What can you get for $1,000,000 these days? Has the thrill of Who Wants to be a Millionaire worn off as the purchase power of a dollar has waned, or is the juice still worth the squeeze?
Of course, the value of a dollar is always newsworthy. Inflation is at the tip of everyone’s tongue as the economy, an ever-hard-to-pin-down enigma, is wrangled by regulators and attempted to be forced into productive submission. The Federal Open Market Committee’s strategy to return inflation to its 2% target remains the major theme in the U.S. economic outlook, and Federal Reserve Chair Jerome Powell is dedicated to trying anything he thinks will work. Though there have been improvements, he is “not confident” that the Fed has done enough to bring inflation down.
On a larger scale, the depreciation of a dollar is a long-term issue. Families across the globe have felt the pain in the increase of prices of the goods and services they have needed for decades. We all know the familiar saying of, “Back in my day, you could get a gallon of gas for $0.99.” But the days of that and penny candy are a thing of the past.
Consider, though: If you acquired $1,000,000 tomorrow, what would you do?
There is no easy answer, as everyone’s dream lifestyle varies. Could you live simply for years on $1,000,000? Yes. Could you have the comfortable life of your dreams? Probably not. Factoring in geography, longevity, lifestyle, healthcare, and long-term care needs will all have an impact on how far your money goes. In fact, you may need to double it to get closer to the ideal comfort level, as a recent survey conducted by Schwab Retirement Plan Services states the average American needs about $1.9 million to retire comfortably.
Retirement calculators abound that help us all plan for our future. Still, according to the 2023 Planning and Progress Study from Northwestern Mutual, about a third of millionaires say it’s possible they will outlive their savings.
In terms of real estate, the amount of house and land one can purchase varies greatly. Of course, $1,000,000 in a small rural town could get you quite far, while in any coastal city… you’d be pressed to find more than a studio for that price.
In one popular comparison , the New York Times does just that, juxtaposing houses sold across the greater New York area at a similar price point with varying home prices across the state – prices that vary even more greatly across the country.
It is an interesting question to ponder, especially in the context of being a game show or lottery winner, but in terms of planning for retirement, pinpointing the amount you need to maintain the lifestyle of your choice is no laughing matter.