Is $1 Million Enough?
Last week we looked at a chart showing how much annual income Americans think they need to be considered rich.
This week, we’re using the same Gallup Poll data to visualize the household net worth required to join the wealthy upper class. (This is, again, according to a group of randomly surveyed individuals.) The median number? $1 million.
Think about it though… is $1 million really enough?
The average net worth in the U.S. is currently $68,828.
Meanwhile, the average retiree lives on $32,000 a year.
So what happens with a net worth of $1 million?
Assuming you’re sitting on seven figures, let’s also assume that $500,000 is investable assets.
With a moderate-risk portfolio of that size, generating a $100,000 annual income in retirement – which is what the average American, age 50 and older, thinks you need to be rich – is nearly impossible. You’d burn through your entire portfolio in less than 10 years.
Our exercise also doesn’t factor in appreciating investments, rising dividends, Social Security, etc.
But, still, you need to ask yourself… is $1 million enough?