Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

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protagonist
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Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by protagonist » Thu May 24, 2018 12:20 pm

I have long thought the fear that many have in this forum of running out of money in retirement unless they retired with huge amounts was largely unfounded.

This from Fidelity:

"While some people do run out of money, a person with less than $500,000 in savings, on average, spends just about a quarter of it during the first 20 years of retirement, according to a study by Sudipto Banerjee of the Employee Benefit Research Institute."

So if you retired at 65 with less than $500K , the odds are you would still have about 3/4 of that if you reached 85 today, which over half of you wouldn't have reached anyway. And remember, this is for all people, not just people who put a lot of effort in investing wisely (or even invest at all) like most people who frequent Bogleheads. It includes those with five figure credit card debt, wacky irrational spending habits, etc.

"One-third actually end up with a nest egg larger than they had when they left their jobs, the study says. Even people who had only $32,000 shortly after leaving the workforce had about $24,000 left some two decades after retiring."

"In the EBRI study, those with the most savings – a median of $857,450 shortly after retiring – still had $756,300 two decades later. The decrease amounts to just 11.8 percent of the original sum.

"The largest drop in retirement nest eggs, 24.4 percent, was among those with the least savings, or a median of $29,975."
Like my mom, who still left me a condo and a small nest egg.

"The medical annual out-of-pocket spending for 90 percent of retirees is just $2,000, and the big nursing home costs over $87,000 hit only 10 percent of people living longer than 95, according to the EBRI study."

https://www.fidelity.com/insights/retir ... vings?ah=1

ColoRetiredGirl
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Re: Fear vs. reality. Don't worry. Be happy.

Post by ColoRetiredGirl » Thu May 24, 2018 3:27 pm

Great article. As a new retiree, it has placed me in the “don’t worry” category. Nevertheless, I plan to remain cautious with my spending given the current market volatility.

livesoft
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Re: Fear vs. reality. Don't worry. Be happy.

Post by livesoft » Thu May 24, 2018 3:35 pm

The study is from people born between 1931 and 1941 which would make them 77 to 87 years old or say retired for 20 to 30 years. We know that folks that retired in the 1988 to 1998 time frame had a remarkable sequence of returns benefit.

But I do agree with the gist of the article: Don't worry. Be happy.
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Quickfoot
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Re: Fear vs. reality. Don't worry. Be happy.

Post by Quickfoot » Thu May 24, 2018 3:44 pm

Livesoft: Studies also found that retirement spending drops pretty quickly, people spend more money in early retirement but as they age they stay at home more and the main expense becomes medical expenses. So while medical expenses can be higher than expected every day living expenses can be a lot less over the long term. Not surprising their portfolios grow because people go into retirement with either essentially NO savings or large savings (very few in the middle).

This is also why people should buy a SPIA with a portion of their savings, it allows higher spend rate without worrying about running out of money and protects from a bad sequence of returns. I have absolutely no desire to worry about money in retirement. We will likely retire at 59.5, annuitize 125% - 150% annual living expenses at 60, defer social security to 70 and aggressively spend down 401K between 60 and 70 while we can still enjoy it and we'll still wind up with some pretty large RMDs.

We are both close to the max social security benefits t so in the event social security remained unchanged we wouldn't technically *need* to withdraw anything from the portfolio but we expect either a benefit cut or age increase.

I'm more worried about getting enough money INTO the 401K than how long it will last :).
Last edited by Quickfoot on Thu May 24, 2018 3:58 pm, edited 2 times in total.

delamer
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Re: Fear vs. reality. Don't worry. Be happy.

Post by delamer » Thu May 24, 2018 3:48 pm

The article says “debilitating healthcare costs are far more rare than people fear.”

But if you had an elderly relative who experienced such costs and/or needed extended long-term care, then your personal risk may be much higher than average. And a married couple has more to fear financially than a single person, because of the possibility of one person needing long-term care while the other is still living independently.

All of these situations happened in my parents’ generation with my blood relatives.

So we each have to assess our personal risk, and plan accordingly.

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VictoriaF
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Re: Fear vs. reality. Don't worry. Be happy.

Post by VictoriaF » Thu May 24, 2018 4:38 pm

protagonist wrote:
Thu May 24, 2018 12:20 pm
I have long thought the fear that many have in this forum of running out of money in retirement unless they retired with huge amounts was largely unfounded.
I think the main problem is not with retired Bogleheads who fear that their $2.2 millions are not enough. The problem is with 65-year old employed Bogleheads who "can't retire" because they fear that their $2.2 millions are not enough.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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lthenderson
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Re: Fear vs. reality. Don't worry. Be happy.

Post by lthenderson » Thu May 24, 2018 4:50 pm

My grandparents fall into the age group of this survey but they also retired with very nice pensions and a still solvent social security system so that they haven't had to touch their other savings. Most of my peers today have no pensions at all and may or may not get a social security check when they retire which makes a big difference on withdrawal rate of our savings.

Another thing that concerns me with this article is that the bulk of those surveyed were born during the great depression. I know first hand that this still influences my grandparents to this day with their spending. Those of us born during these large bull markets since definitely have different experiences with spending habits.

Finally, the entire concept of retirement has changed quite drastically in the last 80+ years. What my grandparents did during their retirement and what I want in my retirement are entirely different animals and have much different costs. The article also never states the percentage that did run out of money and what life was like for them. Although the odds may be small, the repercussions of what life is like being one of them might convince others to save extra just in case.

I like the message of this article but it really feels to me like kind of a puff piece geared to a different generation.

billthecat
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Re: Fear vs. reality. Don't worry. Be happy.

Post by billthecat » Thu May 24, 2018 4:57 pm

Then there those who have four parents due to divorce and remarriage and siblings, all of whom are counting on the one person to pay for everything.

protagonist
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Re: Fear vs. reality. Don't worry. Be happy.

Post by protagonist » Thu May 24, 2018 5:06 pm

VictoriaF wrote:
Thu May 24, 2018 4:38 pm
protagonist wrote:
Thu May 24, 2018 12:20 pm
I have long thought the fear that many have in this forum of running out of money in retirement unless they retired with huge amounts was largely unfounded.
I think the main problem is not with retired Bogleheads who fear that their $2.2 millions are not enough. The problem is with 65-year old employed Bogleheads who "can't retire" because they fear that their $2.2 millions are not enough.

Victoria
funny but true.

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GoldStar
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Re: Fear vs. reality. Don't worry. Be happy.

Post by GoldStar » Thu May 24, 2018 5:11 pm

protagonist wrote:
Thu May 24, 2018 12:20 pm

"While some people do run out of money, a person with less than $500,000 in savings, on average, spends just about a quarter of it during the first 20 years of retirement, according to a study by Sudipto Banerjee of the Employee Benefit Research Institute."

So if you retired at 65 with less than $500K , the odds are you would still have about 3/4 of that if you reached 85 today, which over half of you wouldn't have reached anyway.
Didn't the majority of folks used to get a pension? Thus, perhaps, the reason they don't need the savings? Pensions in corporate America have mostly disappeared so now it's up to (non government) individuals to save for themselves- if I retire with only $500K I won't be able to pay my property taxes and buy food, etc. Social Secuity is too small a percentage of the expenses I will need and a 4% draw on $500K doesn't cover the difference.
Times have changed for us that are saving for retirement today and I believe the stats for today's prior retirees are not relevant to today's accumulators.

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Re: Fear vs. reality. Don't worry. Be happy.

Post by Grt2bOutdoors » Thu May 24, 2018 5:19 pm

lthenderson wrote:
Thu May 24, 2018 4:50 pm
My grandparents fall into the age group of this survey but they also retired with very nice pensions and a still solvent social security system so that they haven't had to touch their other savings. Most of my peers today have no pensions at all and may or may not get a social security check when they retire which makes a big difference on withdrawal rate of our savings.

Another thing that concerns me with this article is that the bulk of those surveyed were born during the great depression. I know first hand that this still influences my grandparents to this day with their spending. Those of us born during these large bull markets since definitely have different experiences with spending habits.

Finally, the entire concept of retirement has changed quite drastically in the last 80+ years. What my grandparents did during their retirement and what I want in my retirement are entirely different animals and have much different costs. The article also never states the percentage that did run out of money and what life was like for them. Although the odds may be small, the repercussions of what life is like being one of them might convince others to save extra just in case.

I like the message of this article but it really feels to me like kind of a puff piece geared to a different generation.
The fear of not receiving Social Security is unfounded - fake news. Unless you are not currently or will be paying into the system, you will receive some level of benefit.

My grandparents never received a pension, retired but with the same standards they had while working - watch where you spend your money. They left a decent sized inheritance, mainly due to real estate appreciation.
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RetireBy55
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Re: Fear vs. reality. Don't worry. Be happy.

Post by RetireBy55 » Thu May 24, 2018 5:24 pm

I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.

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VictoriaF
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Re: Fear vs. reality. Don't worry. Be happy.

Post by VictoriaF » Thu May 24, 2018 5:26 pm

GoldStar wrote:
Thu May 24, 2018 5:11 pm
protagonist wrote:
Thu May 24, 2018 12:20 pm

"While some people do run out of money, a person with less than $500,000 in savings, on average, spends just about a quarter of it during the first 20 years of retirement, according to a study by Sudipto Banerjee of the Employee Benefit Research Institute."

So if you retired at 65 with less than $500K , the odds are you would still have about 3/4 of that if you reached 85 today, which over half of you wouldn't have reached anyway.
Didn't the majority of folks used to get a pension? Thus, perhaps, the reason they don't need the savings? Pensions in corporate America have mostly disappeared so now it's up to (non government) individuals to save for themselves- if I retire with only $500K I won't be able to pay my property taxes and buy food, etc. Social Secuity is too small a percentage of the expenses I will need and a 4% draw on $500K doesn't cover the difference.
Times have changed for us that are saving for retirement today and I believe the stats for today's prior retirees are not relevant to today's accumulators.
Size matters. There are some property taxes that require much more than a pension, and Social Security, and 4% of $500k. And there are some property taxes that can be easily handled by retirees with modest means.

High property taxes vs. Low property taxes
Fear vs. Reality
Worry vs Be happy

The choice is yours,
Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Fear vs. reality. Don't worry. Be happy.

Post by Slacker » Thu May 24, 2018 5:28 pm

VictoriaF wrote:
Thu May 24, 2018 5:26 pm
GoldStar wrote:
Thu May 24, 2018 5:11 pm
protagonist wrote:
Thu May 24, 2018 12:20 pm

"While some people do run out of money, a person with less than $500,000 in savings, on average, spends just about a quarter of it during the first 20 years of retirement, according to a study by Sudipto Banerjee of the Employee Benefit Research Institute."

So if you retired at 65 with less than $500K , the odds are you would still have about 3/4 of that if you reached 85 today, which over half of you wouldn't have reached anyway.
Didn't the majority of folks used to get a pension? Thus, perhaps, the reason they don't need the savings? Pensions in corporate America have mostly disappeared so now it's up to (non government) individuals to save for themselves- if I retire with only $500K I won't be able to pay my property taxes and buy food, etc. Social Secuity is too small a percentage of the expenses I will need and a 4% draw on $500K doesn't cover the difference.
Times have changed for us that are saving for retirement today and I believe the stats for today's prior retirees are not relevant to today's accumulators.
Size matters. There are some property taxes that require much more than a pension, and Social Security, and 4% of $500k. And there are some property taxes that can be easily handled by retirees with modest means.

High property taxes vs. Low property taxes
Fear vs. Reality
Worry vs Be happy

The choice is yours,
Victoria
From what I've observed in 3 states I've lived, there tend to be very nice tax breaks (on property taxes) for people over 65...

protagonist
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Re: Fear vs. reality. Don't worry. Be happy.

Post by protagonist » Thu May 24, 2018 5:34 pm

RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.

delamer
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Re: Fear vs. reality. Don't worry. Be happy.

Post by delamer » Thu May 24, 2018 5:46 pm

protagonist wrote:
Thu May 24, 2018 5:34 pm
[quote=RetireBy55 post_id=3943242 time=<a href="tel:1527200680">1527200680</a> user_id=114707]
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.
[/quote]
protagonist wrote:
Thu May 24, 2018 5:34 pm
RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.
Yes, I think the key is whether that figure excludes insurance premiums.

RetireBy55
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Re: Fear vs. reality. Don't worry. Be happy.

Post by RetireBy55 » Thu May 24, 2018 5:54 pm

protagonist wrote:
Thu May 24, 2018 5:34 pm
RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.
Sure - SOME people will have less than $2K/yr OOP medical expenses (not including premiums) in retirement.

90%?! No freaking way. Would love to see the supposed "data" on this.

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GoldStar
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Re: Fear vs. reality. Don't worry. Be happy.

Post by GoldStar » Thu May 24, 2018 5:55 pm

VictoriaF wrote:
Thu May 24, 2018 5:26 pm
GoldStar wrote:
Thu May 24, 2018 5:11 pm
protagonist wrote:
Thu May 24, 2018 12:20 pm

"While some people do run out of money, a person with less than $500,000 in savings, on average, spends just about a quarter of it during the first 20 years of retirement, according to a study by Sudipto Banerjee of the Employee Benefit Research Institute."

So if you retired at 65 with less than $500K , the odds are you would still have about 3/4 of that if you reached 85 today, which over half of you wouldn't have reached anyway.
Didn't the majority of folks used to get a pension? Thus, perhaps, the reason they don't need the savings? Pensions in corporate America have mostly disappeared so now it's up to (non government) individuals to save for themselves- if I retire with only $500K I won't be able to pay my property taxes and buy food, etc. Social Secuity is too small a percentage of the expenses I will need and a 4% draw on $500K doesn't cover the difference.
Times have changed for us that are saving for retirement today and I believe the stats for today's prior retirees are not relevant to today's accumulators.
Size matters. There are some property taxes that require much more than a pension, and Social Security, and 4% of $500k. And there are some property taxes that can be easily handled by retirees with modest means.

High property taxes vs. Low property taxes
Fear vs. Reality
Worry vs Be happy

The choice is yours,
Victoria
Yes - could sell and move to a LCOL area away from friends and family but I would rather save and have my options.
The point I was trying to make was the change in corporate America (loss of pension plans) and how, I believe, it might makes some of the data in the study shared irrelevant. There is no pension any longer for most - thus the results of the current long time retirees not spending down their savings doesn't apply to the current accumulators.

protagonist
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Re: Fear vs. reality. Don't worry. Be happy.

Post by protagonist » Thu May 24, 2018 5:57 pm

RetireBy55 wrote:
Thu May 24, 2018 5:54 pm
protagonist wrote:
Thu May 24, 2018 5:34 pm
RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.
Sure - SOME people will have less than $2K/yr OOP medical expenses (not including premiums) in retirement.

90%?! No freaking way. Would love to see the supposed "data" on this.
Remember, 65 is the new 55 or 42 or 28 or whatev. And I assume most retirees are on the lower end of the retiree age spectrum, for obvi reasons. (*65 y o writing like a 28 y o*). So I am not that surprised.

Lynette
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Re: Fear vs. reality. Don't worry. Be happy.

Post by Lynette » Thu May 24, 2018 6:27 pm

protagonist wrote:
Thu May 24, 2018 5:34 pm
RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.
Medicare IRMAA B and D premiums, Medigap G and Drug costs are about $600 per month for me. Additional our-of pocket costs are less than $1000 p.a. Fortunately I get about $400 per month HRA from two former employers. This does not cover dental! Fortunately I have not needed much dental work recently but I think that this will be my major medical expense. I'm 75 this year.

livesoft
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Re: Fear vs. reality. Don't worry. Be happy.

Post by livesoft » Thu May 24, 2018 6:32 pm

GoldStar wrote:
Thu May 24, 2018 5:55 pm
The point I was trying to make was the change in corporate America (loss of pension plans) and how, I believe, it might makes some of the data in the study shared irrelevant. There is no pension any longer for most - thus the results of the current long time retirees not spending down their savings doesn't apply to the current accumulators.
Most people never had access to a meaningful pension plan in their life. That also goes for folks who worked in the 40s, 50s, 60s, 70s, 80s, ....

I don't know if this is factual, but it tells the story: https://www.teacherpensions.org/blog/tr ... ted-states
Last edited by livesoft on Thu May 24, 2018 6:34 pm, edited 1 time in total.
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delamer
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Re: Fear vs. reality. Don't worry. Be happy.

Post by delamer » Thu May 24, 2018 6:33 pm

Lynette wrote:
Thu May 24, 2018 6:27 pm
protagonist wrote:
Thu May 24, 2018 5:34 pm
RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.
Medicare IRMAA B and D premiums, Medigap G and Drug costs are about $600 per month for me. Additional our-of pocket costs are less than $1000 p.a. Fortunately I get about $400 per month HRA from two former employers. This does not cover dental! Fortunately I have not needed much dental work recently but I think that this will be my major medical expense. I'm 75 this year.
Of course, we have no way of knowing how many people are receiving adequate healthcare, filling all their prescriptions, getting the needed dental work, etc. based on the spending documented in the report.

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Re: Fear vs. reality. Don't worry. Be happy.

Post by Grt2bOutdoors » Thu May 24, 2018 8:25 pm

Slacker wrote:
Thu May 24, 2018 5:28 pm
VictoriaF wrote:
Thu May 24, 2018 5:26 pm
GoldStar wrote:
Thu May 24, 2018 5:11 pm
protagonist wrote:
Thu May 24, 2018 12:20 pm

"While some people do run out of money, a person with less than $500,000 in savings, on average, spends just about a quarter of it during the first 20 years of retirement, according to a study by Sudipto Banerjee of the Employee Benefit Research Institute."

So if you retired at 65 with less than $500K , the odds are you would still have about 3/4 of that if you reached 85 today, which over half of you wouldn't have reached anyway.
Didn't the majority of folks used to get a pension? Thus, perhaps, the reason they don't need the savings? Pensions in corporate America have mostly disappeared so now it's up to (non government) individuals to save for themselves- if I retire with only $500K I won't be able to pay my property taxes and buy food, etc. Social Secuity is too small a percentage of the expenses I will need and a 4% draw on $500K doesn't cover the difference.
Times have changed for us that are saving for retirement today and I believe the stats for today's prior retirees are not relevant to today's accumulators.
Size matters. There are some property taxes that require much more than a pension, and Social Security, and 4% of $500k. And there are some property taxes that can be easily handled by retirees with modest means.

High property taxes vs. Low property taxes
Fear vs. Reality
Worry vs Be happy

The choice is yours,
Victoria
From what I've observed in 3 states I've lived, there tend to be very nice tax breaks (on property taxes) for people over 65...
Sure, sure, in my town, the break is $50 but only if you have earnings of no more than $10,000. :oops: Wanna venture a guess about how many are in line at town hall to collect? :twisted:
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grt2bOutdoors
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Re: Fear vs. reality. Don't worry. Be happy.

Post by Grt2bOutdoors » Thu May 24, 2018 8:27 pm

delamer wrote:
Thu May 24, 2018 6:33 pm
Lynette wrote:
Thu May 24, 2018 6:27 pm
protagonist wrote:
Thu May 24, 2018 5:34 pm
RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
Mine are.

I assume they are not counting Medicare premiums.
Medicare IRMAA B and D premiums, Medigap G and Drug costs are about $600 per month for me. Additional our-of pocket costs are less than $1000 p.a. Fortunately I get about $400 per month HRA from two former employers. This does not cover dental! Fortunately I have not needed much dental work recently but I think that this will be my major medical expense. I'm 75 this year.
Of course, we have no way of knowing how many people are receiving adequate healthcare, filling all their prescriptions, getting the needed dental work, etc. based on the spending documented in the report.
Don't believe everything that is printed, they aren't surveying the right population of retirees. There are plenty of retirees who are "doing without" fill in the blank....including food.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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lthenderson
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Re: Fear vs. reality. Don't worry. Be happy.

Post by lthenderson » Fri May 25, 2018 7:57 am

livesoft wrote:
Thu May 24, 2018 6:32 pm
GoldStar wrote:
Thu May 24, 2018 5:55 pm
The point I was trying to make was the change in corporate America (loss of pension plans) and how, I believe, it might makes some of the data in the study shared irrelevant. There is no pension any longer for most - thus the results of the current long time retirees not spending down their savings doesn't apply to the current accumulators.
Most people never had access to a meaningful pension plan in their life. That also goes for folks who worked in the 40s, 50s, 60s, 70s, 80s, ....
Not according to studies that show in the 1980's, 60% of workers still had pension plans compared to only 4% these days.

http://money.cnn.com/retirement/guide/p ... index7.htm

gotester2000
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Re: Fear vs. reality. Don't worry. Be happy.

Post by gotester2000 » Fri May 25, 2018 9:02 am

Were there pensions during ancient/medieval times for general working populace? Indexed pension is the 8th wonder of the world and seems to be more of an idea of the last few centuries???

Valuethinker
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Re: Fear vs. reality. Don't worry. Be happy.

Post by Valuethinker » Fri May 25, 2018 9:08 am

gotester2000 wrote:
Fri May 25, 2018 9:02 am
Were there pensions during ancient/medieval times for general working populace? Indexed pension is the 8th wonder of the world and seems to be more of an idea of the last few centuries???
From memory, when the US Social Security system was created, the average lifespan in retirement was expected to be 7 years. The SS system was actually constructed with a remarkably good forecast of improvements to longevity out to the year 2000, (this is in Roger Lowenstein's book on pensions, which I no longer have, but is worth a read).

US life expectancy at age 5 wasn't much more than 70, then.

So it's not like for like.

The great concern amongst the Victorian poor was a pauper's funeral-- the first Friendly Societies and other insurance bodies were about saving for a funeral and a marked grave, not for retirement.

In all pre 20th century societies, and less developed countries today, your "retirement plan" is living with your children and sharing in childcare and housework with them. That's true of Indian society now, still, and to a great extent Greece, Italy, Spain, Portugal - in some of those countries the older generation is better off than the younger, and so the kids live at home/ move back in with the parents.

Japan was the first, and China will be the next, traditional family pattern confronting the reality of a smaller next generation. Japan deals with its elders a lot better than most western societies do, and yet it's already causing strain.

When France had that heat wave in about 2003 something over 10k old people died, alone. Many were not found for weeks or even longer.

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Re: Fear vs. reality. Don't worry. Be happy.

Post by Katietsu » Fri May 25, 2018 9:21 am

RetireBy55 wrote:
Thu May 24, 2018 5:24 pm
I can't fathom that the annual medical costs for "90% of retirees" is less than $2,000. Balderdash.
The premiums for Medicare Parts B and D with a mediocre Medigap policy will be more than that. They must not be including premiums in that estimate.

livesoft
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Re: Fear vs. reality. Don't worry. Be happy.

Post by livesoft » Fri May 25, 2018 2:14 pm

lthenderson wrote:
Fri May 25, 2018 7:57 am
Not according to studies that show in the 1980's, 60% of workers still had pension plans compared to only 4% these days.

http://money.cnn.com/retirement/guide/p ... index7.htm
There was no study presented in the article you linked. I think I did find the source of the 60% mentioned in the linked article, but the 60% is not what you think it was. Please read what you linked carefully. Thanks.

Here is a quote from another article:

" In 1980, 46% of all private-sector workers were covered by a pension plan. By 1990, that number was down to 43%."
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lthenderson
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Re: Fear vs. reality. Don't worry. Be happy.

Post by lthenderson » Fri May 25, 2018 2:41 pm

livesoft wrote:
Fri May 25, 2018 2:14 pm
lthenderson wrote:
Fri May 25, 2018 7:57 am
Not according to studies that show in the 1980's, 60% of workers still had pension plans compared to only 4% these days.

http://money.cnn.com/retirement/guide/p ... index7.htm
There was no study presented in the article you linked. I think I did find the source of the 60% mentioned in the linked article, but the 60% is not what you think it was. Please read what you linked carefully. Thanks.

Here is a quote from another article:

" In 1980, 46% of all private-sector workers were covered by a pension plan. By 1990, that number was down to 43%."
You didn't link an article so it is hard to say in what context you pulled that quote from but just doing a google search shows countless articles in agreement with my view that pensions are on the decline and by significant numbers.
It is one of the most well-known stories about American retirement: the decline of defined benefit pensions in the private sector. At one time, 88 percent of private sector workers who had a workplace retirement plan had a pension. That number is now 33 percent.
https://protectpensions.org/2016/08/04/ ... -pensions/

The next link shows a decline in defined benefit plans of 28% in 1979 to 2% in 2014
https://www.ebri.org/publications/benfa ... a=retfaq14
The BLS’ “visual essay” documents the decline in defined benefit pensions, which now cover 18 percent of private-sector workers, down from 35 percent in the early 1990s.
https://www.epi.org/blog/private-sector ... e-decline/

A Towers Watson study found that from 1998 to 2013, the number of Fortune 500 companies offering traditional defined benefit plans dropped 86 percent, from 251 to 34.
https://money.usnews.com/money/personal ... retirement

Here is a New York Times study showing a decline from 60% in 1980 to 10% in 2006.
https://economix.blogs.nytimes.com/2009 ... -vs-today/
fewer companies are still offering pensions, with the share of Fortune 500 companies that provide them to new hires falling to 24 percent at the end of 2013 from 60 percent in 1998.
https://www.washingtonpost.com/news/get ... f643908e02

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Re: Fear vs. reality. Don't worry. Be happy.

Post by lthenderson » Fri May 25, 2018 2:42 pm

lthenderson wrote:
Fri May 25, 2018 2:41 pm
livesoft wrote:
Fri May 25, 2018 2:14 pm
lthenderson wrote:
Fri May 25, 2018 7:57 am
Not according to studies that show in the 1980's, 60% of workers still had pension plans compared to only 4% these days.

http://money.cnn.com/retirement/guide/p ... index7.htm
There was no study presented in the article you linked. I think I did find the source of the 60% mentioned in the linked article, but the 60% is not what you think it was. Please read what you linked carefully. Thanks.

Here is a quote from another article:

" In 1980, 46% of all private-sector workers were covered by a pension plan. By 1990, that number was down to 43%."
You didn't link an article so it is hard to say in what context you pulled that quote from but just doing a google search shows countless articles in agreement with my view that pensions are on the decline and by significant numbers.

It is one of the most well-known stories about American retirement: the decline of defined benefit pensions in the private sector. At one time, 88 percent of private sector workers who had a workplace retirement plan had a pension. That number is now 33 percent. https://protectpensions.org/2016/08/04/ ... -pensions/

The next link shows a decline in defined benefit plans of 28% in 1979 to 2% in 2014
https://www.ebri.org/publications/benfa ... a=retfaq14

The BLS’ “visual essay” documents the decline in defined benefit pensions, which now cover 18 percent of private-sector workers, down from 35 percent in the early 1990s.
https://www.epi.org/blog/private-sector ... e-decline/

A Towers Watson study found that from 1998 to 2013, the number of Fortune 500 companies offering traditional defined benefit plans dropped 86 percent, from 251 to 34.
https://money.usnews.com/money/personal ... retirement

Here is a New York Times study showing a decline from 60% in 1980 to 10% in 2006.
https://economix.blogs.nytimes.com/2009 ... -vs-today/

fewer companies are still offering pensions, with the share of Fortune 500 companies that provide them to new hires falling to 24 percent at the end of 2013 from 60 percent in 1998.
https://www.washingtonpost.com/news/get ... f643908e02

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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by livesoft » Fri May 25, 2018 2:56 pm

I agree completely that "that pensions are on the decline and by significant numbers." There can be no doubt about that. I disagree that most workers ever had pensions in the first place. Quite a lot of workers never had retirement plans provided by their employer.

Consider your statement "At one time, 88 percent of private sector workers who had a workplace retirement plan had a pension." Even that statement has the caveat restricting the 88 percent to "workers who had a workplace retirement plan." (my bold) What about workers who had no workplace retirement plan?

Even the NYTimes article you linked that had the 60% number restricted the chart to "Private Sector Workers with Pension Coverage, by Pension Type." That is, every person in the chart had a retirement plan. The chart did not include the majority of workers with no retirement plan. The chart also made the mistake of saying a "Defined contribution only" was a "Pension Coverage". To make it more clear, the bar chart did not have a "Neither" category despite having a "Both" category. At least you can agree that the chart did not have a "Neither" category, right? The article did state
(Many employees remain uncovered by a pension plan of any kind, of course.)
which is my point.
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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by lthenderson » Fri May 25, 2018 3:08 pm

livesoft wrote:
Fri May 25, 2018 2:56 pm
I agree completely that "that pensions are on the decline and by significant numbers." There can be no doubt about that. I disagree that most workers ever had pensions in the first place. Quite a lot of workers never had retirement plans provided by their employer.
I see where you are coming from now and I don't know the answer other than more had pensions when the OP survey was being tallied than now. :sharebeer

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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by peppers » Fri May 25, 2018 3:09 pm

fwiw

The link is from the Economic Policy Institute dated January 11, 2013. It shows a higher percentage in public and unionized private sector pensions. Much less so in non-union private sector pensions.

https://www.epi.org/blog/private-sector ... e-decline/
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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by livesoft » Fri May 25, 2018 3:30 pm

I think we can say that the percentage of workers covered by an Individual Retirement Arrangement (IRA) is nearly 100% nowadays. That was not the case in the 1950s, 60s, and 70s. :)
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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by delamer » Fri May 25, 2018 3:54 pm

livesoft wrote:
Fri May 25, 2018 3:30 pm
I think we can say that the percentage of workers covered by an Individual Retirement Arrangement (IRA) is nearly 100% nowadays. That was not the case in the 1950s, 60s, and 70s. :)

I agree with the 2nd statement, but would not assume the first. I’d believe the first of Bogleheads, but not the working population as a whole without proof.

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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by livesoft » Fri May 25, 2018 4:12 pm

delamer wrote:
Fri May 25, 2018 3:54 pm
I agree with the 2nd statement, but would not assume the first. I’d believe the first of Bogleheads, but not the working population as a whole without proof.
I didn't state that workers were using an IRA when they could which is what I believe you are also saying. I guess I should have said "with an available" or "with access to an" instead of "covered by an."

Plus if a worker is married, then their spouse can get in on the action, too.
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Re: Fear vs. reality. Don't worry. Be happy.

Post by mouses » Fri May 25, 2018 4:17 pm

lthenderson wrote:
Thu May 24, 2018 4:50 pm
My grandparents fall into the age group of this survey but they also retired with very nice pensions and a still solvent social security system
Social Security is solvent into the 2030s sometime, and will continue to be for decades after that if the salary cap is raised.

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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by delamer » Fri May 25, 2018 5:30 pm

livesoft wrote:
Fri May 25, 2018 4:12 pm
delamer wrote:
Fri May 25, 2018 3:54 pm
I agree with the 2nd statement, but would not assume the first. I’d believe the first of Bogleheads, but not the working population as a whole without proof.
I didn't state that workers were using an IRA when they could which is what I believe you are also saying. I guess I should have said "with an available" or "with access to an" instead of "covered by an."

Plus if a worker is married, then their spouse can get in on the action, too.

Yes, I interpreted “covered” as “invested in”. but I now I see what your point.

Anyone with earned income can fund a non-deductible traditional IRA, so you are correct in that respect. (Although I guess not those workers over 70.5 years.)

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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by 2015 » Fri May 25, 2018 6:18 pm

The reality of my fear is there will never come a day when some financial article won't contain the word "myth". One would think with all of the supposed "myths" being "debunked" in some new financial post/article almost daily no "myths" would remain to be "debunked".

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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by IlliniDave » Fri May 25, 2018 7:19 pm

2015 wrote:
Fri May 25, 2018 6:18 pm
The reality of my fear is there will never come a day when some financial article won't contain the word "myth". One would think with all of the supposed "myths" being "debunked" in some new financial post/article almost daily no "myths" would remain to be "debunked".
The argument used to debunk the old myth becomes the new myth to be debunked.
Don't do something. Just stand there!

2015
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Re: Fear vs. reality. Don't worry. Be happy. [Outliving your retirement savings]

Post by 2015 » Sun May 27, 2018 12:04 pm

True. Financial bloggers and academics gotta eat.

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