Another "sobering statistics" article (pension, grandparents, divorce, divorced)
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the best thing about the better calculators is because they take human spending patterns out of the equation and because they are based on the worst outcomes ever they generally are more conservative then real life tends to be .
even average outcomes would make about 1/2 to 3/4's of the asset amount work fine .
if the calculators say you are good to go , you are in pretty good shape .
if they show you are not , well then the jury is still out . you may or may not be ok . my go to calculators are firecalc and fidelity's retirement planner .
i find fidelity's new planner more conservative then firecalc since it makes better projections about healthcare and long term care costs .
it also uses monte carlo simulations which attempt to find even worse outcomes then actually happened . firecalc uses actual data .
the difference is very slight but fidelity is a bit more conservative in its answers because of the assumptions .
fidelity actually subtracted 15% off my balance 1 st year to simulate a downturn day 1 . i am like crap , how did it know ha ha ha
Not so much nuts as not fixated. What is nuts is spending your entire adult life planning and saving for a retirement you may never live to see. What is nuts is passing on travel at an age where you can fully enjoy and experience it, because you had to save for retirement. What is nuts is not living fully for the day, because of a fictional image of retirement traveling and golfing. See a theme? Neither is wrong.
I think both extremes are wrong, but that is an opinion. I absolutely agree that you should take vacations and enjoy life along the way; you need to strike a balance. But the point is not whether or not you should devote all your discretionary dollars to the future or not; the point is that you should at least try to figure out what it will cost when you are getting somewhat close and either adjust your plans on how you will live in retirement (since assuming you will make it is starting to be a reasonable assumption) or adjust your priorities on saving so that you can afford what you plan. Anyway, spending a little time assessing your situation is not a fixation. I think it's a cop out to some degree to justify not preparing. You would not take a vacation if it meant you wouldn't have rent for the next couple of months (or at least I hope not). At some point, this becomes exactly that.
Not so much nuts as not fixated. What is nuts is spending your entire adult life planning and saving for a retirement you may never live to see. What is nuts is passing on travel at an age where you can fully enjoy and experience it, because you had to save for retirement. What is nuts is not living fully for the day, because of a fictional image of retirement traveling and golfing. See a theme? Neither is wrong.
I don't know how many people fall under the extreme miss-out-on-life-to-save-for-retirement scenario which you outlined, but I've got news for you: One can plan for retirement and still travel, for example. One does not have to "pass on travel" because it's not all or nothing. One can be a compulsive spender or a compulsive saver, but the OP is not advocating compulsiveness.
Besides, the notion of "retirement traveling and golfing" is not inherently fictional. Lots of people do just that - travel and play golf after retiring.
I've learned that there really is no changing people's minds or their basic personality traits. I've been concerned about retirement for decades and I've worked very hard to make sure that I have assets, no debt, that I know what my annual expenses are and what my income should be, and that I know what options I have. I am always trying to figure out that stage of my life and I am very grateful to every member of this board who has helped to educate me. But that is me and my thinking and does not have to be everyone's thinking.
On the other hand, there is my husband's sister and her family (disclaimer: I am writing about this family only and this is not a reflection of my thoughts about anyone other than this specific family's situation). His sister has never wanted to work. Her husband has worked low paid jobs. Their children have no work ethic at all. But every single one of them thinks that money grows on trees and they can spend what they haven't yet earned because credit cards are taken everywhere. No matter how many times I brought up the subjects of retirement, investing, saving, planning, life insurance, I was mocked. They have been nothing but nasty to me.
So, this past weekend I received a call from his sister asking for money. Her husband had emergency surgery and lost his job. He is 67 years old. Their adult children are too poor to help. Social Security does not cover their needs. They are in trouble. I think of Aesop's The Ant and the Grasshopper. I long ago stopped trying to teach them. They can figure out on their own how to get out of their mess. I'm sure in the end it will be another expense to the taxpayers.
So, this past weekend I received a call from his sister asking for money. Her husband had emergency surgery and lost his job. He is 67 years old. Their adult children are too poor to help. Social Security does not cover their needs. They are in trouble. I think of Aesop's The Ant and the Grasshopper. I long ago stopped trying to teach them. They can figure out on their own how to get out of their mess. I'm sure in the end it will be another expense to the taxpayers.
I dread that call. That is why my annoyance with my sibling borders on anger. When they don't really want to think about it or discuss it, I want to say if it isn't my business now make sure it isn't my business in the future. But I don't...
many times it is just financial ignorance that hurts folks retirement .
our friends had a great house right on the water , a leased benz , ate out a few times a week and made good livings .
when they decided to try to retire they asked me to look over their finances . i was blown away how little they had even after the sale of the house .
to them the 400k they had sounded like plenty of money . when they heard what it could generated and how little their retirement income would be they were shell shocked .
they ended up having to leave family and friends in ny and moved to florida . they regret not saving more now and dislike life down there but it is what it is at this point .
I dread that call. That is why my annoyance with my sibling borders on anger. When they don't really want to think about it or discuss it, I want to say if it isn't my business now make sure it isn't my business in the future. But I don't...
RTB, I don't have your scruples. His sister left our conversation with empty hands and full ears.
As for me, my 2 siblings that did nothing to prepare for retirement are both dead.
So it didn't matter to them.
All the rest including me are well prepared.
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