Retiring on less than a million in savings: Case Studies (accounting, credit)

[Wile E. Coyote]

Originally Posted by moguldreamer

Here's a free link to the 2nd one:

http://archive.today/2022.12.08-1742...ca-11661702455

and the 3rd

http://archive.today/2022.12.27-1153...ca-11671890735

The retired police guy, Fitzgerald I have seen an article that included him a couple of years ago. Some of this stuff is getting recycled.

I don't follow with the pilot... The title says $1.6 million savings and investment. However, they keep referring to a $500,000 portfolio throughout the article.

I think it's odd that the retired university president needs a new bedroom set at 70 years of age. I can see a couch or mattress and box spring; but, who is heavily in the furniture market after a certain point in life? I cut myself off from any new furniture after 50. Yes, you have to eventually replace mattresses and upholstered items. I don't see the hardship or even why she couldn't buy them (except she doesn't actually need them). Yet she stated “You have to challenge yourself and not let the fear of the unknown paralyze you," yet she feels she cannot spend $10k.

Under the here's what a $2 million retirement looks like they have an example of someone with $1 million. I guess maybe he has $700k in equity in his home... but, the rest of the people in that article actually have close to $2 million in savings and investments.

Really sketchy journalism scraping the bottom of the barrel they are.... It wouldn't surprise me if this is actually all made up fake bs. It is so poorly written.

[mathjak107]

Originally Posted by moguldreamer

Super. You're clear on that for those values.

Now, let's say you're on a Game Show and you win and you're given your choice of A or B below.

Let's set X=3.3k/month = $40K/year, and Y=$100,000. Would you choose A or B?

well if you want to change the parameters to only 100k then we are not comparing anything near close in income so of course 40k is better then 100k which generates ten times less

[mathjak107]

Originally Posted by Wile E. Coyote

MJ, MJ?

I guess he's still trying to calculate which one is mo money. LOL

i find it a silly comparison and not sure of his point .

the original discussion was about the same income capability 40k or 1 million dollars producing that 40k .

but this question has ten times less capability if you take the lump sum so it makes no sense to even ask me that question

[mathjak107]

Originally Posted by Wile E. Coyote

The retired police guy, Fitzgerald I have seen an article that included him a couple of years ago. Some of this stuff is getting recycled.

I don't follow with the pilot... The title says $1.6 million savings and investment. However, they keep referring to a $500,000 portfolio throughout the article.

I think it's odd that the retired university president needs a new bedroom set at 70 years of age. I can see a couch or mattress and box spring; but, who is heavily in the furniture market after a certain point in life? I cut myself off from any new furniture after 50. Yes, you have to eventually replace mattresses and upholstered items. I don't see the hardship or even why she couldn't buy them (except she doesn't actually need them). Yet she stated “You have to challenge yourself and not let the fear of the unknown paralyze you," yet she feels she cannot spend $10k.

Under the here's what a $2 million retirement looks like they have an example of someone with $1 million. I guess maybe he has $700k in equity in his home... but, the rest of the people in that article actually have close to $2 million in savings and investments.

Really sketchy journalism scraping the bottom of the barrel they are.... It wouldn't surprise me if this is actually all made up fake bs. It is so poorly written.

the problem with a lot of these articles is that by the time they are written the story line changes …

the actual facts get smoothed over for simplicity … only problem is that those being interviewed don’t get a chance to correct things before it is even seen by them .

we had that happen to us when money magazine did our story ..

my wife had a situation where she was supposed to inherit a share in a family construction business

but missing verbiage from the will and trust threw question on whether those documents which ruled out some estranged step children from getting any part of it were entitled to a piece and whether my wife was to get nothing since the provisions for predeceasing were missing .

her husband died before his mother so my wife may have been entitled to nothing since everything would belong to her husbands brother and no part would have been her husbands .

so we ended up having to buy them out of their share of the business which cost us a lot of money and ended up being no inheritance.

ultimately we sold the business as neither of us wanted to be active participants in a business we didn’t know … but the article said we had inherited this business but we actually didn’t , we reached an out of court settlement on the advice of the judge and ended up having to buy this business .

the judge was unsure which way he was going to rule ,as he told us the intent of the paperwork was clear that the step children were to get nothing , but he couldn’t add missing verbiage or rewrite history .

so he felt we should try to reach an out of court settlement buying out the step kids if we could work a deal that could be profitable enough to us to warrant buying a share in the businesses.

we never saw the article to correct it until it came out.

so facts can change in these articles like playing telephone and the end result is things may not add up or are factually correct.

we didn’t really care about the inheritance part being stated incorrectly since that wasn’t the gist of the story and we really bought that business not inherited it

the article was about their team of pros vs me and my planning ideas , so it was no big deal what they wrote about the inheritance part.

since we used all fidelity funds , fidelity saw the article and contacted us and wanted to do a case story on us in that fidelity investment magazine they used to mail out .

we did it , but if i remember correctly they got the story partially straight as they wrote we were able to add another million dollars to savings from the proceeds of a sale of AN INHERITED BUSINESS ..

but it was a business we ended up buying like buying any business from a stranger for an incredible sum of money and hoping to get a good deal on it so you can sell at a profit .

we also had to split those proceeds with our kids who were partners too .

so the numbers do get fouled up in these articles .

the funny part of that was i went to drop off some paper work at my ex wife’s apartment and on the table was that fidelity magazine …

i didn’t really want her to know my business at that time since we were recently divorced and didn’t know she had an account at fidelity .

this was back in the early 2000’s .


but it was what it was .

she never said anything to me about the article so i have to assume she never opened the magazine

[1insider]

Originally Posted by moguldreamer

Here's a link to a snapshot of five families in 2023, retired, with less than a million in savings/investments.

According to the nonprofit Employee Benefit Research Institute, families of those aged 55-64 have investments in tax-advantaged 401Ks, IRA, and public sector equivalents averaging about $413,814 according to its estimates based on 2019 data, the most recent available. Of course, you add to that taxable accounts - investments, real estate, and the like.

It is a case-study of five retirees with savings ranging from roughly $240,000 to $800,000.

http://archive.today/2023.03.24-0948...erica-846a6ab6

Seems like a title of "Retiring on less than a half million in savings" would have been more honest. I get why they used "million" but it was still misleading although obviously served it's purpose.

[mysticaltyger]

Originally Posted by Wile E. Coyote

He's also single. The idea that two can live cheaper than one does not always translate due to the standards that can be dropped by a single person. Singles can go very low on the food chain -- LOL.. Not keeping up with the Joneses.. etc., etc.

Yes, that is definitely true. Two frugal adults who earn half decent incomes can be a fearsome team. But that combination doesn't happen a lot. Overall though, married couples tend to have higher net worths than singles do.

[EDS_]

Originally Posted by moguldreamer

The people in the case study all seem to be retired with dignity.

A solid related line..........

Asked something about the Kardashians the great British actor Gary Oldman replied, "........my dog has more dignity than those %(@#%$!............."

[Infernal Revenue Service]

Originally Posted by michigan lizard

I found this article:
https://www.forbes.com/sites/baldwin...h=7cd04b0348d5

I'm on my tablet, so can't see if the calculator still works, but the gives you some ideas how valuing pensions works in general.

I didn't read the full article on pension annuity vs. lump sum but the thing to be careful about it the calculation used by most companies to determine a lump sum pay out is based on current interest rates (usually set IRS present value rates for a point in time to reflect the next year), with the higher interest rates resulting in a lessor payout. Lump sum payouts have really taken a dive the last year or so compared to years previously because of the raise in rates.
If you or your company calculated a lump sum payout of $700k a few years ago, it might be only paying out $500k today.

[moguldreamer]

Originally Posted by mathjak107

well if you want to change the parameters to only 100k then we are not comparing anything near close in income so of course 40k is better then 100k which generates ten times less

Originally Posted by mathjak107

i find it a silly comparison and not sure of his point

When comparing a lump sum to a pension, there is always a cross over point where if you make the lump sum slightly larger or smaller, it changes what we select. Make the lump sum slightly larger, while keeping the monthly payout the same, and we select the lump sum at that cross over point. Make the lump sum slightly smaller while keeping the monthly payout the same, and we select the monthly payout.

At that crossing point, we are indifferent to choice A vs. B.

[bpollen]

Almost everyone in the US retires w/less than $1 Million. These articles that keep coming out...I guess it's helpful for the younger generation, but I don't see they serve a purpose for those near retirement or in retirement. Sometimes I suspect they're published by those in the finance business to get more funds from people.

It is clearly possible to retire with less than $1M in savings, since so many do it. But of course they have a leaner retirement than the wealthy do. Just like during their working years. I suspect the fact that there are fewer people covered by union agreement has a lot to do with the lowering standard of living for the middle class. I don't think blaming them is fair, except for the occasional instance. Of course, there are those who live above their means and rack up debt, which prevents them from having a more secure retirement.