Scott Burns nails it

[GolferAndy]

What happiness scale are you refering to Zipper?

[Alex]

they could always go back to, gasp, work.

[astromeria]

Quote:

Originally Posted by jerryo Actually, a 25% drop in the first year may be pretty difficult to recover from, even with a 4% withdrawal rate. It's the drops right at the beginning that hurt you most and 25% must be pretty close to the historical extreme!

By using a 9.75% WR, the couple in the Scott Burns article created their own mini-market-disaster at the beginning of their retirement. To add insult to injury, they have to pay $1,000 toward debt every month (and maybe credit card debt as well...I'm suspicious of that extra $15k they need to withdraw every year--restaurants they can't afford? country club? gifts for the grandchildren? expensive travel?).

Unless I had a reliable COLAd pension that covered most of my expenses, I wouldn't want to cope with a mortgage--I would rather pay rent if I didn't have such a pension or couldn't own a house free & clear.

[samclem]

Quote:

Originally Posted by Zipper A couple of reasons why Canadians rated #10 and the U.S. #23 on the happiness scale.

If only some Dane (#1 on the "happiness scale") would join this forum and regale us with incessant observations on his superior country. Why can't Canada be more like Denmark? Happy--and blissfully silent.

[mountaintosea]

Quote:

Originally Posted by mickeyd "Oh it's a math thing...now you tell us!"

I've spent the last couple of weeks telling people I know "it's the math." I buy them a little notebook and tell them to write down everything they spend. They are horrified! The thought of seeing what they spend is too depressing. They would rather complain they can't retire. :
I say "look you spend less then what you get. It's simple math." More has to come in than what goes out. They don't get it. They don't want to get it.

[2B]

Quote:

Originally Posted by Cut-Throat Bigger trout too! 8)

Canuks don't get decent stripers although they have some great strippers. There was this one place in Vancouver....

Quote:

Originally Posted by mountaintosea I've spent the last couple of weeks telling people I know "it's the math." I buy them a little notebook and tell them to write down everything they spend. They are horrified! The thought of seeing what they spend is too depressing. They would rather complain they can't retire. : I say "look you spend less then what you get. It's simple math." More has to come in than what goes out. They don't get it. They don't want to get it.

Yup, it's denial! - Look at what some politicians get away with. "We're gonna cut taxes and not cut any programs and fund an expensive war!'- And they actually get elected! And people recount their 'successful administrations' :

People want to believe in fantasies!

[2B]

I used to think it took 50 years before an administration could be objectively evaluated. Unfortunately, there are a large number of fossils posing as newsmen/newswomen that still talk about "Camalot." I'm thinking the new paradigm is 75 years to make sure everyone in the popular media has been dead at least 10 years.

I haven't seen either party do anything to really fix the "budget." The "balanced" budget during the Clinton administion was a totally "projected" budget that any normal person would have laughed at.

Bush II can balance the budget in 2010 if only taxes go up 20% and his successor doesn't drive us into a recession which is pretty much guaranteed if taxes go up 20%. Now if the economy explodes to the upside, Bush II can do it without raising taxes but God won't be able to help his successor when the economic cycle turns down.

The ultimate measure of a president is how well he rises to the challanges of his administration. It will take decades to decide how well Bill or George really did. No one has repealed the business cycle. Presidents don't control it -- Herbert Hoover came close but he had help from Europe.

2B

Quote:

It will take decades to decide how well Bill or George really did.

Not if you have a brain or live outside of Texas.

[Beststash]

Quote:

Originally Posted by Cut-Throat Not if you have a brain or live outside of Texas.

Funny!!! I live in Texas and I totally agree with CT - it doesn't take a rocket scientist to see how screwed up this country has become ---yea, I will keep my fingers crossed for the next 2 years but from this administration's track record - not a rosy outlook.

[AltaRed]

Quote:

Originally Posted by samclem If only some Dane (#1 on the "happiness scale") would join this forum and regale us with incessant observations on his superior country.* Why can't Canada be more like Denmark?* Happy--and blissfully silent.

Maybe because we are your next door neighbours and truly want to provide some alternative options to your current environment for serious consideration. Quite frankly, with few exceptions, I don't see that Canadians gloat about it. They are merely proud of their individual situations...especially at time of retirement.

Canadians generally are forced to save more and be less consipicuous consumers during their working lives in order to pay off non-deductible mortgages. That used to tick me off somewhat when I compared the 'advantage' Americans had. However, that positions Canadians to be more likely debt free and relatively higher net worth at time of retirement.

As Zipper has said, most Canadians can aspire to be debt free by 50 yrs of age if they LBYM. I was mortgage free by time I was 40-41. There is a method to that madness. Course we also don't have to worry about capital gains on our principal residences at any time, including in our estate.

[2B]

Quote:

Originally Posted by Cut-Throat Not if you have a brain or live outside of Texas.

I'm not particuarly thrilled by either of them and I don't think history will judge either of them well. However, if I lived in 1863 I'm pretty sure I'd have been really unhappy with Lincoln. He has had to have been the most "hated" president during his administration. There were actually newpaper editorials calling for his assasination.

[farmerEd]

You know what, this couple may not be in great shape, but my guess is that they are doing better than 80% of the people that will be retiring...now thats scary.

$400K may not sound like a lot, but in the US how many people will ever even accumulate that much?

[Andre1969]

One of my coworkers, who is 44 now I think, bought her condo in 1992, which would have put her around 30 when she bought it. If she gave it a half-decent effort she could have the thing paid off by now, or close to it. But instead she kept refinancing, taking out equity, rolled a car loan into it, etc. The last time she refinanced was about 2-3 years ago, taking it back out to another 30 year mortgage.

So she'll be in her early 70's by the time that mortgage is paid off most likely. Yeah, it's a lifestyle choice, and I don't judge her on that. However, if you're going to do something like that, don't whine about it and cry about how you can't make ends meet and expect everybody to feel for your plight.

[astromeria]

There's nothing wrong with retiring on $400k--it's just that the couple in the article is withdrawing almost 10% per year and they're only 68. (Perhaps they should hand out FIREcalc with the first Social Security check!)

14 years ago my mother retired at age 66 (Daddy had gradually stopped working between ages 55 and 70--and was long since fully retired at 78 when Mom retired at 66), which she took as a lump sum of--yup--$400k. It's ~$500k now. After Nana and Gramps died, and Mom realized they couldn't afford to stay in NY any longer (mortgage from remodeling their house plus property taxes were the chief offenders), they sold the house they lived in for almost 50 years and bought a new one in South Carolina for less than the equity--and this was back when you were taxed on the gains. My parents (foolishly-) leased a car when they moved, but after their first and only car lease, bought a car. Mom is still driving it and thrilled to have no payments. Daddy's gone now, along with his Social Security payments (smaller than Mom's)--and Mom is living on ~6% of her stash plus SS, but she's heading toward 81 and could easily reduce expenditures on eating out and charity.

[jeff2006]

Astro -- it sounds like a hard transition to sell the house of 50 years and move hundreds of miles away? How did it go?

Quote:

Originally Posted by OldMcDonald You know what, this couple may not be in great shape, but my guess is that they are doing better than 80% of the people that will be retiring...now thats scary. $400K may not sound like a lot, but in the US how many people will ever even accumulate that much?

You're right that they are in better shape financially, but I don't think they'll be retiring. They'll be at the age to retire, but will still be working. I think the Wall-Mart greeter job may be in high demand!

[astromeria]

Quote:

Originally Posted by jeff2006 Astro -- it sounds like a hard transition to sell the house of 50 years and move hundreds of miles away? How did it go?

Very smoothly--other than the Great Moving Van Disaster, which I'll get to in a moment.

My parents were 12 years apart in age, and most of their friends were older, more like Daddy's age. They must've lost at least one a year for the last 10 years they lived in NY, so half their friends were dead & gone and a couple of others were just plain gone, having moved a great distance to be near children or siblings. After my mother's parents died, plus the expense thing and feeling disheartened by all that death, they felt they needed a new beginning.

meanwhile, following a vacation to Seabrook Island, one of my brother's relocated his small business to South Carolina. In addition, my father's favorite cousin and some of his extended family lived here in SC. Another close relative by marriage (who lost his job at age 49 and hadn;t found another for 5 years) moved to Charleston around the same time. Kind of a confluence ging on! My parents had visited my father's cousin during Spoleto Festival several times, so knew they wouldn't have to give up classical music concerts. And my mother threw herself into several club memberships (bridge club, garden club...) and volunteering at Meals on Wheels--activities she hadn't been able to persue easily when she worked full time. All of their new friends were younger, which seemed to rejuvenate my parents and remove the "stench of death" they felt had been hanging over them. The really enjoyed the city of Charleston as well as the beach, their new house, and even their new 'burb. My father won the Golden Pen award of the local newspaper several times and became involved in a couple of internet chat groups (chiefly the AOL atheist group). He told me more than once that this was the happiest time of his life.

As for that moving van... it was a dark and stormy night, the driver lost control or fell asleep or something, and overturned the truck. He was in critical condition for a while, and my parents lost most of their belongings through breakage, rain damage, or theft. While they missed some favorite things like photos, my mother was delighted to work with a decorator for the first time and furnish a new house almost from scratch. Plus they had also given my brothers and me some things before they moved, which mitigated the disaster.

[jeff2006]

Hi, Astro -- interesting story. Thanks for your response!

[Martha]

I love hearing Astro's South Carolina stories. I am all ready to move next door.