Is $1,000,000 Enough To Retire?
Sep 25, 2023
The age old question "how much will you need at retirement" or how much is the magical number for you to hang up your comfort zone?
In today's day and age, making $100,000 a year is decent. Depending on lifestyle and job titles, obtaining $1,000,000 is a fantasy. However, we ask ourselves, is it enough to actually retire?
The short answer is no. The long answer is yes.
If the current state of our economy is foretelling, then we can safely assume $1,000,000 probably isn't the best to life comfortable, at least in the state of Hawai'i. Homes are at a median of $635,000 in 2023. Groceries and other living expenses have only increased the financial burden.
At Hawai'i Trading Academy, one of our pillars we emphasize is Risk, or Risk management. In order to lower risk and diversify in a broaden range of markets, the longer you can make one dollar go. If we want to stretch the power of our dollar, in this scenario, 1 million dollars to live off in retirement, we can begin created other sources of income, or looking to invest in already profitable strategy. This can relate to real estate, skills you want to refine, other options besides just trading.
Speaking of trading..
What would happen if you invested $1,000,000 into the S&P 500 right now, 2023? Historically, the S&P return has been around 7% to 9%, when adjusted for inflation. This average return is based on data going back several decades.
Therefore, if you invested this $1,000,000 into one big, diversified fund, you could see a net of $70,000-$90,000. After taxes, you're looking at $42,000 to live off of. By doing absolutely nothing, netted that profit is a big help and helps add staying power.
Additionally, you can diversify by evenly distributing a percentage into other markets like a Real Estate firm that takes investors money and provides another source of dividend. Individual stocks are also an option as they have a nice return if invested properly. I prefer investing in dividend paying stocks.
There are multiple ways to out one million dollars to use and is a very comfortable nest egg to start with. Diversify your portfolio and your holdings within them is always a smart way to a more profitable, and financially stable, future.
Thanks for reading!
Take a listen (BY CLICKING HERE) to our Edge Up Podcast where Glenn and Reid talk how they would invest $1,000,000 and if $1,000,000 is even enough to retire in this day and age.
Aloha! We are Glenn & Reid, founders of Hawai'i Trading Academy.
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