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Stop Saving So Much for Retirement
Old 03-01-2011, 08:55 AM   #1
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Stop Saving So Much for Retirement

stop-saving-so-much-for-retirement: Personal Finance News from Yahoo! Finance

At least the article points out the key fallacy in this "strategy"

You can't control the return on your retirement stash, and you can't necessarily control when you get to call it quits. Fahlund's strategy is psychologically astute, in that it blends the security of working longer with the pleasures of enjoying life while you're still young enough to enjoy it. But in the end, Fahlund's plan depends on two things that are outside your control: Market returns and the length of your career. To stop saving in the hope that you won't need to draw on your nest egg until you're in your eighth decade is a gamble.
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Old 03-01-2011, 08:59 AM   #2
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I just read that article on Yahoo and I think was should all rush back to work. NOT!
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Old 03-01-2011, 09:48 AM   #3
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Want me to stop saving so much for retirement? Give me a secure COLA'd DB pension, for starters. Then we'll talk about spending more today.

And frankly, cruises and other indulgences aren't sufficient to convince me to put up with working for another 5-10 years. If I die before I can enjoy most of my nest egg, so be it. Plenty of charities I support will be glad to have the money. And I'll be dead so I won't care.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 03-01-2011, 09:54 AM   #4
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This article is just another of the many scripted post-crash to the effect that the "new way" to "retire early" is to keep working when you would otherwise be retired. Translation: The "new way" to retire early is not to retire early. Redefinition is presented as insight. Gimme a break.
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Old 03-01-2011, 09:57 AM   #5
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This article is just another of the many scripted post-crash to the effect that the "new way" to "retire early" is to keep working when you would otherwise be retired. Translation: The "new way" to retire early is not to retire early. Redefinition is presented as insight. Gimme a break.
The economy may *force* this on many people who thought they had clear sailing a dozen years ago. But that doesn't mean I'm going to go down without a fight and just accept it.

Personally I believe the ultimate "redefinition" of retirement will be a three-tiered approach where one enters a period of semi-retirement or part time work in their 50s, and then hangs it up completely at 65 or 70. However, this can't happen until the link between health insurance and full-time employment is severed. This would be a feasible "winding down" of w*rk for a lot of people otherwise, even today.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 03-01-2011, 09:58 AM   #6
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For someone who's j*b is tolerable or even enjoyable, the article has some merit. For the rest of us ... nah.
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Old 03-01-2011, 10:03 AM   #7
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For someone who's j*b is tolerable or even enjoyable, the article has some merit. For the rest of us ... nah.
Then again, if my j*b was enjoyable, my obsession with early retirement wouldn't be there.

There are few people in life I envy more than those who truly love their work and can't imagine not doing it (assuming they don't lose their job). I envy them more than people with large COLA'd pensions, even.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 03-01-2011, 10:05 AM   #8
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Zig, don't envy them too much...it is often the case that they just don't have any other interests or never bothered to create ties outside of work.
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Old 03-01-2011, 10:07 AM   #9
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Zig, don't envy them too much...it is often the case that they just don't have any other interests or never bothered to create ties outside of work.
But the point is, they don't know any better. And it makes them happy. Now the problem would come if they developed other interests outside of w*rk and decided late in their career that they wanted to do something else... and couldn't pursue it because they never bothered saving for retirement because they thought they wanted to w*rk forever.

But I do know people who have a true passion for what they do, *and* they earn a paycheck and benefits for doing it. They are scarcer than hen's teeth, but they do exist. And what an enviable position to be in if you can keep the j*b for as long as you want it.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 03-01-2011, 10:23 AM   #10
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Originally Posted by Loop Lawyer View Post
This article is just another of the many scripted post-crash to the effect that the "new way" to "retire early" is to keep working when you would otherwise be retired. Translation: The "new way" to retire early is not to retire early. Redefinition is presented as insight. Gimme a break.
The financial director of T Rowe Price came up with this strategy....which just confirms my total contempt for "financial professionals". The advice is to spend, don't save and work longer which is 180 degs from my strategy, be frugal, save 50% of income and retire early.
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Old 03-01-2011, 10:30 AM   #11
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Quote:
Originally Posted by Loop Lawyer View Post
This article is just another of the many scripted post-crash to the effect that the "new way" to "retire early" is to keep working when you would otherwise be retired. Translation: The "new way" to retire early is not to retire early. Redefinition is presented as insight. Gimme a break.
I'm as tired of those articles as you are, but I don't think you're giving this one enough credit. It ultimately presents a pretty balanced viewpoint:

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Only problem is, who wants to work until 70? It sounds like the definition of retirement planning failure, not success. ... What's the takeaway? There's no way around the fact that the best retirement strategy is a balance between three sound but contradictory pieces of advice. Work as long as you can. Save like you'll be on your own tomorrow. Live each day like it could be your last.
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Old 03-01-2011, 10:32 AM   #12
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The financial director of T Rowe Price wrote this....which just confirms my total contempt for "financial professionals". The advice is to spend, don't save and work longer which is 180 degs from my strategy, be frugal, save 50% of income and retire early.
And frankly, I think many of the corporate powers that be are empowered by high unemployment. The fewer financially independent people, the more people there are who need j*bs, and the more who need jobs (more supply of labor) relative to the demand for labor, the lower they can set the compensation bar.

The ability to retire is at odds with their desire to keep as many of us dependent on them as possible.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 03-01-2011, 10:35 AM   #13
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And frankly, I think many of the corporate powers that be are empowered by high unemployment. The fewer financially independent people, the more people there are who need j*bs, and the more who need jobs (more supply of labor) relative to the demand for labor, the lower they can set the compensation bar.

The ability to retire is at odds with their desire to keep as many of us dependent on them as possible.
Agreed and if they can encourage spending too all the better for them. However, the T. Rowe Price director might be shooting herself in the foot by discouraging retirement saving when her company gets fees from such saving.
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Old 03-01-2011, 10:39 AM   #14
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OK - I get all the posts... For you, you wouldn't ever consider working longer.

On this forum, once the current lifestyle budget is covered it's time to quit working. That's the only thinking that gets posted on this forum. Other thinking is politically incorrect here.

However the article brings up a very valid point. And that point is... What is the opportunity cost if I retire a year/ or ten years early ? What (exactly) am I to forgo, in terms of lifestyle, should I check out early.

Is it worth it to keep working ? Evidently not.. Ever based on the responses so far. But I would say that this is a choice for each of us to make. There is no correct answer here.

It sure doesn't hurt to look at the world from a different point of view.
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Old 03-01-2011, 10:44 AM   #15
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On this forum, once the current lifestyle budget is covered it's time to quit working. That's the only thinking that gets posted on this forum. Other thinking is politically incorrect here.
Given that this is the "Early Retirement Forum," it seems logical to suspect that would be the default attitude, is it not? Not many people who love their jobs or are willing to keep them until full retirement age and beyond are going to be on an "Early Retirement Forum."

So you can waggle your finger at the "closed-mindedness" you seem to perceive here all you want, but remember that this is a very self-selecting sample of people who want as little to do with w*rking as possible. Expecting a different attitude might be unreasonable, IMO.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 03-01-2011, 10:44 AM   #16
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It sure doesn't hurt to look at the world from a different point of view.
Definitely.....but I think most people on here have thought about the financial and psychological consequences of ER and come to the conclusion that the scales are tipped towards ER rather than working to amass money they don't need to live comfortably. After all isn't that what FIREcalc is all about.
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Old 03-01-2011, 10:53 AM   #17
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Given that this is the "Early Retirement Forum," it seems logical to suspect that would be the default attitude, is it not? Not many people who love their jobs or are willing to keep them until full retirement age and beyond are going to be on an "Early Retirement Forum."

So you can waggle your finger at the "closed-mindedness" you seem to perceive here all you want, but remember that this is a very self-selecting sample of people who want as little to do with w*rking as possible. Expecting a different attitude might be unreasonable, IMO.
This depends on what you call "w*rking." As others have posted, w*rk is something you do that you wouldn't otherwise do if you weren't being paid for it (syn. "j*b") Many folks here have FIRE'd, only to find something else to do with their time - with the key distinction being something they chose to do. This choice also includes the ability to stop doing it, with minimal, if any, financial repercussions.
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Old 03-01-2011, 10:53 AM   #18
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But I do know people who have a true passion for what they do, *and* they earn a paycheck and benefits for doing it.
I don't think I've ever met any of them, but a few must be out there. I envy them more than I do any retiree.
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Old 03-01-2011, 10:56 AM   #19
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I don't think I've ever met any of them, but a few must be out there. I envy them more than I do any retiree.
I'd say my wife is one of those. She can't stand the corporate BS of her financial planning/advisory employer, but she loves helping people with their finances. When we both tire of the rat race, she will likely become an independent financial advisor working on a fee-based model for a select group of clients. I could make the same choice as a lawyer - hang out my own shingle or do some part-time legal work for a few clients. The key for both of us is to reach the FI level so we can choose to work as much or as little as we want at our chosen professions.
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Old 03-01-2011, 10:59 AM   #20
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I'd say my wife is one of those. She can't stand the corporate BS of her financial planning/advisory employer, but she loves helping people with their finances. When we both tire of the rat race, she will likely become an independent financial advisor working on a fee-based model for a select group of clients.
This is actually not all that uncommon. Many times people enter a field because they are interested in the work itself. But as most of us find out, even if we liked the work itself, the corporate BS -- the bureaucracy, the office politics, the contrived deadlines and urgency of everything, the wage-slave mentality -- becomes intolerable.

In fact I'd wager that many (if not most) people who desperately want out of their j*bs are looking more to escape the corporate BS that accompanies the work than are escaping the actual work itself.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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