Almost everybody will need more than $1,000,000 to retire on … most a lot more!
” Perhaps the most troubling aspect of safe withdrawal rates is that very few folks will have the financial assets required to [even bother] … While we’re blessed to live in a rich and prosperous country, only a tiny sliver of the US population can comfortably retire on their savings alone. “
In 1998 the median family income in the US was $38,885 so using a fairly safe inflation-adjusted withdrawal rate of 4% would require nearly $1 million in assets.
Since most folks acquire a bit more wealth as they age, about 5% of the 47-year-olds could boast $1 million nest eggs in 1998. “
That’s why the Retire Early report goes on to say:
” More worrisome, is the fact that few people with million dollar portfolios would be comfortable living on $40,000 per year. Most feel that level of wealth should support a more expansive lifestyle…
… it doesn’t, at least not safely.
There’s an old adage in wealth building, “The first million is the hardest. The second million usually comes a lot easier and quicker.”
To fund even a modest retirement, you’ll need a significant wad of cash. Prudent folks will begin saving aggressively today! “
Good advice indeed!