Two Million Dollar 401ks

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

Funny you only picked the cheapest milk and eggs. I know it has doubled for me because I rarely spent more than $100 each week at Costco before pandemic. Now I rarely spend less than $200 with the same type of stuff. For example, a pack of 40 bottles of water was $3 pre-pandemic and is now $7.39.

Okay let's both stop anecdotes and see what the actual data shows.

https://www.usinflationcalculator.com/inflation/food-inflation-in-the-united-states/

2020 food inflation : 3.4%
2021: 3.9%
2022: 9.9%
2023: 5.8%

Compounded that's a 25% increase over 4 years. It's certainly very high. But not remotely close to double.

You don't really know how the numbers were obtained and processed/weighted. So I won't say the BLS inflation number is representitative of our daily lives. The bottom line is my experience isn't an anecdote. It's the same to pretty much all the people I know.

"Your experience" is actually the very definition of an anecdote. N=1, as they say

So yes tell me more about how the FDA and the BLS don't know how to study and track food prices. And your much more accurate vibes based info.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

Funny you only picked the cheapest milk and eggs. I know it has doubled for me because I rarely spent more than $100 each week at Costco before pandemic. Now I rarely spend less than $200 with the same type of stuff. For example, a pack of 40 bottles of water was $3 pre-pandemic and is now $7.39.

Okay let's both stop anecdotes and see what the actual data shows.

https://www.usinflationcalculator.com/inflation/food-inflation-in-the-united-states/

2020 food inflation : 3.4%
2021: 3.9%
2022: 9.9%
2023: 5.8%

Compounded that's a 25% increase over 4 years. It's certainly very high. But not remotely close to double.

You don't really know how the numbers were obtained and processed/weighted. So I won't say the BLS inflation number is representitative of our daily lives. The bottom line is my experience isn't an anecdote. It's the same to pretty much all the people I know.

"Your experience" is actually the very definition of an anecdote. N=1, as they say

So yes tell me more about how the FDA and the BLS don't know how to study and track food prices. And your much more accurate vibes based info.

And in fact we DO know how the numbers were obtained and processed:

https://www.bls.gov/cpi/methods-overview.htm

I'll await your detailed critique of their methodology.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

No, this is accurate. The rule is that you can withdraw 4% of principle. So that is 40K the first year. True hopefully a little more each year after, but not a lot. The best estimate on 1M is 40K per year for the first ten years of retirement.

You’d be crazy to use 4% rule if you don’t have pension. 3% max or lower.

Wait do you all think you are gonna live past 95?

Also I assume social security will not be as generous when I retire (probably around 20 years from now?), but it won't be zero.

You save because you can't tell the future. What an idiotic statement

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

No, this is accurate. The rule is that you can withdraw 4% of principle. So that is 40K the first year. True hopefully a little more each year after, but not a lot. The best estimate on 1M is 40K per year for the first ten years of retirement.

You’d be crazy to use 4% rule if you don’t have pension. 3% max or lower.

Wait do you all think you are gonna live past 95?

Also I assume social security will not be as generous when I retire (probably around 20 years from now?), but it won't be zero.

One side of my family everyone lives to 90+, and most of the females live to 98+. So I'm going to assume there's a 50-75% chance I live to 95+. Better to be prepared.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

No, this is accurate. The rule is that you can withdraw 4% of principle. So that is 40K the first year. True hopefully a little more each year after, but not a lot. The best estimate on 1M is 40K per year for the first ten years of retirement.

You’d be crazy to use 4% rule if you don’t have pension. 3% max or lower.

Wait do you all think you are gonna live past 95?

Also I assume social security will not be as generous when I retire (probably around 20 years from now?), but it won't be zero.

One side of my family everyone lives to 90+, and most of the females live to 98+. So I'm going to assume there's a 50-75% chance I live to 95+. Better to be prepared.

Damn those are some solid genes. One side my grandparents almost got to 90. The other they both died in late 70s.

[Anonymous]

Ours are only at half a million and we are our 50s. Only moved to the DC area recently, so only have a few years of DC area salaries to invest versus many decades of low salaries.

[Anonymous]

Depends on a myriad of factors including age, years to anticipated retirement, expenses, other assets, etc. My opinion is millenials may have this sentiment more since social security may or may not be an option at retirement age. I think any boomers (who are close to retirement) that has a milly and the current social security benefits is probably set.

[Anonymous]

Anonymous wrote:It seems a one million dollar 401k was everyone’s goal.

But now with greater contribution limits and a bull market more people are hitting two million. And a rare lucky few even 5 million in their 401ks if they did the max and all growth stocks and older.

How did one million for a retirement goal in the 401k so quickly become a small amount?

We plan to retire in 12 years at the ages of 60 and 62. At that time, our HHI will be approximately $800K. We expect to maintain the same or better lifestyle during retirement. Social security and pension will provide about $150K, leaving $650K. We’re retiring a few years early, so 3.5% withdrawal rate probably makes the most sense. This means we need about $18M in retirement. We currently have about $9.8M, so it seems like we’re pretty well on track.

Having only $1M was never one of our goals. That’s – at best – a lower-middle class target in rural America.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

Funny you only picked the cheapest milk and eggs. I know it has doubled for me because I rarely spent more than $100 each week at Costco before pandemic. Now I rarely spend less than $200 with the same type of stuff. For example, a pack of 40 bottles of water was $3 pre-pandemic and is now $7.39.

Why are you buying 40 bottles of water a month?

Because we have a family of four and don't drink tap water.

Unless you live in Flint or someplace, bottled water is worse for you than tap water— it’s just tap water with microplastics.

Also the 4% rule is conservative— it was based on the worst markets ever. And it allows for annual increases with inflation so you don’t need to keep it flat for 10 years. Bogleheads have been tracking a mythical retirement of someone who started drawing down funds in the 2000 recession/crash and it’s worked out fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It seems a one million dollar 401k was everyone’s goal.

But now with greater contribution limits and a bull market more people are hitting two million. And a rare lucky few even 5 million in their 401ks if they did the max and all growth stocks and older.

How did one million for a retirement goal in the 401k so quickly become a small amount?

We plan to retire in 12 years at the ages of 60 and 62. At that time, our HHI will be approximately $800K. We expect to maintain the same or better lifestyle during retirement. Social security and pension will provide about $150K, leaving $650K. We’re retiring a few years early, so 3.5% withdrawal rate probably makes the most sense. This means we need about $18M in retirement. We currently have about $9.8M, so it seems like we’re pretty well on track.

Having only $1M was never one of our goals. That’s – at best – a lower-middle class target in rural America.

You people are ridiculous

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

Funny you only picked the cheapest milk and eggs. I know it has doubled for me because I rarely spent more than $100 each week at Costco before pandemic. Now I rarely spend less than $200 with the same type of stuff. For example, a pack of 40 bottles of water was $3 pre-pandemic and is now $7.39.

Why are you buying 40 bottles of water a month?

Because we have a family of four and don't drink tap water.

Unless you live in Flint or someplace, bottled water is worse for you than tap water— it’s just tap water with microplastics.

Also the 4% rule is conservative— it was based on the worst markets ever. And it allows for annual increases with inflation so you don’t need to keep it flat for 10 years. Bogleheads have been tracking a mythical retirement of someone who started drawing down funds in the 2000 recession/crash and it’s worked out fine.

That's false. US has low standard in determining quality of tap water. In many european countries, the US tap water would be not suitable for drinking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

Funny you only picked the cheapest milk and eggs. I know it has doubled for me because I rarely spent more than $100 each week at Costco before pandemic. Now I rarely spend less than $200 with the same type of stuff. For example, a pack of 40 bottles of water was $3 pre-pandemic and is now $7.39.

Why are you buying 40 bottles of water a month?

Because we have a family of four and don't drink tap water.

Unless you live in Flint or someplace, bottled water is worse for you than tap water— it’s just tap water with microplastics.

Also the 4% rule is conservative— it was based on the worst markets ever. And it allows for annual increases with inflation so you don’t need to keep it flat for 10 years. Bogleheads have been tracking a mythical retirement of someone who started drawing down funds in the 2000 recession/crash and it’s worked out fine.

That's false too. 4% rule is there to minimize retirement income fluctuation and the risk of being wiped out. This is especially true if you only have one million dollars at the time of retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

Funny you only picked the cheapest milk and eggs. I know it has doubled for me because I rarely spent more than $100 each week at Costco before pandemic. Now I rarely spend less than $200 with the same type of stuff. For example, a pack of 40 bottles of water was $3 pre-pandemic and is now $7.39.

Why are you buying 40 bottles of water a month?

Because we have a family of four and don't drink tap water.

Unless you live in Flint or someplace, bottled water is worse for you than tap water— it’s just tap water with microplastics.

Also the 4% rule is conservative— it was based on the worst markets ever. And it allows for annual increases with inflation so you don’t need to keep it flat for 10 years. Bogleheads have been tracking a mythical retirement of someone who started drawing down funds in the 2000 recession/crash and it’s worked out fine.

That's false. US has low standard in determining quality of tap water. In many european countries, the US tap water would be not suitable for drinking.

You really need to cite evidence if you are going to make up stuff up. Plus where do you think bottled water comes from? It has *fewer* quality requirements than tap water and sitting in plastic just makes it worse for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because everything is so much more expensive now. For example, food price has doubled since the pandemic. Your one million dollar at retirement translates only to $40k per year, which isn't much as you can imagine.

Doubled? In 4 years? Definitely gone up a lot but let's not go crazy here. Got a gallon of milk yesterday for $3 and 12 eggs for $1.50.

And you need to hit a retirement calculator before you say $1 million is $40k/year. The money will grow, of course.

Funny you only picked the cheapest milk and eggs. I know it has doubled for me because I rarely spent more than $100 each week at Costco before pandemic. Now I rarely spend less than $200 with the same type of stuff. For example, a pack of 40 bottles of water was $3 pre-pandemic and is now $7.39.

Why are you buying 40 bottles of water a month?

Because we have a family of four and don't drink tap water.

Unless you live in Flint or someplace, bottled water is worse for you than tap water— it’s just tap water with microplastics.

Also the 4% rule is conservative— it was based on the worst markets ever. And it allows for annual increases with inflation so you don’t need to keep it flat for 10 years. Bogleheads have been tracking a mythical retirement of someone who started drawing down funds in the 2000 recession/crash and it’s worked out fine.

That's false too. 4% rule is there to minimize retirement income fluctuation and the risk of being wiped out. This is especially true if you only have one million dollars at the time of retirement.

Not sure what your point is here. Some people in the thread were suggesting the 4% rule is outdated and should be 3.5%, or should be 4% with no inflation adjustment and my point was it has been back tested thru some pretty bad market conditions (although IIRC the 4% assumes a decent chunk of bonds in retirement).

[Anonymous]

It's feels small because it took forever, doesn't buy a house anymore, was achieved with match and high fees. Many people don't have the experience to get to the same amount on their own. Had just done the match and invested the rest on their own, they would probably have a lot more money.
I would not be thankful my job pushing me into such crap.