cgh1999 said:

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jja79 said:

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I spent a lot of years lending money for banks. Until the day I retired I was astounded at how many people with good incomes had less than expected and debt up to their eyeballs. People 50+ years old making $200K, $400K, $800K and they had less than $100K in current and retirement funds. Some had more than one $1K+ car payment. I had a dentist client that lived in Memorial that was more than 70 years old who owed more than $500K on a house he bought 50 years ago. He kept taking cash out to pay credit cards.

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Had a great one last week. Doctor with a $4MM house and $3.6MM mortgage. $3MM beach house with $2.8MM in debt and listed at $2.8 for the last 6 months. Less than $300k liquidity. Over $1MM in merchant cash advance loans in the 70% interest range.

Looks (and acts) rich, but is perilously close to bankruptcy.

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herewegoagain said:

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I'm no hero. I had 5M at age 40 and was walking away from a high liklihood of having 8-10M at age 43-45. But the cost just wasn't there for me. I have an amazing life. More than I could ever need already. And I'll never get these years with my kiddos back. No matter how much money i try to throw at it later.

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htxag09 said:

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I feel like this debate brings out a lot of extremes.....

It's either the multimillionaire who drives a 5 year old Camry or the multimillionaire who has $100K saved for retirement because he/she blows everything.

Fact is there are a lot in the middle also. Obviously don't get into the deep financials of every person I talk to but I'd guess that 95%+ of the multimillionaires I know drive a Range Rover or a $90K truck but have enough saved for retirement they'll never have to worry about it. Not that they'd ever have to worry about it anyways because they hold positions at companies that have very generous retirement benefits.

ETA: I know 5 couples that are multimillionaires very well and all of them are in this category.

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permabull said:

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I made an example plan just now in income lab to show you guys many of you can probably retire much earlier than you thought.

I made an example couple 58F and 60M assuming they retire now and paid into social security while working. I chose a pretty conservative setting as well and it shows them starting out with a 6.76% withdrawal rate on their portfolio as being safe



It also shows the upper and lower guard rails for when they can increase spending and when they might need to cut back and by how much. The reason they can start so high is because eventually social security will kick in an cover a chunk of their expenses so its okay to spend more early on.


You can see the yellow is the so called "hatchet" as your portfolio won't have to do all the heavy lifting forever. You can test this plan throughout history and see how bad it would have gotten. So if this plan was run by someone who was unlucky and retired right into the great depression how would it have worked out?



As you can see they did have to make a spending cut in this extreme scenario, but they eventually recovered and never ran out of money. In this plan the spending went from $67600 a year to $58200, both well above starting at 4% of their initial million portfolio.

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Texag5324 said:

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jja79 said:

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i live in a retirement community with 2,800 homes so there are a lot of us. I would describe it as very much middle class. Of the group of people in my good friend group (20 or so guys that play golf, go to baseball and hockey, lake, mountains, etc) took an unscientific poll the last few days. I think 1 or maybe 2 have $1MM or more. Some like me retired within the last 18 months but some have been retired 5, 10 and one 14 years. I asked a these questions.

1. Do you have more or less than you retired with. All but one said more.
2. Are you able to do the majority of things you want to with your current finances? One said no, a few said they have to make some choices but most said yes.
3. Do you wish you had worked longer to save more money? Only one yes. The guy that said yes is a great guy but he's a financial moron. I took him to the airport this morning for his trip to his 31 year old son's wedding. He's paying for the wedding which no one can believe.

This week we've played golf 3 times, gone to an MLB game and have 2 more tee times for the week. Last week some of us did a mountain trip to enjoy some 70 degree weather.

Only the moron said he would trade time for more money. At least to these people time is the most important commodity we have.

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Thats awesome! Just curious, how many have pensions? Seems like retirement might be a bit tight with less than a million unless theres a pension involved.

I am thankful my mom worked her entire career for the government, because she is able to live off her pension + social security. Otherwise, there's no way shed have enough to retire.

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Retired Principal said:

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Texag5324 said:

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jja79 said:

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i live in a retirement community with 2,800 homes so there are a lot of us. I would describe it as very much middle class. Of the group of people in my good friend group (20 or so guys that play golf, go to baseball and hockey, lake, mountains, etc) took an unscientific poll the last few days. I think 1 or maybe 2 have $1MM or more. Some like me retired within the last 18 months but some have been retired 5, 10 and one 14 years. I asked a these questions.

1. Do you have more or less than you retired with. All but one said more.
2. Are you able to do the majority of things you want to with your current finances? One said no, a few said they have to make some choices but most said yes.
3. Do you wish you had worked longer to save more money? Only one yes. The guy that said yes is a great guy but he's a financial moron. I took him to the airport this morning for his trip to his 31 year old son's wedding. He's paying for the wedding which no one can believe.

This week we've played golf 3 times, gone to an MLB game and have 2 more tee times for the week. Last week some of us did a mountain trip to enjoy some 70 degree weather.

Only the moron said he would trade time for more money. At least to these people time is the most important commodity we have.

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Thats awesome! Just curious, how many have pensions? Seems like retirement might be a bit tight with less than a million unless theres a pension involved.

I am thankful my mom worked her entire career for the government, because she is able to live off her pension + social security. Otherwise, there's no way shed have enough to retire.

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Two pensions here. My wife with Chevron and mine with TRS. Took my wife's in a lump sum. Taking mine in a monthly.

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PDEMDHC said:

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Retired Principal said:

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Texag5324 said:

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jja79 said:

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i live in a retirement community with 2,800 homes so there are a lot of us. I would describe it as very much middle class. Of the group of people in my good friend group (20 or so guys that play golf, go to baseball and hockey, lake, mountains, etc) took an unscientific poll the last few days. I think 1 or maybe 2 have $1MM or more. Some like me retired within the last 18 months but some have been retired 5, 10 and one 14 years. I asked a these questions.

1. Do you have more or less than you retired with. All but one said more.
2. Are you able to do the majority of things you want to with your current finances? One said no, a few said they have to make some choices but most said yes.
3. Do you wish you had worked longer to save more money? Only one yes. The guy that said yes is a great guy but he's a financial moron. I took him to the airport this morning for his trip to his 31 year old son's wedding. He's paying for the wedding which no one can believe.

This week we've played golf 3 times, gone to an MLB game and have 2 more tee times for the week. Last week some of us did a mountain trip to enjoy some 70 degree weather.

Only the moron said he would trade time for more money. At least to these people time is the most important commodity we have.

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Thats awesome! Just curious, how many have pensions? Seems like retirement might be a bit tight with less than a million unless theres a pension involved.

I am thankful my mom worked her entire career for the government, because she is able to live off her pension + social security. Otherwise, there's no way shed have enough to retire.

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Two pensions here. My wife with Chevron and mine with TRS. Took my wife's in a lump sum. Taking mine in a monthly.

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My parents did this. AT&T and TRS. When he passed away from his monthly pension plan, she gets 75% of his pension now per the arrangement at retirement based on the options. She also gets his SS in full monthly (hers goes away) along with her monthly pension at TRS and any forced IRA payments. She brings home like $115k or something like that annually before the IRA stuff. Health insurance is through AT&T and is like $500 a year for the supplemental along with Medicare.

My dad made sure they were set up well and then became richer in retirement than they ever did working 9 to 5.

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jja79 said:

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i live in a retirement community with 2,800 homes so there are a lot of us. I would describe it as very much middle class. Of the group of people in my good friend group (20 or so guys that play golf, go to baseball and hockey, lake, mountains, etc) took an unscientific poll the last few days. I think 1 or maybe 2 have $1MM or more. Some like me retired within the last 18 months but some have been retired 5, 10 and one 14 years. I asked a these questions.

1. Do you have more or less than you retired with. All but one said more.
2. Are you able to do the majority of things you want to with your current finances? One said no, a few said they have to make some choices but most said yes.
3. Do you wish you had worked longer to save more money? Only one yes. The guy that said yes is a great guy but he's a financial moron. I took him to the airport this morning for his trip to his 31 year old son's wedding. He's paying for the wedding which no one can believe.

This week we've played golf 3 times, gone to an MLB game and have 2 more tee times for the week. Last week some of us did a mountain trip to enjoy some 70 degree weather.

Only the moron said he would trade time for more money. At least to these people time is the most important commodity we have.

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