Wednesday, August 11, 2010

How Much It Costs To Be Considered "Rich"




Depending on where you live, and whether you want to be rich and still working, or rich and just relaxing, you're looking at needing to have between $2 Million to $12 Million in the bank collecting interest, and between $100,000 and $300,000 coming in annually to support your "rich" lifestyle.

CNN Money had a great article the other day on how rich you have to be in order to be considered "rich" by Americans.

Here's the story:

How rich is rich?
How much money do you need to feel rich?

Wealth is a subjective concept, but one thing is universal in most definitions: being able to live a comfortable life without having to work.

Does $250,000 make you rich?

Experts peg the figure to be somewhere around $2 million to $12 million in savings.

On the high end of that range, a single person living in an expensive part of the country (say, New York City), wanting to retire at 35 would need at least $300,000 a year to feel rich, according to Steven Kaye, president of Watchung, N.J.-based wealth management firm American Economic Planning Group. He based that number on real-life figures his clients tell him they need.

A yearly income of $300,000 would allow for taxes, a $3,800-a-month apartment (the average price in Manhattan), and a monthly spending allowance of around twelve grand, he said. Not too bad, especially since you could do this all without a pesky job.

To generate $300,000 a year beginning at age 35, you'd need a nest egg of just under $12 million. That assumes a conservative investment portfolio generating a return of 5% a year, an inflation rate of 2.5% a year and Social Security benefits of $25,000 a year starting at age 62.

If you live in a low cost part of the country, $100,000 a year should be enough, said Kaye. In that case, you would need savings of about $4 million to retire at 35.

But if you're willing to stay in the workforce until age 65, a mere $2 million would be enough.

Oh, what I'd do for a "mere $2 million"... Or $1 million. Or $100,000. Or really, even $5000. Maybe even $500. Ok, ok, even $50. Yes, I'm a whore... ;)

--jackandcokewithalime


(Image:
http://www.flickr.com/photos/argenberg/91885776/sizes/o/ by Argenberg on flickr
)

1 comment:

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