Generic_Commenter-X t1_j0pwa6d wrote on December 18, 2022 at 3:24 PM

I don't get these projections at all. What is a retired couple (I assume) spending their money on that they would burn through a million dollars in X number of years? Presumably, if they have a million dollars, they're also earning passive income on that money. So how is it that they're spending that passive income along with burning through their principle? If they've socked away a million dollars, then they arguably don't have a mortgage? On the other hand, I guess if they're debt-laden, house, cars, second homes, etc. etc. I could see it. I'm sure there are plenty of millionaires who could live indefinitely on that stash no matter what state they live in. Presumably, and all else being equal, if they're financially thrifty enough to stash a million, they're wise enough to know how to invest it and not spend it.

thisoneisnotasbad t1_j0rempk wrote on December 18, 2022 at 9:12 PM

18 years on a million seems about right. The passive income is what extends it out to 18 years. If you are putting it in CD’s you are not investing it all at once and are earning maybe 30k year off of it. You are paying taxes on that money as well. VT taxes interest, social security, pensions, basically everything you earn.

In that end a wisely invested million will earn you 2k a month in income and continue to return less as the principal is drawn down on.

Regular care and feeding of a house with no mortgage is probably close to 1200 a month in heat, repairs and taxes.

1 million sounds like a lot but having it only last 18 years is completely reasonable given Vermont high cost of living.

BooksNCats11 t1_j0qgcaj wrote on December 18, 2022 at 5:38 PM

Electricity and heat are around $400 per month year round here. That's nearly $50k in just 10 years time. And that's IF prices don't go up. If you manage to live 20yrs post retirement that's 1/10th of your money in just heat and electricity.

Planning on $100/week for groceries (that's the low end right now honestly for 2 people) that's another 10th in 20 years.

Gas, phone, repairs on the house (roof cost like $15k), insurance etc etc etc it's not a surprise to me at all that people could get through a mil real fast.

And that's not counting potential medical bills that come with old age....

Generic_Commenter-X t1_j0r2fyk wrote on December 18, 2022 at 7:53 PM

It doesn't cost $400/month if you have solar panels. They're everywhere around here and not just on million dollar houses. I see them on ramshackle trailer homes with a quarter of a million dollar excavator sitting in the back yard. If you're sitting on a million dollars, you install solar panels once and you're done. For heat, you install heat pumps; and you're done. So, we can tick those off your list. As for groceries... I don't see the price of those varying all that much from state to state, so groceries aren't the issue. Besides, at $100/week, that's easily paid for through passive investment income.

Gas? Why would anyone in retirement with a million dollars be paying for gas? I know plenty of customers, not millionaires, who have installed solar panels and charge their EVs for free. So check that off your list.

Phone? That can cost as little as $20/month if you don't need data; and why would someone in retirement need data for roaming? Repairs on a house? Usually that's a roof and roofs nowadays are good for up to 60 years. These people aren't going to live for another 60 years, so that's a one time expense.

I personally know plenty of retirees with less than a million who are doing just fine and did just fine with half that amount. They didn't live extravagantly but within their means.

Eagle_Arm t1_j0r4kp3 wrote on December 18, 2022 at 8:07 PM

Aww yes, the retirement to dream of.

Don't do anything. Don't do house upkeep, repairs, or replace old equipment.

Especially don't have hobbies. Just sit in your home and die.

Pristine_Tension8399 t1_j0rmztv wrote on December 18, 2022 at 10:10 PM

Or pay taxes. Or insurance.

Generic_Commenter-X t1_j0s7cdw wrote on December 19, 2022 at 12:38 AM

You really don't have a clue do you? I work with stock brokers and I'm literally telling you that I know people, lots of people, who had half a million twenty years ago, when they started retirement, and have three quarters of a million or more now. But nah! You go ahead and natter on about "upkeep", "repairs", and "old equipment".

Eagle_Arm t1_j0s9uve wrote on December 19, 2022 at 12:57 AM

So you work 'with' stock brokers? But you're not a stock broker, so easier to say you know other people successful with money, but you aren't yourself?

So they took the money they had and knew how to reallocate their investments into more money? Not something the average person is doing now is it? So you're saying they did their job....to make more money? Fascinating!

Continue to make generalized statements about doing solar and having it solve all your problems or getting a cell phone for $20 a month......ya ok....it's me out of touch. Who knew forecasting about actual realities and how life is still expensive after retiring is a crazy idea? Maybe people shouldn't save money for the years when they can't really work! Have you heard about the grasshopper and the ant?