How does life change once you hit $1 million?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The day you make your first million is just day 1 of the journey to make $2M.

A million is savings is an accomplishment many people in our country and the world can only dream of. Celebrate when you hit the number, OP!

Thank you. I'm so tired of DCUMers telling hard working people they are barely scraping by and will never be able to retire until they have $10+M. It's ridiculous.

This. Most people retire with a lot less and often nothing. This board trends affluent and this area has lots of professionals earning higher incomes and accustomed to certain lifestyle, not that of penny pinching and devoid of luxuries.

I am going to rationalize below why some think they need 10m to retire.

10 M is what you need to have if you want to retire earlier before medicare kicks in, the earlier, the bigger your retirement fund must be. You want to be able to afford health insurance, and continue having the same UMC lifestyle with expensive home maintenance (+ vacation home), travel, dining out, etc. This mean you need to clear close to what you are earning now if you want the same lifestyle you have while working. If your goal is to leave the money to your kids then you need to have enough to invest conservatively to live off your investments without touching the principal much. This is probably where 10 mil comes into picture where making 5% gives you passive income of 500K a year, which is very comfortable to live on.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m single, 41, net worth around $800K including home equity. I’ve always been obsessed with money but, until recently, never as good at making it as some of you here.

I should hit a $1 million net worth in about two years just through savings, or maybe in three years if the market goes down further. I’ve always viewed $1 million as a magical number. Obviously with inflation, the value of that number comes down each year, but it still seems pretty special.

Just curious to hear from all you rich people: how does life change once you get to the promised land? Do you feel a sense of relief and accomplishment? Or is it anti-climactic and just another milestone and you get back to work?

No. Still scared of ending up poor in old age. 1 million is nothing in this day and age.

This. I have $2.5M at 52 and am stressed all the time about running out if I need care.

+2. We have 2M in our mid 40’s and DH wants to tighten our belts even more, and we are already frugal.

Being frugal is the key, if you are used to a certain lifestyle then you will be able to stretch your money in the retirement, but if you are dreaming of upping your luxury game, starting to vacation more, eat out more, wanting to buy a beach condo or something, then you are going to feel broke. If you are happy to live the same lifestyle in retirement then you should know how much you spend and this is the money your money needs to make for you, so that you don't touch your principal. Nursing home may be more expensive than your modest lifestyle, so that's why you need to keep your principal as much as you can to not burden kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m single, 41, net worth around $800K including home equity. I’ve always been obsessed with money but, until recently, never as good at making it as some of you here.

I should hit a $1 million net worth in about two years just through savings, or maybe in three years if the market goes down further. I’ve always viewed $1 million as a magical number. Obviously with inflation, the value of that number comes down each year, but it still seems pretty special.

Just curious to hear from all you rich people: how does life change once you get to the promised land? Do you feel a sense of relief and accomplishment? Or is it anti-climactic and just another milestone and you get back to work?

No. Still scared of ending up poor in old age. 1 million is nothing in this day and age.

This. I have $2.5M at 52 and am stressed all the time about running out if I need care.

+2. We have 2M in our mid 40’s and DH wants to tighten our belts even more, and we are already frugal.

Well, you *are* behind the OP. OP said she’ll be at $1 million by 43 and is single. You have $2 million but you’re married so you each really only have $1 million. Assuming mid-40s means 45, you’re slightly behind the OP.

You are living together, so your expenses are shared.

[Anonymous]

Anonymous wrote:It's not a magical number - it barely gets you anything nowadays. It's probably easier for you, a single person with no obligations, but for the rest of us - you know the parents on this board, a million dollars is not very much money.

People like you exist. It’s mindboggling.

[Anonymous]

For us, hitting $1m in savings was very exciting. It didn't change our life at all - we kept working and saving and getting on with our lives. The hope is to retire at 65 and 63 with about $4m, including $1m home, which we will sell and downsize (not yet sure to where, and, we have time to figure that out).

We are not "DCUM rich," although we realize how lucky we are. Our 2 cars (workhorses) are both over 12 years old, our kids are in public school (and walk there, they do not have cars), we eat 95% of meals at home (dinner together as a family when the kids are not at an activity), and our vacations are not extravagant (VRBO, not hotels, mostly so we can cook some meals at home)

[Anonymous]

Anonymous wrote:The bar for the promise land rose to 5M when I reached the 1M

That sounds about right if you want to feel like you hit a major milestone to financial security if you are married with kids, maybe different for a single person.

Honestly, hard to answer because each person has different financial burdens outside of their own networth. Some have wealthy parents, others have poor parents that need taking care of, some have no kids or 1 kid and others 3+ kids, some have kids with SN or health issues requiring expensive treatment. Some of these burdens can really set you back and make you feel a lot more financially insecure.

If you are single with no other financial responsibilities other than yourself and no health issues then 1m can make you feel financially secure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m single, 41, net worth around $800K including home equity. I’ve always been obsessed with money but, until recently, never as good at making it as some of you here.

I should hit a $1 million net worth in about two years just through savings, or maybe in three years if the market goes down further. I’ve always viewed $1 million as a magical number. Obviously with inflation, the value of that number comes down each year, but it still seems pretty special.

Just curious to hear from all you rich people: how does life change once you get to the promised land? Do you feel a sense of relief and accomplishment? Or is it anti-climactic and just another milestone and you get back to work?

Sorry to say, but for me it was the latter. But I never was that obsessed with money. It was more like, huh, past that amount. When I was little I thought a millionaire meant someone wearing a monocle and a top hat and having so much money it spilled out of their pants, but in reality it was like just a brief slightly shinier feeling towards a number in the Excel file (not to mention that when the market went down soon after it went below 1m again).

Same here, our lifestyle didn't change, so there was nothing to notice or celebrate. I also don't consider myself "one of the rich people" who have "made it to the promised land." UMC compared to the rest of the nation. MC for the immediate area and this board. Our net worth is the house, retirement accounts, and 529, so while we are certainly doing well compared to the average American, we are not superfluously wealthy. I suspect the PP who said $10m is the new $1m is on target. Maybe $5m if you're older and close to retirement.

My biggest worry that keeps me grinding is that my parents didn't save enough for retirement and don't understand how insanely expensive a good nursing home costs, and that we will foot some part of the costs in the future. And then when it's our turn, I want to make sure we have enough extra money saved that we can cover anything and everything with our own savings so our kids don't have to worry the way I do now.

Most people don't spend too much time in nursing homes--do you have reason to believe your parents will need it? People in my family live very long (several past 100, most mid to upper 90s) and out of all my great aunts, grandparents, great grandparents (maybe 30 elderly people in my life) only 3 needed a nursing home for longer than a month, and only one longer than a year (and under 2).

I do, actually. My father's side of the family has a history of dementia with good physical health, so it drags out for years. One of my coworkers had both of his parents in a facility for dementia at the same time, and the cost was ~$12k a month. I'm using the term "nursing home" loosely - I guess "assisted living" might be more accurate? Either way, it is still incredibly expensive. There was a WaPo article on it last week: https://www.washingtonpost.com/business/2023/03/18/senior-care-costs-too-high/

So one scenario that I have to consider is that if my father ends up in a nursing home that will drain their savings in 2-3 years (with the real possibility of needing to be there 5-6 years), do we spend it all on him, and then when it's my mom's turn there is nothing left? Do I dip into my own retirement and savings to pay for them? Do I leave them to the mercy of medicare and whatever facilities we can find with an empty bed? So not to burst OP's bubble, but $1m net does not make me feel rich or living in the promise land.

OP, it is a very good milestone and without a doubt something to be proud of. It's more than most Americans will ever have. I'm sorry so many people on this forum (myself included) and being debbie downers, but we are answering your initial question honestly.

Not to derail the conversation, but, yes, dementia is rough because Medicare doesn't cover it in their nursing home policies and it can last so long. I usually am skeptical of long-term care insurance, but you sound like a potential candidate for a good long term care policy if you're healthy but have this family history--I would try to qualify before your dad has dementia, because that's how long they will look at your family history. (It's likely too late for your dad, but it may also be a possibility for your mom--better to be sending out premiums to ensure her future when the alternative is draining assets down for your dad to maybe end up qualifying for Medicaid and leaving little for her. Another option for her might be a deferred income annuity--so she'll have money in her old age. I do think people with dementia in the family have to plan differently--a good elder care specialist often can suggest how to arrange assets/insurances for protection for both parents (and their kids).

[Anonymous]

Anonymous wrote:I’m single, 41, net worth around $800K including home equity. I’ve always been obsessed with money but, until recently, never as good at making it as some of you here.

I should hit a $1 million net worth in about two years just through savings, or maybe in three years if the market goes down further. I’ve always viewed $1 million as a magical number. Obviously with inflation, the value of that number comes down each year, but it still seems pretty special.

Just curious to hear from all you rich people: how does life change once you get to the promised land? Do you feel a sense of relief and accomplishment? Or is it anti-climactic and just another milestone and you get back to work?

More taxes, less freebies. You realize you are now full pay for colleges.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m single, 41, net worth around $800K including home equity. I’ve always been obsessed with money but, until recently, never as good at making it as some of you here.

I should hit a $1 million net worth in about two years just through savings, or maybe in three years if the market goes down further. I’ve always viewed $1 million as a magical number. Obviously with inflation, the value of that number comes down each year, but it still seems pretty special.

Just curious to hear from all you rich people: how does life change once you get to the promised land? Do you feel a sense of relief and accomplishment? Or is it anti-climactic and just another milestone and you get back to work?

More taxes, less freebies. You realize you are now full pay for colleges.

OP is 41 and single, I doubt too worried about college tuition.

[Anonymous]

4 million is the new 1 million so 1 million means nothing

[Anonymous]

Anonymous wrote:4 million is the new 1 million so 1 million means nothing

I went to the financial calculator. To have the buying power of a million dollars back in 1980, you would need approx. $3.6 M in todays currency. Seems about right.

[Anonymous]

I really wanted to celebrate when I (separate from DH) hit $1m in savings but it’s not something you can really share with others, and I couldn’t think of anything I really wanted to buy to memorialize it. I looked at a bunch of fancy purses and decided I’m just not a fancy purse person.

Nothing really changed, but I do feel a personal sense of accomplishment in “my” money (we do shared expenses/shared savings for things like 529s + our own savings accounts).

[Anonymous]

Anonymous wrote:I only realized that we passed the mark in retrospect. It didn’t signify any change in lifestyle or feel like a finish line or anything.

+1 had no idea when it happened. Just looked at finances for other planning and realized it.

[Anonymous]

Well, we hit $1m (the two of us combined) based on 401ks and home equity mostly in 2021, and now we're back below that thanks to the stock market. I initially thought re hitting $1m, this is totally crazy, what a lot of money! It's enough that we should be able to retire comfortably if we keep saving, which is a real blessing. Like a previous poster, I'm worried about my parents' long term care needs.

[Anonymous]

For us $1M didn't mean much, when we hit $3M networth in 2021, that felt like a milestone. We wont go hungry and worst comes to worst able to move to LCOL city/country and never have to work again. But with the inflation creeping up.. now have a new target of $5M, which is okay as we are in mid to late 40's and have a bit of time before we retire. Tentative goal is after the kids are launched