"It's a challenging reality to think that we even have to question whether someone can retire on $1 million dollars in the bank. There was a time when $1 million, just like a $100,000 salary, put you in rare air, and you thought you had it made for all the right reasons, including living the good life during your golden years."
"Fast-forward to today, and it's wild to think that someone now has to strongly consider whether $1 million is enough to live on. Of course, a lot goes into such a decision, such as cost-of-living and the desired lifestyle when retired. Perhaps more importantly, you need to know how to manage ever-increasing healthcare costs that will eat into your retirement funds yearly."
One million dollars no longer guarantees a secure retirement for many people. Retirement adequacy depends on individual cost-of-living, desired lifestyle, and inflation eroding purchasing power over time. Travel plans and rising everyday expenses increase required savings. Taxation reduces accessible retirement funds, especially for money in traditional IRAs and 401(k)s, and Social Security may not cover shortfalls. Healthcare represents a potentially dominant expense in retirement; Medicare covers some costs but a retiring couple could need more than $400,000 to cover healthcare over 30 years. Careful planning of savings, withdrawals, inflation, taxes, and healthcare costs is essential before leaving the workforce.
Read at 24/7 Wall St.
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