this post was submitted on 09 Nov 2025
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[–] xyzzy@lemmy.today 2 points 5 days ago* (last edited 5 days ago) (1 children)

This question always depends heavily on where someone lives and someone's expected standard of living.

Someone who lives on that much already thinks it would be enough for them until they die, but they might not have ever had open market insurance, and likely not a catastrophic illness while on it. That kind of thing makes you realize how financially vulnerable you really are. It's not about steady state while healthy, it's about contingency planning.

I'm in a situation where I could probably relatively safely retire with $2 million, but like you I would be nervous about $1 million.

[–] WoodScientist@lemmy.world 2 points 5 days ago

We're aiming for $2.5-$3 million in investment income. That's based on two things:

  1. The median household incomes in the US is about $80,000.
  2. The safe indefinite withdraw rate in stock index funds is about 3%.

(2) is based on the 3% rule, a common retirement planning tool. People have crunched the numbers on historic market returns, factoring in inflation, dividends, etc. 3% is about the amount you can safely withdraw each year while the principal will still remain steady through time, even after adjusting for inflation and crashes. It is the amount you use if you want to be reasonably certain you will not outlive your retirement income.