Once upon a time, amassing a million dollars for retirement meant that your golden years would be very golden indeed. But what about now—is a million dollars still enough money to enjoy a luxurious retirement?
The good news is that more than 20 million people in the United States have over a million dollars. The bad news is that depending on your lifestyle, and how you want to live in retirement, one million may not be enough. Today, the opportunities for what once might have been considered a retirement on par with the “lifestyles of the rich and famous” could require closer to one million dollars, perhaps more.
Why? One reason is that in today’s economic climate, a million dollars translates into a sustainable annual income of $30,000-$40,000. That’s down from over a decade ago, where a million dollars could generate approximately $70,000-$80,000 in sustainable annual income.
While a sustainable annual income of $30,000-$40,000 is nothing to sneer at, a successful retirement depends on proper management and prudent decisions. One of the classic mistakes is to make a major purchase upon retirement, such as a boat or membership in a private golf club.
The consensus among investment professionals is that a million dollars can still provide you with a comfortable retirement, but proper planning, realistic expectations, and a sustainable cash flow are the keys to success.
One realistic expectation to set when saving for retirement is the expense that comes with funding long-term care costs. Americans are living longer than ever before. And while this is great news, it comes with a downside. For example, the median annual cost of a private room in a nursing home has hit six figures in the U.S. at $111,000 in 2022, and the cost of nursing home care and other types of long-term care are expected to rise dramatically in the future. Sadly, many families exhaust their life savings within a year or two of a family member entering a nursing home. Meaning your one or two million dollar nest egg could disappear in the blink of an eye. Fortunately, we can help you obtain the care you need without losing the assets you have worked a lifetime to build.
Contact a New York Estate Planning Lawyer
One way to ensure you and your family are protected for the future is to start pre-planning now. Together, we can use a wide range of tools to help you create a plan that will give you the peace of mind by knowing you will be able to receive the care you need in the future, without losing your life savings.
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