Millionaires: No Longer Worth Marrying

These days, The New York Times laments, mere millionaires have to keep working; they can't afford to retire. Decades of inflation have reduced $1 million to nonwealth:

In 1953, when “How to Marry a Millionaire” was in movie theaters, $1 million bought the equivalent of $8.7 million today. Now $1 million won’t even buy an average Manhattan apartment….

 Remarkably low bond yields make 2013 an especially tough time to retire with a mere $1 million. Or maybe not. Truth is, retirees usually get the short end of the stick, one way or another.

 In 1980, for instance, Treasury bonds yielded double digits – around 10%. After the high taxes of the era, a retiree netted maybe 6%.  No, strike that. In 1980 a retiree netted less than nothing. That year the inflation rate was 12%.

As The Times suggests, retirees need common stocks in order to achieve positive returns. And they shouldn't let Mr. Market's mood swings scare them. That's easy for wealth managers to say, difficult for ordinary people to do.

Oddly, Mr. Market's mood swings don't scare anybody, even the most timid millionaires, when for no good reason he sends the Dow up 30%.