Stop Saving So Much for Retirement

Alan said:
I did not have the background. I was an engineer who used TT to do my own personal taxes.

They have a pretty good training program and you can attend a 4 day training class, which I did, or do all the learning from workbooks and/or online with the IRS link and learn site. You may want to try creating an account for yourself and have a look at what is involved.

Even though I took the classes I chose to do the IRS exams online, but you can also take the tests on paper. I've met a whole load of folks, and done returns with a whole range of situations. I've probably now done about 50 returns over 9 half-days working and everyone I have dealt with has been very nice and grateful for the help.
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Thanks, I'll look into this.
 
Ronstar said:
I agree to a point. I briefly go through the obits every day in the paper. A lot of obits of people in their 50's, 60's. I may enjoy my job, but I enjoy my personal time more. As personal time seems more limited, the job seems more like it has to go.
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We've all heard this one before, but it's what I call making decisions based on exceptions, after combating it at work hundreds of times.

People dying in their 50's and 60's are the exception. If your natural life expectancy is below average for some reason, you probably know and can adjust accordingly. As for unnatural life expectancy, any of us could be run over by a bus tomorrow, but that's an outlier and shouldn't be a factor in retirement planning. On the latter basis, you will be wrong way more often than not.

We also unfortunately see/hear of people passing away in their 40's, 30's, 20's and younger, doesn't mean we should plan on it. Stop reading the obits...
 
How to balance present and future consumption? For me, I do not want my living standard to decline in retirement, so I am willing to work until the combination of after tax pension income plus a 4% portfolio withdrawal rate meets or exceeds our current cash income (ex savings). I realize I could reach that point sooner by saving more and accepting a lower standard of living both now and in the future, but I don't want to do that. I like my life just the way it is.

(It helps, of course, that I don't hate my job. But I would like more free time to do other stuff.)
 
Gumby said:
How to balance present and future consumption? For me, I do not want my living standard to decline in retirement....
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This is how I feel, and it also applies after retirement, as one always has a present vs. future tension. I think the psychologically best life course is a gentle upward path, so methods or strategies that rely on luck or on needing or wanting less as you age do not appeal to me.

Ha
 
Jay_Gatsby said:
It is indeed. You start to realize this when you hit your mid-to-late-30s. Physical capabilities start to deteriorate (unless you work hard to maintain them in the gym, and even then it's easy to get injured).

As the article points out, "Save like you'll be on your own tomorrow. Live each day like it could be your last."
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DW and I quit work when we were young and traveled around the country for 9 months. It was one of the best things I ever did. When we were on the road, we observed many retires trying to enjoy the time off but very limited by health issues.
This brings me to the applicable quote:
"It is later than you think"

Free to canoe
 
One of the critical things that make the choice between spending vs. savings rather unbalanced are the existing tax laws, and the existence of IRAs.

If taxes were flat instead of graduating, there would be a much stronger case for spending vs. saving. Also, if it weren't possible to completely tax shelter huge chunks of cash in the form of IRAs, 401(k)s, SEPs, etc, then you'd have a much stronger case for spending today vs. saving. It still wouldn't be an even comparison, but you'd at least start to get to the point to where the debate were worth entertaining, ... or writing articles over.

I'm eligible for up to 15K or so of "traditional IRA" type savings. That means, based on my marginal tax bracket and state tax rate, I can choose either .65 cents today, or 1 dollar "tomorrow", and that's not even getting into tax-deferred growth. For me, that choice is not a difficult one. I (and my wife) are eligible for an additional 10K in Roth IRAs. Once again, tax deferred growth + no taxes at withdrawal, vs taxed money, now, later, and while growing or spent after paying 35 cents on the dollar is an easy choice.

As one can deduce, I choose to tax shelter every dollar that I can legally do so. I eventually spend the rest. That puts my retirement savings rate over 20%, not counting matches.
 
Alan said:
I did not have the background. I was an engineer who used TT to do my own personal taxes.

They have a pretty good training program and you can attend a 4 day training class, which I did, or do all the learning from workbooks and/or online with the IRS link and learn site. You may want to try creating an account for yourself and have a look at what is involved.

Even though I took the classes I chose to do the IRS exams online, but you can also take the tests on paper. I've met a whole load of folks, and done returns with a whole range of situations. I've probably now done about 50 returns over 9 half-days working and everyone I have dealt with has been very nice and grateful for the help.
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I'm still working, but last year I volunteered for 6 months backstage on an "immersive theatre" production. It was different from my physics day job, but still needed lots of organization, hard work and problem solving. I'd leave work and drive over there by 6:30 to do set up and be there until midnight. It didn't seem like work at all. I plan to do lots more of this pre and post ER as I met some great folks and went to some amazing parties.
 
Telecaster said:
Having a heart attack and cancer in your 50's will take all the steam out of your nifty ideas of working 'till 70.
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A couple of close colleagues have been through different versions of "from today, things will never be the same" in the last 12 months. :(

Yet, neither of them feel that they can afford to RE because they don't have "enough" saved, although with their pension and an invalidity deal, neither would be eating cat food or sleeping under a bridge. So they come into w*rk, frequently looking (and presumably feeling) like sh*t.

It's bad enough taking the BS when you're healthy. If I have anything resembling a serious health incident tomorrow, I'm out of here by the end of the month.
 
Katsmeow said:
Not the OP, but I am an attorney. And the answer is....it depends. In some firms becoming partner is almost entirely based upon how much business you bring in. As for other firms, it depends upon the criteria in that firm. Not every firm requires associates to bill 2400 hours to become a partner. There are plenty of firms where 1800 consistently, coupled with good work, is enough. And of course, there is a range in between.

But the point is that if you are meeting the criteria minimum billable hour criteria to be partner eligible, or if you don't want to be a partner (I was a shareholder before I joined my current firm and could have come in as a shareholder but chose not to do so) or if you are already a partner, then there is very little marginal benefit from working an extra few hundred hours every year.
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Another lawyer here. This is correct. Even at the "top" firms, while very high billable hours will help you on the way to partnership, it is neither essential (if you have other desirable qualities) not sufficient (if you are deficient in other areas). Once you make partner, the expectation is that you will keep working the same or higher total office hours (billable and non-billable). Slacking off is not something that most firms will tolerate.
 
haha said:
Doesn't this pretty much seal off your chances of making partner and getting on the long end of that stick?

Ha
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As others have posted, that is generally correct at BIGLAW firms. One's chances of making partner today at such firms is very, very slim these days, so why sacrifice the last few hours of some of the best years of your life to make the firm more money, just to be given "The Talk" after 7-8 years?

There are exceptions to billing crazy hours. As some have pointed out, bringing in business is KEY. The next in line is being the son/daughter of a powerful (ex) politician or Supreme Court Justice (though being a former Supreme Court clerk is almost as good).

A slightly less significant exception is the "Harvard Dispensation". From another board:

All large firms engage in the tawdry practice of granting what has come to be known in the business as the "Harvard Dispensation." This catch-all term covers many other law schools besides Harvard and has numerous permutations, but boils down essentially to this: When times are lean and the associate ranks a little unwieldy and uneven, the pruning shears are pulled out of the Firm's closets (you know, that closet at the firm where you put your empty briefcase and the overcoat your mom bought you in college) and some gentle clipping and housekeeping is accomplished. Some Spring Cleaning. Some market-based structural employment. Some nudges along the way.

Underperforming associate with vague laziness -- booted. Entitled mental case too uneven to present to clients -- clipped. Hermitic manic-depressive disrupting the ranks and living on borrowed time -- given the Talk. Protected Class senior associate with 1.5 years of bad reviews papered in the file and the approval/go-ahead of the head of the Labor and Employment section of the firm -- the Heisman. Perfectly acceptable, hard-working associate who happened to get into it with the wrong partner -- see ya.

But wait a minute, you may ask. Who is that over there? Yea, that guy/gal, over there in that office. The one with the aloof disposition. Aren't they the first to leave most nights? Didn't he/she only bill 1800 for the last few years? How come they are still here, you are heard to inquire.

Well, the simple answer to that question is that he/she went to Harvard, don't you see. Look on their wall -- see that? All of that Latin lettering on that diploma? That's right -- Harvard. You see, that is worth a lot and firms take notice. If you are smart you may need to bill some hours eventually, but right now you can coast on that sheepskin for a few years at least. The Harvard Dispensation.

Most partners are only a few months out of law school mentally, even if they graduated 20 years ago. They still remember their feelings of inferiority in the presence of that Harvard guy or gal. So when the time comes for a clerk to visit the firm or spend a summer, these partners enter a Geek Shangri Law of no compare. Wow, they say to themselves, we must really be a great firm to attract someone from Harvard. And if that is true, I must be pretty damn good myself, because take a look at this office right now -- I am behind the desk with the resume in my hand asking the questions, and that Harvard Law chucklehead is sitting across from me. Look at him! He is sitting there right now listening to my bullshit, and I went to Texas Tech Law School. Damn, that is awesome. I am awesome.

Years pass, and that clerk has long become an associate and entered the flow of the section. And when it comes time to trim the fat, merit goes aside and Harvard Boy or Harvard Girl doesn't have a whole lot to worry about.

Maybe those big law school loans are worth the money it took to buy the Harvard Dispensation.
 
Midpack said:
As for unnatural life expectancy, any of us could be run over by a bus tomorrow, but that's an outlier and shouldn't be a factor in retirement planning. On the latter basis, you will be wrong way more often than not.
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And, yet, how many do I see here paralyzed by the mere remote possibility of the outlier possibility of living to 95 or older? How many plans do I see that run until the age of 95 or 100?

If one shouldn't consider the possibility of death or disability at an earlier age then one shouldn't consider the possibility of living until 95 or 100 because those certainly aren't very likely either.
 
haha said:
I think the psychologically best life course is a gentle upward path, so methods or strategies that rely on luck or on needing or wanting less as you age do not appeal to me.
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+1

That outlook fits well with mine. I've always enjoyed looking forward to things getting better. It would annoy me to have to cope with declining budget plans that would force activity reductions as I age. I understand there is the risk that I'm postponing some consumption now so I don't have to decrease my budget later and that health or other issues may end "playtime" before my expectations. But it's a lifestyle DW and I are comfortable with.

We purchased our camper and kayaks and extra fishing goodies and misc hobby toys in our late 50's and early 60's when we first RE'd. These were relatively inexpensive (although some of the purchases at the bottom of the recent recession were questioned). More expensive activities, such as cruises, tours and guided trips, will come later. If there is a later. It's a chance we all take since time left and health can be tough to predict.
 
youbet said:
+1

That outlook fits well with mine. I've always enjoyed looking forward to things getting better. It would annoy me to have to cope with declining budget plans that would force activity reductions as I age. I understand there is the risk that I'm postponing some consumption now (but I can't think of what!) so I don't have to decrease my budget later despite the fact that health or other issues may end "playtime" before my expectations. But it's a lifestyle DW and I are comfortable with.

We purchased our camper and kayaks and extra fishing goodies and misc hobby toys in our late 50's and early 60's when we first RE'd. These were relatively inexpensive (although some of the purchases at the bottom of the recent recession were questioned). More expensive activities, such as cruises, tours and guided trips, will come later. If there is a later. It's a chance we all take since time left and health can be tough to predict.
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Thsi is my attitude also. Everone is different, but I never felt that I was depriving myself as I went along before retirement, and I feel the same way now. 95% of my satisfaction with life comes from day to day things- solid social relations, good food, pleasant surroundings, some love, some nice Happy Hours. And doing my investments well.

Most everything outside of these core issues is OK or not, but not a big deal. I am sure that I will never think, Oh damn, I never sat in a coffee house in Vienna and drank in the atmosphere!

My Aeropress makes coffee better than 95% of the coffee houses can anyway. :)

Ha
 
rescueme said:
But you get to carry a "man bag" without anybody making fun of you :whistle: ...
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I've carried my stuff in a cloth bag with shoulder straps for 30 years. It used to be the standard bag for carrying 12-inch LP records in the Netherlands when I lived there and still wanted to look like a student. I have 3 or 4 of these bags in various states of wear and tear; with the demise of 12-inch LPs they have become quite rare, at least with long enough straps for my taste.
 
Gumby said:
A slightly less significant exception is the "Harvard Dispensation"
Harvard? Meh.
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From my personal observation the "Harvard Dispensation" is 100% true.
 
nun said:
From my personal observation the "Harvard Dispensation" is 100% true.
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Probably no different in other fields as well, provided the person has some level of skill. In engineering/information technology, I would think that MIT would be the school. In business, Harvard Business School and/or Wharton would be it. In medicine, Johns Hopkins, Harvard and Yale would raise eyebrows.

It doesn't matter if the Harvard boy/girl has top-level talent (though they often do). Just having a Harvard grad on the firm's masthead is enough to attract clients. Keeping clients simply requires doing quality work, which can be done by lawyers who went to so-called "lesser" schools.

If you think private practice is bad, you should see legal academia. Talk about prestige nazis....
 
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