What networth for R2A?

[vapasi1]

We have a lot of "How much is enough" threads for ppl R2Iing.

What would be a good amount one should have if one decides to relocate to USA? Lets say 2 kids have to be put through college. Primary bread winner will not retire before 60, will probably make 150k /yr.

1mil? or 2? or more..

[techynt]

With US citizenship - $1.5-2 million for two people............basically with this money we will be global citizen. this can generate around 100k. Assuming age of 50 years, will be enough until 85.

Without US citizenship, add another 600k, since need to start some business with 1 million and be ready to lose 60% until GC is done.

But if the business idea is good, 1.2 million will be enough since profits will pay for cost of living forever.

[edealfan]

We have a lot of "How much is enough" threads for ppl R2Iing.

What would be a good amount one should have if one decides to relocate to USA? Lets say 2 kids have to be put through college. Primary bread winner will not retire before 60, will probably make 150k /yr.

1mil? or 2? or more..

Here's how I see it..

- Until age 60 of bread winner: $150k household income is plenty to lead a decent living and put kids through college in medium to low cost of living areas (Read NOT east or west coast). No colleges will offer need-based scholarships at this income. Therefore, college expenses need to be paid for through student loans or parents' savings.

- Age 60 till the end: Your expenses are expected to go down for empty-nesters after kids are through college. A net worth of 25x times your annual expenses is a good guidance for retirement. Social security and medicare are gravy if you are eligible for them. With a paid-off house, a couple can lead a great living style at 50-60k annual expenses in low to medium cost of living areas. So, you will be looking at an investible net worth of $1.25M to $1.5M.

[Old-Spice2]

- Age 60 till the end: Your expenses are expected to go down for empty-nesters after kids are through college. A net worth of 25x times your annual expenses is a good guidance for retirement. Social security and medicare are gravy if you are eligible for them. With a paid-off house, a couple can lead a great living style at 50-60k annual expenses in low to medium cost of living areas. So, you will be looking at an investible net worth of $1.25M to $1.5M.

You have not accounted for LT Care and Nursing insurance. If you do not have those insurance and nobody to take care in old age, then expenses will shoot up. Typical nursing for a month runs at $8K or $96K/year if you are in bed like Vajpayee for multiple years. Medicare does not cover these expenses. And you have to count for both, H and W. Expenses after retirement goes up, not down.

[Dicky_Bird]

Getting risk free 5% on $2m will be challenge for that long duration, and remember, one has to pay tax on that 100k so calculations need to show that too.
with interest rates for bond/CD can hover at lower level than currently 2.5% per year can make it further challenging.

With US citizenship - $1.5-2 million for two people............basically with this money we will be global citizen. this can generate around 100k. Assuming age of 50 years, will be enough until 85.

Without US citizenship, add another 600k million, since need to start some business with 1 million and be ready to lose 60% until GC is done.

But if the business idea is good, 1.2 million will be enough since profits will pay for cost of living forever.

[techynt]

Not only counting on return also on depleting capital in later years.....

100k before tax is a big deal, about 75% Americans will love to have that as family income.

Getting risk free 5% on $2m will be challenge for that long duration, and remember, one has to pay tax on that 100k so calculations need to show that too.
with interest rates for bond/CD can hover at lower level than currently 2.5% per year can make it further challenging.

[edealfan]

You have not accounted for LT Care and Nursing insurance. If you do not have those insurance and nobody to take care in old age, then expenses will shoot up. Typical nursing for a month runs at $8K or $96K/year if you are in bed like Vajpayee for multiple years. Medicare does not cover these expenses. And you have to count for both, H and W. Expenses after retirement goes up, not down.

Agree. But, healthcare expenses and long term care expenses are impossible to plan for with 100% success rate. On the other hand, one may just die before 70 or 80, in which case you are looking at someone dying rich. We are always concerned about running out of money in retirement. But, we should equally think about potentially running out of time in retirement. If your withdrawal rate is 3.5% or lower, your portfolio balance will continue to grow and hopefully will pay for LT care toward the end.

[techynt]

I am not sure its worth planning for what happen after 85, I would bet 70% of desis dont make past that age.

I am more worried about taking care of health at 50-65, thats when I feel like we will have some juice left to travel and have fun......After that medicare will kick in....and we will cooling our heals in some cheap retirement community.... that should get us through 80.

Dont want to plan anything after 85......because I hate to burn my youth in the rat race to pay the bills of some hospital in mid-late 80s.......whatever happens is perfectly ok......

Agree. But, healthcare expenses and long term care expenses are impossible to plan for with 100% success rate. On the other hand, one may just die before 70 or 80, in which case you are looking at someone dying rich. We are always concerned about running out of money in retirement. But, we should equally think about potentially running out of time in retirement. If your withdrawal rate is 3.5% or lower, your portfolio balance will continue to grow and hopefully will pay for LT care toward the end.

[vapasi1]

With US citizenship - $1.5-2 million for two people............basically with this money we will be global citizen. this can generate around 100k. Assuming age of 50 years, will be enough until 85.

Without US citizenship, add another 600k, since need to start some business with 1 million and be ready to lose 60% until GC is done.

But if the business idea is good, 1.2 million will be enough since profits will pay for cost of living forever.

What if the household income (not business income but salary from 8-5 job) of next 15-20 yrs will be good enough to take care of expenses, college education, etc.? So 1.5 mil will just be invested and will grow untouched. So in that scenario, what is the lowest one can start with instead of 1.5 mil? Lets say 500k which will grow at 5% for 15 yrs to about 1 mil. Looks like an old couple can live on it for about 10 yrs if no major illness befalls on them. What say?

[techynt]

If there is 150k income, then you need just 200-300k to relocate and pay for initial setup cost and some emergency fund.

And if one is willing to work until 70 years of age, SS benefits should be enough to cover most of the modest living cost along with 401k savings, assuming that it will total 30 years of work, with average income of 100k/year.

but location matters, in east coast 150k is not much and in bay area its just enough to pay the bills...

Whereas 150k/year in Texas is a lot of money.....

What if the household income (not business income but salary from 8-5 job) of next 15-20 yrs will be good enough to take care of expenses, college education, etc.? So 1.5 mil will just be invested and will grow untouched. So in that scenario, what is the lowest one can start with instead of 1.5 mil? Lets say 500k which will grow at 5% for 15 yrs to about 1 mil. Looks like an old couple can live on it for about 10 yrs if no major illness befalls on them. What say?