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re: This "top economist" says most of us are saving too much for retirement
Posted on 6/9/24 at 12:45 am to Pelican fan99
Posted on 6/9/24 at 12:45 am to Pelican fan99
It depends what people want in retirement. $100k is nowhere near enough but people can also live very frugally if they want.
My parents are in their 70s. They each work a bit part time doing stuff they enjoy. They have one car, don't eat out much or have big spending hobbies. They have plenty of money to travel when they want. A very good model.
Also easy retirement hack - do 20 years in the military. After 7 - 8 deployments and a divorce you get half your pension and after child support you still have Tricare.
My parents are in their 70s. They each work a bit part time doing stuff they enjoy. They have one car, don't eat out much or have big spending hobbies. They have plenty of money to travel when they want. A very good model.
Also easy retirement hack - do 20 years in the military. After 7 - 8 deployments and a divorce you get half your pension and after child support you still have Tricare.
0
Posted on 6/10/24 at 6:59 am to Powerman
quote:
One prominent economist says you can retire for a lot less: $50,000 to $100,000 in total savings.
Yeah but I don’t want to have to survive on cat food when I retire. And I want to stay in a nice house with a pool and an AC that I can afford to run.
So I won’t listen to that guy.
This post was edited on 6/10/24 at 7:00 am
Posted on 6/10/24 at 7:12 am to Powerman
His number seems way to low, but with that being said, I feel like a lot of places tell people they need to have way more money than they'll ever need in retirement. If you put away 10%-15% a year of your pretax salary for a longtime, you'll most likely have a good retirement without many worries. I never understood why people on here or over at Bogleheads shoot for these massive savings percentages of like 50%-70%. That's an impressive amount, but what are people forgoing to get there?
A lot of people will never have a million in retirement savings and most older people seem fine with what they've saved and some Social Security.
A lot of people will never have a million in retirement savings and most older people seem fine with what they've saved and some Social Security.
Posted on 6/10/24 at 7:48 am to grsharky
I am 48 and I will be set if I can get the house paid off in 15-16 years. As someone said earlier, it’s not just how much is saved, it’s about becoming debt free as well.
Posted on 6/10/24 at 7:56 am to Powerman
quote:
He points to the 80% rule: Not many retirees, he reasons, will ever spend that much of their working income in retirement.
That's. The. fricking. Point.
quote:
One prominent economist
I question that as he apparently doesn't understand the concept of "generational wealth" and how that's good for an economy.
Posted on 6/10/24 at 7:59 am to kaaj24
quote:All fair observations. However, given set lifestyle retirement expectations, the counter is that a miss on the downside is unrecoverable.
I think retirement calculators are conservative.
Retirement industry makes money the more you invest. Do you think their retirement calculators would help them be more profitable or less profitable?
Posted on 6/10/24 at 8:09 am to kaaj24
quote:
I think retirement calculators are conservative. Retirement industry makes money the more you invest. Do you think their retirement calculators would help them be more profitable or less profitable?
Retirement calculators are conservative but I don’t think it’s a scheme to make more money as much as it’s erring on the side of caution when you tell a 62 year old they can stay retired for the next 25-30 years.
Posted on 6/10/24 at 8:41 am to Powerman
quote:
I can't fathom a scenario where I wouldn't panic if I only had 100K in savings at retirement
I suppose you could survive but if you wanted to travel or even dine out you'd burn through that money in no time. Where do people come up with these ideas?
How many retired people do you know that travel regularly vs those who (for the most part) sit at home?
Most people just want to retire and don't think about their standard of living in retirement.
Posted on 6/10/24 at 9:17 am to Powerman
quote:
I can't fathom a scenario where I wouldn't panic if I only had 100K in savings at retirement
How about a scenario where you have 15-20k in monthly income from dividends, REI, and other passive income, and only have $5-10k in monthly expenses. $100k in "savings" would be sufficient.
There's 2 different paths/ideas for retirement, the lump sum approach or the income approach.
Posted on 6/10/24 at 9:27 am to cgrand
Serious question. How long do you have to be jobless to draw medicade and other government handouts? Do they dig into your 401k and savings accounts? If I had medicade I could probably make it on what's in my 401k. I am 54.
Posted on 6/10/24 at 9:31 am to southside
quote:
a scenario where you have 15-20k in monthly income from dividends, REI, and other passive income
quote:
$100k in "savings"
Posted on 6/10/24 at 9:44 am to VolSquatch
quote:
How many retired people do you know that travel regularly vs those who (for the most part) sit at home?
Most people just want to retire and don't think about their standard of living in retirement.
There are probably 3 different types of retired people.
1) those who stay at home and spend time with family.
2) those with FU money. The retirement lifestyle starts out as active if not more active than at any other point in life.
3) those who stretch a dollar and stay active. Sell or rent the home out to afford the traveling lifestyle. If you ever camp, you see these folks all the time. The life savings is invested in the ability to travel. If they rent out their home, they can eventually move back in when the highway lifestyle gets to be more than they want.
Posted on 6/10/24 at 11:32 am to VolSquatch
quote:
How many retired people do you know that travel regularly vs those who (for the most part) sit at home? Most people just want to retire and don't think about their standard of living in retirement.
Most people who are worried at all about retirement calculators are responsible, prudent savers/investors and those people enjoy retirement with travel and other things.
People who are paycheck to paycheck when they’re working stay paycheck to paycheck in retirement, so their standard of living probably feels unchanged, but the toys stop.
For example, a 66.8 year old with $60,000 in SS wages can retire and draw $1,740/mth today (using SS income assumptions). His spouse can draw $870/mth. Life expectancy between male/female at that age is around 17 years. $100,000 @ 5% would run out if taking $740/mth. That’s $3,350 mth take home since taxes would basically be $0. That same person was netting around $4,000 mth while working, so it’s plausible they can live on $3,350, but that couple probably never looked at a retirement calculator in their entire life.
Posted on 6/10/24 at 11:47 am to slackster
quote:
ople who are paycheck to paycheck when they’re working stay paycheck to paycheck in retirement, so their standard of living probably feels unchanged, but the toys stop.
For example, a 66.8 year old with $60,000 in SS wages can retire and draw $1,740/mth today (using SS income assumptions). His spouse can draw $870/mth. Life expectancy between male/female at that age is around 17 years. $100,000 @ 5% would run out if taking $740/mth. That’s $3,350 mth take home since taxes would basically be $0. That same person was netting around $4,000 mth while working, so it’s plausible they can live on $3,350, but that couple probably never looked at a retirement calculator in their entire life.
I have one parent retired and the other will in the next year, and they are pretty much that scenario I'd imagine. I don't know their finances that well though. They actually encourage me to have bad financial habits (mainly giving me the old "you're saving too much, you have to live now" thing)... most of my financial literacy has been learned on my own or in school.
Their house is paid for though, and they aren't the type to go out and buy a bunch of junk/toys.
Posted on 6/10/24 at 2:57 pm to fallguy_1978
quote:
Personally, I haven’t known any 77 yr olds that just wanted to go all the time.
My parents are that age, and take 2-3 vacations a year, with one being generally longer and over seas. They are in NYC right now. And both have had major health issues that they fought through that I thought would have done them in.
My father in law, same age, is just the same. He will be in Europe this fall.
Parents did very well financially and can afford some luxuries. My FIL lives primarily off SS and the minimum required distributions from his retirement accounts.
One should take stock in their family genes, their own health, and their own lifestyle that contributes or deters from their health to determine what might be in their future in regards to mobility and lifestyle.
Posted on 6/10/24 at 3:20 pm to Powerman
You can retire a slave to daddy government if you don’t save
No thanks
No thanks
Posted on 6/10/24 at 7:57 pm to Powerman
That fact someone is telling me to save less is laughable on many levels.
I wonder if this guy has a retirement he funds?
I wonder if this guy has a retirement he funds?
Posted on 6/10/24 at 9:44 pm to southside
quote:
How about a scenario where you have 15-20k in monthly income from dividends, REI, and other passive income, and only have $5-10k in monthly expenses. $100k in "savings" would be sufficient.
I'm assuming this person is giving away most of their income? Kinda hard to only have 100k in savings if your 10k in the green every month.
Posted on 6/11/24 at 12:29 pm to JohnnyKilroy
My big issue is wanting to provide for my kids and grandkids. I’m 55 and could retire today but will probably work 10 more years for my grandkids future.
Posted on 6/11/24 at 1:26 pm to JohnnyKilroy
quote:
I'm assuming this person is giving away most of their income? Kinda hard to only have 100k in savings if your 10k in the green every month.
What about reinvesting it? No point in having a large sum of money sitting around in "savings" not working for you in some manner or another.
The idea of $100k to retire is far fetched for the boomers, but it is very possible with a solid stream of income. The younger generations are looking at finding passive income to offset their expenses and calling it a day/career. It's much different than the past generations that sold their souls for a 30 year pension or 401k lump and prayed to make it alive to retirement day.
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