a really depressing ny times article on retirement

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sometimesinvestor
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a really depressing ny times article on retirement

Post by sometimesinvestor » Sat Jun 08, 2013 6:45 pm

basically 1 million is not enough to withdraw 4% of an all bond portfolio and if you have stocks you might end up not having enough. Also the average person with a roughly 1 million dollar portfolio is probably used to living on much more than 60k = max ss at 66 plus 3% withdrawal. All this is much worse if you have less and obviously most do

http://www.nytimes.com/2013/06/09/your- ... gg.html?hp^
Last edited by sometimesinvestor on Sat Jun 08, 2013 8:09 pm, edited 1 time in total.

john94549
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Re: a really depressing ny times article on retirement

Post by john94549 » Sat Jun 08, 2013 6:53 pm

Oblivious am I. But I do like the print edition. I'll read it tomorrow.

As an aside, we're fine. Else, how would we be able to pay for the Times?

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Re: a really depressing ny times article on retirement

Post by Johm221122 » Sat Jun 08, 2013 7:04 pm

I never thoght a portfolio of municipal bond funds would substain a 4% withdraw rate adjusted for inflation and I always thought 80% stocks was risky in retirement using 4% .I wonder why the writter did not mention age in bonds :idea:
John

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Re: a really depressing ny times article on retirement

Post by Blues » Sat Jun 08, 2013 7:10 pm

Pretty good article in that it raises many of the right questions to be addressed.
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Re: a really depressing ny times article on retirement

Post by john94549 » Sat Jun 08, 2013 7:11 pm

Catch my other posts on headlines you'll never read. Or will, then ignore. The Sunday Times has about a gazillion column inches to fill. The Quarterly "Retirement Guide" generally touts the advantages of diversification. Duh.
Last edited by john94549 on Sat Jun 08, 2013 7:18 pm, edited 1 time in total.

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Re: a really depressing ny times article on retirement

Post by livesoft » Sat Jun 08, 2013 7:15 pm

An excellent article in the popular press that re-iterates what most folks who read this forum have already assimilated. While there is nothing new here, perhaps seeing it in black& white will stimulate some folks although the comments are full of whiners.
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Re: a really depressing ny times article on retirement

Post by john94549 » Sat Jun 08, 2013 7:27 pm

livesoft wrote:An excellent article in the popular press that re-iterates what most folks who read this forum have already assimilated. While there is nothing new here, perhaps seeing it in black& white will stimulate some folks although the comments are full of whiners.
Bogleheads, by definition, are not whiners. As a result, the NY Times never contacts us. Just sayin'.

Aside: Sometimes the WSJ solicits, but it's a rarity.

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Re: a really depressing ny times article on retirement

Post by Jack » Sat Jun 08, 2013 7:50 pm

What a muddled mess this article is.

1. Why is a couple whose only income consists of social security and a $1 million portfolio using 100% municipal bonds? They would probably be in the 15% tax bracket even with taxable bonds. They would probably be in the 0% bracket for qualified dividends and capital gains if they instead held some equities. And keep in mind that tax-exempt interest is still counted when determining taxes on social security, so that is no reason to hold municipal bonds.

2. They say that in the current environment, withdrawing 4% from a 100% municipal bond portfolio might fail -- that it is no longer risk-free. This has nothing to do with the current environment. The Trinity study always said that a 100% bond portfolio had a high probability of failing. A 100% bond portfolio has never been risk free.

3. Next they conflate the average family with $1 million in wealth with the average retired family with $1 million in wealth. These are not the same population. The average retired family with that wealth is not typically living on $150,000 a year as they claim. They equate the family with $1 million in wealth, about 10%, with the families in the top 10% of income. This is a false equivalence.

4. A retired couple with $1 million plus social security should be fine living on $50,000 per year, the median family income -- unless they have a ridiculous 100% muni bond portfolio as this article assumes.

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Re: a really depressing ny times article on retirement

Post by 2stepsbehind » Sat Jun 08, 2013 7:59 pm

john94549 wrote:
livesoft wrote:An excellent article in the popular press that re-iterates what most folks who read this forum have already assimilated. While there is nothing new here, perhaps seeing it in black& white will stimulate some folks although the comments are full of whiners.
Bogleheads, by definition, are not whiners. As a result, the NY Times never contacts us. Just sayin'.

Aside: Sometimes the WSJ solicits, but it's a rarity.
You haven't read enough "How do I convince my employer to offer me more index funds?" threads.

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Re: a really depressing ny times article on retirement

Post by baw703916 » Sat Jun 08, 2013 8:04 pm

Billionaires can afford to be very flexible: just 2 percent of a $1 billion portfolio is still $20 million. With economizing, even a big spender should be able to scrape by on that.
:)
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Re: a really depressing ny times article on retirement

Post by letsgobobby » Sat Jun 08, 2013 8:14 pm

Jack wrote:What a muddled mess this article is.

1. Why is a couple whose only income consists of social security and a $1 million portfolio using 100% municipal bonds? They would probably be in the 15% tax bracket even with taxable bonds. They would probably be in the 0% bracket for qualified dividends and capital gains if they instead held some equities. And keep in mind that tax-exempt interest is still counted when determining taxes on social security, so that is no reason to hold municipal bonds.

2. They say that in the current environment, withdrawing 4% from a 100% municipal bond portfolio might fail -- that it is no longer risk-free. This has nothing to do with the current environment. The Trinity study always said that a 100% bond portfolio had a high probability of failing. A 100% bond portfolio has never been risk free.

3. Next they conflate the average family with $1 million in wealth with the average retired family with $1 million in wealth. These are not the same population. The average retired family with that wealth is not typically living on $150,000 a year as they claim. They equate the family with $1 million in wealth, about 10%, with the families in the top 10% of income. This is a false equivalence.

4. A retired couple with $1 million plus social security should be fine living on $50,000 per year, the median family income -- unless they have a ridiculous 100% muni bond portfolio as this article assumes.
+1

These were exactly the thoughts I had when I read this article.

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Re: a really depressing ny times article on retirement

Post by Grt2bOutdoors » Sat Jun 08, 2013 8:23 pm

Why they continue to quote "80% pre-tax level of income is considered to be an acceptable target for retirement" :oops: . Um, no, how many times have we said it's not income we need be concerned about, it's all about expenses - if you have 25-30x your targeted level of expenses come retirement, you should be just fine" Who spends 80% of their pre-tax income today? - The paycheck to paycheck'ers likely spend even less than the 80% quoted since a fair chunk of their gross income is lost to taxes, commuting expense, etc.

For once, I'd like to see an article saying you don't need 80% of gross income for retirement, you just need 20-30x you current expense that can be met with Social Security, pensions and/or other savings. Just once!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: a really depressing ny times article on retirement

Post by john94549 » Sat Jun 08, 2013 8:37 pm

A retired couple living on $50K, plus Social Security, plus a nice check from rental properties, plus a pension or two, throw in a modest SWR, yup, it can be done. With ordinary income sheltered per Form 8582, it gets so much easier.

It is a tad weird.

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Re: a really depressing ny times article on retirement

Post by pjstack » Sat Jun 08, 2013 8:41 pm

Surely readers here know people who are retired w/Social Security who have nowhere near a million dollars and they seem to survive OK. I certainly do.

A million dollars in your mattress will divide up to 50K per year for 20 years.
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Re: a really depressing ny times article on retirement

Post by Bob's not my name » Sat Jun 08, 2013 8:42 pm

I didn't know anybody read the NYT anymore.

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Re: a really depressing ny times article on retirement

Post by arcticpineapplecorp. » Sat Jun 08, 2013 9:15 pm

The Trinity study already told us this...the probability of 100% success with 100% bonds is only up to 15 years. Any longer than that, and you need to start adding in stocks.

http://www.bogleheads.org/wiki/File:TrinityTable3.jpg
http://www.bogleheads.org/wiki/Trinity_study
http://www.bogleheads.org/wiki/Trinity_study_update

the above links make for better reading than the NY times any day. Enjoy.
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Re: a really depressing ny times article on retirement

Post by Grt2bOutdoors » Sat Jun 08, 2013 9:17 pm

Bob's not my name wrote:I didn't know anybody read the NYT anymore.
Read it, yes. Pay for it? No!
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Re: a really depressing ny times article on retirement

Post by nedsaid » Sat Jun 08, 2013 9:24 pm

I would not get depressed over this article.

A million bucks plus Social Security is not life in hell. I think as a society we have ratched up our expectations so high that no matter what we achieve, we are depressed by it.

A lot of folks will retire with a paid off house, social security, and $200K-$300K in retirement plans. Not an optimal outcome, not champagne dreams and cavier wishes, but doable. It is amazing what is possible if everything is paid off. These folks will have to accept a more modest livestyle but they won't starve.

As for myself, I will save as hard as I can and invest as well as I can. I will also plan as well as I can. At some point, I will have to retire with whatever I have at the time and retire regardless of whether a financial writer says that I have enough. Hopefully I will have the million plus but there are no guarantees.

The Bogleheads as a group will be well prepared. Let's each do our best and quit getting depressed over these articles.
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Re: a really depressing ny times article on retirement

Post by steve roy » Sat Jun 08, 2013 9:37 pm

Okay. Some retirees will have to learn to live smaller. And they will.

(I know a retiree that has retired and un-retired multiple times. Late seventies now, and she's finally NOT supporting a granddaughter. Stuff we don't anticipate happens, and we make do because we HAVE to.)

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Re: a really depressing ny times article on retirement

Post by Toons » Sat Jun 08, 2013 9:43 pm

Bob's not my name wrote:I didn't know anybody read the NYT anymore.
+1 LOL :happy
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Re: a really depressing ny times article on retirement

Post by bengal22 » Sat Jun 08, 2013 9:46 pm

nedsaid wrote:I would not get depressed over this article.

A million bucks plus Social Security is not life in hell. I think as a society we have ratched up our expectations so high that no matter what we achieve, we are depressed by it.

A lot of folks will retire with a paid off house, social security, and $200K-$300K in retirement plans. Not an optimal outcome, not champagne dreams and cavier wishes, but doable. It is amazing what is possible if everything is paid off. These folks will have to accept a more modest livestyle but they won't starve.

As for myself, I will save as hard as I can and invest as well as I can. I will also plan as well as I can. At some point, I will have to retire with whatever I have at the time and retire regardless of whether a financial writer says that I have enough. Hopefully I will have the million plus but there are no guarantees.

The Bogleheads as a group will be well prepared. Let's each do our best and quit getting depressed over these articles.
Well said. I think that the media and "experts" overstate the amount of money needed to retire comfortably. I think it is important to stress the importance of saving regularly and investing wisely but I think they tend to scare a lot of people over what is needed. Obviously, the more money the more options available but as an earlier poster stated, there are plenty of "salt of the earth people" with modest savings living a fruitful retirement.
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Random Musings
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Re: a really depressing ny times article on retirement

Post by Random Musings » Sat Jun 08, 2013 10:00 pm

Perhaps if I lived in NYC or some expensive coastal area and was pulling in $150K per year before retirement, I would be a little depressed in I only had one million in savings.

Might be time to move to a cheaper locale. Plus, learn to spend a little less.

Most people out there will just break out their tiny little violins and play the world's saddest song for those unfortunate folk.....

RM
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Re: a really depressing ny times article on retirement

Post by thebogledude » Sat Jun 08, 2013 11:01 pm

Jack wrote: 1. Why is a couple whose only income consists of social security and a $1 million portfolio using 100% municipal bonds?
4. A retired couple with $1 million plus social security should be fine living on $50,000 per year, the median family income -- unless they have a ridiculous 100% muni bond portfolio as this article assumes.
It is used to setup the article. The writer later introduces bonds and stocks and working longer/spending less and pros and cons to these points.

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Re: a really depressing ny times article on retirement

Post by DouglasDoug » Sat Jun 08, 2013 11:49 pm

Bob's not my name wrote:I didn't know anybody read the NYT anymore.
Worth considering. A million is still considerable wealth; just ask the majority who don't, nor ever will, have it.

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Re: a really depressing ny times article on retirement

Post by Oliver » Sun Jun 09, 2013 1:01 am

For some more depressing news on the amount you can withdrawal given the current bond rates. The news is not good even if the real rate of return on bonds returns to its historic average in five years.

http://papers.ssrn.com/sol3/papers.cfm? ... id=2201323

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Re: a really depressing ny times article on retirement

Post by iceport » Sun Jun 09, 2013 5:59 am

Bob's not my name wrote:I didn't know anybody read the NYT anymore.
The New York Times (or NYT) is an American daily newspaper, founded and continuously published in New York City since September 18, 1851. It has won 112 Pulitzer Prizes, more than any other news organization.[3][4] Its website is America's most popular news site, receiving more than 30 million unique visitors per month.[5]
Nicknamed The Gray Lady, The Times is long regarded within the industry as a national "newspaper of record".[7]
http://en.wikipedia.org/wiki/The_New_York_Times

:wink:

I though the article was very good, if slightly flawed.

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Re: a really depressing ny times article on retirement

Post by billyt » Sun Jun 09, 2013 6:13 am

The paper that Oliver linked suggest that current bond yeilds will only support a 2.5% inflation adjusted withdrawal rate for a 50/50 portfolio for 30 years. However, it appears that the authors used historical inflation rates with the current low bond yields to arrive at this conclusion. What if inflation going forward is lower than expected, which is what the depressed bond yields are all about?

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Re: a really depressing ny times article on retirement

Post by YDNAL » Sun Jun 09, 2013 6:58 am

[edit] To delete post... see below.
Last edited by YDNAL on Sun Jun 09, 2013 8:16 am, edited 2 times in total.
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Re: a really depressing ny times article on retirement

Post by zaboomafoozarg » Sun Jun 09, 2013 6:59 am

nedsaid wrote:A lot of folks will retire with a paid off house, social security, and $200K-$300K in retirement plans. Not an optimal outcome, not champagne dreams and cavier wishes, but doable. It is amazing what is possible if everything is paid off. These folks will have to accept a more modest livestyle but they won't starve.
Exactly! My grandparents retired like this and did just fine. They would have laughed if you told them that $1 million wasn't going to be enough.

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Re: a really depressing ny times article on retirement

Post by Call_Me_Op » Sun Jun 09, 2013 7:59 am

The main problem is that people spend too much. They have to learn to live comfortably on less.

My folks are retired and live comfortably on social security and a very small pension of a few hundred per month. They have modest savings, but haven't had to dip into them.
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Re: a really depressing ny times article on retirement

Post by Toons » Sun Jun 09, 2013 8:12 am

"Accustomed" to living on 150,000 k per year ". I can't relate to that number.That is spending about 3k a week every week. I don't spend that much most months in retirement :shock:
Last edited by Toons on Mon Jun 10, 2013 12:46 pm, edited 1 time in total.
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Re: a really depressing ny times article on retirement

Post by YDNAL » Sun Jun 09, 2013 8:21 am

sometimesinvestor wrote:basically 1 million is not enough to withdraw 4% of an all bond portfolio and if you have stocks you might end up not having enough. Also the average person with a roughly 1 million dollar portfolio is probably used to living on much more than 60k = max ss at 66 plus 3% withdrawal. All this is much worse if you have less and obviously most do

http://www.nytimes.com/2013/06/09/your- ... gg.html?hp^
The article makes some good observations but it also follows a trend to write "scary" articles which seems now in vogue.
For people close to retirement, the problem is acute. The conventional financial advice is that the older you get, the more you should put into bonds, which are widely considered safer than stocks. But consider this bleak picture: A typical 65-year-old couple with $1 million in tax-free municipal bonds want to retire. They plan to withdraw 4 percent of their savings a year — a common, rule-of-thumb drawdown. But under current conditions, if they spend that $40,000 a year, adjusted for inflation, there is a 72 percent probability that they will run through their bond portfolio before they die......

The maximum Social Security benefit for a retiree at 66 this year is $31,000 — about the equivalent of drawing down 3 percent a year on a portfolio of $1 million.

Still, even $61,000 or $71,000 a year — the combined Social Security and cash flow from the $1 million portfolio — isn’t likely to be enough for most people who have grown accustomed to living on $150,000 or more a year. And $150,000 is the median income of a typical household in the top 10 percent, roughly the ranking of a family with $1 million in net assets, Professor Wolff says.
"Accustomed to living on $150K+" is likely a working couple (writer didn't say) - thus I believe he underestimated SS. Regardless, many of the issues discussed in the article are subjects in threads here all the time:
  • 1. How much of pre-retirement income do we need in retirement.
    2. How to maximize social security.
    3. Relocating to lower cost areas and reducing overall expenses.
    4. Etc.
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Re: a really depressing ny times article on retirement

Post by ruralavalon » Sun Jun 09, 2013 10:37 am

Title of article: "For Retirees, a Million-Dollar Illusion".

About 2/3 of the article is given over to a really poor hypothetical, being a couple with a one million dollar portfolio that is 100% in munis. Doesn't their "typical" couple have any tax protected space? Can't their hypotheical couple have a more appropriate asset allocation like 60/40, 50/50 or 40/60? They seem to assume a couple in a high cost of living locality; "Now $1 million won’t even buy an average Manhattan apartment . . ."

About 1/3 of the article gives some good actionable advice:
(1) "you can try to save as much as you can, and try not to get accustomed to a lifestyle that you won’t be able to afford later on.”
(2) "try to pay off your mortgage";
(3) "work longer and retire later"; and
(4) delay starting Social security. " For example, if you delay claiming benefits past what the government calls your 'full' retirement age — 66, for people retiring this year — your monthly benefits increase by 8 percent a year until you reach 70."
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Re: a really depressing ny times article on retirement

Post by HomerJ » Sun Jun 09, 2013 11:13 am

The writer of this article is probably a 50-year old journalist living in New York who j
makes 150k a year, but who just refinanced his house for another 30 years...

I guarentee the vast majority of Americans could live very well on $40k a year plus social security, especially with a paid off house.

My family is living very well on $60k a year (I make more but that is what we live on), because our house is paid off, and we live in the mid-west where property taxes are low.. We want for nothing, vbuy all the little gadgets we want, take 3 nice vacations every year.... I cant imagine how people think they NEED $150k a year in retirement

Sure, it would be nice to fly first class, have a vacation home on the lake, etc. but even people who enjoy such things can imagine a nice life without them.

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Re: a really depressing ny times article on retirement

Post by enderland » Sun Jun 09, 2013 11:16 am

nedsaid wrote:A million bucks plus Social Security is not life in hell. I think as a society we have ratched up our expectations so high that no matter what we achieve, we are depressed by it.
I think this is the fundamental problem with most all of these articles.

Most people assume in spite of barely living within their means and/or not financially planning during their working decades things will magically change for the better in retirement.

This quote sums up all that is wrong with culture in the USA and entitlement:
Still, even $61,000 or $71,000 a year — the combined Social Security and cash flow from the $1 million portfolio — isn’t likely to be enough for most people who have grown accustomed to living on $150,000 or more a year.


the Bogleheads as a group will be well prepared. Let's each do our best and quit getting depressed over these articles.
Absolutely.

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Re: a really depressing ny times article on retirement

Post by garlandwhizzer » Sun Jun 09, 2013 11:24 am

I think the article makes some good points. Basically most boomers are unprepared for retirement. Many of us will have to choose between 3 strategies or some combination of the three to fund an adequate retirement.
1)Work longer.
2)Spend less.
3)Increase portfolio equity exposure at the expense of bonds. Forget age in bonds and probably also 50/50 split. In the past bonds offered risk free returns. In the next decade or more they may offer return free risk.

Garland Whizzer

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Re: a really depressing ny times article on retirement

Post by damjam » Sun Jun 09, 2013 11:37 am

I thought the article was pretty good.
I certainly hope some of my non-boglehead friends read it. It's a decent "get your head out of the sand" type warning.
Now we can quibble with the example used, whether or not these levels of income apply to most people, etc. but I think it gets the point across to it's target audience.

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Re: a really depressing ny times article on retirement

Post by btenny » Sun Jun 09, 2013 12:33 pm

RETURN FREE RISK

Wow. Great term that defines current situation for all kinds of bond investments..... Sort of like "cash is trash" saying from the 1970s....

Bill

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Re: a really depressing ny times article on retirement

Post by stemikger » Sun Jun 09, 2013 12:43 pm

sometimesinvestor wrote:basically 1 million is not enough to withdraw 4% of an all bond portfolio and if you have stocks you might end up not having enough. Also the average person with a roughly 1 million dollar portfolio is probably used to living on much more than 60k = max ss at 66 plus 3% withdrawal. All this is much worse if you have less and obviously most do

http://www.nytimes.com/2013/06/09/your- ... gg.html?hp^
Something I learned much too late in life is to stop listening to the dream stealers. I make it a point to ignore noise that I find will depress me and make me want to give up. I will keep on trucking and make it work. So this article to me is just another form of noise that I will tune out. I wish I could have done this 20 years ago, it would have saved me from myself on numerous occasions.
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Re: a really depressing ny times article on retirement

Post by paper200 » Sun Jun 09, 2013 4:01 pm

Looks like the journalist and folks who cannot live below 150K/annum with a million dollar portfolio need to go back to middle/high school and revisit a basic course in math. I have no sympathy for these folks. These are the same folks who will wonder how folks in second and third worlds live without the the basic infra-structure available in the USA. For some there is always no end to wants and will shout wolf even when they see a sheep.
Having freedom, food and roof is being 90% lucky in life and so is index investing. So, don't let the remaining 10% bother you.

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Re: a really depressing ny times article on retirement

Post by Bob's not my name » Sun Jun 09, 2013 4:34 pm

You used "journalist" and "basic course in math" in the same sentence.

Wait, I just used "journalist" and "sentence" in the same sentence.

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Re: a really depressing ny times article on retirement

Post by zaboomafoozarg » Sun Jun 09, 2013 8:15 pm

stemikger wrote:Something I learned much too late in life is to stop listening to the dream stealers. I make it a point to ignore noise that I find will depress me and make me want to give up. I will keep on trucking and make it work. So this article to me is just another form of noise that I will tune out. I wish I could have done this 20 years ago, it would have saved me from myself on numerous occasions.
+1, it's really easy to get sucked into thinking that everything is going to be terrible from here on out, I find myself doing it all the time.

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Re: a really depressing ny times article on retirement

Post by Bacchus01 » Mon Jun 10, 2013 8:40 am

So many flaws in that article arleady pointed out.

"Accustomed" to living on $150K makes me laugh. We are a family of 5, 3 boys still under 12 years old, with a household gross income several times the "$150K" threshold and a 7-digit net worth...and we spend only about 2/3rds of that number.

Crazy.

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Re: a really depressing ny times article on retirement

Post by Grt2bOutdoors » Mon Jun 10, 2013 9:24 am

They may need to save even more - apparently Social Security is bankrupt, according to this news source; http://www.newsoxy.com/business/how-muc ... 23566.html :oops: If the trustees have not said that, why are people publishing this?
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Re: a really depressing ny times article on retirement

Post by Garco » Mon Jun 10, 2013 9:37 am

That NYT article served a good purpose in our household. It was the very first time that my spouse called my attention to an article about retirement planning and urged me to read it. Most of the time, I'm the one who's so focused on this matter that I bore her to death discussing it. So score one for the NYT.

Our household subscribes to hard copy NYT as well as reads it on-line. ("All the News That's Fit to Print" goes their long-time slogan. Mad Magazine once parodied that slogan as "All the News That Fits We Print." Nowadays, with everything going digital, there's no limit to what "fits." And it's very hard to establish what the term "daily paper" or "paper of record" means since the content changes constantly on a 24-hour schedule.

In any event, we have a target in mind for retirement income, and it's very reachable with our current accumulation. But if we fell short of that target by 30-40%, we'll survive and live a happy retirement.
Last edited by Garco on Mon Jun 10, 2013 9:38 am, edited 1 time in total.

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Re: a really depressing ny times article on retirement

Post by Fallible » Mon Jun 10, 2013 9:38 am

nedsaid wrote:I would not get depressed over this article.

A million bucks plus Social Security is not life in hell. I think as a society we have ratched up our expectations so high that no matter what we achieve, we are depressed by it.

A lot of folks will retire with a paid off house, social security, and $200K-$300K in retirement plans. Not an optimal outcome, not champagne dreams and cavier wishes, but doable. It is amazing what is possible if everything is paid off. These folks will have to accept a more modest livestyle but they won't starve.

As for myself, I will save as hard as I can and invest as well as I can. I will also plan as well as I can. At some point, I will have to retire with whatever I have at the time and retire regardless of whether a financial writer says that I have enough. Hopefully I will have the million plus but there are no guarantees.

The Bogleheads as a group will be well prepared. Let's each do our best and quit getting depressed over these articles.
Wise words throughout. :thumbsup
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Re: a really depressing ny times article on retirement

Post by YDNAL » Mon Jun 10, 2013 10:01 am

nedsaid wrote:A million bucks plus Social Security is not life in hell.
Put it in perpective. Yeah... $1M today + social security is not life in hell.

* good luck with that.
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Re: a really depressing ny times article on retirement

Post by VictoriaF » Mon Jun 10, 2013 10:11 am

sometimesinvestor wrote:basically 1 million is not enough to withdraw 4% of an all bond portfolio and if you have stocks you might end up not having enough. Also the average person with a roughly 1 million dollar portfolio is probably used to living on much more than 60k = max ss at 66 plus 3% withdrawal. All this is much worse if you have less and obviously most do

http://www.nytimes.com/2013/06/09/your- ... gg.html?hp^
A million is not enough for some things.
Ten million are not enough for other things.
And so it goes.

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Re: a really depressing ny times article on retirement

Post by Sheepdog » Mon Jun 10, 2013 10:46 am

A million bucks plus SS is not life in hell.
It is all about where you live and what you need to spend to keep your living standard. If you live in a modest community in Indiana, buy used autos, and take less expensive vacations, your needed money in retirement will be considerably less than a person living in a Manhattan condo, driving a new Mercedes and taking round the world cruises every year.
I started retirement 15 years ago with no debts with living money to come from SS and $700,000 invested at my age in bonds. I took out an average of 4.5% a year from investments. That provided enough income to support an average annual spending of $59,700 in that period. That investment now totals $730,000. I could have easily spent less and lived well enough, if I had needed to.
If I had lived in Manhattan, I would not have been so fortunate.
Jim
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Re: a really depressing ny times article on retirement

Post by Grt2bOutdoors » Mon Jun 10, 2013 11:07 am

Sheepdog wrote:
A million bucks plus SS is not life in hell.
It is all about where you live and what you need to spend to keep your living standard. If you live in a modest community in Indiana, buy used autos, and take less expensive vacations, your needed money in retirement will be considerably less than a person living in a Manhattan condo, driving a new Mercedes and taking round the world cruises every year.
I started retirement 15 years ago with no debts with living money to come from SS and $700,000 invested at my age in bonds. I took out an average of 4.5% a year from investments. That provided enough income to support an average annual spending of $59,700 in that period. That investment now totals $730,000. I could have easily spent less and lived well enough, if I had needed to.
If I had lived in Manhattan, I would not have been so fortunate.
Jim
There are retirees living in my town, a suburb of NYC where the taxes are higher than most states/towns in the country. Many of theses retirees are not pulling in 6 or even mid five figure pensions, they are living off of a combination of Social Security, a small pension and/or savings or even living with other family members to pool resources. If they own a home, they have paid off the mortgage, are eligible for property tax freezes (not sure how much longer that will stay in effect with ongoing budgetary problems at state and local levels), buy food, use services and stay local - they are not off gallavanting across the country or world on vacation, most on not driving on highways and you won't see them in restaurants, but they are living and interacting with others just fine.
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