Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Is there a disconnect between real life and the "professionals"?
Old 03-22-2015, 04:35 PM   #1
Full time employment: Posting here.
 
Join Date: Mar 2015
Location: philly
Posts: 876
Is there a disconnect between real life and the "professionals"?

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?
__________________

__________________
bclover is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-22-2015, 04:42 PM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,834
Hi bclover, and welcome.

Quote:
Originally Posted by bclover View Post
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?
What has worked for me in the past, has been to ignore all the doom and gloom articles and the professionals, and instead to just look at my own financial situation, to figure out exactly what I would need in retirement, and then to plan how to get it.

My brother once told me, "Nobody cares about your money and your future any more than you do." After hearing that I decided that while I am not a financial guru, I could work really hard to learn and understand more about my situation than anybody, and go from there. I have only been retired 5 years, but so far so good....

Try using out free retirement calculator, FIRECalc (link at the bottom of each page). No calculator is the "be all and end all", but it's a starting point if you want one.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-22-2015, 04:56 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,967
If you need about $40K/yr inflation adjusted and plan to be retired for 30 years with no pension, Soc Sec or other income - it could take $1M to do it with reasonable confidence. It's not surprising that the folks you asked who do have pensions/other income wouldn't have $1M saved, though some others may. And most Americans will have some floor income from Soc Sec, so they could certainly get by on less than $1M.

And if you ask 10 random people how much they need to retire, I would expect 10 different answers since 9 out of 10 people wouldn't know. Some of those 9 wouldn't have any idea whatsoever.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 03-22-2015, 05:08 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Apr 2013
Posts: 5,563
Yes bclover it is media inspired. People want to read something, predicting doom and gloom always attracts attention.

That said it's up to each of us to plan.
__________________
MRG is online now   Reply With Quote
Old 03-22-2015, 06:57 PM   #5
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
I think there is a real issue with people who don't have pensions or savings, and live a life that requires more than what SS will provide.

Depending on your circle, the anecdotal evidence will be very different.

But, the only thing that matters is your own situation. Have you saved enough?
__________________
walkinwood is offline   Reply With Quote
Old 03-22-2015, 07:18 PM   #6
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,372
We all have different real lives. The $1 million target is not necessarily the same for each of us.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 03-22-2015, 07:57 PM   #7
Recycles dryer sheets
 
Join Date: Jul 2013
Posts: 344
Quote:
Originally Posted by W2R View Post
My brother once told me, "Nobody cares about your money and your future any more than you do."
I'm not sure that is true. On a somewhat regular basis, I get the distinct feeling that assorted folks have a great deal of interest in my money. My future, much less interest. Perhaps they are more interested in converting my money into their money?

Some folks have/had a job with a company that has healthcare in retirement, a good pension, and wages that generate significant SS contributions. The need for savings is much less. The opportunity to retire early depends on having enough savings to bridge between w*rking and drawing SS.

Folks that do not have a substantial SS record, no healthcare benefit, and no pension will need to have increased savings. The earlier you retire, the bigger the pot needs to be, and the greater the risk.
__________________
Clone is offline   Reply With Quote
Old 03-22-2015, 11:08 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
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.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 03-23-2015, 04:50 AM   #9
Dryer sheet wannabe
 
Join Date: Mar 2015
Posts: 20
Quote:
Originally Posted by W2R View Post
Hi bclover, and welcome.



What has worked for me in the past, has been to ignore all the doom and gloom articles and the professionals, and instead to just look at my own financial situation, to figure out exactly what I would need in retirement, and then to plan how to get it.

My brother once told me, "Nobody cares about your money and your future any more than you do." After hearing that I decided that while I am not a financial guru, I could work really hard to learn and understand more about my situation than anybody, and go from there. I have only been retired 5 years, but so far so good....

Try using out free retirement calculator, FIRECalc (link at the bottom of each page). No calculator is the "be all and end all", but it's a starting point if you want one.
This is the way to look at it, the way i would look at it. don't let other people dictate the way you should view retirement.
__________________
MikeP is offline   Reply With Quote
Old 03-23-2015, 05:43 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,697
If someone is getting a $40K pension, that is about the same as $1MM saved (4% X 1MM).

A lot of people don't have pensions and need to get more creative, but as noted above, there's more than one way to skin a cat.

If there wasn't any doom and gloom, nobody would read these articles. I've always said that "if you're not afraid of just about everything, you're not watching enough TV".
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 03-23-2015, 06:29 AM   #11
Recycles dryer sheets
 
Join Date: Feb 2015
Posts: 131
I think the message is not so much the actual "number" needed in savings for a comfortable retirement, but the fact that most Americans do not have nearly enough saved to support the type of retirement they desire. This is why everyone freaked out when Legg MAson came out with their "$2.5 million" needed for a comfortable middle class retirement.

Obviously, there are many variables involved. Location, couple, versus individual, expenses, etc.

I think one of the big problems is that many people do not realize just how much they will need to contribute to their health insurance costs once they retire. Also, those with pension and future SS benefits factor in these numbers as virtually " guaranteed" and set in stone. Nothing could be further from the truth....look at Detroit. Pension benefits can and do change. Future SS benefits will definitely change. Medicare? Who knows for those of us 5 or more years away from 65. In fact when estimating me and my wife's future income versus expenses I do not even factor in pension and SS benefits. I figure whatever we get will be a "bonus."

I know one thing. I would rather have the "millions" myself, invested myself, and under my control than be at the mercy of some private or government entity to pay me a monthly benefit. And my wife and I will receive future pension payouts but I know they can be changed at anytime.
__________________
MrLoco is offline   Reply With Quote
Old 03-23-2015, 08:12 AM   #12
Thinks s/he gets paid by the post
 
Join Date: May 2014
Posts: 2,973
If the professionals want to scare everyone who thinks SS (plus maybe an IRA of $50K-$100K) will be enough for them, it's fine by me. Most of them are thinking in terms of what they need for groceries, gas, clothing, etc. and not the occasional big-ticket items such as repairing or replacing the car, a new roof, hearing aids, etc. When I see a house that's crumbling but occupied, I figure that many times it's someone who wanted to age in place but doesn't have the money to keep things maintained and who lacks the energy/co-ordination to DIY.


I agree that if you've got a good pension coming in, especially if it comes with decent COLA provisions and/or retiree medical you need a lot less in savings.
__________________
athena53 is online now   Reply With Quote
Old 03-23-2015, 08:17 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
People will lie to your face before they tell you they have a million dollars. But that doesn't mean one needs a million dollars.

As already noted, people with pensions (government pensions at that) may be doing rather well, but it will depend on whether the pension is adjusted for cost of living and whether the pension income is a reasonabl amount. If someone is getting $200 a month pension, they are going to be different from someone getting $3500 a month.

And as far as I am aware, the US doesn't have millions of mentally healthy homeless retirees.

On the other hand, it may be that all those gals could not afford wine and cheese on their own, so they had to go to a tasting.
__________________
LOL! is offline   Reply With Quote
Old 03-23-2015, 08:52 AM   #14
Thinks s/he gets paid by the post
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 2,469
IMHO, you shouldn't worry about others money, lifestyles, investment strategies, etc. To me it's "interesting" to read the articles or listen to the conversations, news, etc, but that's all it is. I really don't put much "stock" into what others say or think about how much money I need to retire, if I should live below my means (I don't) or how I should investment my money. If I heeded the advice, recommendations or suggestions by the professionals or even individuals opinions I hear or read (including many on this forum) I'd be miserable.
__________________
Car-Guy is offline   Reply With Quote
Old 03-23-2015, 09:09 AM   #15
Full time employment: Posting here.
 
Join Date: Aug 2014
Posts: 555
The points about COL and expectations in retirement are biggies. One thing I pick up from this forum is a big divide is growing between government and private industry. In private industry pensions are pretty much dead. I'll get a tiny defined contribution pension when I FIRE. This is one of the few companies in the area that still offers any sort of pension and its being phased out. Pensions with COLAs are gone from private industry as far as I can tell. It may take a while but I'm betting they will be on the way out for government workers in the next 20 years. Will take longer than that for them to disappear but by then I suspect new workers will no longer be eligible.
__________________
ArkTinkerer is offline   Reply With Quote
Old 03-23-2015, 09:10 AM   #16
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,093
Quote:
Originally Posted by MRG View Post
Yes bclover it is media inspired. People want to read something, predicting doom and gloom always attracts attention.

That said it's up to each of us to plan.
I don't think it's media inspired. There is a train coming.
__________________
Swing hard, look up
Big_Hitter is online now   Reply With Quote
Old 03-23-2015, 10:05 AM   #17
Thinks s/he gets paid by the post
 
Join Date: May 2014
Posts: 2,973
Quote:
Originally Posted by Car-Guy View Post
IMHO, you shouldn't worry about others money, lifestyles, investment strategies, etc.
I agree with Big_Hitter. There's a train coming. What others do is not my business until they want my tax money to support them in retirement because they have no savings. I'm not talking about the people who worked at minimum-wage jobs their entire lives, but people who bought new cars (and a truck) every 3 years, used their HELOC as an ATM and figured SS would be enough. I know there's no neat line to separate the "deserving" low-income retirees from those who are in that position because of bad decisions, but I know I'm going to end up subsidizing many of the latter.
__________________
athena53 is online now   Reply With Quote
Old 03-23-2015, 10:16 AM   #18
Full time employment: Posting here.
 
Join Date: Nov 2009
Posts: 510
Quote:
Originally Posted by bclover View Post
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?
As I see it - you answered your own questions.

  • If you have $1M as a single - you are in the top 4% of the U.S. If you split it with your spouse - you are in the top 7%.
  • If you have $250K - you are in the top 14%. Split with spouse - you are in the top 23%. Not that many people have accumulated a total net worth of even $250k, much less the touted $1M figure.
  • As a reference point - a "Legg Mason" net worth of $2.5M for a comfortable middle class retirement as a single puts you in the top 2% - split with your spouse is top 3%.
Wealthometer: USA

When peddling fear of retirement to the masses - picking a "number" that most will never achieve (reference stats above) leads to the masses seeking answers from those middle class workers that make a living at handling your money, selling annuities, etc, (and not necessarily guiding you to a worry-free retirement). Their job is to get you to give them your money, so they can make money off it during their career while you save for retirement over your career.

Your friends are in a club of retirees that have benefited from jobs where lucrative pensions still exist (or did still exist). The private sector middle class worker mostly toils away in non-union pension-less positions (around 89% of workers are non-union, and only 20% of all workers are covered by a pension).

http://www.bls.gov/news.release/pdf/union2.pdf

The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Baby Boomers

Private sector choices of retirement vehicles - chosen by the company, are most likely from the lowest bidder (and can change often based on cost evaluation). These days it's defined contribution (ie. 401K) retirement plans that dominate the landscape. When this retirement avenue was quickly adopted by mainstream corporate America - workers were pretty much left to figure it out for themselves. Leaves a lot of room for people to write articles about the pending retirement dilemma. A lot of people are making money off your retirement savings these days - how many of them know you or worry about your retirement success.

Most people will still retire (on their own, or eventually forced into retirement by health issues/age). Most of them will have to adapt to a less than comfortable "middle class" retirement with net worth's less than as targeted by Legg Mason at $2.5M......
__________________
fritz is offline   Reply With Quote
Old 03-23-2015, 10:16 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,263
Quote:
Originally Posted by bclover View Post
....
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...

....

So is all the doom and gloom about a nation of retirees about to implode media inspired hysteria?
The first and second lines are mostly unrelated.

The first is a gross over-simplification of what it takes to retire. Though, since I guess I don't listen to the same 'financial/investment/retirement world' that you do, I'm not even sure the statement itself is true.

As others have pointed out, your portfolio only needs to cover the shortfall between your expenses and other sources of income (SS, pension, etc). So there is no one single number that is meaningful. It is highly variable and dependent on individual circumstances.

The second is not something I've paid much attention to. Again, it might be the same 'financial/investment/retirement world' talking? Those people probably have some SS and pension. As long as the grasshoppers don;t come looking for us ants any more than they already do, they'll just have to find a way.

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 03-23-2015, 10:21 AM   #20
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 1,579
I agree, what number works for you is what is important. However, simple math provides that a pension is a great offset to how big your savings need to be.

Most people have three sources of potential retirement income: Pension, Savings, and SS. If you need $60K/year for your expenses and living, then you have to get that out of the three sources. First example: if pension is good for $24K, and SS is good for $18K, that totals $42K. $60K - $42K leaves $18K needed from savings. Second example, same $60K/year needed: $0 Pension, same $18K from SS. Leaves $42K required from savings.

Only you can determine what expense level is right for you. Once you have that number, it has to come out of the three sources. Cost of living plays a big part, as well as controlling expenses. Media hype is somewhat true that many do not have much savings. So it does not bode well for a retirement at the level that many are living while working, to support a similar level in retirement.
__________________

__________________
After Monday & Tuesday even the calendar says, W-T-F...

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/16 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Engineers and Computer Professionals- Help Please! panacea Other topics 66 12-17-2013 08:42 PM
26 yr old requesting guidance from "seasoned" investors and successful professionals ZJR922 Hi, I am... 17 01-25-2011 01:00 PM
And the Stock Market goes up?? Can you say disconnect? newguy88 Other topics 20 02-27-2008 05:28 PM
Finding good professionals EddieG FIRE and Money 7 07-20-2007 09:18 AM
Question for the CPA’s and Financial Professionals? PsyopRanger FIRE and Money 10 07-05-2006 08:40 AM

 

 
All times are GMT -6. The time now is 12:37 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.