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... If financial planners expect people to believe that everyone needs to spend 90K in retirement and be part of the top 1% or else you will fail in retirement then we can reasonably say that it is complete fear-mongering nonsense...
With respect, you and I have very different ideas of the expenditure required to be in the top 1%. I think I am much more likely to be right than you.
Edit:
According to http://economix.blogs.nytimes.com/20...th-not-income/, the NY Times analysis is that nationwide your income needs to be about $380K per year to be in the 1% (although it certainly varies by region; you need $900K per year to be in the top 1% if you live in Stamford CT). Similarly, your net worth (assets minus liabilities) needs to be about $8.4 Million to qualify for the top 1%.
When you're in the top 1%, you certainly spend more than $90K per year.
Last edited by SportyandMisty; 10-05-2014 at 07:54 PM..
With respect, you and I have very different ideas of the expenditure required to be in the top 1%. I think I am much more likely to be right than you.
Edit:
According to http://economix.blogs.nytimes.com/20...th-not-income/, the NY Times analysis is that nationwide your income needs to be about $380K per year to be in the 1% (although it certainly varies by region; you need $900K per year to be in the top 1% if you live in Stamford CT). Similarly, your net worth (assets minus liabilities) needs to be about $8.4 Million to qualify for the top 1%.
When you're in the top 1%, you certainly spend more than $90K per year.
If financial planners expect people to believe that everyone needs to spend 90K in retirement and be part of the top 1% or else you will fail in retirement then we can reasonably say that it is complete fear-mongering nonsense.
Quote:
Originally Posted by SportyandMisty
With respect, you and I have very different ideas of the expenditure required to be in the top 1%. I think I am much more likely to be right than you.
Edit:
According to http://economix.blogs.nytimes.com/20...th-not-income/, the NY Times analysis is that nationwide your income needs to be about $380K per year to be in the 1% (although it certainly varies by region; you need $900K per year to be in the top 1% if you live in Stamford CT). Similarly, your net worth (assets minus liabilities) needs to be about $8.4 Million to qualify for the top 1%.
When you're in the top 1%, you certainly spend more than $90K per year.
O.K. Let's say that poster Hartford_renter mis-stated the annual retirement spending required to be part of the 1%, even for retiree spending. (I have not looked up any data to support one of you versus the other because the specific amount does not particularly interest me.)
If we just remove the reference to the top 1%, his statement would read as follows: "If financial planners expect people to believe that everyone needs to spend 90K in retirement or else you will fail in retirement then we can reasonably say that it is complete fear-mongering nonsense."
It seems to me that statement (as modified by me) was his basic point and is the crux of the issue. He may have gotten off-track and into a bit of hyperbole with the 1% business, but I agree with the basic point.
It's way worse than you imagine. With the Fed devaluing the currency as quickly as it can, even if you HAVE $1 million in the bank today, it will only be able to buy $900,000.00 worth of goods and services next year, and $800,000.00 worth the year after that. Meanwhile, your cost of living will continue to increase, far above the stated inflation rate.
"'Economists don't expect an inflation increase of more than 1.5 percent this year, "even if food goes up 3 percent and energy goes up 10 percent,' says Bill Hampel, chief economist for the Credit Union National Association' (Why the official inflation rate seems low) Why? Because food and fuel--and many other things--are NOT COUNTED in the official inflation rate. So your costs will continue to go up, while your buying power will continue to go down.
Our political leaders don't want us to know how badly we are all being hurt by the fact that no matter how much we save for retirement, the policy of near-zero interest rates (which hides the real cost of the $18 trillion that Washington has borrowed and spent) mean most people can NEVER save enough to retire--and they will be worse and worse off as the years go by.
There will be little or no compounding of interest on your retirement savings--but there WILL be endless fees on your retirement accounts that result in compounded riches for the banking system. And the interest charged to YOU to borrow for a house or car are right up there at the level that means huge costs for you, and huge profits for Big Business.
Washington doesn't want us to pay attention to the fact that even the well-off Baby Boom isn't going to get the Social Security they are promised, because there is a $2.7 trillion dollar gap between what is promised, and what current tax rates produce. They also don't want us to notice that none of us have the legal right to even a penny of Social Security benefits, no matter how much we have paid in Social Security taxes.
O.K. Let's say that poster Hartford_renter mis-stated the annual retirement spending required to be part of the 1%, even for retiree spending. (I have not looked up any data to support one of you versus the other because the specific amount does not particularly interest me.)
If we just remove the reference to the top 1%, his statement would read as follows: "If financial planners expect people to believe that everyone needs to spend 90K in retirement or else you will fail in retirement then we can reasonably say that it is complete fear-mongering nonsense."
It seems to me that statement (as modified by me) was his basic point and is the crux of the issue. He may have gotten off-track and into a bit of hyperbole with the 1% business, but I agree with the basic point.
The link shows spending by percentile although it is from 2001
85th to 95th percentile for a single individual is 46K and 80K for a household with 2.3 people
95th percentile for household earnings is 185K in 2000
The median spent in retirement is about 40K
- 95th percentile is about 80K for 2.3 people
- 95th percentile for nonmarried single people is about 46K
These numbers are from 2001 so adjust for inflation
How much you earn during your working years is something different
The financial planners in the OP are projecting the amount needed to spend in retirement, and their projections are incorrect.
If the median spent in retirement is about 40K and the person lifespan is 20 years, 40K x 20 = $800,000 (excluding tax calculation)
According to Future Value Calculator, if present value = 40K; assume inflation rate = 2%; future value = 80K in 35 years.
$80,000 x 20 years = $1,600,000 (1.6MM) So $1Mil might not be enough
Human in general is pretty good with adaptation. If all you have is the income from SS, then you will adapt to that lifestyle.
If OP still have 35 years before retirement, I will suggest him/her to save as much as possible. I would rather live out my golden years worry-free and travel a bit if I can.
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Trying to zero in on the basic point
So $1Mil might not be enough
