To millionaires: Count your pennies

Mar 19, 2007 @ 6:57 am

By Brooke Southall

SAN FRANCISCO — Being a retired millionaire at 60 could lead to poverty if it means that you have only $1 million on which to live until you die, Mary Witwer, director of business development with Bell Investment Advisors Inc., warned in a recent letter to clients. The Oakland, Calif., firm manages about $410 million.

The blunt warning is aimed at the 8,000 baby boomers turning 60 every day this year, Ms. Witwer said.

“We want a light bulb to go on,” she said. “A million dollars may have been more than enough for Mom and Dad. Thinking $1 million is enough today is really dangerous.”

That danger is real, because investors are caught in the vise grip of rising annual spending needs and increased life expectancy.

“With a $1 million portfolio, a prudent investor could withdraw up to $50,000 each year and have a high probability of not outliving the money,” Ms. Witwer wrote.

The problem is that many people would find it difficult live on $50,000. For instance, a survey by Bell found that the average West Coast retiring couple felt that they needed $81,359, Ms. Witwer wrote — which means that the couple would need at least $2 million to meet their objectives.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Connecting with teachers key to adviser impact on literacy

Advisers can help with curriculum if they don't have the bandwidth to visit classrooms.

Latest news & opinion

InvestmentNews announces 2019 Innovation Awards winners

Sheryl Garrett is this year's InvestmentNews Icon.

Morgan Stanley rides wealth management train to solid first quarter

Chairman and CEO James Gorman expresses excitement about expanding into workplace plans with purchase of Solium.

Fate of New Jersey fiduciary standard could come down to politics, court

With strong support from N.J. Gov. Phil Murphy, the proposal has momentum out of the gate.

Growing wealth fuels demand for family offices

The market for serving wealthy families may be bigger than some data suggest.

FPA backs away from controversial plan to merge chapters

The group is no longer seeking to dissolve local chapters as separate legal entities.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print