Yes, You Can Retire On $1M

On Monday, Maryalene LaPonsie asked in US News, “Can You Retire on $1 Million?”

She quoted a New York City advisor, Brent Lipschultz at accounting and advisory firm EisnerAmper, saying $1M would last about 20 years. Drawing on data from the Bureau of Labor Statistics, which shows that people age 65 and older have annual expenses of about $50,000, he “assumed inflation would be 2.9%, investments would earn 4% each year, and a person’s state and federal tax rates would be 30% combined.”

two persons sitting on grass facing the lake

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SmartAsset makes plain in an interactive map that location matters. The site tallies average expenses for housing, food, health care, utilities, and transportation to estimate how long a $1M retirement fund will last. Samples, in round numbers:

Number of Years a
$1M Retirement Fund Will Last
–  –  –  –  –  –  –  –  –  –  –  –  –  –  –

32 in McAllen, TX
29 in Statesboro, GA
25 in Orlando, FL
21 in Denver, CO
19 in Chicago, IL
17 in Portland, OR
16 in Los Angeles, CA
14 in Seattle, WA
12 in San Fransisco, CA
10 in New York, NY

Lipschultz estimates that a retiree needs to save an additional $765,000 to fully fund a 35-year retirement.

Two endeavors to improve your odds:

1. Grow your nest egg as much as possible.

2. Derive as much retirement income from it as possible.

With enough income generated and reinvested, your retirement stash could avoid a steady decrease from withdrawals, providing you with peace of mind for the duration.

My core Signal plans—3Sig, 6Sig, and 9Sig—are superb growth systems for pre-retirement investing. They’ve made many millionaires already and are in the process of making more. To complete the Sig journey from cradle to grave, an Income Sig plan is needed to provide income and inflation-beating growth. Although I’m still researching the plan, early signs are promising.

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You can learn more about the way I use leveraged ETFs in The Kelly Letter at jasonkelly.com

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Comments

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George Slowhand 4 days ago Member's comment

Just a thought of having a single stock portfolio (with $OHI) is gut wrenching. Consistent, high distributions are great, but watching 66% of the portfolio perish in one month, Feb/Mar 2020 would be an extreme exercise in conviction.

An Income Sig plan? I'm intrigued.

Adam Reynolds 3 days ago Member's comment

Good point.

Jason Kelly 3 days ago Author's comment

I agree, George. It was meant as an example to show that plenty of yield is available. I appreciate your interest in the Income Sig plan. I'm still working on it.

Flat Broke 1 month ago Member's comment

You can stretch your retirement waaaay further but adding in a little side hustle you enjoy. You don’t need to replace a salary, but an extra $1,000 a month could make a big difference

Jason Kelly 1 month ago Author's comment

True.

I focus on nest egg creation and management, but agree with you that a side business can be good for the bank account as well as body and soul.

Thank you for the comment.