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As a non-home owner, I get the shock of my life when I watch HGTV shows like House Hunters and the demands some folks have for the house they want to buy. I grew up in a 3 bedroom, 1 bathroom ranch. There were 4 of us (mother, father, sister and me).
I don't understand these people who won't buy a house if it doesn't have the color backsplash and kitchen cabinet color of the wife's dreams, a three car garage, 3-4 bathrooms (in case they have company), a window their pets can look out of, a bedroom with an attached bathroom for their toddler, a separate play room for the one kid they have and maybe another room to store the kid's toys, 3 - 4 floors of house with a grand staircase so they can make an entrance, a man cave (when the h*** did that happen?) so the guy doesn't have to be in the same room with his family when he comes home from work and that fits all of the husband's toys in it, a media room (we used to call it sitting in front of the TV in the living room), a spa-like en suite (double sinks and a jetted tub or the house is a NO!) for a master bedroom the size of which you could hold the high school prom, separate walk-in closets bigger than the state of Rhode Island, not more than 10 minutes from work otherwise it's a tragedy, a back yard their dog(s) would like and at least an acre or two of land. Oh yeah, and anything they don't like means the whole room needs to be gutted. The Governor's Mansion for their state is smaller than the house they want...and some of them are first time home buyers.
I mean, who in their right mind looks at a house and says the bathroom has to be gutted because she doesn't like the light switches and the color of the cabinet under the sink?
This thread subject makes me think of them. I swear that HGTV goes looking for divas but that's another story. I think most of them will wind up getting divorced but I also think they could be saving some money for retirement with less grandiose houses. I wonder how many of them don't have any money saved for retirement.
Sorry, but it doesn't matter who the intended audience is. It still has to be factual and honest, without gross ambiguities and selective omissions.
The author has also written 'A cool $1 million has long been considered the gold standard of retirement savings. These days, it's only a fraction of what you will really need."
REALLY?! This is nonsense, and I have way more than that.
Then she goes on to quote a financial advisor, who really needs you to invest more:
"... a 67-year-old baby boomer retiring now with $1 million in the bank will generate $40,000 a year to live on adjusted for inflation and assuming a sustainable withdrawal rate of 4 percent, .. blah blah blah"
..and then the horror facing the young: " a 32-year-old millennial planning to retire at 67 with $1 million would live below the poverty line."
The obvious fallacies, to even one like me who DOES read financial journals, is that:
1. of course the purchasing power of money today is not the same as that NOMINAL amount thirty+ years into the future;
and
2. no consideration is given to any asset other than current monetary savings;
or
3. the ability of most people to reduce expenses in retirement in a multitude of ways;
or
4. converting home equity in a reverse mortgage as a last resort;
or
5. the option of purchasing a single premium immediate annuity, which provides two to three times the income for life than the oft-repeated 4% draw calculation, which NEVER TOUCHES THE PRINCIPAL!
How convenient for darkening the horizon, yeah?
One does not need graduate courses in economics nor to have studied the mathematics of investment (tho it helps) to see the holes in the swiss cheese.
Egads you did more over thinking when reading it then I did. I did however note in my previous post it didn't take into account things like pensions etc. I just saw it as quantifying a perspective on retirement and again I read it outside and independent of this forum and the thinking of others. I know you said you read other financial publications. Do you routinely read CNBC personal finance? I read the article previously you mentioned about the 1 million invested generating 40k. I read it in the context of the publication and their basic audience.
CNBC is my most frequently watched channel during the day M-F if home. I was watching the other day and my wife came in and said is money all they talk about on here. She does watch sometimes and usually hour or two per day after 9 AM. I said yes that is the common topic people watch it for money. I also said it is just like her favorite channel MSNBC which spends all day and night talking about you know who. It is their targeted audience and we love us some CNBC.
Also if you watch and Robert Franks is about to come on you know its going to be about the rich as in really rich. He does some good aspirational stuff. However at my age aspiration is as close as we will probably get. Good to see about others who have made it.
As a non-home owner, I get the shock of my life when I watch HGTV shows like House Hunters and the demands some folks have for the house they want to buy. I grew up in a 3 bedroom, 1 bathroom ranch. There were 4 of us (mother, father, sister and me).
I don't understand these people who won't buy a house if it doesn't have the color backsplash and kitchen cabinet color of the wife's dreams, a three car garage, 3-4 bathrooms (in case they have company), a window their pets can look out of, a bedroom with an attached bathroom for their toddler, a separate play room for the one kid they have and maybe another room to store the kid's toys, 3 - 4 floors of house with a grand staircase so they can make an entrance, a man cave (when the h*** did that happen?) so the guy doesn't have to be in the same room with his family when he comes home from work and that fits all of the husband's toys in it, a media room (we used to call it sitting in front of the TV in the living room), a spa-like en suite (double sinks and a jetted tub or the house is a NO!) for a master bedroom the size of which you could hold the high school prom, separate walk-in closets bigger than the state of Rhode Island, not more than 10 minutes from work otherwise it's a tragedy, a back yard their dog(s) would like and at least an acre or two of land. Oh yeah, and anything they don't like means the whole room needs to be gutted. The Governor's Mansion for their state is smaller than the house they want...and some of them are first time home buyers.
I mean, who in their right mind looks at a house and says the bathroom has to be gutted because she doesn't like the light switches and the color of the cabinet under the sink?
This thread subject makes me think of them. I swear that HGTV goes looking for divas but that's another story. I think most of them will wind up getting divorced but I also think they could be saving some money for retirement with less grandiose houses. I wonder how many of them don't have any money saved for retirement.
I have to confess that I do NOT have a functioning television at home. However, last week, I was staying in a hotel and we watched several hours of HGTV. I am always amazed to see people tearing up beautiful homes to put in the travertine, the stainless steel kitchens and the granite countertops.
I find it amazing that childless couple needs a 4k square foot house.
About ten years ago, my boss and I were heading off to his country club in a Chicago suburb. They were building these really ugly mini-mansions in the area and I thought out loud, "Why do people need these places this large?" His response was "because they can."
When I announced my retirement two years later he called me and asked me how I could retire so early. My response - "because I can."
Egads you did more over thinking when reading it then I did. I did however note in my previous post it didn't take into account things like pensions etc. I just saw it as quantifying a perspective on retirement and again I read it outside and independent of this forum and the thinking of others. I know you said you read other financial publications. Do you routinely read CNBC personal finance? I read the article previously you mentioned about the 1 million invested generating 40k. I read it in the context of the publication and their basic audience.
CNBC is my most frequently watched channel during the day M-F if home. I was watching the other day and my wife came in and said is money all they talk about on here. She does watch sometimes and usually hour or two per day after 9 AM. I said yes that is the common topic people watch it for money. I also said it is just like her favorite channel MSNBC which spends all day and night talking about you know who. It is their targeted audience and we love us some CNBC.
Also if you watch and Robert Franks is about to come on you know its going to be about the rich as in really rich. He does some good aspirational stuff. However at my age aspiration is as close as we will probably get. Good to see about others who have made it.
I honestly don't try to 'overthink'; it's that I cannot HELP but think!
You know, I really get that most people don't save enough for retirement, especially in an age when we live longer than ever and have fewer guaranteed pensions and face greater uncertain medical expenses than our forebears. But when very affluent talking heads and nouveau 'financial experts', sprung relatively recently from grad school, and who've not yet faced the full force of life-$h!t, glibly regurgitate the horrors of retiring on less than 1 MM it makes me angry.
Why? Because it only makes the less-fortunate, the less talented, the more self-indulgent and undisciplined, feel bad. With luck maybe it wakes up a few just in time to get their house in order.
But I doubt it.
It really speaks to us 'investor$' who can look down, with a sigh of relief, thankful "that it ain't me".
I honestly don't try to 'overthink'; it's that I cannot HELP but think!
You know, I really get that most people don't save enough for retirement, especially in an age when we live longer than ever and have fewer guaranteed pensions and face greater uncertain medical expenses than our forebears. But when very affluent talking heads and nouveau 'financial experts', sprung relatively recently from grad school, and who've not yet faced the full force of life-$h!t, glibly regurgitate the horrors of retiring on less than 1 MM it makes me angry.
Why? Because it only makes the less-fortunate, the less talented, the more self-indulgent and undisciplined, feel bad. With luck maybe it wakes up a few just in time to get their house in order.
But I doubt it.
It really speaks to us 'investor$' who can look down, with a sigh of relief, thankful "that it ain't me".
All you say it correct and on a site like CNBC which is targeted for the affluent is a reinforcement that they/we can breath a sigh of relief and say to each other we are blessed and thank you. Wife and I often have that reaction to articles like this. Not sure many of the less fortunate are seeing articles like this in their original source form. It is when we/others link them to forums like this that other reactions kick in.
They are for some feel good stories and atta boy pats on the back and keep up the work for folks who have been fortunate to be in a good place.
As far as the author goes she isn't young and out of college that is obvious from her picture. She has a rich history and variety of reporting and winning awards. Of interesting not and sorta funny because of other comments she also writes for HGTV magazine. So she doe have a lifestyle angle to much of what she does. Worked for CNN money at one time.
Jessica Dickler is a contributing writer and editor covering personal finance for CNBC.com.
As an award-winning financial journalist, Dickler has covered national news, the economy, real estate, retail, personal finance and consumer spending. Prior to joining CNBC, she worked for CNNMoney.com, SmartMoney.com and WSJ.com. She is also a regular contributor and columnist for HGTV Magazine.
Dickler holds a bachelor's degree in Political Science and Art History from Johns Hopkins University and a master's degree from the School of International and Public Affairs at Columbia University.
Lack of planning and a longer life expectancy is cited.
Comments?
they didnt end up at risk rig before retirement... if they were near broke going into retirement, they most likely spent the previous 40 years near broke as well
not many lose their life savings in a single event then choose to retire
5. the option of purchasing a single premium immediate annuity, which provides two to three times the income for life than the oft-repeated 4% draw calculation, which NEVER TOUCHES THE PRINCIPAL!
To obtain 2 to 3 times the income of the 4% draw an annuity would have to be paying 8% to 12%.
Pensions are now nearly non-existent. I was talking to a 44 year old co-worker yesterday afternoon, and she said that she was in the very last hiring year of personnel who will receive a pension from our employer. Based on another comment she made I estimate her longevity at the company as approximately 15 years, but it might be longer.
I will not receive a pension from this employer.
My previous employer froze all pensions in 2012. Each individual's pension account value was preserved but would never increase. Future distributions would be either: an annuity purchased for us by the employer; or a lump sum distribution.
I was 56 years old with 32 years of pension eligibility at the time pensions were frozen. So I was faced with:
Retire at that point, take a lump sum distribution, and find another job for the remaining nine years. or
Stay there, hope I didn't get laid off during the next Reduction In Force campaign, and receive an annuity based on an account value frozen nine years previous.
I retired then.
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