Can 29yr old live off $1.5 million w/working?

[Anonymous]

Anonymous wrote:No, that is not enough. As others have said, it isn’t enough at 65 let alone 29.

Yes, people vastly underestimate how expensive it is to be old.

[Anonymous]

+1 to the brother moving abroad, but do some research on different countries. He could keep the house and get a property management company, try to keep some passive income going that way.

[Anonymous]

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Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.

Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.

If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.

Never understand why DCUM people can’t understand buying bonds.

You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.

Many people can live on that per year.

This.

Once people understand this, it's like a lightbulb going off.

The average DCUM type doesn’t understand that 75K is the current MEDIAN American *household* income. Bunch of book smart idiots acting like 75K is poverty wages for a single man WITHOUT A MORTGAGE…

The plan you think is so tractable erodes away every year with inflation. In 60 years, that $75K will be the equivalent of $13K today. Nowhere near the median HHI. Instead, OP would find their quality of life significantly degraded after just 10 years, thereby increasing withdrawals and cutting into principal. Maintaining a $75K lifestyle in today’s dollars would last until OP reaches 50 years old. Then…all money is gone and no pension or SS to cover expenses.

You DO realize that people manage to save and even invest on a HHI of 75K, don’t you? Think about it.

But their HHI keeps pace with inflation.

Investments keep pace (or surpass) inflation too. That's kind of the point. So whatever his spend is would be adjusted each year for inflation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.

Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.

If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.

Never understand why DCUM people can’t understand buying bonds.

You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.

Many people can live on that per year.

This.

Once people understand this, it's like a lightbulb going off.

The average DCUM type doesn’t understand that 75K is the current MEDIAN American *household* income. Bunch of book smart idiots acting like 75K is poverty wages for a single man WITHOUT A MORTGAGE…

The plan you think is so tractable erodes away every year with inflation. In 60 years, that $75K will be the equivalent of $13K today. Nowhere near the median HHI. Instead, OP would find their quality of life significantly degraded after just 10 years, thereby increasing withdrawals and cutting into principal. Maintaining a $75K lifestyle in today’s dollars would last until OP reaches 50 years old. Then…all money is gone and no pension or SS to cover expenses.

You DO realize that people manage to save and even invest on a HHI of 75K, don’t you? Think about it.

But their HHI keeps pace with inflation.

Investments keep pace (or surpass) inflation too. That's kind of the point. So whatever his spend is would be adjusted each year for inflation.

that assumes that he is in any way going to control “his spend.” he’s not - he’s going to take the interest and the principle too.

[Anonymous]

Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.

Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.

Yes, he can retire at 55 or 60 with 1.5M and a paid off house. But this guy wants to retire AT 29! 1.5M is NOT enough to get you through 50+ years of living, including having to pay for healthcare for the next 36 years.

Maybe if you go live in small town (LCOL) and grow your own food and farm your own chickens for eggs and to eat. But it's a risky venture when you are only 29 to quit working with that little saved.

[Anonymous]

Anonymous wrote:I don’t understand everyone saying no. He could live off of the interest in a HYSA. Invest some, HYSA some, maintain the health insurance and he’ll be fine

He's not 55, he's 29!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.

Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.

If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.

Never understand why DCUM people can’t understand buying bonds.

You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.

Many people can live on that per year.

This.

Once people understand this, it's like a lightbulb going off.

The average DCUM type doesn’t understand that 75K is the current MEDIAN American *household* income. Bunch of book smart idiots acting like 75K is poverty wages for a single man WITHOUT A MORTGAGE…

Most people making 75K have health insurance thru their job for moderate rates.
Sure he could live on it if invested properly, but it would be a miserly life as it's not inflation adjusted. He won't get SS and if he does it wont be very much as it's the average of your income over 10+ years (and he might not even have 10 years of work).
Sure no mortgage, but you have property taxes that keep going up and up and up. The house will require maintenance, he will need a car to get places (because he isn't living on that in an urban area)

[Anonymous]

If he DCA into the S&P500 and let it sit for the next 15 years + max out 401K & backdoor Roth during that time span, he could retire at 45.

That's a better plan, tbh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can my brother live the rest of his life without working? He is 29 years old and inherited a modest house and about $1.5 million. He has no intention to ever work again. He is not a big spender, no lavish vacations or expensive shopping sprees. He does make questionable financial choices sometimes such as paying way too much for something because he didn’t do any research. He is not great at “adulting” like remembering to paying bills and frequently lets his Obama insurance lapse. Overall a functioning person who has no interest in working. He has “done the math” and has determined that he never needs to work again and can live off the money we inherited from our parents. I’m not convinced but he is not open to discussion.

I inherited the same amount of money minus the house. I put it in an investment account. I don’t think it is enough to live on but maybe my life is just very different? I have a wife and a baby. We own a house and want to save for school and college. I did tell my brother that he is going to have a hard time finding a woman with his situation but he always seems to have a new girl he met on Tinder so who knows?

A 29 year old needs a nest egg that can last 61 years by most traditional measures. Negligible social security and pension. Such a person would need to be able to live off an initial withdrawal of 1/61 of available savings, with subsequent withdrawals indexed for inflation. That’s basically $1.5M / 61 = $24,600. Even if we’re talking after-tax money, this is a pretty LMC lifestyle.

Lol, no. 3% is considered a "permanent withdrawal rate" (i.e., you NEVER run out of money). So he can take out $1.5M x 0.03 = $45K the first year and adjust that up for inflation forever. If he sells the house and nets another $500K, he can bump that up to $60K forever. Only on DCUM can people not understand how *one person* can live off that.

Inflation. My kid lives in a MCOL area. Their rent just went up 27% for the next year lease. So did many of the apartments near them. So unless they want to get a roommate or live in a downgraded apartment, they are paying much more next year (and likely after that). And by downgraded apartment, I mean one without AC (think area that it's required), one that has carpet everywhere but the kitchen and bathroom (even the eating area would have carpet), apartment is 40+ yo and not been updated in 20+ years, etc. No inside parking (think upper midwest where it snows a lot), etc.

[Anonymous]

Anonymous wrote:If he DCA into the S&P500 and let it sit for the next 15 years + max out 401K & backdoor Roth during that time span, he could retire at 45.

That's a better plan, tbh.

True. But he doesn't want to work.

[Anonymous]

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Anonymous wrote:He should get a vasectomy, sell the house and move to Thailand ASAP. He’ll be fine on 4% a year

Until he pisses some gangster off and gets whacked

Hah this is actually good advice. I'm surprised more single guys aren't expats. I know several people living in Colombia on 20-30k per year.

Actually, the best advice of the entire thread. OP's brother needs to sell the house and move to another country.

+1

Invest the 1.5 mil in vtsax or VT and withdrawal 3%/yr. More than enough (45k) to have a decent lifestyle, and even though this guy is a slug, he should be able to date women significantly better than your average woman in the US.

True. He will be a catch. Which is why I can’t emphasize Vasectomy enough.

[Anonymous]

Also, he can take that house he got and get a better place in Thailand or wherever and probably net some cash

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can my brother live the rest of his life without working? He is 29 years old and inherited a modest house and about $1.5 million. He has no intention to ever work again. He is not a big spender, no lavish vacations or expensive shopping sprees. He does make questionable financial choices sometimes such as paying way too much for something because he didn’t do any research. He is not great at “adulting” like remembering to paying bills and frequently lets his Obama insurance lapse. Overall a functioning person who has no interest in working. He has “done the math” and has determined that he never needs to work again and can live off the money we inherited from our parents. I’m not convinced but he is not open to discussion.

I inherited the same amount of money minus the house. I put it in an investment account. I don’t think it is enough to live on but maybe my life is just very different? I have a wife and a baby. We own a house and want to save for school and college. I did tell my brother that he is going to have a hard time finding a woman with his situation but he always seems to have a new girl he met on Tinder so who knows?

A 29 year old needs a nest egg that can last 61 years by most traditional measures. Negligible social security and pension. Such a person would need to be able to live off an initial withdrawal of 1/61 of available savings, with subsequent withdrawals indexed for inflation. That’s basically $1.5M / 61 = $24,600. Even if we’re talking after-tax money, this is a pretty LMC lifestyle.

Lol, no. 3% is considered a "permanent withdrawal rate" (i.e., you NEVER run out of money). So he can take out $1.5M x 0.03 = $45K the first year and adjust that up for inflation forever. If he sells the house and nets another $500K, he can bump that up to $60K forever. Only on DCUM can people not understand how *one person* can live off that.

Inflation. My kid lives in a MCOL area. Their rent just went up 27% for the next year lease. So did many of the apartments near them. So unless they want to get a roommate or live in a downgraded apartment, they are paying much more next year (and likely after that). And by downgraded apartment, I mean one without AC (think area that it's required), one that has carpet everywhere but the kitchen and bathroom (even the eating area would have carpet), apartment is 40+ yo and not been updated in 20+ years, etc. No inside parking (think upper midwest where it snows a lot), etc.

The safe withdrawal rates are tested for inflation--including periods of intense inflation (e.g. 1970s). You draw down your initial amount + inflation.

[Anonymous]

If he can live on 45K/year, paying for his own health insurance, receive no Medicare and probably receive no SS, for 50 to 60 years, go for it.

And for those saying there are people who live like that, it is rare that it's intentional, plus THEY will get Medicare and SS at a minimum.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can my brother live the rest of his life without working? He is 29 years old and inherited a modest house and about $1.5 million. He has no intention to ever work again. He is not a big spender, no lavish vacations or expensive shopping sprees. He does make questionable financial choices sometimes such as paying way too much for something because he didn’t do any research. He is not great at “adulting” like remembering to paying bills and frequently lets his Obama insurance lapse. Overall a functioning person who has no interest in working. He has “done the math” and has determined that he never needs to work again and can live off the money we inherited from our parents. I’m not convinced but he is not open to discussion.

I inherited the same amount of money minus the house. I put it in an investment account. I don’t think it is enough to live on but maybe my life is just very different? I have a wife and a baby. We own a house and want to save for school and college. I did tell my brother that he is going to have a hard time finding a woman with his situation but he always seems to have a new girl he met on Tinder so who knows?

A 29 year old needs a nest egg that can last 61 years by most traditional measures. Negligible social security and pension. Such a person would need to be able to live off an initial withdrawal of 1/61 of available savings, with subsequent withdrawals indexed for inflation. That’s basically $1.5M / 61 = $24,600. Even if we’re talking after-tax money, this is a pretty LMC lifestyle.

Lol, no. 3% is considered a "permanent withdrawal rate" (i.e., you NEVER run out of money). So he can take out $1.5M x 0.03 = $45K the first year and adjust that up for inflation forever. If he sells the house and nets another $500K, he can bump that up to $60K forever. Only on DCUM can people not understand how *one person* can live off that.

Inflation. My kid lives in a MCOL area. Their rent just went up 27% for the next year lease. So did many of the apartments near them. So unless they want to get a roommate or live in a downgraded apartment, they are paying much more next year (and likely after that). And by downgraded apartment, I mean one without AC (think area that it's required), one that has carpet everywhere but the kitchen and bathroom (even the eating area would have carpet), apartment is 40+ yo and not been updated in 20+ years, etc. No inside parking (think upper midwest where it snows a lot), etc.

The safe withdrawal rates are tested for inflation--including periods of intense inflation (e.g. 1970s). You draw down your initial amount + inflation.

Seriously, how realistic do you think it is that this 29 year old, who doesn't want to work, will be able to manage his inheritance in a way that he can make it work? Seems to me that if he had the chops to invest in such a way to make it work, he would work, at the very least to secure Medicare and SS.