The "Retirement Crisis" is worse than we thought

[daylatedollarshort]

I think it is easier for some personality types to be good savers. The high proportion of INTJ types on this forum and others like it (compared to the general population) is a often a recurring topic. I think it is a lot easier for INTJs to be think long term, have careers with higher than average salaries and LBYMs.

 

[cubicleshark]

I see a few replies in this thread that mention "luck". Luck has very little to do with it. People who are successful at retiring early aren't lucky. That would only apply if you won the lottery got a huge windfall inheritance, etc. Planning, discipline, having the courage to be financially "different" than your peers, that's not luck. All luck is anyway is the intersection of preparedness with opportunity.
Don't short change your hard work.

 

[2017ish]

I see a few replies in this thread that mention "luck". Luck has very little to do with it. ...

Although I'm mostly in agreement with you, we must admit that luck is a necessary and indispensable thing.

1. Genetics. (By what fluke can I ace SAT/LSAT type tests in 1/2 time when my siblings all struggled to finish high school? Talk about a windfall inheritance.)
   
2. Born in USA/Western Europe/Anglosphere after WW2.
   
3. Serendipity of how we met our spouses (for those of us so inclined, and for whom that match was outcome helpful)
   
4. Serendipity of not being arrested for the various and sundry victim-less felonies that some of us may have committed in HS/College

Given that background, I worked hard, planned, and kept waiting for more marshmallows, but that background wasn't my doing.

 

[bada bing]

The war of 1812 was just a precursor to the real war between the USA and the Brit-Cannuck alliance. The Pig and Potato War of 1859 was where the real hash was made.

You Cannucks are just lucky my ancestors were distracted at the time. Otherwise you'd all be speaking American now.

 

[exnavynuke]

I see a few replies in this thread that mention "luck". Luck has very little to do with it. People who are successful at retiring early aren't lucky. That would only apply if you won the lottery got a huge windfall inheritance, etc. Planning, discipline, having the courage to be financially "different" than your peers, that's not luck. All luck is anyway is the intersection of preparedness with opportunity.
Don't short change your hard work.

I was lucky to be born in a developed country with a decent education system.
I was lucky to be raised by people who taught me morals and responsibility and taught me to believe in myself.
I was lucky to choose a career path at an age where I had no idea what it entailed or would do for me that happened to be lucrative.
I was lucky to make friends/acquaintances that could help me personally and professionally.

I was "smart" enough to recognize and seize some opportunities that have contributed greatly to my financial success, but there were probably many others I missed that might have led to much more success. While I certainly have contributed greatly to my success in life, I'm under no illusion that I would have had anywhere close to the same success had I been born to a rural family in the Gambia instead.

 

[cubicleshark]

I don't think you should credit your background to luck. It's just a circumstance....not luck. Plenty of people are born in similar circumstances and still fail, mostly through their own lack of knowledge/and or ambition.
Not getting arrested isn't luck either.
A lot of those things that we say are "serendipidous" are also our own doing whether we consciouslg knew it or not. I met my current wife in a place where I was not looking. I'd that serendipity, or was it just subconsciously registering a good opportunity that I took advantage of?
My point being sone of us get more of a head start than others, that much is true. But it is what we choose to do with it that matters.

 

[JohnnyBGoode]

I think it is easier for some personality types to be good savers. The high proportion of INTJ types on this forum and others like it (compared to the general population) is a often a recurring topic. I think it is a lot easier for INTJs to be think long term, have careers with higher than average salaries and LBYMs.

Interesting! As a (relative) newcomer I didn't know that, but as an INTJ myself I guess I'm just piling on

 

[audreyh1]

I see a few replies in this thread that mention "luck". Luck has very little to do with it. People who are successful at retiring early aren't lucky. That would only apply if you won the lottery got a huge windfall inheritance, etc. Planning, discipline, having the courage to be financially "different" than your peers, that's not luck. All luck is anyway is the intersection of preparedness with opportunity.
Don't short change your hard work.

Oh I was definitely lucky as an early employee in a small company that became a successful medium sized company and also provided generous options along the way. The company could have failed at several points along the way - most startups do. Sure, I was wise enough to make the most of it, but I was very lucky to be in that position - it has always felt a bit like winning the lottery to me.

And I had parents who valued educational achievement and always encouraged me to do well in school. And even though they weren't well off, I had access to a top state university that was very affordable at the time. And I think intelligence is a genetic gift.

So I count my blessings often.

 

[NW-Bound]

Counting your blessings does not count. Hmmm... There's something repetitive there.

You need to share them.

 

[ER Eddie]

I see a few replies in this thread that mention "luck". Luck has very little to do with it. People who are successful at retiring early aren't lucky. That would only apply if you won the lottery got a huge windfall inheritance, etc. Planning, discipline, having the courage to be financially "different" than your peers, that's not luck. All luck is anyway is the intersection of preparedness with opportunity.
Don't short change your hard work.

Nah, plenty of luck involved. Luck of being born in the 20th century. Luck of being born in a developed, affluent country. About half the world lives in poverty. Luck of being born to parents who were not terribly abusive or neglectful, and who generally supported us. Luck of not dying before we reached retirement age.

I'm not saying that knowledge and discipline are not involved. But let's not get carried away with patting ourselves on the back. Circumstances play a large role.

 

[cubicleshark]

I am not suggesting that at all. All I am saying is that when we label every good fortune in our life as some sort of happy accident, we are short changing ourselves. You were born in an "affluent" nation because your parents chose that....not "luck"...luck isn't deliberate. Circumstances do play a huge part. But it's more fortunate than luck. We didn't inherit the state we are in now, unless you are a trust fund baby, and even that is deliberate. Someone meant for you to have it.
I am not lucky that I am just the financhal position I am in. I am fortunate that several generations ago, my descendants made the choice you come here to start a family and make a better life for their children. That's not luck. I sag my ass out of bed even when I don't want you to come to work. That's not luck. I sacrifice now, putting money into investments instead of taking vacations.
I guess it comes down to workday view. Yes, much of the rest of the world is poor compared to us. That doesn't make us lucky. That makes us fortunate.
You can choose to call it luck if you like, but what does that say about all the decisions that were made to get you to this point?
maybe this is six of one, half dozen of another..

 

[Midpack]

I don't recall anyone here who chalks up their success to luck alone, did someone? But to discount luck as a factor is probably foolhardy.

 

[youbet]

They say they looked at businesses, but I wonder how many colleges they looked at too. They have some pretty sweet retirement plans (403Bs if I remember right), at least the ones where people I've known worked.

.

Why would you call a 403B a "sweet retirement plan?"

 

[youbet]

I don't recall anyone here who chalks up their success to luck alone, did someone? But to discount luck as a factor is probably foolhardy.

+1 Agreed.

And, have you ever noticed the tendency for the successful folks who give no credit to good luck - good fortune - favorable circumstances to yell "bad luck - bad fortune - unfavorable circumstances" when things go against them? They seem to want it both ways.

 

[ER Eddie]

.... maybe this is six of one, half dozen of another..

I think so. What you are calling "good fortune," I am calling "luck." Same idea. It's something that we as individuals are not responsible for producing. Someone else produced it, and we just happened to be the beneficiaries. We are "lucky" or "fortunate" in that sense.

 

[Luck_Club]

Although I'm mostly in agreement with you, we must admit that luck is a necessary and indispensable thing.

1. Genetics. (By what fluke can I ace SAT/LSAT type tests in 1/2 time when my siblings all struggled to finish high school? Talk about a windfall inheritance.)
   
2. Born in USA/Western Europe/Anglosphere after WW2.
   
3. Serendipity of how we met our spouses (for those of us so inclined, and for whom that match was outcome helpful)
   
4. Serendipity of not being arrested for the various and sundry victim-less felonies that some of us may have committed in HS/College

Given that background, I worked hard, planned, and kept waiting for more marshmallows, but that background wasn't my doing.

+1

As some one who grew up with a bigger chip on my shoulder than Robert Conrad with am EverReady battery on his shoulder, I have always believed luck had a lot to do with peoples success and failure.

However, as I have gotten older, I've learned that luck alone isn't enough, it is luck applied. You may be very athletic, but if you don't throw hundred and thousands of passes you aren't going to end up a Tom Brady.

By the same token, you can be incredibly beautiful, but if you or someone else doesn't take a head shot and send it around the world you won't end up a super model.

By the same token all the passion and hard work in the world isn't going to allow you to be a super model if you have a BMI of 30, a crooked nose, and bad teeth.

The sad thing and the part that confuses most of the prolific savers in this group, is the many who have great luck and squander the opportunity. The power ball winner who is broke in 5 years. The rising corporate start who at age 35 has jumped 1 too many times, and now faces a $150K corporate relocation package recapture, etc.

 

[NW-Bound]

I have not been here as long as many, but this subject about luck comes up every so often.

Look, life is never fair. Some are born pretty, and tall, some ugly, short, and fat. What does one do? Complaining does not get one very far.

How about working with what you've got, brain and brawn? It won't get one as rich as Buffett or Bill Gates, but it most likely will get one a more comfortable life and eventual retirement. A lot of people have done it. Come on, get off the couch. And save that money, put it in an IRA if you do not have a 401k. Do not blow it on a new iPhone, no matter how they make it look so cool in the ads.

 

[Markola]

The "Retirement Crisis" is worse than we thought

Why would you call a 403B a "sweet retirement plan?"

Not sure why you're skeptical. DW and I have put together well into 7 figures with 403b plans while working for non profits. A university I worked for during the first part of my career had a 13.5% match, which was a good boost early on, while my wife's nonprofit employer had an 8% match. We bought low fee Vanguard and Fidelity funds.

Incidentally, throughout my career, I always felt I was more interested in retirement savings and that we had a higher savings rate than the people responsible for running the plans. Maybe that's one reason for the retirement crisis - the people in charge are themselves pretty lackluster at saving.

 

[jollystomper]

I have not been here as long as many, but this subject about luck comes up every so often.

Look, life is never fair. Some are born pretty, and tall, some ugly, short, and fat. What does one do? Complaining does not get one very far.

How about working with what you've got, brain and brawn? It won't get one as rich as Buffett or Bill Gates, but it most likely will get one a more comfortable life and eventual retirement. A lot of people have done it. Come on, get off the couch. And save that money, put it in an IRA if you do not have a 401k. Do not blow it on a new iPhone, no matter how they make it look so cool in the ads.

+1

At times I feel that some who focus on "luck" alone have a tendency to use it as an excuse for not taking responsibility for their choices. After all, the one sees folks succeeding due to "luck", the more one can justify "there is nothing I can do about it". I have seen many instances of this among some of my relatives. At one point a (now ex) BIL was so big on the "you were lucky, that's all" kick that I actually sat down with him and went through major points of our lives to determine who was luckier... it turns out a lot of what he deemed as my "luck" was more me choosing to make different choices than him in similar situations.

 

[jazz4cash]

I was the GM, so I knew everyone's salary and their 401k balances.

You knew their balances?? That doesn't seem right.
It was always a fear of mine that management would shortchange people with higher account balances, but until now I thought it was irrational!!

 

[samclem]

There's a lot of evidence that indicates it is not that people who are unsuccessful then blame factors beyond their control, but instead that people who tend to see external factors as being the cause of what happens to them become less successful as a result.

Psychologists have studied this quite a bit. It's known as "Locus of Control." From our friend Wiki:

In personality psychology, locus of control is the degree to which people believe that they have control over the outcome of events in their lives, as opposed to external forces beyond their control. Understanding of the concept was developed by Julian B. Rotter in 1954, and has since become an aspect of personality studies. A person's "loci" (plural of "locus," Latin for "place" or "location") is conceptualized as internal (a belief that one's life can be controlled) or external (a belief that life is controlled by outside factors which they cannot influence, or that chance or fate controls their lives).
Individuals with a strong internal locus of control believe events in their life derive primarily from their own actions: for example, when receiving exam results, people with an internal locus of control tend to praise or blame themselves and their abilities. People with a strong external locus of control tend to praise or blame external factors such as the teacher or the exam.

In longitudinal studies, people who began with a strong internal locus of control become more successful, are healthier, have lower stress, and are happier. While it might seem that blaming "fate" for one's situation would provide some psychological relief, it doesn't appear to produce happiness long-term. Conversely, an inclination to take responsibility for one's situation may result in a bitter pill occasionally, but it tends to result in a happier person.

 

[Texas Proud]

You knew their balances?? That doesn't seem right.
It was always a fear of mine that management would shortchange people with higher account balances, but until now I thought it was irrational!!

I think it make a difference in how big a company you work.... I knew everybody's balance, but I was 'in charge' of the 401(k) even though the CEO was officially the person who was...

Sometimes I would go through the investments to see if we should change any... we had a good number of available funds as that is what people asked for... but, 90% of the money was in 10 funds... and the rest was spread around with maybe one person in this fund and another in that fund...

 

[NW-Bound]

Psychologists have studied this quite a bit. It's known as "Locus of Control." ...

It sounds similar to the "victim mentality".

 

[jazz4cash]

I think it make a difference in how big a company you work.... I knew everybody's balance, but I was 'in charge' of the 401(k) even though the CEO was officially the person who was...

Sometimes I would go through the investments to see if we should change any... we had a good number of available funds as that is what people asked for... but, 90% of the money was in 10 funds... and the rest was spread around with maybe one person in this fund and another in that fund...

That still doesn't sit right with me. I understand management access to all the statistics but knowing the identities seems intrusive (e.g. should be illegal). Our megacorp plan used to publish a chart of age band vs balance band with # of employees in each band. I can't imagine Fidelity sharing the identities with megacorp.

 

[samclem]

It sounds similar to the "victim mentality".

Yes. And even if person is successful, if they have an external LOC, it would be logical that they are more likely to suffer from the "imposter syndrome." After all, if everyone tells you that you are great, but you believe your success is due to luck, you'll probably feel less deserving of the accolades, that you are just fooling them.

On a semi-related note, I recall some experiments on "learned helplessness" that various test animals endured. One group of animals could avoid an electric shock by doing a task, but the difficulty of the task resulted in them getting shocked, say, 50 times per hour. Another group of animals also did tasks, but they got shocked randomly at a rate of 30 times per hour. The randomly-shocked animals experienced higher stress, despite being shocked less often.
When we believe (accurately or not) that our actions don't impact what happens to us, it is not conducive to happiness.
I suppose the ability to accurately and objectively analyze outcomes and to correctly attribute responsibility to ourselves, others, or luck would be the optimum situation, rather than reflexively attributing almost everything to luck or, alternatively, to our own efforts.