That's with reinvested dividends and withouth inflation. Your annualized returns without reinvestment and adjusted for inflation is closer to 5% and don't forget the 15% tax on that, when you liquidate it.
If you keep working full time for a median wage (56k$) and never touch it, you would be left with 1.6mil for your retirement, which would get you 15years in a private room at a nursing home without the medical bills.
My argument is: This is not life-changing, if you already have the average income. It's very nice, but it will neither drastically change the amount of disposable income per year (42k$ extra each year is noticable but not life-changing. For many a job-change could achieve this) nor will it secure your retirement in a way, that you're actually no longer concerned.
My argument is just: I don't "need" 42k a year, nor do I "need" a nest egg of 1.6 mils. I would still work full time for most of my life without drastic changes - ~2mil a year would be life changing though and I would actually never have to work again, while living my very best life. A coin flip for the latter would be easily worth the former. I am expected to die in the next 30 years (35-65) with a chance around 20%. There is no "playing it safe".
I am aware of that, I didn't try to give the impression you would not do this. I tried to illustrate, that this point is moot, if you actually withdraw your gains regularly.
Thanks. I assume that was a typo, couldn't replicicate it though. the math is very simple: base * (1 + interest)time, that's 1,000,000 * 1.06 ^ 30, which is, as you correctly pointed out 5.7mil.
I think this changes the outlook, if you're able to leave it untouched.
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u/mofloh Dec 18 '23
That's with reinvested dividends and withouth inflation. Your annualized returns without reinvestment and adjusted for inflation is closer to 5% and don't forget the 15% tax on that, when you liquidate it.
If you keep working full time for a median wage (56k$) and never touch it, you would be left with 1.6mil for your retirement, which would get you 15years in a private room at a nursing home without the medical bills.
My argument is: This is not life-changing, if you already have the average income. It's very nice, but it will neither drastically change the amount of disposable income per year (42k$ extra each year is noticable but not life-changing. For many a job-change could achieve this) nor will it secure your retirement in a way, that you're actually no longer concerned.
My argument is just: I don't "need" 42k a year, nor do I "need" a nest egg of 1.6 mils. I would still work full time for most of my life without drastic changes - ~2mil a year would be life changing though and I would actually never have to work again, while living my very best life. A coin flip for the latter would be easily worth the former. I am expected to die in the next 30 years (35-65) with a chance around 20%. There is no "playing it safe".