Quote:
Originally Posted by HockeyIlliterate
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.
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Yeah well the circle I'm talking is my profession of working with people to plan their retirement. So sure, some people have saved and will have more, but its not the majority. Like I say, its anecdotal, and it depends on what kind of income you earn and how you live. I have clients who spend more in a month than my parents made in a year, so clearly some people might be able to live on less than others.
I'd be curious to know your situation though. Like how young are you, how many kids and that sort of thing. I don't mean that as a shot at all, its just that I have some clients who are single with no dependents and for them a couple grand a month is totally enough. For people with families and other commitments its likely not though. Then you throw in things like the costs of travel increasing as you age (because you're older and just plain want better accommodations and things like that). And the big point here....inflation. So for you to say that you can't imagine not having $1.5 could be totally the case, because you might want closer to $4mm. I couldn't say for sure, but there are a lot of factors.