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Welcome to STop, the Seattle Times Opinion blog where our editorial writers and editors share their evolving thoughts on a variety of issues. STop is a place where opinion writers and readers can exchange views and readers can learn more about how editorial positions are formed.

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August 02, 2005

Every Man a Millionaire

I received the following email from a self-employed man, age 63:

At little research by your folks would find that none of us can retire today at 65 and expect to live to 80 at about $65,000 a year without $1.5 million in the bank. That means all of us will have to be millionaires to stay off the dole in our old age. My financial advisor has been beating me with this info for five years now trying to embaras me into saving more. She really wants me to save--and I would have to work another 10 years. I just met with a CPA and he told me the same thing. You need to explode this ‘millionaire’ myth. All of us working stiffs will have to be millionaires.

I tried the math on this, and my calculator says this man could live to age 88 on $1.5 million, assuming that interest, inflation and taxes cancelled each other out. By this back-of-the-envelope calculation, this man can get by with $975,000, assuming he expires on schedule at age 80.

That doesn’t count Social Security, which he probably will get, and will reduce the amount he needs to save. Still—if he does not have a defined benefit pension plan in addition to Social Security, he will have to save a lot to retire at 65 on anything like $65,000 a year.

And if he’s already 63, he may have a problem. Especially if he hopes to make it past 80.

All of which reminds me of a language issue—the use of the term, “millionaire.” In my youth, it meant somebody who was rich. Now it merely means someone who’s well-off (or maybe even someone who owns two houses in Seattle) and the word is therefore going out of use. We need a word for ten-millionaire, fifty-millionaire and hundred-millionaire. “Billionaire” is a fine word, but the standard is too high.

Respond to Bruce.

 
Posted by Bruce Ramsey at August 2, 2005 05:45 PM



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