On a scale of 1 to 10, how likely are you to be a millionaire?

[rennigade]

I always wonder about this. We're still 3 years from having to make the first decision. I know that one factor is spousal benefits. If I claim at 62 I think that impacts what she gets if I die before her whenever that is. My benefit is much higher than hers so I want to make sure we maximize that since statistically I'll go first. Maybe she claims hers at 62 and I delay mine. I'm really not sure and haven't looked into it yet as I'm still 3+ years from needing to decide. Definitely a question for our CFP and CPA. I believe when we met with the CFP, he did the projections based on collecting at 70 but we didn't delve into the math behind that.

Yeah that's definitely a wrench in the gear scenario, spouse survivor benefits. You have a hefty amount of funds so even without SS I'm guessing your wife could live very comfortable if anything we're to happen to you. It is a good question for your CFP. Take it now or later.

[Off-Grid Lover]

Yes, we are. In the Sierra foothills, at about 3,600 ft. We moved up here 5 years ago from the central valley, and what a change it was. We live very rurally, in a 5th wheel. We have electric (PG&E), also a gas-powered generator and a back-up battery. Water is from the well, always cold, clean, and delicious.

Yesterday, I posted about a bear encounter on my blog, if you're interested.

Can you guys do Solar where you live? I think ours costs 4-5K (to buy it today) so when the snow hits, and we live near the Truckee area, it really comes in handy. Much quieter.

[QuarterMillionMan]

At 42 yrs of service my 80 yr old co-worker maxed out his pension at 100%. I think the plan automatically has to pay out his pension at age 70.5 so maybe that is why he is still working at 80 where he is both getting his regular pay in addition to his pension. I'll have to ask him next time I speak with him.

[disneysteve]

Yeah that's definitely a wrench in the gear scenario, spouse survivor benefits. You have a hefty amount of funds so even without SS I'm guessing your wife could live very comfortable if anything we're to happen to you. It is a good question for your CFP. Take it now or later.

Definitely. All of my retirement planning was done without counting SS benefits. If I died today, she'd be fine. I also have $1.5M in life insurance so she'd get that on top of our existing portfolio of $3M. She'll be set no matter what happens with SS.

[QuarterMillionMan]

Even if not a millionaire big gubermint makes things a little easier in retirement and covers supplemental medical up to 100% of the cost with 25 years of service (10 years minimum at 40%).

For a member with 10 years of service credit (excluding ARC and reciprocal service credit), the Plan contributes 40 percent of the selected plan premium or 40 percent of the benchmark plan premium, whichever is less.* For each year of service credit beyond 10 years, the Plan contributes an additional four percent per year of the selected plan premium or four percent of the benchmark plan premium, whichever is less, up to a maximum of 100 percent for a member with 25 years of service credit.

[disneysteve]

Even if not a millionaire big gubermint makes things a little easier in retirement and covers supplemental medical up to 100% of the cost with 25 years of service (10 years minimum at 40%).

That's a huge benefit and also speaks to why being a millionaire isn't needed by a lot of people. If you have a retirement plan that includes medical insurance, you don't need nearly as big a nest egg. Again, I'm private sector and totally on our own for healthcare costs. We're currently on COBRA to the tune of nearly $2,000/month. When we switch to ACA, it will drop quite a bit but still be substantial. I won't know exactly how much until it happens. And if you're wondering why I didn't just go straight to ACA, with my wife's current medical issues, I didn't want to switch insurance midstream and find out that something or someone wasn't covered. I'm hoping that by the time my 18 months of COBRA are up, her issues will be resolved.

[QuarterMillionMan]

The plan must begin paying a retirement allowance to a deferred member who:
• Reaches age 70.5
• Left service with his or her accumulated contributions
on deposit with the plan.

My 80 yr old coworker is getting both, now I see why he is still working.

[Petunia 100]

Thank you. Sounds exciting. We live in Sierra City right now but within a few years, will hopefully have the funds to finish the house in the off-grid down we will move to. He may take Social Security early.
Woke up to a ton of snow. It's difficult to work here. 5 years ago I had a job 2.5 hrs away working 2.5 days straight- Wed afternoon to Friday morning. Due to COVID, they transferred all the clients down to Sacramento which is just too far to drive. So we either increase income or lower expenses. The entire town is Off-Grid and is a few hours away from us right now in a State Recreation area.

You sound like you have a great set up. It's wonderful to have nice clean water. We live in the one county which has that all year long in Northern California due to snowfall. The water off-grid isn't the best, we believe it is either from a mine or underground lake. Bathing in it will be okay, but we may haul in water otherwise. The Old timers live to a ripe age up there so the water is probably just fine.

Well, you and I live in the same general area.

[james.hendrickson]

That's a huge benefit and also speaks to why being a millionaire isn't needed by a lot of people. If you have a retirement plan that includes medical insurance, you don't need nearly as big a nest egg. Again, I'm private sector and totally on our own for healthcare costs. We're currently on COBRA to the tune of nearly $2,000/month. When we switch to ACA, it will drop quite a bit but still be substantial. I won't know exactly how much until it happens. And if you're wondering why I didn't just go straight to ACA, with my wife's current medical issues, I didn't want to switch insurance midstream and find out that something or someone wasn't covered. I'm hoping that by the time my 18 months of COBRA are up, her issues will be resolved.

Disneysteve, I just wanted to respond back to your excellent comment. I'd be curious to see how many people actually have retirement plans that include medical insurance. It's probably a minority of people - maybe what, one-third of the country...at the most?

There are also lots of reasons why being a millionaire makes sense beyond just covering health care....personal autonomy, freedom, security, etc. I don't think anyone on the board here really disagrees with this second point, but it merits repeating for all the lurkers here on the forums .

[QuarterMillionMan]

He & I same classification $7000/month so he is getting $14,000/month, Disney Steve kind of income, or close to it.

[myrdale]

If I had to bet, I'd say I'm an 8 out of 10.

The current numbers are about
$250k house value
$150k 401K
$50k IRA
$50k Cash

So at 41, I am half way there.

[disneysteve]

There are also lots of reasons why being a millionaire makes sense beyond just covering health care....personal autonomy, freedom, security, etc. I don't think anyone on the board here really disagrees with this second point, but it merits repeating for all the lurkers here on the forums .

It completely depends on your expenses. Using the standard 4% withdrawal rate, a $1M portfolio will generate $40,000/year for a 30-year retirement. But what if your expenses are lower than $40,000? What about Social Security or any pension? What about life insurance proceeds from the spouse that dies before you? What about any anticipated inheritance? There are folks on the early retirement forum who live in LCOLA and don't spend anywhere near 40K/yr so they can live perfectly well on a lot less than $1M. My mom has a little over 400K in her portfolio but her annual expenses are around 20K. SS gives her $17,000/yr. She barely touches her savings even though she has well under $1M and she has autonomy, freedom, and security.

$1M isn't a magic number that everyone needs to achieve. While it would be way too much to meet my mom's needs, it is also way too little to meet our needs. Every situation is different.

[Petunia 100]

Disneysteve, I just wanted to respond back to your excellent comment. I'd be curious to see how many people actually have retirement plans that include medical insurance. It's probably a minority of people - maybe what, one-third of the country...at the most?

There are also lots of reasons why being a millionaire makes sense beyond just covering health care....personal autonomy, freedom, security, etc. I don't think anyone on the board here really disagrees with this second point, but it merits repeating for all the lurkers here on the forums .

A lot of FIRE types plan to use the ACA. It can be very inexpensive, or even free (Medicaid).

[disneysteve]

A lot of FIRE types plan to use the ACA. It can be very inexpensive, or even free (Medicaid).

Yep. We'll be using ACA once our COBRA benefits end and it will be hundreds of dollars a month less.

[myrdale]

It completely depends on your expenses. Using the standard 4% withdrawal rate, a $1M portfolio will generate $40,000/year for a 30-year retirement.......

Also people need to consider future inflation and medical expenses. $100 light bill today may be $150 in 20 years. The additional need for a handy-cap van, and bath room modifications may take chunks out of the principle amount, much less hospital bills.

A google search of "average 401k balance by age" shows an average for 55-64 as $232k and +65 as $255k while the median values are $84k and $82k. Significantly lower than the $1M target.