What do you consider to be rich?

How much in assets do you consider to be rich? I’m talking about actual assets minus liabilities and not things like being healthy, being happy, having a lot of people that care about you and that you care about. IMO between $1-3 million you’re doing pretty good, between $3-10 million you’re well off, between $10-20 million you’re very well off and over $20 million you are rich.

Meh about labels. I’d guess the amount to not ever have to worry about work unless you want to might be around $3M.

That’s probably accurate depending upon lifestyle and age. I wouldn’t consider a 25 year old with 3m never has to work again, but a 50 year old who’s kids are grown can get by without working.

I would consider 10m net worth to be rich but would still require a logical lifestyle. If we’re talking planes and yachts and vacation homes, you’ll need to be over 100m.

That depends. With only 4% interest, $3M would generate $120K per year without touching the principal. Most people could live off of that easily.

Most people could live on a third of that if they had to, but there wouldn’t be a lot left for fun things.

With a paid off home and $2 million spinning off $100k a year you could live pretty comfortably. Take a few nice trips a year, eat out often, go to concerts and sporting events, not have to worry about needing a new roof or AC, etc.

That’s hard to put a universal number on. I’d say 2-3 million is fairly rich but not wealthy. If you got a couple mil you can comfortably retire but your not going to buy a private jet.

You can be asset rich and cash poor. This is my grandma. She has 100 acres that is probably worth $500K but is cash poor and lives on SS and tiny savings. She doesn’t want to sell off any acres that would provide her a very comfortable retirement.

I have a couple boss’s that I would consider wealthy. They are in the $100 million to billion range. Not only could they never work, none of their kids would need to work and they can afford private jets to fly around wherever and whenever they want to. One of the guys is going to pull a quarterly distribution in the $20 MILLION+ range. That is the wealthy level.

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What was her life like before retirement? Is she sacrificing and forgoing some things she might want? IF not and if she’s comfortable, the land could be worth 50 billion, but if she’s happy, then it’s a nice windfall for you when she passes.

To me wealthy is > $25 million. Rich is an income of greater than $1M. Upper middle class is 20% of that. The other issue is whether your wealth is growing or shrinking - are you spending less than you make?

For most, $1M is probably enough if you have SS and live in a modest inexpensive area. Probably when I retire, it’ll be $2-3M with a pension and a reduced SS benefit that is at least 40% lower than now

I expect my SS benefit to either be pushed out 5 years or my $1,500 benefit at 67 to be only $875

Simple rural farmer life. Doesn’t want anything fancy.


And I have some ancestors to whom the land was worth far more than money.


Hold your horses there Bears! If in an IRA that $2M is going to require an RMD of at least 100k!

Moral of my little story is “retirement” money in TIRA is not your money it belongs to the Gestapo! Back into original post, we could say the gov’t share of it is a liability, and we don’t know exactly what the liability is because it is all so-called “ordinary income.”

I have no idea what RMD rules are but I guess they start at age 70? No IRA here, just 401k that would be subject to the rules.

That’s right Beemer at 70 more or less, they require you to take a certain percentage based upon your life expectancy, essentially requiring you to use it (and pay tax) before you croak. The great way out of paying the tax is to take it out as a QCD. Lots of fun.

Major diff in the 401k? First it will surely move into standard IRA not long after you retire. Before it turns, though, its RMD must be taken regardless of your other RMD draws. For TIRA, you can take all your total RMD out of one if you like and let the others grow. But if you still have 401k, you must take the required amount from it. At least that is what Schwab declares.

Not so. RMDs from 401k and IRAs begin at age 73 and are going up to 75 before BMW gets there. First year withdrawal requirement at age 73 is about 3.77%, or $76K in your $2 million example.

For Jim and Taz, what are your thoughts on early spending in retirement? I keep hearing the theory that at 60 you’re active so should go hard and spend hard. At 75 you’re in a rocking chair and spending slows to a trickle. Did you find this has borne out?

I’m inclined to follow this theory, go where I want and buy what I want early with no real concern of running out of money. I don’t feel a need to leave my kids millions of dollars, they’re born into a family that provides wealth where they and their offspring will never have to work again if they choose. (mother’s side, mom basically retired when I started paying the bills)

Is it 3.77% per year or does it go up as you get older?

That’s for age 73, and the percentages grow over time. When the Feds proscribe how to calculate the amount, they don’t use a method 98% of the people would use - a percentage to multiply the prior year’s ending balance. The table provide a number to divide into the prior year ending balance.


As for spending in retirement. I don’t think there is a one size fits all scenario. As one who recently past 75, I’d say your second scenario is BS. I know someone who is 10 years older than me who once said he was done with road trips at age 80 who is still on the road as I write this. We’ve spend much of this year having work done around the house and If we don’t get out on the road this year, it will be the first in a long time.

It really depends on whether or not you have pension and/or annuity, how you invest your money, how much you typically spend while working, and probably a dozen other factors. We retired at 52. Our net worth today is probably 3-4 times what it was then. Now that we have hit RMD age, our income is higher than it has ever been (as is our tax bill). Yet, we have difficulty naming some trip we have wanted to take but didn’t, or something we wanted to buy but didn’t. We simply don’t spend it just to spend it. Money is just a tool to accomplish what you to do, but having it and not needing it (or when you need it) relieves a lot of pressure we put on ourselves. We have no kids no leave it to, so whatever is left at the end goes to charities.

I’d like to think I’ll buck that trend too. Early retirement will be focused on US/Canada travel in an RV since I’ve seen most of europe over the last several years. But I could see a pivot back to europe or Asia. I know I’m more active than the typical 55 year old and my pops lived ot 98 so I could see traveling into my 80s.

I do have a pension which allows me to be more risk tolerant with 401k and other money. But I also don’t feel a need to amass as much $$$ as possible, I’ve hit my number. But I have no idea what the next 30 years will look like, I could see having a net worth 3x that I have now.

I have changed my opinion on when to draw SS. I was always a fan of waiting until 70 since I could live to be 100 and it would pay off. But I’ve decided to draw it at 62.5, earliest I can. You never know what’s aroudn the corner, if I waited to claim and got cancer at 69 I’d be rather upset with myself.

Thanks for the perspective Jim.

Yes pretty much. I had an advisor explain that the phases of retirement are “Go-go” and “Slow-go” and “No-go” – just a little more resolution there. I think health issues are the single biggest impediment to continued heavy activity. Doing what you want while you can is probably a good thing, particularly if you don’t have over riding concerns like heirs you wish to bequeath.