When Friends Claim They Need to Keep Working...and You are Doubtful

[treeofpain]

I know a lot of people who make more than me, and have for years, but they don't know how to manage and save their money.

 

[Sunset]

I'd like to hear the $4M story.

There is a valuable lesson in it, one I've heard before but really kind of wondered how important it was. That lesson is diversify, especially when old.

This fellow went in heavily on a oil company, he has been in the business for decades and researched and likes to take risks.

He tells me, he'd like to buy some property from me if I ever want to sell, as he can afford it as he has over $4M !!

I'm thinking I'd take some of that $4M and buy VTI. But I've never had a great winning stock.

So a couple of years later, he is telling me about some work he is doing at age 60+ and I wonder and ask about his big savings ?
Turns out he kept the $4M all in that one stock, and didn't diversify and went it went bust, he still claims it shouldn't have gone bust.

Similar to a fellow I knew who had all his retirement money in Nortel, where he worked. He said he felt the retirement professionals were stupid telling him to diversify because he is getting rich on Nortel. That was about a year before it went bust

 

[Lucie]

You are confused because you are focusing on the logic behind their numbers. One more year syndrome is mostly psychological and rarely logical.

 

[old medic]

Maybe they have a gambling habit or big drinking problem, or both....

My wife gambles ON my drinking problem.....

 

[mystang52]

I don't worry about it. I have enough on my own plate without worrying about why other people keep working vs. retiring.

Why is this an important question for you and DW? Worrying about other people's business Is not something of any importance for me, especially when I have not bee asked for an opinion.

Not in a nasty way, but why do you care? It's their life, their decision, and based on your post they are not asking for any advice. No reason to count other people's money.

 

[Surewhitey]

You described us... DW has an "easy" home office and doesn't travel much for work. She's in insurance, so she has a risk on attitude for everything. E.g. We still have life insurance with no dependents.

We have 2 DGK's and we like to travel... Our only big expenses.

She says we can't afford to as we'd have to pay for health insurance (not really). And no one we know is retired so we obviously can't be better than everyone else.

So I just coast w*rk & travel with her for work on occasion. One day...

 

[sparky08]

Why is this an important question for you and DW? Worrying about other people's business Is not something of any importance for me, especially when I have not bee asked for an opinion.

Absolutely.

Just reading the OP's poost made me uncomfortable.

 

[Qs Laptop]

Why is this an important question for you and DW? Worrying about other people's business Is not something of any importance for me, especially when I have not bee asked for an opinion.

Already answered your question a few posts previously, here:

https://www.early-retirement.org/fo...-and-you-are-doubtful-120768.html#post3044621

It's not an important question for me but my wife seems to ponder it quite often.

As far as you not worrying about other people's opinions, well, I think that's untrue. Just look at your pouncing on anyone that dares invest in managed funds and not index funds.

 

[brett]

Why do you even care? What difference does it make?

We owned our homes for thirty years. Sold and traveled for a year after early retirement. Came back, rented for four years. Then bought again.

A few people we know came to the conclusion that we had spent all of our equity traveling for a year! One was foolish enough to make a comment to us about it when while we were renting.

We are huge believers in MYOB.

 

[W2R]

You don’t know what you don’t know.

+1000

It's not your business in any way, shape, or form, and in addition, you don't know what you don't know. So, if/when it comes up in conversation, I'd suggest it would be wise to leave it alone and quickly move on to another topic. Otherwise you might be in danger of being labelled as a busybody.

 

[Qs Laptop]

I will try to explain it one more time...

My DW and her friend (call her Barb, not real name) get together at least once per week. My wife says that her friend constantly brings up the idea that she NEEDS to work at least one more year. My wife comes home and starts asking me: "They've got to have more money saved than we do. If Barb say she needs to work another year do you really think we could retire now?"

I agree they've got to have more saved than we do, but I show her the retirement worksheet/survey from Fidelity that shows we will be in great shape, I show her the FIRECalc results and we're fine.

Repeat about once every other month.

To be clear, I don't bring it up. I don't talk about it. I don't worry about it. But my wife seems concerned about it.


If I worry about it, it's trying to get my wife to understand we could retire now and we would be in great financial shape. If I were to ask the group a question it would be this--How can I convince my wife we are good to go?

 

[mystang52]

--How can I convince my wife we are good to go?

I RE'd 7 years before DW. She fully supported my decision provided the $$$ issue was fully vetted. It took 2 or 3 times using my spreadsheet, along with some explanations based on our NET income versus expenses. To your DW, explain that your friend's concerns have no relevance to your budget.

 

[MarieIG]

Well I have noticed that people seem to misunderstand what they need.

I had a buddy tell me he thought he needed $10m to retire.

I assume he wants to live off interest and divs.

Meantime he is a new grandfather punching a clock instead of hanging with grands.

In summary people are bad at simple math and have not studied retirement finance.

My last boss told me repeatedly that I needed 10 Million to retire. He also "recommended" that I buy a new car. (Ha!) He knew what I was making, but I saw no need to provide him with any information regarding my portfolio. I just smiled at him but otherwise declined to answer.

And a lot of people "need" to work for their social/status/enjoyment. Not everyone hates it.

Back in 2009 I had to do layoffs. One woman was already in her early 60's and she had money and didn't mind telling people. She had investment properties, her DH had a very good pension, and she was also going to get a retiree pension and great healthcare as she was grandfathered into them. She got a great severance package as well.

Within a year, she was back as a contractor. I think the office was her favorite place to be.

Very true.

I think the reason my wife is concerned about it is that we are approximately at the same point they were at four years ago as far as retirement savings. We're both still working and are making more than they were.

So maybe DW is worried if they think they can't make it why do I think we can retire if we wanted to?

You know your DW. That may indeed be the motive for her interest. She may see them as a barometer for your fiscal readiness.

I would just change the subject vs. pressing them. Perhaps they have old debts, or are helping another family member, or something else, private.

FWIW you know far, far more about their finances that I do of anyone else I know. More than my sister, my parents, my closest friends.

This is what happens when people announce their financial situation. When one of our neighbor's passed away a number of years ago, his widow announced that he had refinanced the house, and without his pension income she could not afford the payments. (The subsequent foreclosure was pubic record and she continued to keep the neighbors updated.) This particular situation highlighted the risk of leaving a surviving spouse with a reduced income.

A (second) recent widow on the block who stated that she did not want to move (again with the pension reduction) announced that she cannot afford to stay in the home.

 

[Target2026]

It is possible that once you and your DW retire, your good friend will follow suit. She may be experiencing anxiety over the whole retirement process.

 

[jollystomper]

I will try to explain it one more time...

My DW and her friend (call her Barb, not real name) get together at least once per week. My wife says that her friend constantly brings up the idea that she NEEDS to work at least one more year. My wife comes home and starts asking me: "They've got to have more money saved than we do. If Barb say she needs to work another year do you really think we could retire now?"

I agree they've got to have more saved than we do, but I show her the retirement worksheet/survey from Fidelity that shows we will be in great shape, I show her the FIRECalc results and we're fine.

Repeat about once every other month.

To be clear, I don't bring it up. I don't talk about it. I don't worry about it. But my wife seems concerned about it.


If I worry about it, it's trying to get my wife to understand we could retire now and we would be in great financial shape. If I were to ask the group a question it would be this--How can I convince my wife we are good to go?

It sounds like a good time for a lesson on "Retirement is not just about what you have saved."

 

[Bestwifeever]

...My wife comes home and starts asking me: "They've got to have more money saved than we do. If Barb say she needs to work another year do you really think we could retire now?"

Meanwhile, Barb goes home from lunch and says to her DH: "The Qs have to have more money that we do and they are both still working--I guess I need to work another year...."

 

[brett]

There seems to be such a focus by some on comparing themselves to others.

Average income, average retirement savings, average spending, average home value, average retirement age, average everything....

Why the huge focus on this? Is it a North American thing? Competition?

Without context the numbers are often meaningless. Is it all about feel good or ego?

We do not care about the Jones'. We only care about us.

 

[RunningBum]

If I worry about it, it's trying to get my wife to understand we could retire now and we would be in great financial shape. If I were to ask the group a question it would be this--How can I convince my wife we are good to go?

Good. This is the correct focus for you.

Would she understand FireCalc output?

How about your own spreadsheet of what you have now, what you expect to make in income from investments, SS, and anything else, and how much your investments can expect to grow each year, subtracting out your expected expenses?

If she doesn't like spreadsheets, can you put words around the data, perhaps a paragraph for each year, showing how you will fare each year until age 100 or whatever age you want to put?

Explain how you have (I assume) diversity in the stocks you own through mutual funds or ETFs, and also diversity with bonds and cash equivalents.

Show where you have fat in your budget in case the worst does happen and you have to cut back, and how you identify when you might have to do that.

Perhaps annuities (SPIAs) to help cover your mandatory expenses would give her some comfort. Shift the risk from you to the insurance company.

I guess the first thing really is to figure out if there is any specific worry or concern she has.

 

[rk911]

The OP needs a new hobby. k

 

[Healthy Lifestyle]

Why is this an important question for you and DW? Worrying about other people's business Is not something of any importance for me, especially when I have not bee asked for an opinion.

My feelings as well and who truly cares?

 

[Qs Laptop]

Meanwhile, Barb goes home from lunch and says to her DH: "The Qs have to have more money that we do and they are both still working--I guess I need to work another year...."

HA! Good one.

 

[Sunset]

I will try to explain it one more time...

My DW and her friend (call her Barb, not real name) get together at least once per week. My wife says that her friend constantly brings up the idea that she NEEDS to work at least one more year. My wife comes home and starts asking me: "They've got to have more money saved than we do. If Barb say she needs to work another year do you really think we could retire now?"

I agree they've got to have more saved than we do, but I show her the retirement worksheet/survey from Fidelity that shows we will be in great shape, I show her the FIRECalc results and we're fine.

Repeat about once every other month.

To be clear, I don't bring it up. I don't talk about it. I don't worry about it. But my wife seems concerned about it.


If I worry about it, it's trying to get my wife to understand we could retire now and we would be in great financial shape. If I were to ask the group a question it would be this--How can I convince my wife we are good to go?

Makes sense to me, friends are a comparison source for a lot of stuff.

I was just working like a little bee , very busy, then on vacation my friends told me they were going to retire the next summer !

I was shocked, how could they ? , They told me they would get pension and had savings.
I never asked how much as they are responsible level headed folks.

But I went home and looked at my piggy bank, and realized we should think about retirement.

 

[Sunset]

There seems to be such a focus by some on comparing themselves to others.

Average income, average retirement savings, average spending, average home value, average retirement age, average everything....

Why the huge focus on this? Is it a North American thing? Competition?

Without context the numbers are often meaningless. Is it all about feel good or ego?

We do not care about the Jones'. We only care about us.

People don't' get a great home finance education in schools... so they want to get some idea where they stand.

Can't compare ourselves to various African village housing cost or food cost as it's has no relationship to our lifestyles.

Using a median value would be better than average NA costs. But again that relates to the education deficit.

 

[Kork13]

My best guesses:
- Concerns about healthcare. They only just became eligible for Medicare, so that could have been a driving factor. Now, they probably need to learn about options & how to do all of that.
- OMY. Retirement can be a massive life change, and that's not easy for most people.
- Conservative estimates, and/or wanting plenty of cushion prior to retiring.
- Possibly other expenses that are not readily apparent -- supporting a child/grandchild, for example.

Any number of other reasons could exist. I'd say don't worry about their situation ... but if comparing notes with them has your wife worrying about your own ability to retire, then it just needs a conversation. At least a (likely ongoing) discussion with your wife, but since they're such close friends & you seem to share openly with one another ... They might even be open coming over for a meal to discussing their situation & thoughts with you both with some detail, in order to help set your wife at ease about your own situation.

 

[Andre1969]

- Concerns about healthcare. They only just became eligible for Medicare, so that could have been a driving factor. Now, they probably need to learn about options & how to do all of that.
- OMY. Retirement can be a massive life change, and that's not easy for most people.
- Conservative estimates, and/or wanting plenty of cushion prior to retiring.

Those first three are a big part of what's keeping me on the employment treadmill. It's like I can step out of my body, and look at myself the way others might see, and logically I know I'll most likely be good. But, I'm also good at second-guessing myself, and worrying about things that will probably never happen.

The health insurance especially is something that I'm worried about, mostly because I just don't know how to figure it all out. But, I'm sure when the time comes, I'll learn!