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5 Reasons You Won't Retire Early
Old 08-16-2010, 11:33 PM   #1
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5 Reasons You Won't Retire Early

Take it as a challenge, and prove him wrong!

5 Reasons You Won't Retire Early - On Retirement (usnews.com)
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Old 08-17-2010, 12:52 AM   #2
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I went to the link to read the article, and just opposite "Reason #3"
You don't save effectively. It's not just about saving as much as you can. You need to save effectively by avoiding taxes, high investing fees, and low returns and taking steps to counteract inflation. To help you delay taxes, do as much investing as possible within tax-advantaged accounts like a 401(k) or an IRA. Avoid high fees by paying attention to individual fund expense ratios and load fees. (italics added)
was an ad for....Ameriprise!
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Old 08-17-2010, 05:49 AM   #3
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Alas, another article misleadingly using current income as a metric for post-retirement spending. Based on the sparse facts in the article, one easily can conclude that if a person is saving 50% of their current income (as the article suggests might be necessary), she won't need to generate that in retirement. She will only need to generate half of current income and will therefore need a nest egg of only 12.5 times current income. I wonder if the author got paid for this nonsense.
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Old 08-17-2010, 07:23 AM   #4
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Originally Posted by Gumby View Post
Alas, another article misleadingly using current income as a metric for post-retirement spending. Based on the sparse facts in the article, one easily can conclude that if a person is saving 50% of their current income (as the article suggests might be necessary), she won't need to generate that in retirement. She will only need to generate half of current income and will therefore need a nest egg of only 12.5 times current income. I wonder if the author got paid for this nonsense.
+1 That jumped out at me too. But I expect anyone serious enough to be doing all of the other things would figure out that it is expenses that matter. The author is undoubtedly not doing any of them and not seriously thinking about the topic either.
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Old 08-17-2010, 07:51 AM   #5
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"Phil Taylor is the author of the popular 52 Ways to Make Extra Money."

I guess writing articles like this make it #53 ....
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Old 08-17-2010, 09:03 AM   #6
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Alas, another article misleadingly using current income as a metric for post-retirement spending. Based on the sparse facts in the article, one easily can conclude that if a person is saving 50% of their current income (as the article suggests might be necessary), she won't need to generate that in retirement.
You're right, but for the average person with a house underwater, maxed-out CCs, and an emergency fund of $100 if they can just find the raincoat where it's in one of the pockets, current income and expenditure are, for all practical purposes, equal; therefore, to determine current expenditure (which is an essential starting point), they just need to look at their pay stub, thus saving quite a lot of effort.
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Old 08-17-2010, 09:31 AM   #7
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You're right, but for the average person with a house underwater, maxed-out CCs, and an emergency fund of $100 if they can just find the raincoat where it's in one of the pockets, current income and expenditure are, for all practical purposes, equal; therefore, to determine current expenditure (which is an essential starting point), they just need to look at their pay stub, thus saving quite a lot of effort.
Maybe. But this is yet another reminder: most of these pop-culture financial planning articles are geared toward relatively novice personal money managers.

I doubt these articles are intended to be of much use to someone who has no debt, at least six figures in a securities portfolio with a solid asset allocation model and religiously putting away a large percentage of every paycheck for years.
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Old 08-17-2010, 10:13 AM   #8
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most of these pop-culture financial planning articles are geared toward relatively novice personal money managers
Very true. But then they're the ones who need it most. And they're in the vast majority.
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Old 08-17-2010, 10:17 AM   #9
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Very true. But then they're the ones who need it most. And they're in the vast majority.
Agreed. But that just means we need to keep that perspective before ridiculing the authors of these pieces. Their advice is not aimed at intermediate and advanced level students of personal finance -- and most of us here (at least among those actively posting here) are at least at the intermediate level.
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Old 08-17-2010, 11:45 AM   #10
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Shooting for the number they suggest is good so that when the person falls short of it in retirement they should have enough. Or they just keep working trying to hit that number and we can sit on the sidelines and laugh.
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Old 08-17-2010, 12:51 PM   #11
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You're right, but for the average person with a house underwater, maxed-out CCs, and an emergency fund of $100 if they can just find the raincoat where it's in one of the pockets, current income and expenditure are, for all practical purposes, equal; therefore, to determine current expenditure (which is an essential starting point), they just need to look at their pay stub, thus saving quite a lot of effort.
This is true but the "number" is irrelevant for these folks. If their income = expenses they can't save and will never reach any multiple of their current expenses.
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Old 08-17-2010, 01:19 PM   #12
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This is true but the "number" is irrelevant for these folks. If their income = expenses they can't save and will never reach any multiple of their current expenses.
I think I'm in agreement with you and Ziggy29. There is a place for entry-level advice, and until these people start to pay off their CCs, everything else they might think about doing is irrelevant.
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Old 08-17-2010, 05:35 PM   #13
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One of the things about articles like this is that they may serve to discourage people from even trying to save enough. 25 times current income is a daunting figure.
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Old 08-18-2010, 04:52 PM   #14
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I didn't read the article -too lazy - however, I think it's 25 times lifestyle costs and not current income - If you are saving 50% of your income, then your lifestyle costs are only 50% of your income - now I do understand if your lifestyle costs equal your income then your will never or have a very low probability of retiring early (theoretically you would never retire at all if your lifestyle costs did not include a savings for retirement item).
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Old 08-18-2010, 05:03 PM   #15
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I didn't read the article -too lazy - however, I think it's 25 times lifestyle costs and not current income -
Uh, yeah. Thats what we were all commenting on. The article got it wrong. The quote was, "You could need upwards of 25 to 30 times your current salary, depending on the age you are shooting for..."
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Old 08-18-2010, 06:14 PM   #16
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The quote was, "You could need upwards of 25 to 30 times your current salary, depending on the age you are shooting for..."
Of course, when you analyze it that quote says, umm, nothing. "You could need upwards of 25 to 30 times..." doesn't exclude that possibility that you might not or that you could need 2 times or could need 100 times. It doesn't say that everyone or most will need that amount.
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Old 08-18-2010, 09:23 PM   #17
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One of the things about articles like this is that they may serve to discourage people from even trying to save enough. 25 times current income is a daunting figure.
I agree. When we started to save for retirement in my mid twenties, I didn't fixate on the size of the "pot" we'd need and what a huge job we'd have in trying to accumulate the needed money. I thought about the "magic of compounding" and how each buck we put away then would grow to about $10 in forty years (at 6% real growth--I thought that was reasonable at the time). Better yet--for each $1 in monthly contributions, I could expect our eventual savings balance to be $480 larger. That made it relatively easy for us to stay motivated to save more each month.
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Old 08-19-2010, 06:00 PM   #18
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Would you like to retire early? Maybe even as soon as your late 40s?
He lost my interest right there!
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Old 08-20-2010, 10:07 AM   #19
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Of course, when you analyze it that quote says, umm, nothing.
Reminds me of a "SALE" sign I once saw in a clothing store's window: "Up to 60% off or more!"

So, what kind of discounts should I be expecting when I walk in?
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