LogFAQs > #954860923

Revelation34 posted...

Anybody who thinks that a million isn't enough to retire on is a person living way above their means.

That's not how means work >_>

Means are a variable. Somebody whose lifestyle requires $10k/year might be living above their means while somebody whose lifestyle requires $100k/year might be living well below their means. It all depends on what their means actually are.

As for whether somebody here could retire on $1m dollars -- even without taxes taken out -- most PotDers are probably too young to do that. If you tried to retire now, you'd have a *lot* more expenses than you're assuming.

ReggieTheReckless posted...

The majority lottery winners are idiots for sure, as are people that don't think they can retire on a mil.

You're what, 30? Maybe 40? You've got plenty of years ahead of you. And sure, I have a cousin who lives on well under $10k/year (despite bringing in a six-figure salary), but he lives the most frugal lifestyle you could imagine (the kind of lifestyle that far-left progressives would say nobody should have to live) and it's worth noting that part of that would only be possible through some of his employer's benefits (such as health insurance). Could he do it on just that million (while excluding his other assets)? Probably. Most people? That's not realistic.

Personally, I plan on living a very fucking long time and I doubt I'll ever fully retire because I'd get bored.

ReggieTheReckless posted...

Assuming the million offered here is tax free initially, 8% on a mil invested is 80 grand, and even the laziest of investors can make 8% a year in stable years. Let's say you don't let it sit and instead take it out and it's taxed as income instead of long term capital gains, so you're left with maybe 63k after taxes

First, if you're retiring on just that, you're not able to invest the full million. Second, if you're arguing that the average person should be able to do it, you'd look to at the average person's assets (or lack thereof). The average American is $90k in debt:

https://www.cnbc.com/select/average-american-debt-by-age/

But you're arguing anybody should be able to do this, right? So subtract $40k for this year (keeping in mind that you'd now need to pay for 100% of insurances because you lose out on both the employer benefits and can't access means-tested programs) and then $90k to get out of debt. So you're starting off with $870k. Let's say that your 8% number actually holds (and overlook that things have been atypical in recent years) and you're able to take at least part of that money out, 8% of $69,600 before any taxes. I *think* the capital gains rate between the federal and the state might be around 30%, but I'm not 100% sure about that. If that's the case, you'd be looking at $48,600... which might be more than enough for most people.

So I guess with the caveat "if you invest everything you feasibly can," the million would be enough to retire on assuming that a person's debts don't vastly exceed the national average. When I heard "retire on a million," this wasn't where my mind was going. Colloquially, when people say that, they mean just living on that money and maybe whatever assets they already have, which would be difficult for younger people.

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