My Multi-Million Dollar Retirement Nest Egg Gives Me Only $90K to Spend and I Don’t Feel Rich at All

Becoming a multi-millionaire is the dream for many, and those who have not achieved this milestone may assume that once their investment account balance crosses this far into seven-figure territory, they’ll be sitting pretty. Sadly, that’s not necessarily the case, as one Reddit user explained. 

The original poster (OP) said that his savings and retirement fund are pretty close to $2 million right now. However, he’s at retirement age, so his nest egg isn’t going to keep growing anymore. He’s calculated that his investments should give him around $80K per year at a safe withdrawal rate, and when combined with his pension and Social Security, he expects to live on about $90K a year for the rest of his life (as measured in today’s dollars).

Since the poster said he’s basically already lived on $90K, he doesn’t feel rich, doesn’t have the luxuries that “truly” rich people have. He wanted to touch base with other Redditors to get their thoughts on the situation.

Is a $2 million nest egg enough to make you rich?

Objectively speaking, $2 million is a lot of money. The majority of retirees don’t have anywhere close to that much cash invested. However, as the OP said, it isn’t really enough to produce the kind of income that allows him to just spend freely on whatever he wants. While his balance is big, it also has to last decades. This means he has to be careful about how much he takes out over time. 

Since he can’t really go above $80K without worrying about draining his account dry, he’s still going to have to live on a budget. There’s a limit to how far $80K will go, especially for older people who may have healthcare costs to think about. However, while it’s not a sum that will allow you to buy a lot of first class airline seats or make other really lavish purchases, it is also a good amount of cash when you consider the fact you’ll be able to spend that much for the rest of your life and you will no longer have to work for any of your money. 

Plus, the OP may be surprised that the $80,000 feels like more than he expects, since he no longer has to save for retirement, his tax bill may fall, and if he paid off his mortgage before retiring, his housing costs should go down.

Working with a financial advisor can help you make the most of your money

Since the OP here has a nice financial cushion but not enough to provide him with enough to buy whatever he wants without checking prices, he may want to consider working with a financial advisor. His advisor can help him ensure that he uses the funds he does have wisely so he can make the most of his money and truly enjoy his retirement.

An advisor can also help him with other key tasks, like developing a tax-efficient withdrawal strategy and making sure he’s investing in the right things, so he can make his money last. The Redditor may not feel rich, but if his advisor helps him preserve his nest egg and live out the rest of his retirement spending on the things he values the most, that feeling may change over time.