How long can you live off $1 million?

Discussion in 'The Pub' started by Laelaps, Dec 4, 2017.


  1. Bluedawg

    Bluedawg Member

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    US tax laws have some influence on this ... most of us who will have $1 million or more by retirement have been putting that money into tax deferred investments ... namely IRAs, 401Ks and similar funds. The UK equivalent may be a PPP (personal pension plan).

    If we pull money too early then we get hit with huge tax penalties.

    We can start pulling money out of them after retirement at age 55 or at age 59.5 regardless of retirement status without the penalties. The money will then be taxed the same as our other income.

    There's also another savings option called a Roth IRA where you pay your taxes in advance and your interest is tax free ... but with the same age requirements for pulling out your cash. Looks like the UK equivalent may be an ISA.

    And most of us middle class types won't be reaching the $1 million mark until we are near retirement age anyways.

    :munch
     
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  2. rsm

    rsm Member

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    not if you're buying new Gibsons :confused:

    :p
     
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  3. rsm

    rsm Member

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    I was doing fine (not great, not bad) with the retirement plan until divorce, which set me back many years, and with alimony and child support "catching up" fast isn't feasible.

    I also narrowly missed a recent layoff, next round may be my turn. If I can get another 8-10 years in my current work, I should be ok, not great, not bad; another 15 years of work, I'd be caught up and more.

    Also depends on college tuition costs in the next few years, and, I hope, grad school too.

    As always health is the biggest unknown, so far so good, but that can change in an instant.

    I also assume that social security that I've paid into will be there when it's my turn, which may not be the case.
     
  4. sundog964

    sundog964 Supporting Member

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    If it is the first million, not very long. But the last million has to last a long time.
     
  5. circle_o_5ths

    circle_o_5ths Member

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    People erroneously assume your contributions are being saved for you, when it is in fact a pass through system. What I pay in this month goes to my parents next month. The system will always be there, but what you receive might have to be adjusted depending on what is coming in.
     
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  6. rsm

    rsm Member

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    I know how it works. My concern is the "always be there" part - it's not guaranteed, and it's a topic that's not allowed here. I paid into it as most of us here have, doesn't mean it's going to be there when we get there. IMO
     
  7. circle_o_5ths

    circle_o_5ths Member

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    Old people are the most reliable voters, it will be there, but you might have to accept Bitcoin. :D
     
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  8. rsm

    rsm Member

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    it's not the old people I worry about ;)
     
  9. Davy

    Davy Supporting Member

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    Gotcha. That said, the gist of the thread seems to be that £1m might not be enough for some in America to live on. I'd be an incredibly well off pensioner here with that kind of pension pot. I'd be living like a king. Why, I could buy a True Historic Les Paul with that kind of cash :D
     
  10. Dirty_Tones

    Dirty_Tones Supporting Member

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    So where does one get this 8%?
     
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  11. Bluedawg

    Bluedawg Member

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    It will depend on where you live in the US. We have lots of Californians and folks from the northeast US here. $1 Mill may not be enough in those parts of the country. Could you live in the nicer parts of London on $1 Mill?

    If you have $1 mill in the bank in small town Ohio or Alabama you are probably in good shape if you don't go crazy. You might even be able to afford a True Historic LP.

    :munch
     
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  12. Davy

    Davy Supporting Member

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    I'd be moving to Alabama then. I heard it's sweet :)
     
  13. circle_o_5ths

    circle_o_5ths Member

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    Covered earlier, S&P 500 fund
     
  14. Bluedawg

    Bluedawg Member

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    Yup .... Lots of people move out of the big cities and expensive states when they retire.

    At least LA (Lower Alabama) is warm in the winter

    It could be a sweet home.

    :banana
     
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  15. AZChilicat

    AZChilicat Member

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    Reality. Try it some time!
     
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  16. AZChilicat

    AZChilicat Member

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    Reality. Try it some time!
    Not trying to be a dick but what's your concept of "living like a king?" I've looked at housing prices in Edinburgh and Glasgow, recently read a BBC article about how pensioners are renting more and more, the cost of living...and I'm not seeing it.
     
  17. ksandvik

    ksandvik Member

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    I'm not a big fan of the current bubble-Bitcoin situation. However, the blockchain technology will indeed revolutionize economics. Such as finally having transparent transactions, you can't hide behind strange paperwork. Shipping costs will go down as tracking is precise. Even better, a lot of work will move towards blockchain based transactions, you do work for me and I pay with 'blockchain currency' that you could use for another service. Means tax revenues short term will go down quite a lot. Which politicians should think of when planning tax plans.... The current old-timers have no hum what is going on.
     
  18. Boris Bubbanov

    Boris Bubbanov Member

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    That's what I used to tell people.

    I'm still very proud of the Little River Canyon area and how we got a large area under protection - it is wonderful, there, and I'm most grateful to all the people in Alabama that helped make this happen. Most grateful.

    But Tribalism is on the rise, there. Old friends who won't return phone calls from the other guy. Many places in AL are more like living 100 years in the past. I was more optimistic there, as the 1970s gave way to the 1980s and 1990s. Not so much, now.

    I used to go through Alabama to get to someplace in Alabama. Now, I go through Alabama to get to someplace else.
     
  19. Davy

    Davy Supporting Member

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    Not sure what you're reading but unless you're living in millionaires row in Morningside then houses are absolutely affordable in Edinburgh. I stayed in a lovely apartment in Leith recently which is very central and it was owned by a single, non professional girl. I doubt the same would apply in NY from what I read here.

    Same with Glasgow, there are a few pockets of pricey areas but generally housing is affordable. I have a very nice detached property in a very nice area that, in parts of the south of England, would be very easily well over half a million if not £3/4m. I paid £142K.

    South Englands property prices are a whole other ball game but, even so, I have friends and relatives there who are doing fine. All have bought. Regardless of that, I assumed we were talking here about a retirement pot of a million outside of buying a property? I'd hope anyone reaching retirement here would own outright and it'd be a non issue. Honestly, none of my friends or acquaintances rent properties. In south England renting is common and very expensive in many areas. London is insane.

    Some facts for you to help you "see it" :)

    https://www.gov.uk/government/publi...2017/uk-house-price-index-scotland-april-2017
     
    Last edited: Dec 7, 2017
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  20. Davy

    Davy Supporting Member

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    Sadly that mindset is becoming common in some areas in the UK too :(
     

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