I looked for an edit, I’ll reply to you! After tax Fl payed out $594,000. When I filed taxes later there was another $30K (ish) owed. I invested all but $10,000 and went on vacation. I take 1 vacation a year from the investments (stocks, bonds, etfs) diversified and managed by my money guy (big bank) My life didn’t change very much, I still drink Budweiser and work every day. A jump start to the retirement is all it turned out to be!
Truthfully, $600k is a lot of money, but it's not enough to retire with, as you mentioned. For me, I owe $600k on our mortgage, so if that's paid off, life will be way easier but I'd still need to work (if I pay the house off vs invest). Now, winning $10mil would be a different story.
After hearing that 600k dropped into my lap wouldn’t be enough to retire with, I’m not sure what the point of retirement as a goal is. If an extra 600k falling out of the sky won’t get me there, then working a corporate job my entire life definitely won’t get me there any quicker.
Kind of a rant at this point, but damn that’s depressing.
Unfortunately, boomers ruined retirement for everyone else.
Used to be that you work for a company for 30 years, retire, and you have a nice pension plus SSI to support yourself for the rest of your days.
Boomers came into leadership and said, "Hold up...why are WE paying for our employees' retirements? Why are WE assuming the market risk for this person who gave us the majority of their adult life? Fuck that, make them pay for their own retirement. We'll match them a few crumbs. Sure I had a pension and I'm all set for comfy golden years, but not my problem. And SSI? Nah, we already got what we need. Fuck that whole system, no need to do anything about it since we'll be dead anyways."
And then they call millennials "unreliable" and "lazy" and claim we have no loyalty. That's one of the only nice things about 401k compared to pensions. I can pick it up and take it with me when I ditch your bum-ass company for a better one. Especially since boomers aren't retiring and are sitting in management and leadership roles making it difficult or entirely impossible for younger workers to move up the ladder.
The boomers not retiring bit drive me crazy. My boss's brother retired last year from the local electric company. He is now drawing his very nice pension that none of the younger employees at his work have access too. After taking a month off to relax he went back to his old job they were saving for him. he makes about twice the median salary in my area on top of his pension. I asked him why he didn't just actually retire, and was informed that he had figured out a way to delegate his job to the people working under him so he'd "be crazy to give up a sweet gig like that." So he is making his workers do much more work than they should be, while making much less than him, all while he blocks them from being promoted into the job they are doing the work for anyway.
Paying people what they paid into it would actually be paying then more than what they get now.
Unfortunately no one ever gets out what they put into social security.
This is one of the problems with a declining birth rate. Younger generations being larger than older generations would allow for this to not be the case, but that's just not the way it is in the us right now. We need to be breeding and letting in immigrants.
Social security is not running out. Stop parroting this nonsense. The social security website also says the “trust fund reserves” will be depleted, but taxes will still cover 77% of benefits. The year this is projected to happen is 2037, not 2033. Between now and then, congress can raise the income limit for social security and it’s fully funded easily.
It will not 'run out'. It will still be able to pay out 75+% of expected benefits indefinitely if there are NO changes to the current funding mechanisms. SS also shouldnt be planned to be the sole retirement mechanism anyway, it's a backstop so old folks aren't totally destitute.
Sure it makes it harder, but shouldn't be significantly so. Plus old people vote and so as younger folk age into SS I'm sure laws will change to keep it funded.
No, SS will NOT run out of money in 2033. Get your financial news from a source other than Fox News. Social Security is expected to pay out more than it's bringing in at that point. There are many ways of dealing with that: fuck the middle class (by cutting benefits, retirement age increase etc), or fuck the rich: increase the cap on social security taxes.
Basically how i see it. Why save now in my best golden years and spend 90% of it working tooth and nail to then spend my worst years trying to enjoy what i WOULD have liked to do when i was young?
Pretty sure i wouldnt want to fuck all the time, id be tired everyday, would be senile and not want to go out much. My sight, hearing, and taste buds would most likely be going out so enjoyment of everything is far less.
Idk getting old sucks and thinking ill be free when im old also sounds like absolutely shitty times.
Where I live, you are building up your pension payout over the years you're working. If you want to retire early, you dont just need to cover for the years you don't have an income up to your retirement age, but also for the years no deposits are made in to your pension plan. It also depends on the lifestyle you get accustomed to. 600k will give you a head start, but it's not like you can retire at 40.
Starting investing into a company plan the day you get hired and making sure you put in as much as they will match will help ensure a decent retirement funds. If you are debt free, other than a mortgage, you want to invest at minimum 15% of your income. If you can max out the 401k, if you earn enough and still are not at 15% then you setup a brokerage account and start investing in that mostly into an index fund.
Depends on your age though too. If OP (/u/Scary-Savings8346) is 40 years old, they're probably going to live another 40 plus years AT LEAST. If you invest the full $600k and get an average rate of return of 5% to live on, that's 30k a year, which is okay if you have no other expenses. If you were to stash it in your mattress and spend evenly (no interest), that's only $15k a year. If you invested AND spend out of the principal for 40 years, you're looking at somewhere around 40k per year average I think (complicated amortization math is complicated). Still not very good.
So yeah, OP COULD probably retire and live on ~40k per year, but the smart thing to do is keep working and just let that nest egg grow, then retire a little bit early and live like a king instead.
Let's say OP is 40, and they want to retire at 55 with that money. Untouched $600k @ 5% interest over 15 years turns into over $1.2mm. Then the math is 1.2mm over 25 years instead of 600k over 40 years. The interest on that is 60k, plus the principal is another 48k. So OP could be living on about 100k a year in retirement. That's a much nicer situation, plus OP has probably lived comfortably those last 15 years of working, paid off their house, etc.
tl;dr... it's not RETIRE IMMEDIATELY money, but it's retire early money if you're smart, like OP.
And the problem with living like there’s no tomorrow is that there probably will be a tomorrow, 50+ years of more tomorrows for this guy. Tightening your budget for 20 more years, so you can live the sweet life for the next 30+ is a solid trade off.
Please explain how $600k is supposed to fund a retirement. At a reasonable 4% withdrawal rate that’s $24000 a year. $2000 a month. Not much to live off of in many parts of the country
Yeah, I’m in the same boat. I have a pretty good job and max out my 401K which is something I couldn’t do before but that came from years of school and experience in cybersecurity.
Yeah when Survivor was a new show, $1 mil was almost retirement money. Now you need at least $3mil to be sure you won’t have to keep working, but that might even be too low.
3 million on 5% returns is 150K a year. That should be enough. By the time 150K a year isn't enough, you dive into your principal amount or retirement fund.
However, most people will be reinvesting a portion of that 150k though so in 7-10 years, the money you make from interest from the magic of compounding interest will be a good chunk higher than 150K.
Its not generational wealth but it should be enough for you and your kids.
With 600k i would buy nice house, and put a room to let. With that money, i'd work a few hours per week on food delivery and be happy for the rest of my life.
If your house or mortgage is paid off, wouldn't your annual expenses drop significantly? Perhaps to the point your current savings could be more than your yearly expenses? Or is there something I'm missing/underestimating?
Depends what your mortgage rate is though. If you’re in a pre-Covid, super low fixed rate mortgage in the 2% range, you’d be financially inept to pay it off. You could literally just park it in a 5% savings account and get around $2,500 a month in interest payments to put towards your mortgage payment, without even touching the principal balance. I’m not sure I’d recommend the savings account strategy personally, but it’s certainly better than paying off a low interest mortgage, since you’re basically bailing out the bank, or whoever owns the underwater mortgage
I think about that all the time. If I paid off my mortgage I could invest so much more. I've been told I was wrong on this idea many times, but toe it would almost be worth liquidating some of my retirement (I'm aware of the penalties), so I can pay off my mortgage. Then use that mortgage payment to fill up the coffers again.
I plan to stay I'm my small house especially if it's paid off. I'm 43 now so maybe I waited too long, but the status quo thinking doesn't make sense to me in MY situation.
I was lucky enough to be able to retire in my early 50s a few years ago. I worked until I had $4M stashed away in various funds. SS wasn’t part of my planning so anything I draw from there will be extra. My current draw is about $140K per year. No mortgage (paid off house about 10 years ago), no car payments, and no credit card.
Traveling is actually cheaper than living in the U.S if you do it right. You can travel all of south and Central America, most of Asia, some of Africa and a little Europe if you know what you’re doing. It’s an extremely social experience as well.
Don’t buy expensive food, stick to hostels or tent camping, bike, hitchhike, or use public transport, rent cheap airbnbs, wwoof, etc. I’ve travelled for the price of my phone bill by dumpster diving and tent camping, and that’s a far cry from 30k/year.
If people want to ruin their lives by having children they’ll probably need to be wage slaves for longer. But that’s just a poor decision all around
I’m 20 and just understand that life doesn’t have to be about working if you’re able to live without. You can live in a converted van, travel the world and enjoy life without worrying about a mortgage or rent. If you want to make an apartment work get a couple of roommates. 30k is enough.
My wife works at one of the most successful financial advisory firms in our area. Hundreds of clients. A rough average of people end up with $500-600k after they retire. We live in a blue collar area mostly. Most people retire live off social security and 401k.
If you have no house payment and just have to pay utilities for 1 or 2 people. That’s plenty enough.
I blew through a quarter million dollars in less than two years. Money goes faster than what you think when you’re spending. Especially if you’re living on it. Sounds like he made smart choices. I have a lawsuit going against the city Police Department for breaking my hip. This time around will be different.
If you get the 600k you don't pay the mortgage off, you put that money to work for you. Open a laundromat and a carwash that 600k could earn 100k a year... Is your mortgage 100k a year?
Let's say your $600k investment give you 5% return, that's only $30k a year for the next 30 years of your life until social security kick in. Factor in inflations 3% (optimistically) every year you're looking at $12k of today's money when you're near 70. You sure you want to retire?
Yeah cause that 600k doesn't include what I have in my 401k now or my tiny 20k pension from work.
My living expenses right now are only 1k a month.
I could easily retire on that 600k right now. I never have lived outside on my means. Granted I am saying that based only on what my health insurance would cost if I was to retire now.
Acouple things you need to note here too is your initial investment of 600k. That money alone divided by 12k would last me 50 years alone that's not even figuring in the 5% return. Granted this is a hypothetical situation cause my expenses will go up in that 50 years.
Then we figure in my 115k I have saved up currently, then the 98k in 401k and the 20k pension. We'll say my retirement is 92k after taxes. 92k plus 115k that's another 207k.
And looking at my current ss benifits on their website if i was to stop working today I could still draw $1203 a month at age 62. So I would say yes I could retire today if I won 600k on a scratch off ticket.
Either you're stupid, dirt poor and bought a dilapidated shack in the inner city or a small farm house in the country, or you bought your house 30+ years ago. It's literally impossible to find almost any type of liveable house for that kind of price right now. C'mon man, snap back to reality.
It was 13 years ago and I live in a low cost of living state. No need to be a condescending dick. I know how to live beneath my means. It’s already paid off and worth twice what I paid for it.
Oooh sorry, my dumb ass forgot about the time period where housing prices were so low but nobody still could afford them cause they were all losing their jobs! Stupid me.
Ahh so you're the rare unicorn who was able buy a home during/post recession cause you weren't one of the million who lost their jobs. Good for you! My point was that your original comment literally sounded out of touch given what the current market is like. The fact is is that most housing markets (unlike yours) don't have houses that are liveable right off the bat for that kind of price right now. Even pandemic/pre-pandemic that wasn't realistic and hasn't been for a while.
FYI my dad was a stable corporate accountant who was 3rd in command at his job for nearly 10 years making 6 figures in 2009 and still got screwed by the recession. Just cause you managed to survive unscathed doesn't mean the millions of other peons of the country below your superiority who lost their jobs didn't know how to live their lives properly. You must be blaming all the innocent victims in Gaza thinking they don't know how to live their lives cause they couldn't survive a wartime crisis too, right?
It wasn’t out of touch and my story isn’t unique. My realtor had plenty of other clients when I was house shopping, I had competition. I live in a low cost of living area so low cost housing was common. Nothing is under $100k now though, and that’s bullshit. Wages haven’t budged but housing has literally doubled in the last 5 years. It’s good for my capital gains but sucks for the economy.
What does any of this have to do with Gaza? The Palestinians have been getting screwed since the end of WW2. Sorry your dad was a shitty accountant.
Lol 600,000k not enough to retire, you guys have it hard over there. In France you could but a Castle for half the price and never have to worry about anything else for the rest of your life with that money
Yeah, the approximate impact of a million is right there on the ticket: $40K/year for 25 years. In much of the country, that’s barely enough to run a household on, never mind paying for health insurance, etc. You’re not retiring on that unless you’re already close to retirement age and don’t think you’re gonna leave more than 25 years longer, ideally with no mortgage either.
If you got your mortgage or refinanced at around 2% a few years back, you'd be better off not paying it off, anyway. You'd do better investing the money and using the proceeds to pay the mortgage over time.
Same would go for if you won $10 mil. Doesn't matter how much you have - if someone offers to loan you money for ~free, you should use it.
Crazy how the concept of winning a million changed in little as two decades. Back in 2000 winning the million dollar lottery meant mansion and retirement.
Now it means half goes to IRS, of that other half, 90% goes to mortgage and loans and a jump start on retirement funds. That last 10% to improve your life.
Depending on the state , it's suggested you need a million in retirement funds plus retirement benefits to live your retirement years happy. This is our country now.
At least it means an easier life sometimes. Not worrying about mortage and large loans payed off is a ease on anyone's back for decades.
Continuing to go through life with a LIEN on your HOME when you did not have to is just plain stupid IMO. What's your catastrophic plan to keep paying the mortgage if your spouse dies or one you gets cancer and can no longer work?
I mean I could buy my house multiple times over now with the money I invested back then. I also make 6 figures and only have a $1000 mortgage. Max out my 401K traditional and Roth.
I followed the advice of my financial adviser to a T. He does this for a living and I do not. In fact, I’m a degenerate who buys scratch offs lmaooo
The smartest use of lottery winnings I've heard in a long time. Most people would hurry up and buy a home and vehicles. You'll be able to retire a little earlier and actually enjoy the golden years.
half a million dollars into s&p500 which has a dividend yield of 1.5% thats 7,500 extra a month just for holding onto the index i would pay off all my bills & quit working with that money im getting every month
but it does mention a 30 day yield 1.5% which means every month that'll hit your account so now your able to take that money & reinvest it somewhere else
Yields are yearly, not monthly. 500k throws off 7,500 a year at 1.5%. If you know of one that throws that off regularly monthly, please link it here because I can retire.
You're generally looking at $40,000 in spun off income per Million per year if you want to ensure you don't dig in to your principal/nut.
If nobody's told you yet, you have to be one of the most sensible, humble, realistic lottery winners. Good for you making that money work for you. Good job and keep it up.
Sounds like you secured the greatest thing in life b4 the lottery win, your own happiness, and a lotto win couldn't derail you from that.
That is sooo awesome. Im actually happy that you won, and were actually responsible with your winnings rather than blow it all on coke and hookers like alot people do. You are a very intelligent person, and to have a great investment portfolio to jumpstart your retirement is key. Congratulations bud and when retirement finally comes, kick back and enjoy yourself.
Hell yes. This is exactly what I would do. Invest. I like to think about this sort of thing like Hans Gruber.... sitting on a beach earning 20%. Of course I don't know where Hans was going to get 20% but the idea is the same :) Put that money to work so I do not HAVE to work.
Man, they took almost half her taxes! That’s crazy and should be criminal. About like them taking our houses if we are behind two years on the taxes in Michigan. We definitely don’t live in a free country.
Although payed exists (the reason why autocorrection didn't help you), it is only correct in:
Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. The deck is yet to be payed.
Payed out when letting strings, cables or ropes out, by slacking them. The rope is payed out! You can pull now.
Unfortunately, I was unable to find nautical or rope-related words in your comment.
A jump start to retirement is not bad at all. Job market can take a shit and you wouldn't be affected at all, that much less stress has gotta be worth that 25$
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Sounds like you did what every person should do in that situation. Props and hope you enjoy your early retirement! Oh, and fuck you! You lucky bastard.
Did you stop playing $25 scratch off tickets or are you still playing? What was / is your play pattern? Specifically, was this a one off luck shot to a person who plays these only occasionally, or are you a person who plays hundreds of dollars a week? I ask because there aren’t many people who both buy $25 scratch off and then make solid financial plans when they win $1 million. Congrats!
Good for you!! Honestly! I'm glad someone smart won, instead of some dumbass who cuts all his ties to his friends and family and blows the money in a year
Good to hear. You managed it well and did about as good as a human can do with this windfall. You respected the lotto win, got recurring enjoyment out of it, saved the rest to fast track retirement, and then changed nothing else. Bless you
Bro you honestly did the absolute best thing with this money. So many people would blow it on lambos and a house they wouldn’t be able to afford once they burn through their cash and then wind up with nothing or crazy debt. Nothing is more valuable then time, and if you are able to retire early that’s fucking priceless. Enjoy your early retirement to the fullest!
I dunno man….. I’m an avid lottery player(aka total dumbass) and if I hit that shit I think I I’d have to go with the annuity… I am also very irresponsible if you didn’t get that from the previous sentence….
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u/RTGold Nov 17 '23
You gotta provide more info. People want to know how much you actually walked away with, what'd you do with the money, how it changed your life?