Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
New retirees better off financially than previous generations?
Old 12-05-2012, 09:07 PM   #1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
New retirees better off financially than previous generations?

Here is a totally different view of the recently retired:

Retirees may be doing better than you think

Quote:
Contrary to what you may have heard, new retirees are doing better financially than previous generations, according to research being published on Wednesday by a mutual fund industry trade group.

"On average, more-recent generations of households have higher levels of resources to draw on in retirement than previous generations," said the study by the Investment Company Institute, a trade group. "Other measures also indicate improvements in retiree well-being. For example, the poverty rate among people aged 65 or older has declined from nearly 30 percent in 1966 to 9 percent in 2011."
My bold:
Quote:
To be sure, the ICI findings are in the aggregate, so not every retiree will be on more solid financial footing than his or her forebears. But the study shows that the money Americans have earmarked for retirement -- now topping $18.5 trillion -- is substantially higher than at any other time in U.S. history, even when defined benefit plans are included.
And for all of us concerned a 4% withdrawal rate is too high...

Quote:
There are starting to be shreds of evidence that people are withdrawing less from their retirement accounts than might be expected.

That observation comes from T. Rowe Price, an investment company that holds a substantial number of retirement accounts. Its advisory clients often tend to withdraw roughly 4 percent of their assets during their first year of retirement, said Christine Fahlund, a senior retirement adviser with the company. But they tend not to raise their withdrawals in every subsequent year, even though T. Rowe Price retirement plans typically allow for annual inflation adjustments of those withdrawals.

Moreover, Fahlund says some of her retired clients are unhappily surprised when they hit age 70-1/2 and must take required minimum distributions from their accounts. "In many cases, they don't need the RMDs and they don't want to take them," she said.

That's another surprising and nontraditional retirement story line: There's too much money.
Note this is a report compiled by the mutual fund industry - most likely to be used as a counter to the buzzards folks in DC drooling over the possibility of modifying the tax-favored status of 401k's. (Aren't these mutual fund companies the same folks who have been telling us we aren't saving enough for retirement? )

Whatever, it is nice to hear some positive news about the future of retirement in the US.
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo 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 12-05-2012, 09:12 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Purron's Avatar
 
Join Date: Nov 2007
Posts: 5,584
Quote:
Originally Posted by REWahoo View Post
Whatever, it is nice to hear some more positive news about the future of retirement in the US.
Yes it is nice to hear some positive stuff for a change. A bit of counterbalance to the tin foil hat crew. Reality is apocalyptic stories get most of the attention. But maybe we're not so bad off after all!
__________________

__________________
I purr therefore I am.
Purron is offline   Reply With Quote
Old 12-05-2012, 10:35 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,391
Lemme see.

Retirees either do not have enough money in their 401k as reported by some articles linked in previous threads, or they have more money than they need.

If the first case, the gummint has to take over so that the retirees will not all become homeless.

If the second case, golly, they have too much and the gummint must relieve them of some moolah.

Did I get that right?
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 12-05-2012, 10:57 PM   #4
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by REWahoo View Post
Here is a totally different view of the recently retired:
Retirees may be doing better than you think
My bold:
And for all of us concerned a 4% withdrawal rate is too high...
Whatever, it is nice to hear some positive news about the future of retirement in the US.
I'm going to go way out on a limb and predict that at least 95% of these retirees will finish at least 30 years of retirement with more money than they need.

But maybe I'm just making up those numbers...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 12-05-2012, 11:09 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by NW-Bound View Post
Lemme see.

Retirees either do not have enough money in their 401k as reported by some articles linked in previous threads, or they have more money than they need.

If the first case, the gummint has to take over so that the retirees will not all become homeless.

If the second case, golly, they have too much and the gummint must relieve them of some moolah.

Did I get that right?
Yes, right on the button. Good job!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 12-05-2012, 11:45 PM   #6
Recycles dryer sheets
 
Join Date: Jul 2008
Location: Sacramento area
Posts: 444
Quote:
Originally Posted by Nords View Post
I'm going to go way out on a limb and predict that at least 95% of these retirees will finish at least 30 years of retirement with more money than they need....
THAT has been MY contention. Your earlier retirement years ARE your younger years, where you are more likely to travel and enjoy your time... spend down! "At some point" we will most likely slow down, and the spending will slow down too. Now, THAT SAID, there are other things that climb with age... most notably medical costs. BUT **IF** (big little word) you have good coverage, your out of pocket may still not be THAT bad. The other cost would be nursing home care.

My own draw down plan, however, does the conservative route and is NOT front end loaded for fun. (Tho my DW **DID** get a retirement gift of a BMW Z-4 when I retired. Hey.... where is MY 'Vette How did THAT happen..... )
__________________
AWeinel is offline   Reply With Quote
Old 12-06-2012, 03:16 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
after reading the data came from t-rowe i liken it to alians landing on earth ,walking into a hospital as the first place they go and reporting back earthlings seem to be very sick.

the data in this case is coming from only those who saved .
__________________
mathjak107 is offline   Reply With Quote
Old 12-06-2012, 05:13 AM   #8
Dryer sheet aficionado
 
Join Date: Jan 2012
Location: Salem
Posts: 40
I also think retires today are better informed and have become more creative in their approach to retirement. We are retiring in March and my plan includes three sources of income (SS, 401k, and a good paying hobby). Also we have eliminated debt. I also think things aren't as bad as a lot of people say they are. Doom and gloom seem to sell well. I am happy in Ohio.
Cjacks
__________________
cjacks is offline   Reply With Quote
Old 12-06-2012, 08:10 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,964
Quote:
But the study shows that the money Americans have earmarked for retirement -- now topping $18.5 trillion -- is substantially higher than at any other time in U.S. history, even when defined benefit plans are included.
At least until the next time someone proclaims "Wh____!!!" Then we'll all be staring at 8% WRs, so both POVs referenced above are correct in due time...
__________________
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 12-06-2012, 10:03 AM   #10
Recycles dryer sheets
 
Join Date: May 2012
Posts: 403
Quote:
Originally Posted by mathjak107 View Post
after reading the data came from t-rowe i liken it to alians landing on earth ,walking into a hospital as the first place they go and reporting back earthlings seem to be very sick.

the data in this case is coming from only those who saved .
+1
__________________
anethum is offline   Reply With Quote
Old 12-06-2012, 01:05 PM   #11
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
"Retirees may be doing better than you think"

Shouldn't that be "might" rather than "may"

There's a lack of definitions and data in the article.....it looks more like a PR piece than rigorous research having "culled" the numbers and conclusions from other papers. It reads like a response to the gloom and doom of the far more numerous papers that come out of places like the Boston College Center for Retirement Research.

Center for Retirement Research

It might be that current US retirees have far more retirement assets than previous generations, but no mention is made of other factors like health care costs or negative home equity and quoting an average retirement asset of $153k/per household is not useful without seeing the distribution with age and income.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 12-06-2012, 01:43 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,357
In that article it's tough to tell which data is coming from which sources. An "observation" from T. Rowe Price, a decidely second-tier operation, doesn't add to the confidence in the information.
__________________
GrayHare is offline   Reply With Quote
Old 12-06-2012, 02:11 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,318
We are being setup for higher taxes on what had been tax deferred or tax free retirement accounts.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 12-06-2012, 02:57 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Apr 2011
Posts: 1,553
Quote:
Originally Posted by mathjak107 View Post
after reading the data came from t-rowe i liken it to alians landing on earth ,walking into a hospital as the first place they go and reporting back earthlings seem to be very sick.

the data in this case is coming from only those who saved .
I think that's right. And those that haven't saved keep working if they can until they do have enough.
__________________
gerntz is offline   Reply With Quote
Old 12-06-2012, 09:58 PM   #15
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by AWeinel View Post
THAT has been MY contention. Your earlier retirement years ARE your younger years, where you are more likely to travel and enjoy your time... spend down! "At some point" we will most likely slow down, and the spending will slow down too. Now, THAT SAID, there are other things that climb with age... most notably medical costs. BUT **IF** (big little word) you have good coverage, your out of pocket may still not be THAT bad. The other cost would be nursing home care.
My own draw down plan, however, does the conservative route and is NOT front end loaded for fun. (Tho my DW **DID** get a retirement gift of a BMW Z-4 when I retired. Hey.... where is MY 'Vette How did THAT happen..... )
Um, I was just quoting the statistical conclusions of the Trinity Study.
__________________

__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords 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


 

 
All times are GMT -6. The time now is 04:39 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.