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Old 04-13-2015, 10:31 AM   #81
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Again, you're reading more into it than what he actually says, and I'm not sure your interpretation is what he really means. And more to my point, putting a number to it from a survey is meaningless to me, and I don't really see how that number is meaningful to anyone. I know that's not the whole point of the article, but it is the point that two separate threads have focused on.

We're both repeating ourselves, so I'll stop now.
Thats fine. I am not directing this at you.

But its kind of funny how people interpret the Vanguard.com Mr Moss interview so literally and get defensive.

Mr. Moss is a financial planner and Vanguard allows him to share his findings from his survey of 1,350 people on retirement savings because its valuable information.

Mr. Moss never said there is a magic number. He just pointed out that 880k in his survey of 1,350 investors is a approximation to achieve the first level of financial peace or happiness.

The target audience he and Vanguard are aiming at with this info are the millions of average income earners who hope to become the millionaire next door.

Its pretty straight forward info. The old saying "money can't buy happiness' applies here.

He is a financial planner. A numbers guy. Its on Vanguard where I have lots of money invested. So yes for me that 880k number is good info.
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Old 04-13-2015, 10:56 AM   #82
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He is a financial planner. A numbers guy. Its on Vanguard where I have lots of money invested. So yes for me that 880k number is good info.
One thing to consider, is that the investment companies and advisers all have a vested interested in managing money. The more people save and keep in savings, generally the more they make. They want our money. I do think this lends itself to a focus in finance site articles on a portfolio number alone, when retirement income / net worth factors for most households are usually something more like:

(SS + pensions + home appreciation + rental income + investment income / capital gains + portfolio draw down + hobby income + part-time work + annuities + passive business income + royalties + credit card rebates and bonuses + tax credits + other) - ((Essential expenses (housing, food, medical, transportation, clothing, taxes) + Nonessential expenses (travel, entertainment, hobbies, gifts, charitable contributions) )

I would think the "magic number" would logically be the result of equations something along these lines, not an individual component like savings alone. Many studies on retirement income show that on average portfolio income is not the major source of income for most retirees in the U.S. Studies on happiness show most people in the U.S. are happier as they get older and most don't come close to having $880K in savings.
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Old 04-13-2015, 11:39 AM   #83
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One thing to consider, is that the investment companies and advisers all have a vested interested in managing money. The more people save and keep in savings, generally the more they make. They want our money. I do think this lends itself to a focus in finance site articles on a portfolio number alone, when retirement income / net worth factors for most households are usually something more like:

(SS + pensions + home appreciation + rental income + investment income / capital gains + portfolio draw down + hobby income + part-time work + annuities + passive business income + royalties + credit card rebates and bonuses + tax credits + other) - ((Essential expenses (housing, food, medical, transportation, clothing, taxes) + Nonessential expenses (travel, entertainment, hobbies, gifts, charitable contributions) )

I would think the "magic number" would logically be the result of equations something along these lines, not an individual component like savings alone.
1+

What I found intriguing and refreshing about the article, was that Mr. Moss offers that a number, less than the so frequent off-the-cuff million or multiples thereof, might just be sufficient for families to have adequate resources for a happy retirement. Seems like too many of the people I've talked to about retirement felt they never would be able to retire because they had the thought firmly planted in their heads that they needed to have their "million(s)" saved. I suspect they just had no real handle on their expenses, or likely income streams available in retirement, so it is easier to just go with the common sage, even though it may be wildly inaccurate for their case.
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Old 04-13-2015, 12:27 PM   #84
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It was interesting reading this thread and then the article. I can see the points ripe for debate in his comments, but this is the one with which I think most would agree:

"That people who were the happiest in retirement were not necessarily those who had amassed the most money. Rather it was those who knew what they wanted to do in retirement, planned for it, and managed money wisely throughout their lives."

That's about all I took from that article and applies to most here. The rest is probably a good summary for the 1,350 he surveyed. As they say in polls, the margin of error is +/-$2M.
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Old 04-13-2015, 01:41 PM   #85
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Originally Posted by daylatedollarshort View Post
One thing to consider, is that the investment companies and advisers all have a vested interested in managing money. The more people save and keep in savings, generally the more they make. They want our money. I do think this lends itself to a focus in finance site articles on a portfolio number alone, when retirement income / net worth factors for most households are usually something more like:

(SS + pensions + home appreciation + rental income + investment income / capital gains + portfolio draw down + hobby income + part-time work + annuities + passive business income + royalties + credit card rebates and bonuses + tax credits + other) - ((Essential expenses (housing, food, medical, transportation, clothing, taxes) + Nonessential expenses (travel, entertainment, hobbies, gifts, charitable contributions) )

I would think the "magic number" would logically be the result of equations something along these lines, not an individual component like savings alone. Many studies on retirement income show that on average portfolio income is not the major source of income for most retirees in the U.S. Studies on happiness show most people in the U.S. are happier as they get older and most don't come close to having $880K in savings.
And Mr. Moss would agree with you.

I imagine as a financial planner he has many clients with many different components that paint their overall financial picture.

I sure hope Vanguard and Fidelity make some profit so they can continue to manage my money and facilitate my trades.

I am satisfied overall with the low fees I pay to Vanguard and Fidelity. They are allowing me to build wealth.
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Old 04-13-2015, 01:47 PM   #86
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It was interesting reading this thread and then the article. I can see the points ripe for debate in his comments, but this is the one with which I think most would agree:

"That people who were the happiest in retirement were not necessarily those who had amassed the most money. Rather it was those who knew what they wanted to do in retirement, planned for it, and managed money wisely throughout their lives." [Emphasis added]

That's about all I took from that article and applies to most here. The rest is probably a good summary for the 1,350 he surveyed. As they say in polls, the margin of error is +/-$2M.
This.
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Old 04-13-2015, 06:37 PM   #87
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1+

What I found intriguing and refreshing about the article, was that Mr. Moss offers that a number, less than the so frequent off-the-cuff million or multiples thereof, might just be sufficient for families to have adequate resources for a happy retirement. Seems like too many of the people I've talked to about retirement felt they never would be able to retire because they had the thought firmly planted in their heads that they needed to have their "million(s)" saved. I suspect they just had no real handle on their expenses, or likely income streams available in retirement, so it is easier to just go with the common sage, even though it may be wildly inaccurate for their case.
Agreed. Whether or not the number fits my situation, it is encouraging to see a sub-1mil figure being cited.
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Old 04-13-2015, 08:49 PM   #88
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Considering that $300K or so for LTC for one spouse could deplete those savings pretty quickly, I sure wouldn't feel comfortable with that number.
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Old 04-13-2015, 09:56 PM   #89
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We own our home and are debt-free. MADE IT!

If I sold everything including the gold in my teeth, we might have $880k (not including SS). $880k of investable assets would indeed be a Magic Number for us, but we are doing OK so far. DW is happy and I manage to amuse myself (details possibly forthcoming sometime soon).

Like Ha, we are hanging our toes off the Pacific Rim and we like it here. Watching a dynamite sunset under the clouds tonight over Bellingham Bay as we watch the Mariners doing well tonight, with a glass of very nice red blend for us. Esta Bien, amigos.

Holding our breath for the next 3 years, until 70 when I grab the big brass ring.

Cheers!
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Old 04-14-2015, 10:10 AM   #90
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We own our home and are debt-free. MADE IT!

If I sold everything including the gold in my teeth, we might have $880k (not including SS). $880k of investable assets would indeed be a Magic Number for us, but we are doing OK so far. DW is happy and I manage to amuse myself (details possibly forthcoming sometime soon).

Like Ha, we are hanging our toes off the Pacific Rim and we like it here. Watching a dynamite sunset under the clouds tonight over Bellingham Bay as we watch the Mariners doing well tonight, with a glass of very nice red blend for us. Esta Bien, amigos.

Holding our breath for the next 3 years, until 70 when I grab the big brass ring.



Cheers!
Ed, Congratulations! Glad to hear you are "there".
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Old 04-14-2015, 01:36 PM   #91
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Considering that $300K or so for LTC for one spouse could deplete those savings pretty quickly, I sure wouldn't feel comfortable with that number.
Thats a good point. I wonder what savings number gets people to a comfortable spot to self insure LTC.

With a pension and SS income it would help but still might not be enough.

I guess a good financial planner would make sure an individual buys LTC insurance or determines if they can self insure. Its kind of a gamble.
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Old 04-14-2015, 01:36 PM   #92
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Very interesting thread, from 500k to 5M Glad to hear people are very happy with less than 880k

The people preparing freak wondering do I have enough before leaving mega Corp I totally agree learning to be content. We chased material things when we were younger raising kids. Being debt free has lifted a huge burden. Two more years on house. Done 😀



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Old 04-14-2015, 05:31 PM   #93
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Without context, lifestyle and location, this magic number thing is useless....

... but this "core pursuits" thing is interesting. And I was thinking of posting a new topic on this earlier today.

I have some people look at me surprised when I say I will retire in less than 2 years, and they ask "Won't you be BORED?". Well, the people that ask me that are the people that don't know me well. I am an active person, a do-er. I watch maybe 4 hours of TV a week (except football season). I have my own shop building, restore old German cars, started a web business for fun making unobtainable parts 13 years ago (all gravy money, it will never be something I have to do), I am an avid do it yourselfer. Love to travel, explore, etc.

But what I have observed is that there are people whose only core pursuit is their job/career (and there is nothing wrong with that if it makes you happy) but they are the ones who tend to struggle after retirement. They don't know what to do with themselves.

I'm not that person.

My retirement acid test is this: I can take a week off work, stay home, not spend a dime more that I would if I were working, and tinker in the shop, drive some old cars, hike with the dogs, do some home improvement... all on my schedule. Happy as a clam.

I truly think that if someone pending retirement has to spend some time coming up with things they might want to do, they might be in trouble. Sure, do nothing (couch potato, TV watcher) is an option, but I don't think that is very healthy.
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Old 04-14-2015, 05:41 PM   #94
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I have some people look at me surprised when I say I will retire in less than 2 years, and they ask "Won't you be BORED?". Well, the people that ask me that are the people that don't know me well.
They're projecting. It's actually saying something about them, as they visualize themselves in your shoes, rather than about you.

I didn't expect to be bored in retirement, but I did draft a long list of things to pursue. Seven months in, I have yet to refer back to that list. It's been even easier than I expected to stay engaged and stimulated.
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Old 04-14-2015, 06:00 PM   #95
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Dagnabbit, I only have $780K. I was wondering why I was feeling a bit grumpy this morning.
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Old 04-14-2015, 06:06 PM   #96
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Dagnabbit, I only have $780K. I was wondering why I was feeling a bit grumpy this morning.
Yep. That's surely the reason.
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Old 04-14-2015, 06:13 PM   #97
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Dagnabbit, I only have $780K. I was wondering why I was feeling a bit grumpy this morning.
Maybe a burst of inflation will help, or cut back on the expensive cat food.
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Old 04-14-2015, 06:31 PM   #98
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You guys are funny
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