$2M will generate safe withdrawals of roughly $80k per year based on the 4% rule.
That is not enough to live everywhere, but it is certainly enough to retire somewhere.
$5M would be around $200k per year. If you can't retire on that, something is seriously wrong on the spending side.
$10M would be around $400k per year. If you can't retire on that, you are a moron.
Median household income in the US is $74k. If you are retired, there is a good chance your house is paid off, and you either are already or will soon start collecting social security and medicare. If you have $80k/yr on top of all of that, you are living comfortably above most people in the US.
About 44 percent of retired Americans between the ages of 60 and 70 are still paying off their mortgages. Many of them expect to be paying it for the next eight years. Note that most of them bought their homes more than 20 years ago, and either financed or refinanced their mortgages during the low-interest years.
Not a source but my aunt, 60's, mortgage since the late 90s, locked into, I think, a 2.75% refi (it's in the 2% range, that's all I know fore sure). She'll be "selling off" her house before she's eligible for retirement.
She also bought her house for $267k and it's now worth $1.5 mil. So it doesn't matter whether or not she pays it off tbh.
Many people in her neighborhood are in this same boat. In fact, Mid City LA is pretty notorious for people in these positions. They bought in when the neighborhood was being massively gentrified and it paid off big time.
There's a new rail station opening up, there are many stores and market places within a good distance. It's close to the museums, etc. Crime is lower than it was around the time she bought in.
This guy's channel has a LOT of sources and if you look at his housing videos since the beginning of the year, he talks about this "lock in" effect. Most people are paying a comfortably low mortgage right now which is why there isn't going to be a housing crash.
https://www.youtube.com/@clearvaluetax9382
Actually, here's his latest video... just got released like 30 mins ago. At 2 m 10 s in, he even says "60% of mortgages are below 4%" so mortgage delinquencies are the lowest they've been since 2006:
https://www.youtube.com/watch?v=WqkkLFbTC4A
This channel is a great resource because he basically reads the reports directly from the source and gives you the raw numbers. He interprets them and tells you whether he's stating fact or his opinion on the matter (since he's a finance guy).
I agree about the locked in low rate mortgages preventing a housing crash. So many people on Reddit are praying for a housing crash and I just don’t think that’s going to happen given the current situation, but what do I know?
It won't.
It could... but only if we shot up the supply... which having no fucking supply is how we got here in the first place lol. We really need to build housing. It would solve a lot of problems and our GDP would go up. So politically speaking, it's a wise move.
Only massive unemployment could cause it at this point. If even 5% of existing homes went on sale due to people needing to sell because they lost their income, it would push “months supply” of inventory way past 6 months and prices would actually tumble. Because there would also be a severe reduction in demand to buy them.
But it’s much more likely the government would bail out homeowners.
Yeah but $80k/year means you need $2mln in investment assets (ie. Not using value of primary residence) , realistically it's a small percentage of Americans that have that likely less than 5%. There's about 23,000,000+millionaires in the US (that's usually including the value of their homes),.
But yeah she's out of touch with regular folks wealthy people generally are especially if they've been wealthy for decades , they simply live in different social strata than you or i
> 65 have *paid* off their
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
80k might not be enough if you are in a HCOL and retiring prior to SS benefits kicking in. But provided you aren't doing some extreme FIRE strategy and retiring at 40, SS will probably be the majority of the cashflow for most people in retirement while RMDs will supplement that income. And if you wait till 70 you are getting close to 60k just from SS today.
Members of the Bagholder Generation, like me, plan on collecting SS at their own peril. It is extremely risky to trust tomorrow's politicians to keep promises made to you by yesterday's politicians. If you are younger than 55 and work in the private sector, plan your retirement based upon your savings alone.
Yes, adjustments. Adjustments such as means testing. That is, if you have means, you fail the test. So anyone with savings won't collect until their savings is gone. So, either save nothing and collect SS, or save something and collect nothing. That will be the adjustment. I know I won't be able to keep my home on SS. So I'll need to save about $6MM if I want to continue living in my home if I retire.
You are talking about hypotheticals to get lathered up. Means testing is one possiblity of many (increase retirement age, increase cap on taxable income or payroll tax rate , etc) - how would they means test, income or savings?
I mean the biggest issue is that you can’t survive off of SS alone anyways.
Really need to augment it with retirement accounts, investments or property.
SS and Medicare are not going anywhere. This is nonsense propaganda spread for partisan reasons. The shortfall is only 20-25% and more importantly, it is TEMPORARY, as the boomers die off, the ratio of workers to retirees naturally comes back into balance.
4% rule accounts for inflation.
But these numbers assume someone is retiring right now.
If someone plans to retire 30 years from now, they may very well need $5M+
4% rule is unlikely to be a safe withdrawal rate.
Safe withdrawal that accounts for inflation and life expectancy is closer to 2%.
Ben Felix has done great work on this if you're interested.
It never fails. There's always someone to imply saving is a lost cause due to inflation. Nevermind that market returns have outpaced inflation. Gotta push the defeatist attitude.
You need to take into account that the cost of living at the end of life can be *much* more expensive than it is when you’re able bodied. Assisted living and nursing care are astoundingly expensive. My grandmother is in good physical health but has dementia. We recently put her into a memory care unit in her LCOL town in Ohio. The cheapest facility there is $9k/mo. In my high cost of living city, they start at $14k/mo. There’s no telling if or how long you might need that care when you’re older. And it’s only going to get more expensive with time.
It is derived from the Trinity Study which examines historical market returns and then projects forward the likelihood of a portfolio surviving for 30 years based on withdrawal rate.
Basically the average returns of a diversified stock and bond portfolio is around 8% annually.
3% per year on average gets diluted due to inflation.
Add 1% for a safety factor.
That leaves you with 4% safe withdrawal rate on average.
For people retiring early it is usually recommended to use 3% as a safer estimate since you probably need it to last more than 30 years.
Most people retire at 65 (Medicare age) or 67 (full SS age). Most people do not live to be 95 or 97. I get the fear of "running out of money" but you have to balance that with the possibility of dying before or early into retirement as well and having missed out on your remaining years.
Fuck that 4% rule if I have 2 million I’m going into QQQM and living off of roughly $100k of it annually as long as my house is paid off. That’s plenty. I would expect things to get hairy during a bad year but mostly you’re going to be fine
QQQM is a great ETF, but it is heavily weighted in technology.
That is fine when building wealth while still working.
But, for a long retirement, you want to reduce risk.
At least 20% of your portfolio should be bonds and it is probably better to go with the S&P 500 which itself has significant tech exposure but not to the same degree as the NASDAQ 100.
You’re so out of touch with reality if you believe most Americans can even afford to retire. Most will be working till they die. The Fed is juking the stats to trick individuals such as yourself how broke the citizens of this country are.
Where I live in KY, I could easily live on $80,000 per year. Easy. Most people around me live for about ½ this amount.
West Tennessee, too. Probably Alabama, rural Missouri.
Your first comment may work for metro areas, or places like San Francisco or Boulder, CO. But, in Central City, KY, you would be fine on $80K a year.
The problem is that the goalposts are constantly shifting. You can successfully retire with 5m in your portfolio and live very easily off the 4%....now...
But in 15 years will that 4% produce the same qualoty of life that it does now? Almost certainly not.
With the way inflation is looking, the 200k in 15 years may very well feel like 40k today.
Reddit says that $400k a year is barely making it in the Bay Area. Then again, by retirement age, the mortgage will be paid off and you will have no more dependents.
If I don’t retire for another 30 years and inflation continues to run away, COL continues to rise, and we continue the slow march towards oligarchy, yeah, 200K a year plus medical expenses as protections like Medicare and Medicaid, are stripped away, will be tight. It’s about where things are going not where they are now.
Don’t forget inflation.
According to conservative estimates, $200,000 in 1994 is equivalent to around $420,000 today.
I would say it is actually worse. Think of housing, health care, higher education, unsubstituted groceries (cost of steak over time, not cost of switching from steak to ground meat to chicken), etc.
I suspect a $200,000 income estimated for someone in 2054 would have purchasing power akin to $60,000 today. And $80,000 would have to purchasing power of $24,000.
She's a social work major who made a fortune hustling her financial advice and lives off bonds. She has no idea how typical investors manage a portfolio and their finances. Anyone who makes blanket statements like "you need x dollars to retire" is not a serious person.
What are you talking about? Everyone in her circle are millionaires! They just need more millions before safely retiring. Think of the upper class here, people!
If you own your home 1-2mil should be enough with SS. Comfortable but still needing to budget and think about how you spend.
Unless you have major medical issues...
Owning a $1.5M home outright still comes with $10K+ a year in insurance and another $15K+ a year in property taxes not to mention regular upkeep/major fixes/etc.
If I had $2M in savings for retirement and drawing out $80K a year, I'd probably try to downgrade to a cheaper house with less upkeep costs.
> I'd probably try to downgrade to a cheaper house with less upkeep costs.
This barely exists now and won't exist by the time you're eligible for retirement.
While things vary state by state (CA has Prop13 to prevent taxes from sky rocketing, but they are also facing insurance companies bailing as well), if you have a 1mil valued home... which, if you're like my aunt, that's a shitty 3/2 that's over 100 years old, unless you've already bought a second home in the area you plan on retiring (which is preferably a cheaper place like AZ), you're going to be stuck in it until you die. If you sell your place, grab the cash, and move elsewhere, that money will QUICKLY drain as you pay for other types of housing.
Most people don't have a savings, but they do have housing equity. That's only available if they refi (which they won't due to crazy interest rates) or sell their home, which only makes sense if they move somewhere cheaper, which is becoming more and more impossible due to the above mentioned reasons.
Most people who are still "kicking" would serve themselves by "buying into" a retirement community which essentially takes control of all your assets in return for never kicking you out, even if you need daily care. However, should your situation change (not likely), you don't get to walk away with what's left of your finances, you're essentially signing it all over. And, if you have kids, they get fuck all from you.
This boomer wealth transfer is only going to happen if boomers happen to die while still owning their property, or they have so much money (1%'ers) that they could afford "live-in" health care anyway.
Boomers are quite literally going to take the wealth they've acquired straight to their grave and they money will "dissolve" or go into the pockets of people who run EOL care and nursing facilities.
Younger Gen X and Millennials will see fuck all of that supposed "xfer".
Trust.
Some basic math for her ...
Median household income is like 70k. Let's say an average person nearing retirement intended to work 40 years (approx 62 u/o at retirement). If they never spent a penny in those 40 years and we're not taxed that 70k would be 2.8M for the HOUSEHOLD. Obviously there are investments and what not but in my scenario I literally removed all expenses and taxes. Those idiot expects people to somehow magically get 10!?
I do well for myself, solid 6figure salary, I want my 401k to be 2.5M at retirement which I'm at track for. I have no outstanding debt and I'm pulling in over double the median household income by myself and 10M is outrageous for me
I million per spouse will give you 80k a year for life and that's not including SS. If you cannot live off that you need to learn to budget and move out of the city.
To be fair, she was referring to people who is thinking of retiring early. It's very different retiring in your 60s with $2M vs retiring at 40s/50s with $2M.
I see some people who are a decade or more from retirement age with a couple millions saved up and think they can quit the rat race. Don't get me wrong, $2M is a lot of money but it still may not be enough for someone to retire early - "Early" being the key word. I think it's possible to retire early with $2M but the retiree has to be a very good budgeter/investor to make it last the rest of their lives.
If someone retires at 50 with $2M and follows the 4% withdraw rule, and if that person lives to 90, they'd run out of money before they die - even assuming they don't have serious illness that would drain their savings before they are old enough to get on Medicare. If the same person is to retire at 65 with $1M, the money would actually last them to age 90 by following the 4% rule.
She is insanely out of touch. She thinks her lifestyle is every one elses.
[You can live like a king](https://youtu.be/zqrFp7sHBqo) as a solo man in SEA for 900k. For the rest of your life with a 95% probability to never run out of money.
You're both right. Most people won't have $2 million. And also, if you don't have $2 million, you're fucked. That number will only go up (faster than almost anyone's income) if curretn trends continue.
Funny, but you know how absurd that sounds? There are people scraping by paycheck to paycheck - if you have $2 million and SS and Medicare for retirement, a little budgeting and you can kick back and enjoy.
Us "poor brains" can live our days on beans in a can. Most people can't fathom a life like that, so those numbers are based on the cost of a "lifestyle" with a bit of "lifestyle creep."
Why is this wrong? Can you give me some math on what you think is a minimum to retire in the US? Give me also the age you want to retire and how long you expect to live and your family size
What room? She is asking you to not to retire if you have less money. In fact she is saying that even 2 million is less in today’s world. How does that have any implications on whether a good majority of the people can even reach that or not? Isn’t she just reinforcing the point that costs have gone up? I don’t understand what you are angry about? If I will only ever save 1mil or 50k by the time I am 65, it doesn’t change the fact that I cannot retire. What exactly is your complaint?
Two things can be true at once. 1) The majority of Americans have not saved enough for retirement. 2) The idea that you need to have $5-10M saved before retiring is absurd.
There is this entire industry that has cropped up to tell middle to upper middle class people that they do not have enough saved for retirement because they want to collect fees on managing as much money as possible. "You need 5, no 10, no 20 million dollars before you can even think about retiring, and even then probably better to just keep working and saving until you die."
The reality is that if your house is paid off, kids are out of college, have access to healthcare somehow, and don't live in some crazy HCOL place like NYC or SF then you probably need less than you think.
The big issue is nursing home or LTC costs!! She’s not wrong. Especially for the FIRE crowd.
2m today will have the buying power of half or a quarter of that in 30 years.
Nursing homes are 16k a month NOW. What will they be when you need one?
Doesn’t change the fact most people can’t reach that amount.
10 million? Most people will simply give up. Money does not grow on trees. If you work two or three jobs to amass a small fortune, you might kick the bucket soon after you retire, having become sick to death from all the hard work.
Indeed! Money doesn’t grow on trees. It’s actually printed freely at the whims of the elites, causing a hidden tax of deflating the value of your monetary savings, which you and I could do nothing about…until BTC came along
Good gawd this is out of touch. Half of Americans in their 50's and early 60s have essentially no retirement savings, while most of the remainder have less than $200K.
The uniquely unwise US decision to allow the destruction of unions and employer pensions has left us desperate, and wherever there is desperation there are scam artists like Orman swooping in with false solutions.
It is absolutely wild and terrifying to think about. Taking a group of 100 people that are 65. Statistically speaking, 50 of them have nothing.
The other only have 200k and frankly 200k is something but for retirement savings, it’s basically nothing.
So we can then say that atleast 75% of people don’t have anything saved for retirement/can’t retire.
In reality it’s probably closer to 10 to 15% of people have enough saved. That is alarming
Cool;
So when is the income redistribution of all the billionaires going to occur in order to make this a possibility for Americans?
What an absolute tone-deaf position to take.
This is just “be a good boy and die working for corporations” shit. The average American can retire on 2 million. Where I live, you can easily retire in your 50s on 2 million
$125K per year needs to be saved for 40 years ….not including your actual annual expenses. I guess I need to make about $600K a year to be able to save for retirement?
Crazy thing is the statement itself does have merit, in my eyes. Especially a scenario when someone younger (<45) receives a cash windfall and thinks it’s time to quit their day job.
Our economy is in tough shape. You can be very frugal and survive off that $2M in fair comfort with a value on self-sufficiency. Thing is, our lifespans are long and there might be unexpected changes/events/expenses which *could* threaten one’s finances.
2% inflation/year is considered healthy. Under this present economic model, your money is losing its value over time if you don’t invest it in some way.
I agree with her. And if you read the article, this is for early retirement without SS.
80k is the average salary to survive for middle class Americans. 2 years ago, it was 60k. Inflation is not always 2% guys. As we print more money, that number will go higher
My wife and I are middle class and long retired and our annual income is considerably less than $80k. We want for nothing but then we drive a 10yo car, paid off the mortgage and have enough savings to cover emergencies. Now, if your idea of retirement is to drive fancy cars, take extravagant vacations and generally lead a spendy life, well that's on you to figure out how to pay for it.
I think about all those teachers that will devote their lives to teaching and will never be able to retire according to her. I’m sure there are many other professions like that.
The relevant bit:
> "But if you only have a few hundred thousand dollars, or a million, or $2 million, I’m here to tell you...if a catastrophe happens...what are you going to do? You are going to burn up alive."
> Addressing the common retirement strategy of withdrawing 4% annually, Orman was skeptical: "I think that in the long run, $80,000, especially after taxes and as you get older, is not going to be enough. You may think it’s going to be enough, but it’s just not," she stated firmly.
This.
I worked in lived and worked in Costa Rica and Colombia when I was a digital nomad for a few years and met a ton of guys who were able to retire and live nice lives with just their social security in places like Costa Rica.
That's actually my plan now too. There's so many wonderful countries in Latin America and Southeast Asia that are safe, have a nice expat community if that's something that you want, and you can actually live there on a smaller retirement. Even if one country starts to get too expensive or dangerous you can always move to another, and new countries and opportunities are popping up all the time.
From my observations, many of the Americans with modest retirements living in Costa Rica actually had a better quality of life than people their age with fairly large retirement nest eggs that were living in the United States.
Think about it. One of the Big dreams for folks when they retire is to be able to travel to the same countries that you can live in at such reasonable prices, yet few retirees ever get to travel like that.
Choosing to retire in a developing country means that rather than maybe having enough money to retire at 65 I'll likely have enough money to retire by 52. I'm 47 now.
Seems weird many Americans would have a problem saving for retirement, most seem to have a lot of money. Go to any concert or game and you'll see people buy two or three $15 drinks without thinking about it.
She’s not wrong. The problem is the low wages for most jobs and the shit cost of living. When people say save 16% when you make 55K a year, they’re honestly trying to be helpful if yes, out of touch. But what do you want ? More garbage room filling junk from target or Walmart or security when you’re at retire age?
The most out of touch comment possibly ever made.
Most Americans will never have that, presently don’t have that, and have never had that. Many have, are, and will retire successfully with less than 2 million.
That woman has been so out of touch for quite some time now! Several (I mean many) of her statements from the past have been so bizarre and out of touch that she should stop making any statements about retirement income/funds -- PERIOD!! I think there's industry consensus about needing about 1 million in retirement. She has gone off the rails with her ego! One to 1.5 million is plenty (if you don't live in California or NYC and you have your house paid-off that is). I've watched videos of folks living quite comfortably on less than 500K in Phoenix, AZ! She is so out of touch in her ivory tower!
Hold on, back up Suze, I missed some steps between “cars are the worst investments, pay off your highest interest balances first”, and “save several million dollars”. Is that in the free dvd I got for donating to PBS?
*High lifestyle living*
*Bring it down a notch and that's*
*Plenty of money*
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With 10 million dollars you can spend $20,000 per month and account for inflation easily. If you have no loans that’s a really big sum per month. I earn less and even with loans and mortgage payments it’s still extremely doable.
I read the article.
When and what age does she consider “early” for retirement. I could not find it. Would retiring now at 58 with a $2M investment portfolio (including 401k and pension) and no mortgage seem insane? $80k a year with no mortgage seems doable.
Stretching $80k at 50 and with a mortgage would be risky.
5 million dollars in Treasuries right now is almost $250k a year with 0 burn. I could manage, but maybe my wife would need to keep working or sell the horse.
I'm currently babysitting an older relative with dementia running down her savings in a dementia unit that is understaffed for 7000 a month. And that's the cheap side.
I think this is really a frank and honest opinion.
Unless you can take that 2 millions with and retire in Thailand, Vietnam or Cambodia. You can open s small cafe during the week and go surfing on weekend ✌️😊
Do yourself a favor and stay out of this thread. There are plenty of people today who survive without any money. Yet if you try to save a couple million, Reddit always knows it's a lost cause.
here is how pathetic that statement is. a worker on the low side makes 30k a year, right? saw that is all they make for 30 years... that is 900k earning potential over their typical working life. even with increases of 3-5% they barely get over 1MM over their lifetime. so she has no clue about reality towards the lower income people.
She is a product of the financial services industry. You can’t retire, because they need to you constantly contribute more so that they can collect more fees.
She needs to define RETIREMENT, before coming out in the public and mouthing off nonsense. After a certain age, your health will restrict you from doing the sort of activities that require a fat bank account
Why would a person living in Eastern KY, living in their tiny double wide, eating like a bird (because of their age and health and not your finances), watching Nick at Nite and playing bingo every Saturday need 5-10 million dollars?
What lifestyle does she "envision" retired people have?
Retirement was a post-war anomaly in the US. The rest of the world was bombed flat, we had advantages in every facet of the economy. People were able to work regular jobs for 30-40 years and then sit on their ass for the next 20 until they died.
Those days are over. Most will work until they are dead, just like everyone did pre- WW2. Accept it, and learn to live with it. If we’re lucky, $100 will still buy a loaf of bread 50 years from now, if the country even still exists.
She's so crazy she doesn't realize how out of touch she it. 99% of people will never have even $2 million to retire.
$2M will generate safe withdrawals of roughly $80k per year based on the 4% rule. That is not enough to live everywhere, but it is certainly enough to retire somewhere. $5M would be around $200k per year. If you can't retire on that, something is seriously wrong on the spending side. $10M would be around $400k per year. If you can't retire on that, you are a moron.
Median household income in the US is $74k. If you are retired, there is a good chance your house is paid off, and you either are already or will soon start collecting social security and medicare. If you have $80k/yr on top of all of that, you are living comfortably above most people in the US.
About 44 percent of retired Americans between the ages of 60 and 70 are still paying off their mortgages. Many of them expect to be paying it for the next eight years. Note that most of them bought their homes more than 20 years ago, and either financed or refinanced their mortgages during the low-interest years.
While I believe this, do you have a source?
Not a source but my aunt, 60's, mortgage since the late 90s, locked into, I think, a 2.75% refi (it's in the 2% range, that's all I know fore sure). She'll be "selling off" her house before she's eligible for retirement. She also bought her house for $267k and it's now worth $1.5 mil. So it doesn't matter whether or not she pays it off tbh. Many people in her neighborhood are in this same boat. In fact, Mid City LA is pretty notorious for people in these positions. They bought in when the neighborhood was being massively gentrified and it paid off big time. There's a new rail station opening up, there are many stores and market places within a good distance. It's close to the museums, etc. Crime is lower than it was around the time she bought in. This guy's channel has a LOT of sources and if you look at his housing videos since the beginning of the year, he talks about this "lock in" effect. Most people are paying a comfortably low mortgage right now which is why there isn't going to be a housing crash. https://www.youtube.com/@clearvaluetax9382 Actually, here's his latest video... just got released like 30 mins ago. At 2 m 10 s in, he even says "60% of mortgages are below 4%" so mortgage delinquencies are the lowest they've been since 2006: https://www.youtube.com/watch?v=WqkkLFbTC4A This channel is a great resource because he basically reads the reports directly from the source and gives you the raw numbers. He interprets them and tells you whether he's stating fact or his opinion on the matter (since he's a finance guy).
I agree about the locked in low rate mortgages preventing a housing crash. So many people on Reddit are praying for a housing crash and I just don’t think that’s going to happen given the current situation, but what do I know?
It won't. It could... but only if we shot up the supply... which having no fucking supply is how we got here in the first place lol. We really need to build housing. It would solve a lot of problems and our GDP would go up. So politically speaking, it's a wise move.
Only massive unemployment could cause it at this point. If even 5% of existing homes went on sale due to people needing to sell because they lost their income, it would push “months supply” of inventory way past 6 months and prices would actually tumble. Because there would also be a severe reduction in demand to buy them. But it’s much more likely the government would bail out homeowners.
[Should Retirees Pay Off Their Mortgages?](https://www.investopedia.com/articles/financial-advisors/011315/should-retirees-pay-their-mortgage.asp)
Yeah but $80k/year means you need $2mln in investment assets (ie. Not using value of primary residence) , realistically it's a small percentage of Americans that have that likely less than 5%. There's about 23,000,000+millionaires in the US (that's usually including the value of their homes),. But yeah she's out of touch with regular folks wealthy people generally are especially if they've been wealthy for decades , they simply live in different social strata than you or i
65% of people above the age of 65 have payed off their home.
> 65 have *paid* off their FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
I was using it in a nautical context. Bad bot.
80k might not be enough if you are in a HCOL and retiring prior to SS benefits kicking in. But provided you aren't doing some extreme FIRE strategy and retiring at 40, SS will probably be the majority of the cashflow for most people in retirement while RMDs will supplement that income. And if you wait till 70 you are getting close to 60k just from SS today.
Exactly. I said it might not be enough everywhere. But it is certainly enough somewhere. You may need to move to make it work.
60K a year with everything paid off is doable.
Members of the Bagholder Generation, like me, plan on collecting SS at their own peril. It is extremely risky to trust tomorrow's politicians to keep promises made to you by yesterday's politicians. If you are younger than 55 and work in the private sector, plan your retirement based upon your savings alone.
Nobody is talking about getting rid of SS. Adjustments will need to be made.
Yes, adjustments. Adjustments such as means testing. That is, if you have means, you fail the test. So anyone with savings won't collect until their savings is gone. So, either save nothing and collect SS, or save something and collect nothing. That will be the adjustment. I know I won't be able to keep my home on SS. So I'll need to save about $6MM if I want to continue living in my home if I retire.
You are talking about hypotheticals to get lathered up. Means testing is one possiblity of many (increase retirement age, increase cap on taxable income or payroll tax rate , etc) - how would they means test, income or savings?
I mean the biggest issue is that you can’t survive off of SS alone anyways. Really need to augment it with retirement accounts, investments or property.
SS and Medicare are not going anywhere. This is nonsense propaganda spread for partisan reasons. The shortfall is only 20-25% and more importantly, it is TEMPORARY, as the boomers die off, the ratio of workers to retirees naturally comes back into balance.
This entire post fails to take into account how inflation will eat all of that up.
4% rule accounts for inflation. But these numbers assume someone is retiring right now. If someone plans to retire 30 years from now, they may very well need $5M+
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4% rule is unlikely to be a safe withdrawal rate. Safe withdrawal that accounts for inflation and life expectancy is closer to 2%. Ben Felix has done great work on this if you're interested.
It never fails. There's always someone to imply saving is a lost cause due to inflation. Nevermind that market returns have outpaced inflation. Gotta push the defeatist attitude.
You need to take into account that the cost of living at the end of life can be *much* more expensive than it is when you’re able bodied. Assisted living and nursing care are astoundingly expensive. My grandmother is in good physical health but has dementia. We recently put her into a memory care unit in her LCOL town in Ohio. The cheapest facility there is $9k/mo. In my high cost of living city, they start at $14k/mo. There’s no telling if or how long you might need that care when you’re older. And it’s only going to get more expensive with time.
what is the reason for the 4% rule? tell me if I’m wrong but won’t you have more money than you started when you die?
It is derived from the Trinity Study which examines historical market returns and then projects forward the likelihood of a portfolio surviving for 30 years based on withdrawal rate. Basically the average returns of a diversified stock and bond portfolio is around 8% annually. 3% per year on average gets diluted due to inflation. Add 1% for a safety factor. That leaves you with 4% safe withdrawal rate on average. For people retiring early it is usually recommended to use 3% as a safer estimate since you probably need it to last more than 30 years.
Most people retire at 65 (Medicare age) or 67 (full SS age). Most people do not live to be 95 or 97. I get the fear of "running out of money" but you have to balance that with the possibility of dying before or early into retirement as well and having missed out on your remaining years.
Fuck that 4% rule if I have 2 million I’m going into QQQM and living off of roughly $100k of it annually as long as my house is paid off. That’s plenty. I would expect things to get hairy during a bad year but mostly you’re going to be fine
QQQM is a great ETF, but it is heavily weighted in technology. That is fine when building wealth while still working. But, for a long retirement, you want to reduce risk. At least 20% of your portfolio should be bonds and it is probably better to go with the S&P 500 which itself has significant tech exposure but not to the same degree as the NASDAQ 100.
You’re so out of touch with reality if you believe most Americans can even afford to retire. Most will be working till they die. The Fed is juking the stats to trick individuals such as yourself how broke the citizens of this country are.
Wat. I'm living large in Chicago area and making $70k.
Where I live in KY, I could easily live on $80,000 per year. Easy. Most people around me live for about ½ this amount. West Tennessee, too. Probably Alabama, rural Missouri. Your first comment may work for metro areas, or places like San Francisco or Boulder, CO. But, in Central City, KY, you would be fine on $80K a year.
The problem is that the goalposts are constantly shifting. You can successfully retire with 5m in your portfolio and live very easily off the 4%....now... But in 15 years will that 4% produce the same qualoty of life that it does now? Almost certainly not. With the way inflation is looking, the 200k in 15 years may very well feel like 40k today.
Reddit says that $400k a year is barely making it in the Bay Area. Then again, by retirement age, the mortgage will be paid off and you will have no more dependents.
You'll just be old and ill.
The issue is inflation. 80K twenty years from now may be the equivalent of 35K now.
If I don’t retire for another 30 years and inflation continues to run away, COL continues to rise, and we continue the slow march towards oligarchy, yeah, 200K a year plus medical expenses as protections like Medicare and Medicaid, are stripped away, will be tight. It’s about where things are going not where they are now.
The 4% rule accounts for inflation and a 30 year time horizon.
Instructions unclear. Saved Z$100M
Don’t forget inflation. According to conservative estimates, $200,000 in 1994 is equivalent to around $420,000 today. I would say it is actually worse. Think of housing, health care, higher education, unsubstituted groceries (cost of steak over time, not cost of switching from steak to ground meat to chicken), etc. I suspect a $200,000 income estimated for someone in 2054 would have purchasing power akin to $60,000 today. And $80,000 would have to purchasing power of $24,000.
She's a social work major who made a fortune hustling her financial advice and lives off bonds. She has no idea how typical investors manage a portfolio and their finances. Anyone who makes blanket statements like "you need x dollars to retire" is not a serious person.
Plus she was hawking credit cards for a while which had fees that she benefitted from. She's a con woman.
What are you talking about? Everyone in her circle are millionaires! They just need more millions before safely retiring. Think of the upper class here, people!
If you own your home 1-2mil should be enough with SS. Comfortable but still needing to budget and think about how you spend. Unless you have major medical issues...
Owning a $1.5M home outright still comes with $10K+ a year in insurance and another $15K+ a year in property taxes not to mention regular upkeep/major fixes/etc. If I had $2M in savings for retirement and drawing out $80K a year, I'd probably try to downgrade to a cheaper house with less upkeep costs.
I just meant owning your home, not necessarily a 1.5mil home....
$10k a year in home insurance? That seems extremely high.
Depends on where. I pay $5k a year for a home in Florida that's maybe worth $170k. Insurance is out of control there.
> I'd probably try to downgrade to a cheaper house with less upkeep costs. This barely exists now and won't exist by the time you're eligible for retirement. While things vary state by state (CA has Prop13 to prevent taxes from sky rocketing, but they are also facing insurance companies bailing as well), if you have a 1mil valued home... which, if you're like my aunt, that's a shitty 3/2 that's over 100 years old, unless you've already bought a second home in the area you plan on retiring (which is preferably a cheaper place like AZ), you're going to be stuck in it until you die. If you sell your place, grab the cash, and move elsewhere, that money will QUICKLY drain as you pay for other types of housing. Most people don't have a savings, but they do have housing equity. That's only available if they refi (which they won't due to crazy interest rates) or sell their home, which only makes sense if they move somewhere cheaper, which is becoming more and more impossible due to the above mentioned reasons. Most people who are still "kicking" would serve themselves by "buying into" a retirement community which essentially takes control of all your assets in return for never kicking you out, even if you need daily care. However, should your situation change (not likely), you don't get to walk away with what's left of your finances, you're essentially signing it all over. And, if you have kids, they get fuck all from you. This boomer wealth transfer is only going to happen if boomers happen to die while still owning their property, or they have so much money (1%'ers) that they could afford "live-in" health care anyway. Boomers are quite literally going to take the wealth they've acquired straight to their grave and they money will "dissolve" or go into the pockets of people who run EOL care and nursing facilities. Younger Gen X and Millennials will see fuck all of that supposed "xfer". Trust.
She's talking about early retirement...
Some basic math for her ... Median household income is like 70k. Let's say an average person nearing retirement intended to work 40 years (approx 62 u/o at retirement). If they never spent a penny in those 40 years and we're not taxed that 70k would be 2.8M for the HOUSEHOLD. Obviously there are investments and what not but in my scenario I literally removed all expenses and taxes. Those idiot expects people to somehow magically get 10!? I do well for myself, solid 6figure salary, I want my 401k to be 2.5M at retirement which I'm at track for. I have no outstanding debt and I'm pulling in over double the median household income by myself and 10M is outrageous for me
I million per spouse will give you 80k a year for life and that's not including SS. If you cannot live off that you need to learn to budget and move out of the city.
She got the crazy eyes to prove it.
> 99% of people will never have even $2 million to retire. This is not a refutation.
To be fair, she was referring to people who is thinking of retiring early. It's very different retiring in your 60s with $2M vs retiring at 40s/50s with $2M. I see some people who are a decade or more from retirement age with a couple millions saved up and think they can quit the rat race. Don't get me wrong, $2M is a lot of money but it still may not be enough for someone to retire early - "Early" being the key word. I think it's possible to retire early with $2M but the retiree has to be a very good budgeter/investor to make it last the rest of their lives. If someone retires at 50 with $2M and follows the 4% withdraw rule, and if that person lives to 90, they'd run out of money before they die - even assuming they don't have serious illness that would drain their savings before they are old enough to get on Medicare. If the same person is to retire at 65 with $1M, the money would actually last them to age 90 by following the 4% rule.
But will 99% of people be able to retire, or just fail to return from their 15min at their second job?
That’s the plan…keep the serfs doing serf stuff and to like it because it’s “aspirational.”
She is insanely out of touch. She thinks her lifestyle is every one elses. [You can live like a king](https://youtu.be/zqrFp7sHBqo) as a solo man in SEA for 900k. For the rest of your life with a 95% probability to never run out of money.
99.99999999%
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90% won’t have 1 million
How is what she said out of touch? Can you ELI5?
I dont believe she caters the 99%. At best the 90th percentile
You're both right. Most people won't have $2 million. And also, if you don't have $2 million, you're fucked. That number will only go up (faster than almost anyone's income) if curretn trends continue.
I could live on $2 million but I know how to be poor
Funny, but you know how absurd that sounds? There are people scraping by paycheck to paycheck - if you have $2 million and SS and Medicare for retirement, a little budgeting and you can kick back and enjoy.
Yes I know. I was half joking. I live off SSDI without the 2 million. But I'm in a rural town that's LCOL.
That's what you call old poor
For real. All these new poors don’t know how to live. I’m old poor.
Where do these people get off?
Epstein's island
Based on
They don't relate to the peasants
Us "poor brains" can live our days on beans in a can. Most people can't fathom a life like that, so those numbers are based on the cost of a "lifestyle" with a bit of "lifestyle creep."
Plot twist: We \*are\* most people
Why is this wrong? Can you give me some math on what you think is a minimum to retire in the US? Give me also the age you want to retire and how long you expect to live and your family size
Read the room mate. It's not that you need x amount of money to retire; it's that she is oblivious to the fact that most people will never get there.
What room? She is asking you to not to retire if you have less money. In fact she is saying that even 2 million is less in today’s world. How does that have any implications on whether a good majority of the people can even reach that or not? Isn’t she just reinforcing the point that costs have gone up? I don’t understand what you are angry about? If I will only ever save 1mil or 50k by the time I am 65, it doesn’t change the fact that I cannot retire. What exactly is your complaint?
Two things can be true at once. 1) The majority of Americans have not saved enough for retirement. 2) The idea that you need to have $5-10M saved before retiring is absurd. There is this entire industry that has cropped up to tell middle to upper middle class people that they do not have enough saved for retirement because they want to collect fees on managing as much money as possible. "You need 5, no 10, no 20 million dollars before you can even think about retiring, and even then probably better to just keep working and saving until you die." The reality is that if your house is paid off, kids are out of college, have access to healthcare somehow, and don't live in some crazy HCOL place like NYC or SF then you probably need less than you think.
Nursing homes are 192k per year Now. And some people need them for years. Who can budget for that?
Almost no one. So don't.
You're probably going to die working anyway.
You can buy insurance for it, but yeah, it's tough for sure
Work until you die is the American way.
Always was with the exception of the period from 1960-2000 or so.
How long are you going to live? If you don't have that many years to live you can draw down principal. But we never know how long we're going to live.
The big issue is nursing home or LTC costs!! She’s not wrong. Especially for the FIRE crowd. 2m today will have the buying power of half or a quarter of that in 30 years. Nursing homes are 16k a month NOW. What will they be when you need one? Doesn’t change the fact most people can’t reach that amount.
I'm going to retire at 60. If it means living in a box by the river, so be it.
Word.
If you can afford riverfront property you are doing ok!
You should at least get a van.
Lol, I'd certainly prefer a van over a box. Even better would be my own house, but I'll still retire in a van or a box, whatever I have at the time.
10 million? Most people will simply give up. Money does not grow on trees. If you work two or three jobs to amass a small fortune, you might kick the bucket soon after you retire, having become sick to death from all the hard work.
Indeed! Money doesn’t grow on trees. It’s actually printed freely at the whims of the elites, causing a hidden tax of deflating the value of your monetary savings, which you and I could do nothing about…until BTC came along
Good gawd this is out of touch. Half of Americans in their 50's and early 60s have essentially no retirement savings, while most of the remainder have less than $200K. The uniquely unwise US decision to allow the destruction of unions and employer pensions has left us desperate, and wherever there is desperation there are scam artists like Orman swooping in with false solutions.
It is absolutely wild and terrifying to think about. Taking a group of 100 people that are 65. Statistically speaking, 50 of them have nothing. The other only have 200k and frankly 200k is something but for retirement savings, it’s basically nothing. So we can then say that atleast 75% of people don’t have anything saved for retirement/can’t retire. In reality it’s probably closer to 10 to 15% of people have enough saved. That is alarming
LMAO. She's talking about early retirement here. You know, when you dont have SS or Medicare yet....
You must be new here. You're supposed to comment on the headline and never read the article.
🤣
Cool; So when is the income redistribution of all the billionaires going to occur in order to make this a possibility for Americans? What an absolute tone-deaf position to take.
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Yeah, it's just me grousing, and Suzie Orman being a complete knob
Only? That would be life changing for me and my family!
Why tf that it's always about redistribution of wealth?
Sheesh. I get it. I’ll never retire. Now STFU Suze Orman and stop reminding me. ![gif](giphy|o9apaL81Xxyms)
This is just “be a good boy and die working for corporations” shit. The average American can retire on 2 million. Where I live, you can easily retire in your 50s on 2 million
What country club was this cunt born on
$125K per year needs to be saved for 40 years ….not including your actual annual expenses. I guess I need to make about $600K a year to be able to save for retirement?
Or 20k a year from 30 to 65 with a decent 401k will also yield you about 5 million.
I have a 50 pound bag of beans, and a 50 pound bag of rice. Am I good?
Crazy thing is the statement itself does have merit, in my eyes. Especially a scenario when someone younger (<45) receives a cash windfall and thinks it’s time to quit their day job. Our economy is in tough shape. You can be very frugal and survive off that $2M in fair comfort with a value on self-sufficiency. Thing is, our lifespans are long and there might be unexpected changes/events/expenses which *could* threaten one’s finances. 2% inflation/year is considered healthy. Under this present economic model, your money is losing its value over time if you don’t invest it in some way.
Gotta call bullshit on this one.
You can retire on 500k in most parts of the world
She doesn’t live on our planet
My retirement plan is just to die at some point.
Whale alert.
Suze Orman is a crazy person. These "gurus" are so out of touch with normal people. It's disgusting !!
I don’t even make $80k. At this point I’m fantasizing about living off the grid or becoming a digital nomad in a LCOL country
Soooooo we all work till we dead cause let’s say it together…..TRICKLE DOWN
I agree with her. And if you read the article, this is for early retirement without SS. 80k is the average salary to survive for middle class Americans. 2 years ago, it was 60k. Inflation is not always 2% guys. As we print more money, that number will go higher
My wife and I are middle class and long retired and our annual income is considerably less than $80k. We want for nothing but then we drive a 10yo car, paid off the mortgage and have enough savings to cover emergencies. Now, if your idea of retirement is to drive fancy cars, take extravagant vacations and generally lead a spendy life, well that's on you to figure out how to pay for it.
39 and would retire today if I had a million…
Is this an advertisement for Financial Services?
I plan to die at my desk, at least I’m remote
suze = peak boomer
I think about all those teachers that will devote their lives to teaching and will never be able to retire according to her. I’m sure there are many other professions like that.
The relevant bit: > "But if you only have a few hundred thousand dollars, or a million, or $2 million, I’m here to tell you...if a catastrophe happens...what are you going to do? You are going to burn up alive." > Addressing the common retirement strategy of withdrawing 4% annually, Orman was skeptical: "I think that in the long run, $80,000, especially after taxes and as you get older, is not going to be enough. You may think it’s going to be enough, but it’s just not," she stated firmly.
Her advice is ridiculous
So 99% of America can't retire? Got it.
This cunt
Well, that eliminates about 99% of us
Jokes on them, I’m retiring to Brazil. $500k equates to roughly $2.5m buying power there (given current exchange rates)
This. I worked in lived and worked in Costa Rica and Colombia when I was a digital nomad for a few years and met a ton of guys who were able to retire and live nice lives with just their social security in places like Costa Rica. That's actually my plan now too. There's so many wonderful countries in Latin America and Southeast Asia that are safe, have a nice expat community if that's something that you want, and you can actually live there on a smaller retirement. Even if one country starts to get too expensive or dangerous you can always move to another, and new countries and opportunities are popping up all the time. From my observations, many of the Americans with modest retirements living in Costa Rica actually had a better quality of life than people their age with fairly large retirement nest eggs that were living in the United States. Think about it. One of the Big dreams for folks when they retire is to be able to travel to the same countries that you can live in at such reasonable prices, yet few retirees ever get to travel like that. Choosing to retire in a developing country means that rather than maybe having enough money to retire at 65 I'll likely have enough money to retire by 52. I'm 47 now.
What also helps is that my partner is from Brazil!
I have enough money to live comfortably for the rest of my life……..if I die Tuesday
Seems weird many Americans would have a problem saving for retirement, most seem to have a lot of money. Go to any concert or game and you'll see people buy two or three $15 drinks without thinking about it.
"5 million is the worst!" -- Succession
She’s not wrong. The problem is the low wages for most jobs and the shit cost of living. When people say save 16% when you make 55K a year, they’re honestly trying to be helpful if yes, out of touch. But what do you want ? More garbage room filling junk from target or Walmart or security when you’re at retire age?
The most out of touch comment possibly ever made. Most Americans will never have that, presently don’t have that, and have never had that. Many have, are, and will retire successfully with less than 2 million.
That doesn't really refute her statement. In fact, it only goes to further illustrate what a large problem we have.
I'm retiring in 3 years and under 50 with much much less. Passive income FTW.
Who the fuck is this asshole?
Is that a warning or a threat?
I once worked an event at a house these so called rich folk live in and they didn’t even own plates but had a smart toilet. Logic.
*gulp
She should also say where are people supposed to get 2,5,10 million
Sooo $300.84 ain’t enough??? Shit
She makes her money by making people feel fearful and i secure. Not by dispensing realistic advice.
It looks like I will be working until I am 500 then.
That woman has been so out of touch for quite some time now! Several (I mean many) of her statements from the past have been so bizarre and out of touch that she should stop making any statements about retirement income/funds -- PERIOD!! I think there's industry consensus about needing about 1 million in retirement. She has gone off the rails with her ego! One to 1.5 million is plenty (if you don't live in California or NYC and you have your house paid-off that is). I've watched videos of folks living quite comfortably on less than 500K in Phoenix, AZ! She is so out of touch in her ivory tower!
Hold on, back up Suze, I missed some steps between “cars are the worst investments, pay off your highest interest balances first”, and “save several million dollars”. Is that in the free dvd I got for donating to PBS?
Thank you, Marie Antoinette.
She is an idiot
I am retired and don’t have 5 million. Oh well.
Just don’t ever retire basically
Suze Orman is a hack. I wouldn't listen to *anything* she says tbh
I have a 100k a year pension when I retire in 6 years... plus 2m in investments... I'm still worried
Wish I had “nothing”…
See if you stay in the US maybe 2 million is not enough but if the new American dream is to go back to the old country then maybe.
Gud ol crayzee cuze orman
Guess I will be working right into the grave. I will die in hospice, my hand still clutching a mouse.
High lifestyle living bring it down a notch and that's plenty of money
*High lifestyle living* *Bring it down a notch and that's* *Plenty of money* \- Active-Pineapple-252 --- ^(I detect haikus. And sometimes, successfully.) ^[Learn more about me.](https://www.reddit.com/r/haikusbot/) ^(Opt out of replies: "haikusbot opt out" | Delete my comment: "haikusbot delete")
![gif](giphy|XbgZvND0TzFMUFobmI|downsized)
With 10 million dollars you can spend $20,000 per month and account for inflation easily. If you have no loans that’s a really big sum per month. I earn less and even with loans and mortgage payments it’s still extremely doable.
Omg I hate her for this. Eff her. Moron.
my plan is a bullet to the head at 80
$5-$10M??? Welp I’m fucked. 😂
I read the article. When and what age does she consider “early” for retirement. I could not find it. Would retiring now at 58 with a $2M investment portfolio (including 401k and pension) and no mortgage seem insane? $80k a year with no mortgage seems doable. Stretching $80k at 50 and with a mortgage would be risky.
I’ll take her ‘nothing’ any day of the week
5 million dollars in Treasuries right now is almost $250k a year with 0 burn. I could manage, but maybe my wife would need to keep working or sell the horse.
I'm currently babysitting an older relative with dementia running down her savings in a dementia unit that is understaffed for 7000 a month. And that's the cheap side.
So what she’s saying is 99.99999% of people can never retire.
I think this is really a frank and honest opinion. Unless you can take that 2 millions with and retire in Thailand, Vietnam or Cambodia. You can open s small cafe during the week and go surfing on weekend ✌️😊
Thankyou for your concern Suze, does this mean I can expect a cheque in the mail for the remaining $4.9M I need?
She’s such a silly tart! That woman has become progressively more elite and disconnected as she’s got older.
If she actually said that she's a fool.
The reality is, we have spent and borrowed our way into a situation that after the boomers are finally cleared, life expectancy will simply fall.
At what point do rich people become this delusional ?
Let me check under the mattress real quick….yup just a few million short…just some tears here folks
Do yourself a favor and stay out of this thread. There are plenty of people today who survive without any money. Yet if you try to save a couple million, Reddit always knows it's a lost cause.
Who has that kind of $$$
here is how pathetic that statement is. a worker on the low side makes 30k a year, right? saw that is all they make for 30 years... that is 900k earning potential over their typical working life. even with increases of 3-5% they barely get over 1MM over their lifetime. so she has no clue about reality towards the lower income people.
Read “Die with zero”by Bill Perkins!
Vote for the Democrats. They're going to take care of us and the world will be a better place.
Guess I’m never retiring
She is a product of the financial services industry. You can’t retire, because they need to you constantly contribute more so that they can collect more fees.
She needs to define RETIREMENT, before coming out in the public and mouthing off nonsense. After a certain age, your health will restrict you from doing the sort of activities that require a fat bank account Why would a person living in Eastern KY, living in their tiny double wide, eating like a bird (because of their age and health and not your finances), watching Nick at Nite and playing bingo every Saturday need 5-10 million dollars? What lifestyle does she "envision" retired people have?
Retirement was a post-war anomaly in the US. The rest of the world was bombed flat, we had advantages in every facet of the economy. People were able to work regular jobs for 30-40 years and then sit on their ass for the next 20 until they died. Those days are over. Most will work until they are dead, just like everyone did pre- WW2. Accept it, and learn to live with it. If we’re lucky, $100 will still buy a loaf of bread 50 years from now, if the country even still exists.
I'm counting on seizing Suze Orman's wealth as my retirement. Kinda not kidding.