Why even $1M may not be enough for retirement 6:56 p.m. EDT April 22, 2014 You've been saving like a miser to get ready for retirement. You've pinched pennies, kept that last car for what seems like an eternity. And now you've banked a cool $1 million for your retirement years. Think you're set? "Thirty years ago, $1 million was a huge amount of money," says Haitham "Hutch" Ashoo, CEO of Pillar Wealth Management, in Walnut Creek, Calif. "Today, given today's lifestyles and costs, it isn't so much money." "That is not that much money on an annual basis." Heider says that 10 to 12 years ago, when people earned a lot more on their investments, $1 million could generate $70,000 to $80,000 a year in retirement income. But with interest rates as low as they are, that's not really feasible. "At the end of the day, if you want to have a quality retirement, to do what you want to do, I think you need at least $1 million," says Michael Wall, president and founder of Wall Financial Group, in Altoona, Pa., and Palm Beach Gardens, Fla. "A lot of my clients are 50-plus," he says. "They are still from a world where they have a small pension. Some have real estate. Then there's Social Security. A lot of clients are in a place where they have lived below their means. They can live on a million. "Not everyone will have $1 million," he says. "They will not have the ability to have as many choices, to do and go and buy and travel. I definitely would suggest that clients shoot to have at least that much. You are talking about 30 or 40 years of unemployment, called retirement." http://www.usatoday.com/story/money...ment-pension-financial-planning-401k/7864899/ How many have achieved this goal already? Given this is ET, I know there are many elite traders here who have saved at least that much for retirement.
1 million in the tri-state area around NYC is no where close to enough to retire for "30 to 40" years. I'm sure it's the same in LA, San Fran, Chicago, D.C., etc. The Fed's ZIRP has really screwed the savers and fixed income retirees....all to save some banks that should have been allowed to fail.
But I think this all gets resolved with the new MyIRA program. This mixed with free healthcare and record high food-stamp participation should keep everybody happy for years to come. -burn8
Used to be one could rely upon that kind of income and expenditure before cannibalizing capital. But with today's interest rates, you're "eating your retirement seed corn" from day one... not good.
Exactly. For 10+ years I laddered CD's and rolled them over as they would come due. Thanks to the Fed, I haven't opened a CD in many years and it doesn't look like I will be anytime in the next few years. That's 6+ years of interest income stolen from myself and other hard working Americans.
The reason CDs gave good returns was because of high inflation in the 80s. Nothing was stolen from you, bafoon. You are terrible at making decent returns, hence you are stealing from yourself.
%%%%%%%%%%%%%%%%% Hi, CL; Well no wonder ,they're HI tax areas. NO income tax states like FLA, TN, TX................................ with evething paid for/ debt free;Of course it is. enough. Wisdom is profitable to direct
I dont recall having negative real interest rates in the 80's , 90' s or at anytime until , well, now. It does matter. But wait, if i can average 1 es point a day on "x" contracts , while overcoming dimentia when i am in my 80's then i guess i will be all set. :eek:
2 ES points is considered to be the standard average among professionals here on ET. So you are well below the average.