Who needs a million dollars? Apparently, nobody

[PanthersATL]

One economist says you can retire on just $50,000-$100,000 in total savings, citing experience of actual retirees as evidence

85% of retirement-age Americans (65 to 74) said they were "living comfortably, or at least doing OK" when asked how well they were doing financially

Only 15% said they were struggling.

The finding matters, Biggs says, because most retirees have much less than $1 million in the bank. In the federal survey, the typical senior who reported a satisfactory retirement had $50,000 to $100,000 in savings.

“It’s impossible to find any evidence that seniors need even a fraction of $1.46 million in savings to be financially secure,” Biggs wrote.

By his argument, retirees don’t need nearly so much savings as financial planners say they do.

source: https://www.usatoday.com/story/money/2024/06/07/retire-without-a-million-dollars/73969717007/ 

[LinvilleGorge]

How deep into retirement were these folks? I just don't see how $50-100k is going to carry you very far even with Social Security supplementation unless you have significant other assets you can also liquidate as needed - which is probably the huge factor missing here.

[PanthersATL]

5 minutes ago, LinvilleGorge said:

How deep into retirement were these folks?

it read like a poorly researched study

[LinvilleGorge]

If you have $100k in the bank and you live in a paid for home you can probably make it quite awhile relatively comfortably with SS supplementation as long as you're not being extravagant. Then you hit the first big medical expense and now you're in a financial tailspin.

[PanthersATL]

34 minutes ago, LinvilleGorge said:

make it quite awhile relatively comfortably with SS supplementation as long as you're not being 

likely an unpopular opinion: nobody should *rely* on SS to cover their expenses in retirement. 

If you plan for retirement in a manner that does not take SS into account, then you can treat any SS money  you get as an add't bonus entry

=-=

Practical SS advice: the longer you can hold off before collecting SS, the higher the monthly SS payment amount will be. (In other words, don't start collecting at 62 if you can afford not to)

[LinvilleGorge]

8 minutes ago, PanthersATL said:

likely an unpopular opinion: nobody should *rely* on SS to cover their expenses in retirement. 

If you plan for retirement in a manner that does not take SS into account, then you can treat any SS money  you get as an add't bonus entry

=-=

Practical SS advice: the longer you can hold off before collecting SS, the higher the monthly SS payment amount will be. (In other words, don't start collecting at 62 if you can afford not to)

They absolutely shouldn't, hence why I keep referring to it as supplementation.

[jasonluckydog]

I have my 401k, pension and SS. I should be good. My home is paid for. I only have 15 years left to retire. I plan on working once I retire and get my pension. I'm going to double dip as long as my health is good. 

[Davidson Deac II]

On 6/7/2024 at 11:42 AM, PanthersATL said:

One economist says you can retire on just $50,000-$100,000 in total savings, citing experience of actual retirees as evidence

85% of retirement-age Americans (65 to 74) said they were "living comfortably, or at least doing OK" when asked how well they were doing financially

Only 15% said they were struggling.

The finding matters, Biggs says, because most retirees have much less than $1 million in the bank. In the federal survey, the typical senior who reported a satisfactory retirement had $50,000 to $100,000 in savings.

“It’s impossible to find any evidence that seniors need even a fraction of $1.46 million in savings to be financially secure,” Biggs wrote.

By his argument, retirees don’t need nearly so much savings as financial planners say they do.

source: https://www.usatoday.com/story/money/2024/06/07/retire-without-a-million-dollars/73969717007/ 

I would say it depends on where they live and what they want to do when they retire.  I think most of these folks saying you need a million are talking about living a relatively high end lifestyle.  With a cruise or some other type of vacation every year and perhaps buying a new car every 4-6 years.  If you don't need that, then SS, and a small 401k or pension is probably enough.

My mom is living ok off of SS and a small pension she gets from my stepdad's employer.  And that was after years of financial mismanagement, which saw them have a house with a mortgage and two other loans that used the house as collateral.  Sold the house for enough to pay off all the debt with a little left over and they bought a small condo.  Even with making payments on the condo, my mom still has enough to pay all the bills and save a little bit.  

One recommendation I do have for anyone reaching Medicare age.  Look into signing up for a Medicare advantage plan.  My mom signed up for it last year, and it is well worth it.  

[LinvilleGorge]

Yeah, "needing" a million plus seems excessive but $50-100k seems low. Somewhere in between is probably the right minimum number for most folks.

 

[LinvilleGorge]

Then again, if you get into a situation where you need assisted living you're going to chew through a million way faster than you'd think. As long as you can live on your own you can make money go a long way living modestly but assisted living is out-fuging-rageous.

[PanthersATL]

4 hours ago, LinvilleGorge said:

Then again, if you get into a situation where you need assisted living you're going to chew through a million way faster than you'd think. As long as you can live on your own you can make money go a long way living modestly but assisted living is out-fuging-rageous.

Even independent living in a retirement community can run $3-6k/month or more. And some communities have huge entry fees ($100k+ up front)  that they hold until the tenant leaves

[rayzor]

On 6/8/2024 at 1:34 PM, LinvilleGorge said:

Then again, if you get into a situation where you need assisted living you're going to chew through a million way faster than you'd think. As long as you can live on your own you can make money go a long way living modestly but assisted living is out-fuging-rageous.

unless you qualify for medicaid. you don't get the best places, typically, and it's no resort area, but if you need long term care, that's an option. you either have to be REALLY well off or at the poverty line.

it's a challenge to get by, but i'm around a lot of people who manage to pull it off. 

i know a lot of people are stressed that they won't have a million in their retirement built up, but they don't need to. unless you are fixed on having this one particular lifestyle and want to live it up while you're retired, you can make it. you just have to learn to be smart and adaptable and get past this idea that retirement is supposed to look like it did when boomers retired. unless you lucked out, you're not going to have it easy when you retire. but life isn't meant to be easy. just manageable. 

[jayboogieman]

On 6/8/2024 at 1:24 PM, Davidson Deac II said:

One recommendation I do have for anyone reaching Medicare age.  Look into signing up for a Medicare advantage plan.  My mom signed up for it last year, and it is well worth it.  

My mom has been on medicare for five years or so now. It gets worse over time and they pay less each year as they shift medicines from one tier to another. She has an inhaler and they started making her copay higher than what they paid last year. Thankfully, the local pharmacy she uses started giving her the generic version for less than her copay as the price for the name brand version went up.

[Paa Langfart]

On 6/7/2024 at 12:05 PM, LinvilleGorge said:

If you have $100k in the bank and you live in a paid for home you can probably make it quite awhile relatively comfortably with SS supplementation as long as you're not being extravagant. Then you hit the first big medical expense and now you're in a financial tailspin.

Not only that but just properly maintaining a home is expensive as hell these days and the older you get, the less you can actually do on your own.  Unless you have family in the area willing to do it for you, you have to hire someone else to do the work and that is not cheap.