Yes, we realize that the question’s been posed in seemingly a million stories, but even at a time of high unemployment when the economy is still healing there are more millionaires in the U.S. than ever before (reportedly more than nine million of them in fact) so we’ll ask again: Is one million bucks really enough for retirement?
“Well, the question might be more answerable if it were 10, 20 or30 years ago when having a million in the bank (or portfolio) could, thanks to such factors as low interest rates, high returns and more affordable health-care services, provide significant investment income and a more financially promising retirement,” says Kevin F. McCormack, president of Pension Parameters Financial Services, Inc. “Then a million meant wealth; now, not so much. As people live longer—and therefore spend more over the course of their senior years—the how-much-will-I-need query can, in some instances, be reduced to this: lifestyle, lifestyle, lifestyle. Put another way, as we tell our clients, it’s important to remember that having a greater life expectancy and more time on your hands can also mean a big uptick in recreational spending, and that, along with other big-cost items (particularly health care) needs to be a part of any sensible retirement blueprint. For some with lower retirement expenses (and expectations) a million may be enough. But that’s not necessarily so for all.”