Wealth Blog

Finance Blogs » Wealth » Can you retire with $1 million?

Can you retire with $1 million?

By Judy Martel · Bankrate.com
Tuesday, May 27, 2014
Posted: 4 pm ET

A million dollars used to seem like all the money in the world. In 1960, for example, it had the buying power of approximately $8 million today, according to InvestmentNews. But now, retirees wonder if it's enough.

It might seem like a lot, but $1 million is not the milestone it used to be.

It might seem like a lot, but $1 million is not the milestone it used to be.

A survey by InvestmentNews found that 449 advisers cited asset levels and longevity as the two biggest challenges to a stable retirement plan. Retirees who might plan to withdraw 4 percent to 5 percent from their $1 million portfolio -- a range considered safe by many financial advisers -- would have an income of $40,000 to $50,000 per year.

Depending on your lifestyle, that amount might be sufficient, especially when Social Security is added. But the uncertainty lies in the unexpected expenses that could derail your plan. Advisers in the survey said the high cost of medical care is their biggest concern when developing a strategy.

Affluent pre-retirees are worried, too

A survey by Market Strategies International of investors who are 55 and older and have a net worth of at least $100,000, not including primary residence, found that those approaching retirement age are worried.

Only 28 percent of pre-retirees are confident in their ability to generate enough income for retirement, compared with 48 percent of those already retired.

The fear factor

Part of the reason pre-retirees are worried is that fewer have pensions that will kick in at age 65. Instead, pre-retirees in the survey were three times more likely to say their income will come from a 401(k) plan. That compares with the already-retired, who are twice as likely to say their primary source of income is from a pension.

Although the stock market has trended upward since the recession, its performance is not stable, which contributes to the concern of those who will rely primarily on investment income.

But fear can be a motivator: By planning early for retirement and thinking in terms of income rather than a set amount, such as $1 million, you can figure what size your portfolio should be based on your estimate of what it will cost to live in retirement.

If you are planning to live primarily off investments when you retire, this planning calculator will help determine how much income you can expect from your assets, given your age and expected rate of return.

If you're just starting out in your career, here's how you can join the future millionaires club.

Keep up with your wealth and mortgages and follow me on Twitter.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
40 Comments
Richard
June 04, 2014 at 7:07 pm

I agree with Wes, 3 million is needed to retire which is about $90,000 gross minus 15% for taxes is $76,500 plus social security which is approximately $23,00 gross minus 15% for taxes is $19,550 so that's a total of $96,050 that you'll have per year, but don't forget health insurance costs which on average could be approximately $20,0000 per year which leave you with $76,050 per year to spend which is approximately $6,254 per month. which is a good number. Also, not to mention that with all this additional time you may want to travel which could draw down that figure. All I can say is set a goal and stick to it in getting there and all should be ok, otherwise keep working until you get there.

Louie
June 02, 2014 at 3:58 pm

Doesn't matter to me.... I plan on retiring 3 days after I die...

L Train
May 30, 2014 at 4:12 pm

Have 3 or more sources of income- a few rental properties, an annuity, Social Security, an IRA, etc. The first three are especially important because you can't outlive the income. Maybe buy some precious metals. Taking systematic withdrawals on stocks or mutual funds is a risky proposition, especially given the state of the economy and it's inevitable collapse.

Douglas
May 30, 2014 at 10:52 am

The biggest financial problem facing this country, especially parents of College age students and those with children planning to attend college or graduates is the paying off of that debt. Most boomers are reluctant to admit they are strapped big time with this debt. Most are paying off their own at the same time.
The wealthy are exempt, of course... Maybe if that money was invested over four to eight years, that would amount to a million plus.

Donny Coach
May 30, 2014 at 10:22 am

Doesn't "retire" mean purchasing 4 new tires for your car! OTOH, whomever made up this myth of stop working at 65 or whatever age...must have been working some kind of scam. The banking industry, maybe? The investment advisers, maybe? Wall Street, maybe?
Just curious?

Donny Coach
May 30, 2014 at 10:07 am

I'm a 82 year young life coach and mind healer. For some, retirement works, but for others it's a death sentence...or worse, you're dead while still breathing.
IMO, to be really happy and remain happy, we all need to be productive in one way or another. To make a joyful difference in people we touch...and especially ourselves.
This million dollar plus idea to retire is a cruel joke. Inane and thoughtless.

wes
May 30, 2014 at 9:50 am

I need at least 3 million to retire

billu
May 30, 2014 at 9:41 am

I agree that He will provide and give us what we need, not necessarily what we want! The Bible(His Word) is the ultimate source. God does give us a brain and free-will.

"Pray for a rich harvest but keep hoeing!"

Lorna
May 30, 2014 at 9:29 am

I appreciate the comments that are on topic, including the one by Daniel, who recognizes that the author of life is well able to lead and guide us and care for us...not that we just sit and do nothing, but, we do as he tells us. For Len, well, if you don't have a comment that relates to the article, why do you feel the need to display your ignorance of the Bible and the real history of the life of Jesus?

Add a comment

(Comments may take 5-10 minutes to appear)