MSN Article: "What Would You Sacrifice to Retire Early?"

[scrabbler1]

I was shown this MSN article about early retirement, by Liz Alterman of MSN Money.

https://www.msn.com/en-us/money/reti...ing/ar-AAFwaDC

"With that in mind, it’s no wonder the FIRE (Financial Independence, Retire Early) movement has garnered so much attention. But in a new FinanceBuzz survey, we discovered that early retirement isn't in the cards for most Americans. Not only do they lack the means to retire early, but also they’re unsure about how much money they actually need to save before saying goodbye to full-time employment."

My small beef with the article is that is described having kids as a roadblock to ER. As someone who is childfree, and who decided that at age 20, I never saw this is some sort of tradeoff or sacrifice. For me, it's a positive means to an end, the way not smoking or using illegal drugs is not a tradeoff for being in better health, not a tradeoff or sacrifice.

[rk911]

we were a DINK couple on purpose but not in order to RE. we just didn't care for kids. our "sacrifice" was living well beneath our means but since we were childless our version of way beneath our means was a pretty nice life compared to couples with kids. no doubt being childless helped.

[Oz investor]

my health !!!

sadly i planned to work till i dropped , however the government considered this a mental trauma hazard to the co-workers , and paid me to STOP working ( immediately ) before the medical bills became contagious in the work-group ( after all i would have been No. 3 to collapse on the work-site , had i done so )

apart from medical and pharmacuetical costs , i am really killing it now ( the saving bit , apart from the internet , i am not allowed to do much )

[joeea]

"When asked which extreme measures respondents would be willing to take in order to be able to retire a decade earlier, 12% said they'd forgo having children, and 11% said they'd give up their pets."

Sad.

[24601NoMore]

Every time I see an article that claims you should estimate your retirement income needs based on your pre-retirement income, it makes me absolutely crazy.

"If you hope to enjoy a lifestyle similar to the one you currently have, experts at T. Rowe Price suggest this rule of thumb: In order to maintain their current lifestyle during retirement, people should strive for an income replacement rate of 75% of their gross pre-retirement income."

...

" Fidelity recommends saving 10X your income by age 67 and offers these guidelines to help you set savings milestones"

UGH! This is some of THE ABSOLUTE WORST "advice" people can be given. You need to save based on EXPENSES (which in some cases may even increase in retirement due to HC costs), not income (as most of us here already know).

No wonder people who do not follow sites like ours are so confused about retirement.

[ShokWaveRider]

In one word, nothing, we did it right as far as we considered anyway. Retired temporarily for a travel adventure in ~2002 (48 and 44 resp.), then returned to work for 5 years in late 2005, retired permanently in 2009. We had sold our SoCAL home in ~2002, rented in FLA in 2005, and bought our current home when prices had reduced significantly. We never wanted or even considered having children, they were never part of our life plan. We did have a pet though, basically our child till he passed in 2002, never got another as nothing could replace him.

[Dtail]

Quote:

Originally Posted by 24601NoMore Every time I see an article that claims you should estimate your retirement income needs based on your pre-retirement income, it makes me absolutely crazy. "If you hope to enjoy a lifestyle similar to the one you currently have, experts at T. Rowe Price suggest this rule of thumb: In order to maintain their current lifestyle during retirement, people should strive for an income replacement rate of 75% of their gross pre-retirement income." ... " Fidelity recommends saving 10X your income by age 67 and offers these guidelines to help you set savings milestones" UGH! This is some of THE ABSOLUTE WORST "advice" people can be given. You need to save based on EXPENSES (which in some cases may even increase in retirement due to HC costs), not income (as most of us here already know). No wonder people who do not follow sites like ours are so confused about retirement.

Big +1

We reduced our expenses 60% from our high spending year to retirement.
If we had to replace 75% of income, would have never retired.

[ShokWaveRider]

Quote:

Originally Posted by joeea "When asked which extreme measures respondents would be willing to take in order to be able to retire a decade earlier, 12% said they'd forgo having children, and 11% said they'd give up their pets." Sad.

Depends what one considers extreme. Having children is a life choice people make, nothing more. We chose not to, and do not regret it one iota, why is that sad, is it because you disagree with the decision, or?

Just because some disagree with, or do not like a life decision others choose to make does not make it sad, bad or otherwise.

[CardsFan]

Quote:

Originally Posted by 24601NoMore Every time I see an article that claims you should estimate your retirement income needs based on your pre-retirement income, it makes me absolutely crazy. "If you hope to enjoy a lifestyle similar to the one you currently have, experts at T. Rowe Price suggest this rule of thumb: In order to maintain their current lifestyle during retirement, people should strive for an income replacement rate of 75% of their gross pre-retirement income." ... " Fidelity recommends saving 10X your income by age 67 and offers these guidelines to help you set savings milestones" UGH! This is some of THE ABSOLUTE WORST "advice" people can be given. You need to save based on EXPENSES (which in some cases may even increase in retirement due to HC costs), not income (as most of us here already know). No wonder people who do not follow sites like ours are so confused about retirement.

Quote:

Originally Posted by Dtail Big +1 We reduced our expenses 60% from our high spending year to retirement. If we had to replace 75% of income, would have never retired.

I agree that some one nearing retirement needs to look at expenses, and not rely on a rule of thumb.

However, for someone in their 20's or 30's, I really don't think the 75% number is bad target. Using actual expenses, at that age, could be even more meaningless.

[MarieIG]

Quote:

Originally Posted by ShokWaveRider Depends what one considers extreme. Having children is a life choice people make, nothing more. We chose not to, and do not regret it one iota, why is that sad, is it because you disagree with the decision, or? Just because some disagree with, or do not like a life decision others choose to make does not make it sad, bad or otherwise.

It IS sad if those people are already parents/ pet owners. If you have children their wellbeing should be a priority in your lives.

It IS NOT sad, if people choose to be childfree and do not create them in the first place.

[scrabbler1]

Quote:

Originally Posted by 24601NoMore Every time I see an article that claims you should estimate your retirement income needs based on your pre-retirement income, it makes me absolutely crazy. "If you hope to enjoy a lifestyle similar to the one you currently have, experts at T. Rowe Price suggest this rule of thumb: In order to maintain their current lifestyle during retirement, people should strive for an income replacement rate of 75% of their gross pre-retirement income." ... " Fidelity recommends saving 10X your income by age 67 and offers these guidelines to help you set savings milestones" UGH! This is some of THE ABSOLUTE WORST "advice" people can be given. You need to save based on EXPENSES (which in some cases may even increase in retirement due to HC costs), not income (as most of us here already know). No wonder people who do not follow sites like ours are so confused about retirement.

Big +2 here.

Whenever I hear this, my first reaction is 75% (or whatever percent) of WHAT income? Twice I reduced my weekly hours worked in the last 7 years of my career. The first time I went from 37.5 hours per week (full-time) to 20 hours per week, a 47% reduction. The second time, I went from 20 hours per week to 12 hours per week, another 21% reduction from my original hours. Taken together, I reduced my gross pay (and, most importantly, my weekly hours worked ) by 68%, still giving me enough to live on comfortably (and it wasn't like my FT pay was huge; it was still under $100k). So, I ask again, 75% of WHAT, my original FT pay, my first PT pay, or my second PT pay?

And, in a strange but not totally unintentional way, I was able to test my ability to live on that lowest pay because that is about what I planned to generate each year in investment income after I ERed.

A key part of my ER planning spreadsheet was to project my expenses. Using my pre-ER expenses, I estimated that the elimination of my commutation expenses and FICA taxes would roughly be offset by the increase in health insurance costs (pre-ACA). HI was very volatile from 2009-2013, so some years it was lower and other years it was higher.

[Bamaman]

My wife had 3 kids very young, then we had one more together 20 years later. Now we're raising an 8 year old granddaughter too.

Our early retirement and living in large homes is a product of my wife working--until her body broke down from hard work at age 50. Her medical job allowed us to save so hard and work the stock market aggressively. I retired at age 58 when our company started "consolidation" of offices, and retiring every employee 55 years of age and older.

And very frugal living also helped.

[HenryD]

Quote:

Originally Posted by MarieIG It IS sad if those people are already parents/ pet owners. If you have children their wellbeing should be a priority in your lives. It IS NOT sad, if people choose to be childfree and do not create them in the first place.

I agree. The quoted article is mixed in it's wording - "forgo" kids, "give up" pets. Not sad vs. sad (assuming in the latter case they mean disposing of the pet after a period of ownership rather than giving up the chance of having it.)

It's obvious kids make FIRE harder, but so do our individual choices on what constitutes acceptable shelter, food, etc. I certainly don't regret my kid, step kids, or pets. That they have significantly impacted my chances of, and timing of, FIRE is neither good nor bad, just an objective fact.

[scrabbler1]

Quote:

Originally Posted by joeea "When asked which extreme measures respondents would be willing to take in order to be able to retire a decade earlier, 12% said they'd forgo having children, and 11% said they'd give up their pets." Sad.

I'd say only the pets part is sad because the pets are already in the household, based on the words chosen, while the children are not yet born. The pets may end up in a shelter, or euthanized, or end up in another household where they may not be treated as well. Their lives will be impacted, and perhaps for the worst. The children not yet conceived will not see any loss in quality of life. The would-be parents may or may not see a quality of life reduction, depending on if the ER they get is better than the kids they don't get.


ETA: HenryD beat me to it!

[tb001]

I think this is just a function of an extremely poorly worded and designed survey being used to generate an article with even worse interpretation of the survey. Garbage in, garbage out.

[MichaelB]

How exactly does a 40-ish couple with 2 children "forgo having kids"? Where exactly is the return policy?

The article linked in the OP is about the challenges of early retirement, and the title is real clickbait. The sponsor, Financebuzz, makes no effort to present the survey as statistically sound, and it isn't.

[Aerides]

The sad part is (and is not clear) is if those 12% already have children, and now say they would have decided not to - it's not unreasonable to feel a bit sad for those kids that have those parents.

It's one thing to decide not to have kids (like a few of us here), but I do have some feelings about that 8 year old in a house with parents who think that having them wasn't a good idea....because retirement.

And if someone HAS a pet and is thinking "eh wish I hadn't because money", yes I feel sad for their pet!

But if those decisions are being made before one makes the kids or gets the pets, ok fine - not sad. (but still...maybe the pet. and really, having one dog or cat wouldn't be the main difference between ER and not).

[ShokWaveRider]

Quote:

Originally Posted by scrabbler1 I'd say only the pets part is sad because the pets are already in the household, based on the words chosen, while the children are not yet born. The pets may end up in a shelter, or euthanized, or end up in another household where they may not be treated as well. Their lives will be impacted, and perhaps for the worst.

Unless like ours they expired at their time, and we simply chose not to replace him.

[scrabbler1]

Point taken, SWR, and that's a nice Augie Doggie you have (had) there.

[MRG]

We made a conscious decision to be child free. Had nothing to do with ER, more about knowing parenting was not for us. I mean it's ok to crate train your dog, people get upset when you do it to children.