A century ago, individuals who claimed to be millionaires were part of a rare and exclusive club, but a million bucks today doesn’t go as far—and isn’t nearly as impressive—as a million dollars in 1915. Using a basic annual inflation rate of 3.2 percent, calculations indicate that you’d need over $23 million today to get the same value as you would with a $1 million in 1915.
One Million Dollars Is Not What It Used to Be, Retire as a Millionaire Today
For decades, $1 million was a common retirement goal for many Americans. Hitting 65 years with a net worth of $1 million meant you were well-off, that you’d played the game and won, and that you would be comfortable for your remaining years as long as you managed things with a bit of sense. While a million dollars at retirement still protects your independence throughout later years, it doesn’t offer you entrance into the upper class. Most basic calculations figure you’ll end up with $30,000 to $50,000 per year for 20 years of retirement based on a million bucks. For most, that’s enough to pay the medical bills, cover insurance premiums, put food on the table, and buy the grand kids an occasional treat. It’s probably not enough to travel the world or buy your dream retirement car and home. You can boost your value with those numbers by ensuring you enter retirement without debt.
According to NBC, brokers across the country are seeing investors reach for higher than $1 million as a financial objective. A growing number of people are aiming at, and achieving, the $5 million mark. Experts say a million dollars isn’t the benchmark that separates the wealthy from the normally financed anymore, and the $5 million mark has become that point. Even so, $5 million isn’t as an exclusive club as you would think. The Spectrum Group reports that the number of families with $5 million in assets has grown by a factor of four in about two decades. As of 2014, over a million families met the mark.
If $1 million doesn’t make you “rich” today, then what about those who expect to retire in ten or twenty years? If inflation remains at the historical average of around 3 percent, then DailyFinance notes that $1 million will provide the same value as about half that amount today. The takeaway? Whatever you think is enough to retire on today, add at least 50 percent if you’re planning to retire down the line.
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