The Fat FIRE Reddit group discusses whether $10 million should replace $1 million as the retiree benchmark due to inflation's effects on living costs. Historically, $1 million once provided substantial retirement funds, but rising expenses challenge its adequacy today. Calculations show $1 million in 1970 would equate to about $8.3 million now. As more Americans retire, many realize that relying on only $1 million is impractical, leading to discussions about needing significantly larger portfolios to ensure financial security in retirement.
In most areas, $1 million is enough to buy a house... However, a $1 million portfolio is no longer enough for retirement.
While the question makes for entertaining conversations, it's important to focus on your finances and know how much you need to retire.
Using the 4% withdrawal rule, you can withdraw $40,000 per year from a $1 million portfolio... not realistic for most people.
A $10 million portfolio will be enough for almost anyone to retire, allowing a $400,000 annual withdrawal with the 4% rule.
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