Can a Couple Retire on 1 Million Dollars?
First, how much do you need to retire as a couple? This is the question most working couples would ask themselves before getting into retirement life. Getting the right number you need for retirement is not easy. You may think you have saved enough for your retirement, but once you leave your office, you realize that it won’t last the next two decades. This is because you will meet many variables in your retirement life that will consume your savings quickly, leaving you in debt. So, is one million dollars enough for a couple to live a happy retirement life?
Having seven-figure savings in your account sounds excellent. However, not all retirees manage to hit that number when planning to retire. According to financial experts, most people aged between 60 and 70 retire with something around $150,000 for men and $130,000. Therefore, working yourself to reach $1M before retirement could guarantee a happy life after retirement. However, many factors determine the kind of life you will live as a couple retiring with $1M in your retirement saving account. These factors include;
The Type of Life You Intend to Live
The type of life you lead after retirement determines how long $1M will push you. For instance, some people would prefer slowing down their expenses and spending more time with their loved ones, while others would think about getting new hobbies and traveling to expensive destinations they never had time to.
Therefore, if you think about living a modest and happy life with your family, you may not need much savings for your retirement. However, a couple who would like to enjoy their retirement life in different destinations needs more than $1M.
Investment Plays a Big Role
There are many investors out there looking for the best place to invest their money. They are not all looking at the same investments, so it is essential to do your research to make sure you are making the right moves. However, with the current economic crisis, more people than ever before are looking to make their investments and get good returns. So, what are the best ways to go about doing this?
For starters, you should always diversify. Diversification means that you are putting your eggs in different baskets so that one doesn’t fail. If you are putting all of your eggs in one basket of stocks, then perhaps you should look elsewhere for your investment options. It may mean that you diversified too much and are now taking on many risks that you can’t afford right now. For practical investment advice, reach out to Instant Loan.
Of course, you need to make sure that you know what you are doing when investing. There is no point just jumping into a venture unless you know exactly what you are getting yourself into. Take your time when choosing the right stocks to put your money into. Don’t rush into anything, and always follow the strategies and advice of those that know the best.
Calculate Your Daily Expenses
Knowing how much you need for retirement also depends on your daily expenses. This can be determined by looking at the following costs;
- How much do you spend on your groceries and everyday foods with family and friends?
- How much do you spend on eating out in restaurants and cafes?
- If you have kids, how much do you spend on local, domestic, or international holidays with your family?
- How much do you spend on repairs and maintenance of your house and machinery?
Apart from your daily or weekly expenses, you also need to factor in unexpected costs like your kids’ academic trips, medical factors, and significant events. Once you have estimated how much you will spend in one month on miscellaneous expenses, you can now calculate how long $1M will last you.
How Long Will You Live After Retirement?
Do you know how long you will live after retirement? Of course, nobody knows about their remaining years, but thanks to advanced nutrition and public health. From the assumption, about 26% of men and 40% of women currently 65 years are estimated to live up to 90 years old. This number is way above the average life expectancy. Therefore, using the above factors and your life expectancies helps determine how much you need to save for your retirement. However, remember that the number works on assumption, and you should assume you will live above the estimated period when calculating your retirement savings.
Are You Eligible for Government Age Pension?
Do you have enough financial resources to fund your retirement, such as super? Do you think you are eligible to receive a partial or full government age pension once you retire? The government age pension is a government payment or safety net for those retirees who meet the age and residency requirements. These payments depend on your assets value, how much super you have accumulated, and other retirement incomes such as rents. Therefore, when calculating if $1M will be enough for you as a couple to retire, consider your Government Age Pension eligibility. If you are eligible for full or partial payment, then $1M would be a good number for you.
Consider Your Retirement Transition
Sudden retirement would come as a massive shock to most workers, significantly if they did not save enough. This involves shifting from your comfortable lifestyle, self-worth, and financial freedom to a more stressful life. Therefore, to avoid such inconveniences, you can think about walking slowly into your retirement while you are still working. You can use the transition to retirement strategy (TTR) that allows you to track your super while still working.
How long do you think $1M will last you as a couple if you decide to retire today? There might be no absolute answer to this question. However, a couple planning to retire one million dollars can live happily if they cut unnecessary expenses and stick to the basics. Moreover, the couple can comfortably retire one million dollars if they follow the transition to retirement strategy.