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Senior spending tapers off: Scott Burns
Old 08-14-2005, 09:27 AM   #1
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Senior spending tapers off: Scott Burns

http://www.dallasnews.com/sharedcont....2290e0f9.html


He said there's no need for inflation adjustment after 55 or so....

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Re: Senior spending tapers off: Scott Burns
Old 08-14-2005, 09:44 AM   #2
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Re: Senior spending tapers off: Scott Burns

Here is the thread on the original Scott Burns column on this subject a few weeks ago:

http://early-retirement.org/forums/i...p?topic=3509.0

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 09:43 AM   #3
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Re: Senior spending tapers off: Scott Burns

Quote:
Originally Posted by amt
He said there's no need for inflation adjustment after 55 or so....
I've been drinking Scott's Koolaid for years, but I have two questions that reflect on his credibility:
1.* How old is he?
2.* Why is he still working?
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 10:04 AM   #4
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Re: Senior spending tapers off: Scott Burns

I think Scott Burns has been getting crabbier.* As his column picture gets updated, he looks crabbier, too!* I wouldn't be surprised if he hangs it up soon when he reaches 65.* But I'll miss him!* * * * *He'll leave a big hole behind him.

Disclosure... I might look crabby when I near 65 too!

The hardcopy of Scott's "Senior Spending Tapers Off" article has a bar chart that has 3 age groups: 55 to 64, 65 to 70, and 75+.* And 8 expense buckets.* And an expense scale running up to $15k.* So there is much more detailed info in the chart that will not appear in the text online.

Sometime when I get a chance, I'm going to try to massage my expense data as if I were 75 years old right now.* I'll have to figure out a way to manipulate the real estate taxes to account for special handling of those over 65 here.* And wing it on how much to reduce some of the other expenses.* But just guesstimating, I have serious doubts that I could live here for only ~ $24k a year.
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 10:18 AM   #5
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Re: Senior spending tapers off: Scott Burns

Nord's said:
Quote:
I've been drinking Scott's Koolaid for years, but I have two questions that reflect on his credibility:
1. *How old is he?
2. *Why is he still working?

From his article:
Quote:
But let's start with ages 55 to 64, the period when most people retire. What happens then?

For that group, total consumption declines from $44,330 to $23,759 at 75. That's a decline of 46 percent in 20 years, an annualized rate of 3.07 percent.

That's enough to offset the overall rate of inflation, which means your actual income could be flat and you'd do fine.

As someone approaching his 65th birthday, I can tell you this looks perfectly reasonable.
So his is almost 65 and is still working. Maybe he just enjoys it and feels no need to stop. *Some people acutally enjoy their work. *(I am not one of them) but I have seen a few people that just don't want to quit because they enjoy it. *

I see where the is coming from in the article but it is "funny math" and people should be careful about it. *We need to know the reason spending went down. *In my parents case it was due to poor health and the inability to travel or do much besides sit around and watch TV. *If you don't do any thing you don't spend much except maybe on health costs. *Inflation is still there and is still eating away at everything you buy. *Ignoring it even if spending is lower later in life can lead to having less because you can't afford to spend more.
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 10:50 AM   #6
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Re: Senior spending tapers off: Scott Burns

Yeah i think he just most likely enjoys working. Back when i used to be a practicing southern baptist, they taught that "we" are designed/programmed for work. And you know, my experinece has been that for most people, that is true. Most people have an innate desire to contribute to society in some form or fashion, so it only stands to reason you might as well 1. do something that you like. 2. get paid in the process, while you go about that.

I guess i'm an anomoly like most of us here in that, for some reason, i lack this gene that makes me want to do work. I work now because i cant afford not to, and that's the only reason.

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 11:10 AM   #7
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Re: Senior spending tapers off: Scott Burns

He may be right, but I do not think so and wouldn't plan on it. I think their will be a general inflation (federal debt driven) as well as a specific inflation on those things we plan to use more of in retirement (i.e. sun, such as florida real estate; health care, etc).

If it turns out that there is not a spending inflation at 70, great. OTOH if there is, I want to be able to have it prepared for now when it can be.

Just my two cents.

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 12:26 PM   #8
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Re: Senior spending tapers off: Scott Burns

I don't plan to alter our assumption of inflation adjusted spending needs, but this data does help reduce my anxiety that occurs when contemplating ER risks...peace of mind is priceless.
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 01:01 PM   #9
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Re: Senior spending tapers off: Scott Burns

Scott Burns has an agenda, and it involves attacking retired people's share of GDP; especially the share than comes from government.

He is not the retirees' friend, IMO. Just one more talentless hack.

Haha
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 01:42 PM   #10
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Re: Senior spending tapers off: Scott Burns

Ah now HaHa

Scott's - what 63 ish And still working!

I like Scott - let him do his thing.

While I work on my 62 ish 12th year of ER.

Heh, heh, heh, heh, heh

Besides - it's fun to read - in hindsight - all the great advice I never followed.
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 03:35 PM   #11
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Re: Senior spending tapers off: Scott Burns

Quote:
Originally Posted by HaHa
Scott Burns has an agenda, and it involves attacking retired people's share of GDP; especially the share than comes from government.

He is not the retirees' friend, IMO. Just one more talentless hack.

Haha
I like him, but maybe partly due to comparison with my candidate
for the ultimate "talentless hack", Mr. Bob Brinker.

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 04:18 PM   #12
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Re: Senior spending tapers off: Scott Burns

Does the article assume, that Seniors do not buy gas for their cars, Pay taxes on their homes and repair their homes when they break, drink occasionally, buy drugs (may be classified as healthcare) or buy groceries?

All of the above go do up in time. I would however agree that inflation is not so prevalent once one is retired, but not eliminated. Once tends to buy less luxurious items, clothing, etc.

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 04:39 PM   #13
 
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Re: Senior spending tapers off: Scott Burns

Quote:
Originally Posted by ShokWaveRider
Does the article assume, that Seniors do not buy gas for their cars, Pay taxes on their homes and repair their homes when they break, drink occasionally, buy drugs (may be classified as healthcare) or buy groceries?

All of the above go do up in time. I would however agree that inflation is not so prevalent once one is retired, but not eliminated. Once tends to buy less luxurious items, clothing, etc.

SWR

You are correct that all of these items go up over time. But what the point is here is that travel expenses, Luxury car purchases, Furniture expenses may be drastically cut to the point that they override the inflation of the basic items.

Of course if you are living a subsistance lifestyle now (Not Traveling, eating at expensive restaurants, driving and buying luxury cars or boats) then chances are that inflation will definitely be a factor in a subsistance lifestyle.

It all depends on your lifestyle.
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 04:52 PM   #14
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Re: Senior spending tapers off: Scott Burns

As I posted in an earlier thread on this same subject, I've seen the spending of my three older retired siblings gradually decline over the years. No major health problems, just reduced desire to travel and buy "stuff". Other expenses (taxes, gas, etc.) have not gone up to the point they offset savings from reduced spending.

I know it may come as a shock to you youngsters posting here, but as you age what is important to you (and consumes your income) does change. For example, I'm considering not renewing my subscriptions to Canoe & Kayak and NASCAR magazines. But no way am I giving up my Gun World subscription.

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 05:09 PM   #15
 
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Re: Senior spending tapers off: Scott Burns

Quote:
Originally Posted by REWahoo!
As I posted in an earlier thread on this same subject, I've seen the spending of my three older retired siblings gradually decline over the years.* No major health problems, just reduced desire to travel and buy "stuff".* Other expenses (taxes, gas, etc.) have not gone up to the point they offset savings from reduced spending.

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 05:21 PM   #16
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Re: Senior spending tapers off: Scott Burns

Quote:
Originally Posted by Cut-Throat

You are correct that all of these items go up over time. But what the point is here is that travel expenses, Luxury car purchases, Furniture expenses may be drastically cut to the point that they override the inflation of the basic items.

Of course if you are living a subsistance lifestyle now (Not Traveling, eating at expensive restaurants, driving and buying luxury cars or boats) then chances are that inflation will definitely be a factor in a subsistance lifestyle.

It all depends on your lifestyle.
This is how I saw what he was saying also. But this essentially affirms my original contention that Burns has an agenda. Who would be surprised if as one shifted down from a luxury lifestyle to a bare-bones lifestyle that costs might be contained? Big surprise there! But it isn't what one usually means by "inflation" This ploy is usually seen as comparing apples to oranges, and renders the comparison useless.

Haha
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 08:40 PM   #17
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Re: Senior spending tapers off: Scott Burns

If anyone is interested. Here is an audio interview with the finacial planner who wrote the book scott was refering to.

http://marketplacemoney.publicradio....ving_too_much/

I understand the math and it is appealing. But I think it is more applicable for someone with an average spending profile.

In my case, we are in the accumulation phase and keeping spending very tight. I am planning for our spending to increase once we retire. I also, expect spending to increase again, once we feel comfortable that our savings will last. No kids to leave anything to. I also don't see a limit on spending. (At least until someone takes the keys away from the wife so she can't get to the mall.)

In all it seems like everything depends on things you can't know. How healthy you will be. How active you will be. How much you will like to travel. How expensive your tastes will be. How generous you will feel. etc. If it happens great, but can't bank on it.

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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 09:32 PM   #18
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Re: Senior spending tapers off: Scott Burns

Quote:
Originally Posted by Cut-Throat
Right!* - As they say. "Don't save Sex for your old age"
When I was a young man, I was in a duck blind with 2 old geezers.
At least they seemed old. Probably about my age now
Anyway, in a lull (lots of those in duck hunting) they were passing along
some of their "wisdom". They said "Don't pass up any sex because
when you are our age you will regret it." Kind of the same thought
as what C-T posted.

JG
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Re: Senior spending tapers off: Scott Burns
Old 08-15-2005, 09:35 PM   #19
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Re: Senior spending tapers off: Scott Burns

Quote:
Originally Posted by REWahoo!
As I posted in an earlier thread on this same subject, I've seen the spending of my three older retired siblings gradually decline over the years.* No major health problems, just reduced desire to travel and buy "stuff".* Other expenses (taxes, gas, etc.) have not gone up to the point they offset savings from reduced spending.

I know it may come as a shock to you youngsters posting here, but as you age what is important to you (and consumes your income) does change.* For example, I'm considering not renewing my subscriptions to Canoe & Kayak and NASCAR magazines.* But no way am I giving up my Gun World subscription.

REW
Yeah, I dropped a bunch of non-essential stuff too, but kept the NRA
membership active.

JG
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Re: Senior spending tapers off: Scott Burns
Old 08-16-2005, 09:48 AM   #20
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Re: Senior spending tapers off: Scott Burns

Yep

Dropped my NRA membership a couple years back - still getting junk mail - from those idiots who think I'm a fricking Republican - at least Laura still looks ok - for an old Republican.

I still remember when I was a kid in the barbershop - the mag was actually about guns/shooting/hunting - not lawyer's/politics/weird agenda's. They became what they are against - ala POGO.
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