LeavingOhio
Recycles dryer sheets
I just do not understand her at all.
I actually like watching her Can I Afford It segment, and often either the caller is so off from being able to buy what they want to buy or so clearly has plenty of money that she gets those right of course, but last night I was watching, and I just scratch my head.
Woman called in and wanted to take her family to Bermuda to celebrate her husband's and her 25th anniversary. Cost $5,500.
She was 47.
She did have a mortgage and I don't remember what it was, but I don't remember thinking it was outrageous.
Other than that she had:
$36,000 liquid
$64,000 in non-retirement investments
$282,000 in retirement accounts
Suze asked her how she was going to pay for this, and she said they would budget out of their income $450 a month until it was time to go and that they would have the $5,500 by then.
Suze denied her. Main reason was that she didn't have enough in retirement at age 47 top be able to retire in 20 years. What!?
Leaving her $36,000 liquid alone, the remaining $346,000 at JUST 6% annual return will be more than $1.1 million by age 67, and that's if she doesn't ever add another penny to it. The 6% is conservative in my opinion as I have averaged just under 11% annually since 1989.
To get $346,000 invested by age 47, assuming she didn't just inherit that, she likely invested to get it. Let's say from age 47 to age 67 she can only invest $10,000 a year. Now, she has $1,467,524.78. Add that coupled with likely social security that she continued to earn until age 67...man that's going to be plenty by then...ESPECIALLY if she pays the house off as she should before retiring.
With the likelihood that she will be able to invest more than $10,000 a year and that she will get more than 6% return on average over the next 20 years, she will probably have more...I suppose she could have inherited what she has invested and doesn't really save at all, but Suze should have asked about that.
Anyway, that seemed ridiculous to me. Gotta live life a little, and she had the money to do it in my opinion.
I am planning to retire by age 60, and if all goes well, I will have just over a million dollars then along with 3 years of expenses saved in a liquid form (might need that extra to help with medical insurance until we are 65). If my wife and I decide to start taking SS at age 62, that is projected to be another ~$47,000 a year. So, at 4% draw on the retirement pile plus $47,000 a year from SS in just 14 more years, that is right on what we make today...and by then the house will be paid off and the kids gone...should be easily doable. If we can't do it on that in just 14 more years, then something is really wrong. Might even be super frugal the first 2-3 years and take just a 3% draw...we could make it on that with next to no problem (assuming no unforeseen medical issue, etc.).
Anyway, it seems Suze doesn't allow for lower-level lifestyles at all. My parents retired at 60 and 61, and they had WAY less than what she would say is enough...and they have a blast...they have enough money, they own their house outright (just paid it off at ages 73 and 74! - my dad was a Methodist minister and so didn't own a house until he retired), they work as volunteer Rangers at a national park in the winter months, and live a lifestyle that they enjoy and that I see as very fun and fulfilling.
Long rant. Sorry. Just can't believe Suze sometimes.
I actually like watching her Can I Afford It segment, and often either the caller is so off from being able to buy what they want to buy or so clearly has plenty of money that she gets those right of course, but last night I was watching, and I just scratch my head.
Woman called in and wanted to take her family to Bermuda to celebrate her husband's and her 25th anniversary. Cost $5,500.
She was 47.
She did have a mortgage and I don't remember what it was, but I don't remember thinking it was outrageous.
Other than that she had:
$36,000 liquid
$64,000 in non-retirement investments
$282,000 in retirement accounts
Suze asked her how she was going to pay for this, and she said they would budget out of their income $450 a month until it was time to go and that they would have the $5,500 by then.
Suze denied her. Main reason was that she didn't have enough in retirement at age 47 top be able to retire in 20 years. What!?
Leaving her $36,000 liquid alone, the remaining $346,000 at JUST 6% annual return will be more than $1.1 million by age 67, and that's if she doesn't ever add another penny to it. The 6% is conservative in my opinion as I have averaged just under 11% annually since 1989.
To get $346,000 invested by age 47, assuming she didn't just inherit that, she likely invested to get it. Let's say from age 47 to age 67 she can only invest $10,000 a year. Now, she has $1,467,524.78. Add that coupled with likely social security that she continued to earn until age 67...man that's going to be plenty by then...ESPECIALLY if she pays the house off as she should before retiring.
With the likelihood that she will be able to invest more than $10,000 a year and that she will get more than 6% return on average over the next 20 years, she will probably have more...I suppose she could have inherited what she has invested and doesn't really save at all, but Suze should have asked about that.
Anyway, that seemed ridiculous to me. Gotta live life a little, and she had the money to do it in my opinion.
I am planning to retire by age 60, and if all goes well, I will have just over a million dollars then along with 3 years of expenses saved in a liquid form (might need that extra to help with medical insurance until we are 65). If my wife and I decide to start taking SS at age 62, that is projected to be another ~$47,000 a year. So, at 4% draw on the retirement pile plus $47,000 a year from SS in just 14 more years, that is right on what we make today...and by then the house will be paid off and the kids gone...should be easily doable. If we can't do it on that in just 14 more years, then something is really wrong. Might even be super frugal the first 2-3 years and take just a 3% draw...we could make it on that with next to no problem (assuming no unforeseen medical issue, etc.).
Anyway, it seems Suze doesn't allow for lower-level lifestyles at all. My parents retired at 60 and 61, and they had WAY less than what she would say is enough...and they have a blast...they have enough money, they own their house outright (just paid it off at ages 73 and 74! - my dad was a Methodist minister and so didn't own a house until he retired), they work as volunteer Rangers at a national park in the winter months, and live a lifestyle that they enjoy and that I see as very fun and fulfilling.
Long rant. Sorry. Just can't believe Suze sometimes.
