# Is $1M Enough in the US?

This is not an easy topic for most people to discuss, however by not discussing the situation will not improve for most. I was reading an article this weekend which is a bit light on reality, although it does show some nice infographic and let us think about the retirement problem in the United States. With the rising cost of healthcare and aging population, the United States is at the cross roads for millions of Americans who are ready for retirement now or soon will be. The question in most people's find, how much is enough. There is no real answer to this question. It is highly variable on individual life style, location, health and expectation during retirement. Also it is easier to speculate for someone who is going into retirement now vs. for someone who will be retiring say 10-15 years into the future. Variables and uncertainity increases exponentially with time.


<center> ![image.png](https://files.peakd.com/file/peakd-hive/azircon/23wXLbfenSTMsZcZ9f8aT1xsZ3fNNh28dMNoVhiHggBZFpVkemGGg7WDdKhxnhqyooxRh.png) </center> 

<center> [Source](https://www.visualcapitalist.com/is-1-million-enough-for-retirement-in-america/) </center>

The above infographics is mostly applicable to the large cities in the United States. They also factor in the social security, which currently is about $1400/month on average as per Bankrate. That is $16800/year. If one retires at 65, and live to 80 years (rounding off), that is 15 years of living in retirement (currently, and average). As per my simple math; $1M + 252K (SS) = 1,252,000. Divide that by 15, and I get $83,466. 


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> According to Genworth Financial, the average cost of assisted living in 2020 was $4,300 per month. Similarly, according to a National Center for Assisted Living report, the median cost for assisted living in the United States is about $4,300 per month or $51,600 annually

I can also see that $52K can pay for a reasonable assisted living. Leaving $31K for miscellaneous. Hopefully medical costs are covered mostly, and therefore the math probably works out in general. Obviously individual situations are highly variable and uncertainity increases with age and expensive cities life NYC or SFO. However, in general we can say the as of now $1M in retirement (used as cash and no investment) will probably get you through. The longer you can stay out of assisted living, the cheaper it is. 

Incidentally a lot of it is Housing. So if you own your house outright and can stay there as long as you can, that improve the equation in the favor of the retiree significantly. Obviously cheaper cities in the midwest is better than more expensive cities along the coastline. But if you can afford it, then why not? As personally I'd love to live in SFO, as opposed to Memphis, TN!

# Financial Freedom

Most commonly Financial freedom means having enough savings, financial investments, and cash on hand to afford the kind of life we desire for ourselves and our families. Notice that the defition is vague and it is very difficult to put a $ value to this. I have a friend who lives in Northern India and Nepal and can basically live off the land with very little cash. He is single, stopped working in his 40s and unlikely to work again. His assets are less than $100K, but he is financially free. At the same time I have seen multiple individuals with networth north of $1M and yet they are not financially free.

In my mind, it boils down to income or rather income replacement, as opposed to net worth. Because this is more tangible calculation. The math is conceptually simple. First you have to define how much income you need to live comfortably whereever you are or like to be. Whatever that monthly income may be, you have to determine what kind of asset will generate that much income consistently over the period that you will live. Once you have accumulated that asset and distributed into investment generating that income, you have acheived financial freedom.

It could be any of the following items:
1. A portfolio of stock and bonds generating dividend income
2. A portfolio of rental properties generating income
3. A portfolio of crypto defi investment (wink, wink)
4. A portfolio of NFT gaming investment generating income (wink, wink)

Right now the bottom two is outperforming everything else. I have no idea what will happen in future but whatever it is I think it will work out for people who have invested in the current Hive L1-L2 economies.








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