Investing September 26, 2021
Is $1 million enough to retire on? I can hear you now… I sure hope so!
Today I’ll dive deeper into this question, give you some suggestions on how you can get there, and tell you how to get some free stock picks from some of the world’s best investors.
A million doesn’t buy as many yachts as it used to
Now this question of whether $1 million is enough was unthinkable even a few years ago. For people of a certain age (like me) $1 million represented that you had made it that you were among the wealthy people of the world.
You were a millionaire.
But if you think it’s not quite like that anymore… there’s a good reason for that. That’s because $1 million in 1970 was the equivalent of nearly seven million dollars today. And even if we look back as recently as 1990, a million dollars has lost half its buying power since then, meaning you’d need two million today to have the same buying power as you did in 1990.
So… $1 million definitely will not offer you as comfortable a retirement as it did a few years ago.
But let me answer the question.
With the overall caveat that of course you knew was coming — the question of whether any amount of money is enough for retirement: It certainly depends on what you want your retirement to look like.
But yes, of course $1 million can be enough for retirement, and maybe even a lot less… and I’ll show you why.
And I want you to know that no matter where you are on your retirement journey I’m confident you can make it. No matter how little you have or how much time you have left until you want to retire, you can always improve your situation. And I believe the act of getting started and understanding what I’m about to show you will help give you a mental boost that can carry you a long way.
Let’s start with a sort of baseline to think about your retirement and how much you may need. I’ll give you a basic breakdown here and if you want it I’ll send you a free report that explains this stuff even further. (And that report has free stock picks for you as well.)
4% is a big deal
Maybe you’ve heard about the so-called 4% rule, based on research from Bill Bengen, a literal rocket scientist who later became a financial planner. His work shows that it’s historically been pretty safe to withdraw 4% of your initial total nest egg each year… and have your money last longer than you do. What’s more, you can adjust your withdrawal for inflation each year.
(This is not guaranteed and assumes a certain mix of stocks and bonds in your portfolio, details of which are in the free report I can send you.)
So let’s look at an example. If you do have $1 million when you retire, that means you can withdraw 4%, or $40,000, in the first year. And for another baseline hypothetical, if you have, say, a couple of thousand dollars per month of Social Security to go with that, then you get to a total of about $64,000 a year.
Again, this is just a very rough look at the figures and is probably not tailored to your situation, but at least you now have some idea of what we’re talking about here. If you retire with $500,000, the 4% rule would have you withdrawing $20,000 for that first year. Add in your estimated Social Security and see where that gets you.
Now whether you’re looking at these numbers and panicking or not probably depends a lot on your current situation.
Indeed, some of the research out there is pretty sobering concerning how much Americans have saved for retirement
How do you compare?
A Northwestern Mutual study found that one in three Americans has less than $5,000 saved up for retirement, and 21% of Americans have no retirement savings at all.
But if this describes you, it’s not too late to enjoy the kind of life you’ve worked so hard for… and the retirement you deserve. Here’s why I say that:
Did you know that billionaire Warren Buffett made 99% of his current wealth after his 50th birthday?
Yep, at an age when many are giving up hope, Buffett was just getting started on the vast fortune he controls today.
How did Buffett do it? Well, he achieved this incredible feat by continuing to buy stocks despite his older age.
Many people think older Americans should sell all of their stocks, but at The Motley Fool, we think those people being misled…
And to prove it, we have something for you today I hope you’ll like… and that’s the free report I mentioned earlier.
5 Stocks for Building Wealth After 50
Today, The Motley Fool is offering — for free — this special report detailing five of their team’s favorite stocks to buy right now.
This report is called “5 Stocks for Building Wealth After 50″… and it also includes a more detailed explanation of the 4% rule and how much you can safely spend in retirement.
And because we are convinced that it’s never too late to start to build your fortune in the stock market…
To grab your copy of “5 Stocks for Building Wealth After 50” simply enter your email below and we’ll deliver it directly to your inbox.
This free report is brought to you by The Motley Fool, the top-rated investing newsletter in the world for 2017 according to Wall Street Survivor.
The Motley Fool has been helping investors find great stocks since 2002.
I think some of our early stock picks really illustrate the awesome power of long-term investing (and great stock picking on the part of our team):
- Netflix up 31,847%
- NVIDIA up 13,408%
- Amazon.com up 22,274%
- Walt Disney up 9,641%
- Booking Holdings up 10,408%
Though not every pick has done as well as these, the full list of winners is much longer. And here’s the bottom line: over the last 19 years The Motley Fool’s average stock pick has returned 624%, and that’s more than 4 times the return of the S&P 500 over that time period.
And that’s why I know you’ll want grab a copy of “5 Stocks for Building Wealth After 50” while it’s still available for FREE.
Don’t risk missing out on an enjoyable retirement… or anything else you want!
Simply enter your email and we’ll send you a copy of “5 Stocks for Building Wealth After 50” — and more about the 4% rule — directly to your inbox.
Returns are updated during market hours. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rex Moore owns shares of Nvidia. The Motley Fool owns shares of Amazon, Booking Holdings, Netflix, Nvidia, and Walt Disney. The Motley Fool has a disclosure policy.
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