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Old 06-14-2021, 06:14 PM   #10 (permalink)
Isaac Zachary
High Altitude Hybrid
 
Join Date: Dec 2020
Location: Gunnison, CO
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Avalon - '13 Toyota Avalon HV
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Quote:
Originally Posted by redpoint5 View Post
I once determined that I could retire in Nicaragua for $200k, and that was when I was in my 20s. Back then I figured I'd need 2.2M to retire in the US at my youthful age.

A million bucks isn't anything anymore. Depending on how much longer one expects to live, the interest on a million probably isn't going to get them to the end of their years. 3% inflation will end up making the interest income insufficient to live on.

My retirement strategy will likely involve renting out property since the income adjusts up with inflation.
Whether a million is enough or not depends on your circumstances and expectations when it comes to your standard of living. Half of American households make less than $70,000. Than means some live off of $60k, others $50 and even others $40 and so on.

If you can earn 7% off your million dollar assets then keep 3% for inflation and take out 4% (currently $40,000) you could live indefinitely ($413,000 per year in 80 years) and your million dollar assets would also increase by 3% every year (over $10 million in 80 years).

Just a bit more (current equivalent of $42,000) and you could live off of it for 80 years ($433,000 per year by that time) but would run out of money by then.

If you take out $50,000 today's equivalent you could live off of that money for some 43 years ($173,000 by then) and then run out of money.

If you use $60,000 you'd run out of money in about 30 years ($141,000 per year by then).

Or just invest it and wait 14 years and then start taking out what would likely be the median wage by then ($103,000 and 3% more every year). Then you could live off that money for the following 66 years or more.

Whether real estate or stocks are better depends. The point is it's an investment that continues to increase along with inflation.
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Last edited by Isaac Zachary; 06-14-2021 at 06:43 PM..
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