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06-07-2014, 02:34 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by Another Reader
These folks are trying to figure out why there is not a rush to create retirement income is the post pension world. What they found was a population mostly dependent on pensions and social security. These people aren't going to call a financial services provider and ask how to convert their meager savings into income. Nope, this population will be tightly clutching their CD's and account statements until they are pried out of their fingers.
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I also think it's because no "safe" income stream will give any kind of remotely acceptable returns. I'm thinking about things like SPIAs among other things, and with long term interest rates so pathetic the cost of a guaranteed income stream is just way too damn high. If we had a 10-year treasury at 4% instead of 2.5%, I think you'd see a LOT more interest in securing income streams in a post-pension world. But as it is, people are still sticking with the stock market because the safer alternatives, well, suck to high heaven right now.
__________________
"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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06-07-2014, 03:51 PM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 7,422
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Isn't there some stat that says only a small percent of people at 65 have even $50k in savings?
In that context, I can see why some might say $100k is wealthy, at least in relative terms.
When I first discovered ER, some of the first threads I followed were those about annuities. Now I no longer think about them. Education from this community but also a 5 yeAr bull market has disabused me of the idea, though back then, because of higher rates, the payout per $100k of immediate annuities were much better than they probably are now.
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06-07-2014, 06:29 PM
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#23
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
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"If we had a 10-year treasury at 4% instead of 2.5%, I think you'd see a LOT more interest in securing income streams in a post-pension world. But as it is, people are still sticking with the stock market because the safer alternatives, well, suck to high heaven right now. "
I dunno, I think a lot of these people would buy CD's. Maybe treasuries if they were a little more knowledgeable.
The financial advisor/wealth manager comments on the MarketWatch article are sort of interesting. There's at least one annuity pusher in the pack, judging by what I read.
I also think the Vanguard people are out of touch with the people that were age 60 to 79 in 2012. Most of those folks grew up around people that lived through the depression and didn't place a lot of faith in the stock market or financial "products." The response to a reduced income is more likely "how can I stretch that pound of hamburger and can of tuna" than "how can I turn my savings into an income stream for life."
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06-07-2014, 07:28 PM
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#24
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Ventura County
Posts: 1,432
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Interesting paper. A portion I found particularly noteworthy was the breakdown of investing style by education on page 11. If I read correctly 72 - 76% of those who are primarily "Pensioners", "Retirement Investors", and "Taxable Investors" have college educations whereas only 28 - 37% of those categorized as primarily "Social Security Recipients", "Liquidity Investors" or "Annuity Investors" do.
Probably a reflection of the ethos of investment among the professional ranks that has been building for at least a generation in America, but thought provoking nonetheless.
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06-08-2014, 06:59 AM
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#25
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by explanade
Isn't there some stat that says only a small percent of people at 65 have even $50k in savings?
In that context, I can see why some might say $100k is wealthy, at least in relative terms.
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I've seen those, too. The problem is that the amount someone has saved for retirement is just one piece of the puzzle. Someone with only $50K saved for retirement is in trouble if it's all they have to look forward to, but if they have a pension with a COLA that more than meets their annual living expenses by itself, it's not a deal breaker at all.
__________________
"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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06-08-2014, 07:40 AM
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#26
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,686
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After skimming the original paper, I think the authors should have included the distribution of what they defined as wealth among the participants. I think the survey wanted to capture certain demographics, and not leave out retirees who are down the road, and may have depleted all but 100K of investments. I tried to find email for the authors, but couldn't. I think the article is scholarly enough, but I'd really like to see a distribution graph of wealth and income so I could get a better sense of who they are talking about.
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06-08-2014, 09:22 AM
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#27
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Recycles dryer sheets
Join Date: May 2011
Location: Austin
Posts: 375
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It is a good paper. I think the author mentioned this is intended to be a base for future survey.
I am just curious which group I might belong. My NW is kind of equally distributed between taxable, retirement account, real estate, and business.
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06-20-2014, 05:12 PM
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#28
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Recycles dryer sheets
Join Date: Nov 2011
Posts: 182
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It is shocking to me that only one third of retired households aged 60 - 79 in the survey had financial assets of $100K. How can that be?
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06-20-2014, 05:25 PM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by 523HRR
It is shocking to me that only one third of retired households aged 60 - 79 in the survey had financial assets of $100K. How can that be?
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Uh, because most of us here represent the end of a very long tail on a distribution curve?
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06-20-2014, 05:58 PM
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#30
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,983
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Quote:
Originally Posted by TuborgP
Lot of truth in the article. Our pensions form a very nice retirement income. Having done the 62/70 SS strategy and now collecting spousal at 66 and my full age 70 benefit (close to max) our investment income is being added to and not drawn down. Many pension recipients also went down the 401/403 route and have three solid legs on their retirement stool. Especially those coming out of high income areas. Would love to see research comparing investment wealth of pensioners vs non pensioners could be surprising.
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Having a great deal of experience with mega corp pensioners vs their decendants, I would also love to see the research. Living in Michigan I saw many rather well to do auto pensioners live pretty well and the kids got nothing in the end. Very few if any had the foresight to form a three legged stool. They simply lucked into a two legged program which supported their lifestyle. Perhaps this was right and part of the plan but not my style. Furthermore I don't even know if this applys to today's environment.
Personally I benefited from a pension being frozen in the early 90 's. Turbo charged 401k contributions and the big run up in equities enabled me to be at a point now where I live my my mothers mantra of " live off the divies and interest only" and don't touch what goes to the kids. Just sayin.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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Vanguard: Retirement Income Among Wealther Retirees
06-20-2014, 06:06 PM
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#31
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Recycles dryer sheets
Join Date: Feb 2013
Posts: 68
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Vanguard: Retirement Income Among Wealther Retirees
My experience is that the three legged stool and wealth transfer to family is correlated with education level? The finial perspective of friends and neighbors can play a role. Peer pressure and keeping up with the Jones can be profitable if they are financially wise.
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06-20-2014, 06:31 PM
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#32
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,983
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Quote:
Originally Posted by TuborgP
My experience is that the three legged stool and wealth transfer to family is correlated with education level? The finial perspective of friends and neighbors can play a role. Peer pressure and keeping up with the Jones can be profitable if they are financially wise.
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These were mid level to VP management that I referenced. You naturally assumed they were uneducated workers
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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Vanguard: Retirement Income Among Wealther Retirees
06-20-2014, 06:46 PM
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#33
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Recycles dryer sheets
Join Date: Feb 2013
Posts: 68
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Vanguard: Retirement Income Among Wealther Retirees
No I didn't know about your experience I was talking about mine and more neighborhood and youth activity oriented than work. Neighborhood because it really involved a family perspective of both spouses.
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06-20-2014, 07:16 PM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by foxfirev5
.........Living in Michigan I saw many rather well to do auto pensioners live pretty well and the kids got nothing in the end..............
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Sounds good to me. The purpose of retirement funding is not to set up the kids for life, it is have a secure and happy retirement, then die.
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