Millionaire by 65

fred990

John_G_Jones wrote: »

But it’s a lot less than many people are used to, and less than many would choose to spend in retirement.

I wonder what percentage of the retired population are on more than 40K then?

John_G_Jones

fred990 wrote: »

I wonder what percentage of the retired population are on more than 40K then?

I think it’s around 10% of retired households.

Fatbritabroad

fred990 wrote: »

40K year without having to get out of bed isn't too shabby?

Very true and it's what I'm aiming for I wasn't meaning that wasn't alot of money just that relatively nowadays a millionaire doesn't mean private jets and owning Islands.

If you're earning 150k a year now then 40k is going to seem a step back

Anonymous101

John_G_Jones wrote: »

That sounds like penury rather than being frugal.

You could take what, £8k a year?

£12k if you subscribe to the 4% rule of thumb. Still not really sufficient for the majority of people even on a frugal life style.

Back to the OP yes absolutely worth saving as much as possible and for someone on even an average salary saving a million pounds is achievable over a working lifetime.

There are some people that pour negativity on those that save a lot. The "Live for today" or "you might get hit by a bus" brigade. What a lot of people who comment like this forget is the power of having a savings.
The power of FU money!
From having a couple of months emergency fund saved up to having a couple of years expenses saved up the feeling of security that having that money can give you cannot be underestimated.

Of course having a million pounds saved up and being totally Financially Independent to a point where you no longer need to work for money is a goal totally worth pursuing for me. Why not try to get there as quickly as possible. I'm certainly aiming to be FI before 65.

Alexland

Fatbritabroad wrote: »

If you're earning 150k a year now then 40k is going to seem a step back

Depends how much of your pre-retirement earnings you actually spend (we invest most of ours) and if some of your costs stop (eg mortgage).

Alex

Anonymous101

Alexland wrote: »

Depends how much of your pre-retirement earnings you actually spend (we invest most of ours) and if some of your costs stop (eg mortgage).

Alex

Totally agree. Lifestyle inflation is the biggest enemy of saving. I know I reached a lifestyle I was happy with at a certain income and with every payrise since then I've just increased my savings.

Even if I found myself on £150k which is substantially more than I earn I don't think I'd increase my expenditure until I had more than enough put away to never work again.

Thats what I don't like about traditional retirement planning. Its based upon current income which is totally wrong for me. It should be based upon current spending.

ruperts

£12k per year mortgage free would be easy. I spend about £10k excluding mortgage and holidays and don't really feel as though I'm missing out on anything day to day.

Muhren

fred990 wrote: »

40K year without having to get out of bed isn't too shabby?

I don't even earn that much now in my mid 30's, so would be more than happy with that in retirement!

TBC15

The figures mentioned probably were not intended for the dissection of the board.

They are probably meant as bubblegum for the mind for people who had not considered their future.

People with a realistic expectation to be a Millionaire would probably help the stock market no end

bostonerimus

Alexland wrote: »

Depends how much of your pre-retirement earnings you actually spend (we invest most of ours) and if some of your costs stop (eg mortgage).

Alex

Exactly, and this is why budgeting is so important so you know what your income needs are. The industry throws around numbers like you needing 80% of your pre-retirement income, but that is high for lots of people who manage to spend far less than they earn. Once large fixed costs like the mortgage are paid and the kids are out of the house many people are able to live comfortably on far less than they earned.

The last year I worked my gross income was $160k, but my spending was $40k/year and now that I'm retired its around $30k. Rent and a DB pension give me $40k/year so I'm still following my rather arbitrary rule of spending less than what comes in from non-investment sources and I can bank $10k each year.