Quote:
Originally Posted by Slava
You would be wrong, basically for sure. I don't know statistically, but I work with people for this very purpose and its not "most professionals". I would say a majority don't have that saved up by the time they're 65-70, never mind 15-20 years before that. Like I say though, that is anecdotal, and I don't know statistically.
The $40k figure is probably pretty light as well. Maybe $40k after tax for a good portion of the population, but then again if you're retired at 50 you're probably more active than a guy at 70 in terms of travel, activity and spending.
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We must travel in different circles. I can't imagine not having $1.5 million saved up by age 50, and I'd be shocked if most of my friends didn't think likewise. And that's all I'm going to say about that because I don't want to say too much.
But on the spending matter---I track what I spend every month (and have for years), and $40k a year with no rent/mortgage payment would sustain, in my view, a very nice lifestyle. It won't allow for first class flights every week to Paris, but it will allow for plenty of travel and you won't go hungry. Besides, there is only so much stuff that you really need (or, honestly, want) to buy after a while.
As for the tax matter, in the US, if the $40k is from dividends/capital gains, there won't be any federal tax to deal with. As far as the federal tax code is concerned, earned income is for chumps.