Can you retire on 1mill?

If it was just me living alone...my typical meal plan would be :

• bowl of porridge - lets say $0.50
• lunch - lets say can of tuna with salad - $4
• dinner - chicken breast and veges - lets say $6

Snacks will be cans of tuna, fruit, protein shakes - $5.

Point is, I could easily live on < $20 worth of food per day eating healthy. That's well under $10K pa. Me alone.

Fortunately, I have a family who demand variety and more exy choices so that budget is a pipe dream.

 

I think 45k is enough for single person who has paid off a house to live comfortably. So you will need about $1.1m using the 4% rules (assumes equities not properties)

But as a couple 65k is more realistic. I laugh at some people on this forum..who want 150k....to get this sort of income you need something like 3.8m out side of your own home (in ETFs/shares). If it is in property you will need something like 5m paid off...on top of you home.

Hate to say this but a lot of people will never get there.....I see a lot of waste incomes...people are so busy they are over paying on fixed cost items...phone plans, car insurance, medical insurance, etc, etc. Just sorting these out could put 5k into you pocket.

 

I think we have been down this road before ...... very small % will retire with income of $100,000 pa which seems to be the benchmark on PC

 

Underachievers

 

Depends for some you don't need any

If you on the old government defined benefit scheme
it outrageously generous, you can comfortably live on this and never run out of money index to inflation

any extra money you have in your bank account or investment it is party money

 

Lol
Just adapt

 

Providing you own your ppor and no dependants yes.

PIC has a grossed up dividend of over 8%.

Easily live on 60-70k and reivest the left over.

However Labor government removing franking credits or one the kids getting knocked up could throw a spanner in the works.

I would continue to work 2 - 3 days and use 50% of the returns to live off, re-invest the remainder.

 

If you are OK with a frugal life... 45K isn't a lot of money if you want to travel or take up hobbies/activities in retirement

See above

Nah - just need 3 unencumbered Dual Occ's. It's easy. They'll help you pay off your PPOR and then pay themselves off. 20 years ...set .

 

Just to be annoying, we have alot more than this amount but usually only buy wine around $8 (less in Europe). I love op shops and only shop there for most clothes. couldI never justify buying the clothes I buy for a few dollars in those stores.

Cheap cruises sound like a fate worse than death I can afford to go business class because I spend less in other areas (op shops, cheap wine) but don't feel I missed anything. In fact probably enjoyed more doing the opposite of what's expected.

Can you retire on $1m? Well it depends Do you want to leave some/all capital to kids and just live off equity? I read that $1m savings is not a good place to be because you lose access to means tested pension but it's not enough to live off.

If this situation applles to you then do some problem solving.

 

Leeuwin Estate Art Series Chardonnay 2014

The 2007 was the really special one.

 

If you are in your 60s with a paid off place it’s plenty for a couple. Structured correctly it’s tax free.

640k would be doable at 67 with a pension kicking in.

if you are still young however the numbers are meaningless after you factor in inflation.

 

Ellejay...this is what separates the dreamers from people who have actually go there.

I have a 8 figure portfolio with low levels of debt comparatively...let me tell you despite all the palava...getting 200k net is quite difficult. But easier with equities.

Less than 1% of retires have 100k net income in Australia. I posted the numbers/stats but people o not believe it. They will realize this when retirement hits. Have lots of people I know on 300k...I know for a fact most will not hit 100k income even gross.

Believe it or not there are some $12-20 bottles of wine which have won international Gold Medals.

 

VAS ended on $89.86 at the close of trade today. $1,000,000 invested at that cost would provide gross annual distributions of ~ $53,000 with franking at 67%. If you purchased a year ago when it was trading at ~$76, gross distributions would be just shy of $60,000. Clearly a couple could retire on this and have a higher standard of living than most other retirees; especially so if they have no mortgage.

The question is would you want to?

 

Yep...bought VAS at $72....

I was not a convert till this guy I met....how told me he would not own property. He tipped 800k into Vanguard and a handful of LICs. This was 4 years ago in this time he also tipped in 300k (his wife's wages) into his ETF/LIC portfolio. Today it is worth...over 2m.....it returns over 75k in income. .....

I asked aren't you worries..he said no..as he has dealt with a 15% drop a couple of years ago. He acutally said he would dump even more in....

 

1. Per Year - Modest
2. Per Month - Comfortable
3. Per Week - Exotic
4. Per Day - Erotic

 

Of course even an average returning investment such as VAS gave a total return of about 24 %, 5% yield and 19 % growth that's 240k in the last year.. Surely you could live on half of that Interesting people think you would need to run down capital . Don't know why you would invest in that though when you could invest in NDQ which in the last year has given a return of 40% or better still LKHO1 both of which would have given a return of 400k on 1 million. You only need to be frugal for about 2 or 3 years , live in Asia while renting your house out. Once you have a million it is increasingly easy to get every half million after that, especially with a little leverage. But I don't know what retirement has to do with it or why you would wait, until you have $1m cash, when it only cost 3k to borrow 100k.

 

Hindsight is a beautiful thing isn't it?

NDQ has been and will be a great investment but how many retirees would realistically be comfortable with their nest egg wholly invested in tech stocks? NDQ is a great capital play but has an unfranked distribution of less than 2%. The lure of franked ETFs and/or LICs for retirees looking for a passive income to live off seems more prudent than drawing down equity to pay for the groceries.

 

if it were just myself and myself alone..i can retire on 1 mil...

But i reckon with a family of 4 or 5 with kids...5 mil MINIMUM would be the magic number to never have to work again

 

If PPOR is paid off, probably yes though it will be very frugal life. It's more likely for us to take part time work arrangement and use the yield from the $1M to "patch" the salary.
I'd prefer about $2M as a minimum.

 

Sounds like too many have got a poor understanding of how to get to a reasonable level of income for their 'retirement' - invest beforehand.

No one has considered the age at which the retirement question is proposed - obviously, the earlier (younger) or the longer you will have in retirement (The Death Clock) the more that you will need.

Take into account that the first $18k (or so) is taxed at 0% (tax free threshold), then low income off-sets, remote allowances etc - so for a couple with joint assets/income the first $36k can be tax free. With no kids at home, and relying solely on dividends quite achievable. With access to your super at 60 (tax free), then boosting it is even easier for a larger tax free income.

But as @sash notes, <1% of people retire on $100k. A dose of reality might be warranted.