Life changing money - how much would it take?

[SirDuff]

I'm shocked by how many people would stop working if they came into 2-4 million. Both my brother and I inherited in that range (technically in our early 20s but full disbursement took well into our 30s, for various reasons). Neither of us have stopped working or have plans to retire anytime soon - both now in our 40s. It does mean that I have "screw you" money and was able to take career risks that I might not otherwise have taken, but still working and still saving (though, admittedly, possibly at a lower rate than I'd likely otherwise have done).

Ideally, I'd like to leave a large chunk to the next generation.

 

[china mom]

Well, in my case, I am already collecting my pension and am only working for health insurance and the extra cushion the income brings. It would only take enough money to replace the income and benefits I get from my second job to allow me to stop doing and, therefore, change my life.

 

[morgan98]

I'm shocked by how many people would stop working if they came into 2-4 million. Both my brother and I inherited in that range (technically in our early 20s but full disbursement took well into our 30s, for various reasons). Neither of us have stopped working or have plans to retire anytime soon - both now in our 40s. It does mean that I have "screw you" money and was able to take career risks that I might not otherwise have taken, but still working and still saving (though, admittedly, possibly at a lower rate than I'd likely otherwise have done).

Ideally, I'd like to leave a large chunk to the next generation.

In my response, I wasn't going to get into too many technical details about our situation, but I think the desire to leave "a large chuck to the next generation" is a huge differentiator.

Both my husband and I had been previously married and had no children. We also do not have children together. My brother is married but will not have children either. We do have two nieces and a nephew on my husband's side. We have been fortunate and have worked hard in decent paying careers and have managed to save. However, we have no need or desire to leave a large legacy to anyone. What is left will go to the nieces/nephews, but we not need to leave them anywhere near 7 figures. In full disclosure, we have helped pay for some schooling and some other family issues over the years, so it is not like we are selfish.

But we are both wanting to slow down and do something different and my husband already has. As others in this thread have discussed, following a 3-4% withdraw rate will almost 100% of the time leave a large amount of principal left. I just wish there was a more accurate calculator to get to dying with almost nothing left. Now, don't get me wrong, I don't want to worry about money at the end. But I also don't want to keep working 50-60 hour weeks for another 12-15 years, to accumulate a legacy while being too conservative while alive.

 

[marcyleecorgan]

Any number I can think of, quickly gets depleted by the costs incurred by lifestyle change.

Example: $1 million - that is enough to pay off debt and invest in long-term savings but that's not money you can "live off of", you wait to withdraw it at certain times. $5 million, okay, but probably there's some real estate involved now, which has its own lifecycle. $10 million - starting to think of my extended family's needs and estate-type things, but again, that brings new costs of legal retainers 24/7, etc.

Good thing I like working!

 

[barkley]

Any number I can think of, quickly gets depleted by the costs incurred by lifestyle change.

Example: $1 million - that is enough to pay off debt and invest in long-term savings but that's not money you can "live off of", you wait to withdraw it at certain times. $5 million, okay, but probably there's some real estate involved now, which has its own lifecycle. $10 million - starting to think of my extended family's needs and estate-type things, but again, that brings new costs of legal retainers 24/7, etc.

Good thing I like working!

i dunno. i guess it greatly depends on how drastically one changes their lifestyle.

many on this thread have said that their version of life changing would include (and in some cases be limited to just being able to) immediately pay off their home mortgage. no longer having a home mortgage? yeah, that's VERY life changing for most people-but it doesn't mean that with good planning they can't have their cake and eat it too. someone who pays off their home mortgage tends to be in a position of now having a decent chunk of change each month that's no longer obligated to their housing. sure they will still have property taxes/homeowners and such but that's usually a small fraction of the entirety of a monthly mortgage payment so if they pay off the mortgage and then take what they previously paid to their lender (minus the above expenses which they should set aside in a separate account to pay as they come due) and save/invest that they could end up well AHEAD of where they began when they received their hypothetical financial windfall. at minimum they would save the interest expenses and earn whatever interest their new found source of savings nets.

in our case we didn't realize how significant the simple act of paying off our mortgage would impact our lives. being able to set that amount aside each month is pretty enjoyable in and of itself, and now when we have a month like we did in march (about 8K in unplanned/emergent expenses) there's no questioning/stress over which credit card to put it on or how long it's going to take to build back up an 'emergency fund', it's more of a 'eh, hate to do it but it's really only x months of our old mortgage payments and we got out of having to pay over 20 years worth of them so no biggie-just pay it'. that for us has been a HUGE life style change.

 

[Colleen27]

I think my threshold for life changing would have to be $1 million or more, after any applicable taxes. At a middling rate of return (5%), that would be enough to support our current lifestyle without drawing down the principle, essentially rendering our day jobs unnecessary. Since we're content with our current lifestyle and DH is the type who wouldn't want to stop working even if he didn't need the paycheck, that would be a level of comfort and security that would be truly life-changing even though we aren't interested in making any big upgrades to our standard of living.

 

[Colleen27]

I'm shocked by how many people would stop working if they came into 2-4 million. Both my brother and I inherited in that range (technically in our early 20s but full disbursement took well into our 30s, for various reasons). Neither of us have stopped working or have plans to retire anytime soon - both now in our 40s. It does mean that I have "screw you" money and was able to take career risks that I might not otherwise have taken, but still working and still saving (though, admittedly, possibly at a lower rate than I'd likely otherwise have done).

Ideally, I'd like to leave a large chunk to the next generation.

So much depends on where you're starting from and what it takes to support the life you want to live. We are already debt free except for the tail end of a small student loan and smaller car loan, both of which we're paying down ahead of schedule, and we haven't had a mortgage in almost a decade. Since we live in a relatively low cost area on a pretty average income it wouldn't take a lot to replace our income, and we're in a place where the time it would free up means more than any lifestyle upgrades more money might enable.

I'm also not particularly concerned with leaving a large chunk to the next generation. That just isn't something we're planning for - we will get the kids through their educations without the student loans that are weighing down so many in their generation and we'll help them with the big things like down payments and weddings if they want/need it, but anything beyond that is just a bonus. Not something we're actively planning for.

 

[lovin'fl]

Interesting topic. I think there are 2 phases...one is life helping and other is life changing. I think just about any amount is life helping though we have 2 kids in college right now so $100K+ would be so very life helping in that regard. Life changing would be around $3 million. We are 46 and have a nice retirement saved already.

 

[starry_solo]

I'd like to take care of my immediate family so I think $5-10 million would do it.

I'd like to get three houses on the same property. Single level, hardscaped and landscape lights. No mortgage and then just get newer cars. Not luxury cars, just reliable ones.

Then travel a bit. Some of us still need over 20 years to get to Medicare age so I know health insurance would be costly.

 

[barkley]

i noticed that several people mention needing medical coverage UNTIL medicare kicks in. as someone who is covered by medicare i STRONGLY advise pre planning the cost of additional coverage into your retirement planning. medicare comes nowhere near to covering the average healthy person's even basic needs. between deductibles, co-pays and non covered services it's vital to budget to have a supplemental insurance plan.

 

[aristocatz]

$500K. I think that amount would be entering into a completely foreign financial situation, at least temporarily. With this amount, we could pay off our small debts, upgrade to a nicer house, buy a modest vacation home, and put the rest in savings to finally have a financial cushion

 

[SirDuff]

In my response, I wasn't going to get into too many technical details about our situation, but I think the desire to leave "a large chuck to the next generation" is a huge differentiator.

So much depends on where you're starting from and what it takes to support the life you want to live. We are already debt free except for the tail end of a small student loan and smaller car loan, both of which we're paying down ahead of schedule, and we haven't had a mortgage in almost a decade. Since we live in a relatively low cost area on a pretty average income it wouldn't take a lot to replace our income, and we're in a place where the time it would free up means more than any lifestyle upgrades more money might enable.

I'm also not particularly concerned with leaving a large chunk to the next generation. That just isn't something we're planning for - we will get the kids through their educations without the student loans that are weighing down so many in their generation and we'll help them with the big things like down payments and weddings if they want/need it, but anything beyond that is just a bonus. Not something we're actively planning for.

It does depend - as noted, I was only 20. Had no debt, but obviously hadn't build up a lot of money of my own. Plus, that would have been really early retirement (I was still doing my undergrad!).

In terms of leaving it to the next generation, I understand your thoughts. I don't have kids but have nieces/nephews (I include my cousins' kids in this). None of them *need* a seven figure inheritance (but, then, neither did I) and their parents are more then set to take care of them (and would never expect that I consider their children in my financial planning). However, I kind of feel that I did nothing to get it (other than having dead parents) and I know that my grandparents worked hard to have money to leave (they lost everything when they had to escape Europe during WWII), so spending it all in one generation (i.e. on me) just doesn't feel right (though, of course, I would if circumstances change and having "screw you" money is definitely a major positive in my life). And, honestly, I do save less than I would otherwise, and don't really feel that I deprive myself of anything.

 

[mousefan73]

Life-changing for me is winning enough money that drastically forces me to change my life. For example if we were hit one of those mega millions that would be life-changing. This would require us either moving, having to change our names, or getting bodyguards for our kids. If I was worth 500 million overnight I would seriously be concerned about my and my family’s safety. People who are worth that much already live in their secure, bubble environment. We are not.

Now something to the tune of 500,000 to maybe 2 million would not be per se life-changing. It would give me the luxury of not having to work for the rest of my life and setting my kids up a good foundation for a start in their adult lives; giving my mom the best elder care on earth. in this situation I would most likely continue to work as 2 million is tons of money but you hear about people always losing that much really fast. And it just takes one major illness that can wipe a major chunk of that out

Now anything above 2 million would be some what life-changing as that would open the discussion of me buying maybe an additional home or starting a fun business.

As PP’s case the amount of 150,000 I believe their bronwill get will not be life-changing fir us. But sure the heck would make me sleep very well at night. First thing we would do is get a new furnace and a new roof and pay our cars off. In essence half already gone.

 

[quandrea]

Interesting question. At first I was going to say five million. Would mean dh could retire, we’d have enough for the rest of our lives. But then I got thinking that even with five million, dh would probably keep working and we wouldn’t spend more. Life would stay the same. It’s just who we are. I often say that even if we had inexhaustible funds, I wouldn’t live in a bigger house, wouldn’t get my hair or nails done, wouldn’t eat out any more often, wouldn’t have a cleaning lady, etc. Life is exactly as we want it now. So the five million would be invested and life would continue on as normal.

The only thing that may change would be we would travel a bit more—but not much more. And again, the style wouldn’t change. I’m basically at the peak of any want for luxury now.

 

[AurumPunzel]

Anything that's above what I currently make in a year, especially if it's in the hundreds or millions of pounds. I'd buy a nice house, a nice car, zero all the debts and not even have to worry about a single mortgage and utility bills, not to mention investing my money well and building a massive savings pot so then I can have the most comfortable life in the whole wide world. Oh, and also go jetsetting to all the Disney Parks around the world and go on all them Disney Cruises I've dreamt of.

 

[Sleepy425]

I actually don't mind working most days, so I'd say $750,000 after taxes would be life changing. I would put it in an account, my husband and I would keep living the same lives we currently are. I would use the interest to pay down the mortgage quicker ( I know that the interest wouldn't be much, but still we would probably be able to pay it off in 5 years at that rate). Then once the mortgage was paid off, I could put the interest plus the prior mortgage payment amount towards the kids' college accounts. After 5 years of that I could convince my husband to finally move to Florida, where he could keep working (he loves working and could get transferred to FL/Louisiana territory) and I could enjoy the parks all day and we could a few cruises a year (considering the money I would be saving not traveling to Disney a few times per year). The money we would make from selling our current house could more than get us a decent home in Florida, with property taxes that are half of what we currently pay.
So although the money wouldn't be life changing right away ( I would still live the same lifestyle for the next 10 years, with the same mortgage, retirement and 529 contributions we have always made each month), it would help us live much more comfortably in the future prior to DH's retirement.
Give me 5 million and I will work for a couple more years just to make sure I have a good plan for everything, then I'm building a big compound in Florida where our families and my best friend could move to with us (help them each put a down payment on a house to be built). After that, the biggest responsibility I want is operating the blender for weekly margarita nights at the Sleepy Compound (DH will still work, because he's weird like that).

 

[smiths02]

I'm shocked by how many people would stop working if they came into 2-4 million. Both my brother and I inherited in that range (technically in our early 20s but full disbursement took well into our 30s, for various reasons). Neither of us have stopped working or have plans to retire anytime soon - both now in our 40s. It does mean that I have "screw you" money and was able to take career risks that I might not otherwise have taken, but still working and still saving (though, admittedly, possibly at a lower rate than I'd likely otherwise have done).

Ideally, I'd like to leave a large chunk to the next generation.

Depends on your age, the fact that you want to leave a legacy, but it also depends on your career. My DH is in law enforcement. With a large windfall, he could be forced to quit because of the threat of lawsuits. If it got out that he was sitting on $4 million, every single person he even looked at would start suing. He would be a liability and the government would probably want him to resign.

 

[cabanafrau]

I'm shocked by how many people would stop working if they came into 2-4 million. Both my brother and I inherited in that range (technically in our early 20s but full disbursement took well into our 30s, for various reasons). Neither of us have stopped working or have plans to retire anytime soon - both now in our 40s. It does mean that I have "screw you" money and was able to take career risks that I might not otherwise have taken, but still working and still saving (though, admittedly, possibly at a lower rate than I'd likely otherwise have done).

Ideally, I'd like to leave a large chunk to the next generation.

My response would have been different if I were in my twenties -- or my forties for that matter. I answered based on our situation in our fifties. My husband would stop working at his current job and find one that he really enjoys to occupy his time. I would probably work a few more, simply take on a smaller caseload. Putting the bulk of a million dollar windfall to work instead of us carrying the entire load would be enough to carry us into retirement and beyond.

 

[DisLiss]

I think it depends on what people consider "life-changing". Just like with any other aspect of life some people find happiness in smaller things than others. I personally don't feel one needs to win enough to stop working to still have the win change their life. But I understand why others feel differently.


For many people their mortgage (or rent for someone who doesn't own a home) is their largest monthly bill. Not having to pay your highest monthly bill could certainly change how you live your day to day life, even if you have to still work. So winning enough to purchase or pay off a home could be life-changing. You could use the money you're not paying to the bank or landlord to possibly travel more or travel differently. You could do some significant home or property improvement you've always wanted. You could save money far more rapidly than before, which could allow you to invest more or invest differently. You could take up a hobby you've always wanted to try but couldn't afford. And all of these things would change your life to a varying degree.


For someone wondering how they might pay for college, then winning an amount equal to what they would need for that could certainly be life-changing.

For someone who would like to have some sort of non-covered surgical procedure done or something along those lines, an amount to cover that could be life-changing.

So, depending on what any of things cost for the particular individual, I could easily see an amount as "low" as $150-$200K being life changing. But I'm strictly talking about changing your life, not being set for life.

 

[cayennews]

I guess it all depends on your definition of life changing. Of course, as many people are saying, 5 million would be life changing. But for me even 500,000 would be life changing. We could pay off our house and one of us could afford to stay home with our son full time.