegg one day and say "gimme".

[Pugchief]

Originally Posted by Blueblaze

My biggest fear is that the generation who refuses to show up at the office to work, and thinks the Gooberment ought to pay for their student loans, is going to look at my nestegg one day and say "gimme".

That seems like a pretty rational fear. Wealth redistribution never turns out well, but they keep trying it anyway.

[tophcfa]

Originally Posted by Rainger99

According to the Villages, the basic costs including taxes and bond is between $858 and $1390 a month.

That should cover the grocery bill.

[OrangeBlossomBaby]

Originally Posted by tophcfa

That should cover the grocery bill.

It doesn't cover the cost of the house, food, dining out, clothing, golf cart, replacement of appliances, furniture, etc. etc.

It's just amenity fee, trash collection, average sewer, water, gas/electric, insurance, taxes, and development district assessment which would be the bond + maintenance + fire.

The numbers they provide are believable.

[themartianchick]

Like everything else in life, there are innumerable variables. My husband and I took a different path. We were focused on developing multiple income streams, so we worked 9-5 jobs and purchased a few rental properties. Our personal home was a lot less than what we could afford and we never traded up. Over the years we contributed to 401Ks, invested in the stock market and my husband used the IRS 55+ exception to quit his job and begin retirement. We paid off any remaining mortgages with some of the money from his 401K without penalty. We are debt-free and paid cash for a condo in Florida so that we could snowbird. I'm not old enough to withdraw from my retirement accounts yet, but I don't need to. Our properties help our rental income to keep pace with inflation, so we have never needed to have anywhere near a million dollars in investments or cash. I earn a nice bit of cash consulting for a couple of clients and hubby is now old enough to collect social security. We don't live extravagantly, but we do have the luxury of traveling and buying the things that we want without a financial struggle. Ours was just one of the many paths that can lead to retirement.

[bowlingal]

it all depends on your lifestyle. I don't have a million dollars....or anywhere near it. BUT I am living a very active lifestyle, retired, own my home and car and have a nice nest egg. Managing your money is key.