Is there a disconnect between real life and the "professionals"?

[daylatedollarshort]

There are many you need a million or more to retire articles these days and not so many on the flip side - lowering expenses. The investment industry only profits from the larger the 401Ks and not when retirees lower expenses and learn to live well on less savings.

 

[Big_Hitter]

depends..... there are a great many life scenarios why someone might not choose what you think is so obvious.

it would be a no brainer for me, caeterus paribus

 

[Big_Hitter]

I'd think that a COLA'd pension would be the same as having $1MM in a well balanced portfolio. Most calculators would agree that a ~4% withdrawal --including increases for inflation-- would last a lifetime.

depends on your gender, age, form of payment and how the COLA is calculated

 

[Walt34]

My mother-in-law hates going shopping at certain times in small town iowa (because it's too crowded) but even at busy times much of the state feels like a ghost town to me.

Ha! Its all relative isn't it? I can have to wait for three cars to pass by before I can pull out onto a street and feel like I am in a traffic jam.

Exactly. When we talk to people who have lived here all their lives they complain about the heavy traffic, and from their perspective they're right. And I'm thinking "You have no clue what heavy traffic is..."

5:00 PM Friday afternoon traffic here looks like 10:00 AM Sunday where we used to live.

 

[Lsbcal]

Is there a disconnect between real life and the "professionals"?

A pest control guy who came over and did some rat traps for us described himself as a "professional".

 

[sherrywilliam]

I think there is something to that. Both of my parents retired with no savings at earlier than age 62. They live on SS + "allowance" from me. They live within their budget and they are contend. This is the case with a lot of people I know around me. Typical ER.org members are exceptions to this (they piled up money, they are financially astute & conservative, want to live well in their ER, ....). Just look at ER.org's introduction threads. If I average those folks net worth, I think it is closer to or north of $3M, and many with good SS & pension. And they still ask the question "can I retire?" ER.org is not a reality for the vast majority of folks out there. Out there, people retire at later age, and get by with what they have in retirement. ER.org folks should not have much to "rant" about their lives, at least, in financial areas.

I agree, I came here after looking up questions that directed me to this forum. But the norm here is way above the vast majority in or near retirement. If only I knew then what I know now, but would I still have had the funds with a growing family to save and invest a lot more than I already have. Not so sure about that.

 

[sherrywilliam]

this is one of those topics where you ask 10 different people and you can get 10 different answers.

So it seems in the financial/investment/retirement world the message is if you don't have AT LEAST a million dollars saved that you are pretty much doomed to living your old age in a box underneath a bridge.....

Yesterday I went to a wine and cheese tasting with my sister and 4 of her friends.
topic started with wills and living wills but eventually got around to retirement.

Ages of us gals range from 52-62. ALL are retired except me.

now full disclosure 3 are retired correction officers and my sister and one other are retired NYC police officer so they all get pensions.
1 lady was also a retired military along with correction officer.
but I did ask if anyone had 1 million in savings. All said no, one young women does own a NYC apartment that generates income. 2 have mortgages, 2 do not.

I know quite a number of people who retired well before 67 and seem to be enjoying life as a retiree. Sure no one is running away with the cabana boy to live in tahiti but they seem pretty darn happy. they travel annually, have hobbies etc etc. Only one seemed interested in finding a second career.

So is all the doom and gloom about a nation of retirees about to implode media inspired hysteria?

I think a lot will be having a hard time. But blue collar workers don't live as long, many don't even get to tap their ss benefits or damn little of it

 

[RockyMtn]

It all depends on what you need to live and how much your pension and SS are/will be. Any remaining gap needs to be filled in from retirement savings. Broadly speaking you'll need 25x your gap.

But a public pension is a big leg up.

+1

All this talk about having "some number" is really irrelevant. What you need to do is replace income in order to do the things in retirement that you did in working life (pay the bills, travel, hobbies, etc, etc). That income can be in the form of pension, SS, annuities and/or savings. Clearly the bigger the pensions and/or SS the less reliance on savings.

Getting hung up on some number without taking into account other sources or retirement income is a fools game.

 

[Al in Ohio]

I dispute this statement even as a generality. There are places in the US that pay public school teachers outrageous amounts of money for a relatively easy to get degree. Other places in the US pay teachers poorly. This goes through different job functions and different locations. Places that pay poorly usually also have poorer pensions. Pay and pensions for government workers are usually more closely tied to the relationships between the public employee unions and the local politicians.

In a career dark spot, I worked at NASA as a contractor. Contractors are paid well below the civil servants that they work with. Some of the CSs I worked with had technical degrees and were top level scientists. I would consider them underpaid but they wanted to be in the space program. Some of the others had non-technical degrees and very high GS levels. Some of these wouldn't have lasted a week in my organization.

Public school teachers are not government workers. They are public servants that often belong to a strong teachers union.


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[ERD50]

Public school teachers are not government workers. ...

Please do explain this. I am taxed by my local government, and most of it (at least from my property tax) goes to the school district. Their largest expense is salaries (teachers and others). Those teachers, admins, etc, get their paycheck from the school district.

How are they not government workers?

-ERD50

 

[Andre1969]

Please do explain this. I am taxed by my local government, and most of it (at least from my property tax) goes to the school district. Their largest expense is salaries (teachers and others). Those teachers, admins, etc, get their paycheck from the school district.

How are they not government workers?

-ERD50

I always thought of teachers as government workers as well. After all, that's where something like 55% of my Maryland property tax bill goes to. But, I wonder if the teachers themselves are considered contractors, rather than direct employees of the government?

 

[Mulligan]

I always thought of teachers as government workers as well. After all, that's where something like 55% of my Maryland property tax bill goes to. But, I wonder if the teachers themselves are considered contractors, rather than direct employees of the government?

Teachers in my state (no union) without question consider themselves working for the government. But I imagine the Catholic school teachers here do share that line of thinking.


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[LitGal]

As a public school teacher in CA--and as a community college instructor-- I sat in meetings every year where administrators would admonish us to remember that we were there to serve the taxpayers. As public servants we were to do the best we could to develop the skills of the next generation.

As a teacher in Catholic school here, I was encouraged to reflect the mission and vision of the school. Many features of that mission paralleled the values of public school colleagues with whom I had worked. But here we did not view ourselves as government employees; instead, the principal would remind us that the parents contracted with the school for us to act "in loco parentis." That is, we were there to follow through in helping to mold the students in the same way where their parents would, if they were there.

Certainly not the function of a government worker.

 

[Mulligan]

As a public school teacher in CA--and as a community college instructor-- I sat in meetings every year where administrators would admonish us to remember that we were there to serve the taxpayers. As public servants we were to do the best we could to develop the skills of the next generation.

As a teacher in Catholic school here, I was encouraged to reflect the mission and vision of the school. Many features of that mission paralleled the values of public school colleagues with whom I had worked. But here we did not view ourselves as government employees; instead, the principal would remind us that the parents contracted with the school for us to act "in loco parentis." That is, we were there to follow through in helping to mold the students in the same way where their parents would, if they were there.

Certainly not the function of a government worker.

"In loco parentis" is a basic tenant of all public education teachers. I really don't think most teachers see themselves as "government workers" but simply as an educator. As you know schools are funded by a blend of local, state, and national monies so its a bit messier when saying "government worker" to describe a teacher.


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[HFWR]

Plenty of loco parents...

 

[jim584672]

"So is all the doom and gloom about a nation of retirees about to implode media inspired hysteria?"

Hard to say. I see posts on here where people are asking if they can make it on only 2.5 / 3 million. My reaction is they need to get a grip on spending if they can't make it on that amount.

 

[MrLoco]

"So is all the doom and gloom about a nation of retirees about to implode media inspired hysteria?"

Hard to say. I see posts on here where people are asking if they can make it on only 2.5 / 3 million. My reaction is they need to get a grip on spending if they can't make it on that amount.

Hmmmm...well too much generalizing. A 4% withdrawal rate on $2.5 million is only $100,000. For a retired couple under 65....health insurance and deductibles will take a big chunk of this. Also taxes depending where the money is taken from. Then all the fixed usual expenses.
For my wife and I , we spent years saving and now is the time to enjoy that money, especially before old(er) age makes travel less enjoyable. Now is the time we will take those 3 week cruises, eat out whenever we want, travel here , there, and everywhere. In fact I think , at least for us, 2.5 - 3 million would not be nearly enough. $4 - 4.5 million is more like it.

My reaction is that many people need to get a grip on saving if they feel they will fall short in retirement savings

 

[HFWR]

Hmmmm...well too much generalizing. A 4% withdrawal rate on $2.5 million is only $100,000. For a retired couple under 65....health insurance and deductibles will take a big chunk of this. Also taxes depending where the money is taken from. Then all the fixed usual expenses.
For my wife and I , we spent years saving and now is the time to enjoy that money, especially before old(er) age makes travel less enjoyable. Now is the time we will take those 3 week cruises, eat out whenever we want, travel here , there, and everywhere. In fact I think , at least for us, 2.5 - 3 million would not be nearly enough. $4 - 4.5 million is more like it.

My reaction is that many people need to get a grip on saving if they feel they will fall short in retirement savings

If I'd never spent one cent of my life's earnings, I still wouldn't have near that much...

 

[MikeWillRetire]

If I'd never spent one cent of my life's earnings, I still wouldn't have near that much...

If I saved all of the money I earned during the last 30 years of my career, and invested it to just keep up with inflation, it doesn't even add up to 2.5 million ( and my salary puts me in the top 10%).