Author Topic: NYT Article: What's Your Retirement Number?  (Read 4112 times)

Connemara

  • 5 O'Clock Shadow
  • *
  • Posts: 73
NYT Article: What's Your Retirement Number?
« on: February 20, 2017, 09:35:51 AM »
https://www.nytimes.com/2017/02/19/your-money/how-big-do-you-want-your-nest-egg-to-be.html?rref=collection%2Fsectioncollection%2Fnyregion

I laughed out loud at several of the individuals interviewed for this article. Almost everyone says they need a stupid spendypants  amount of money to retire.

Some excerpts:

Quote
Twenty million dollars. That’s how much Julien Mellon needs to live the life he wants. With that kind of cash, Mr. Mellon, a 32-year-old tour guide, could buy a “beautiful” home with enough left over to spend $100,000 a year (“in 2017 dollars”) until the day he dies.

Quote
So does Andrea Todd. Her number hovers around $65 million. With that she would travel with her family. But “I see that as an educational experience more than a luxury item purchased with a windfall,” said Ms. Todd, 51, a writer and teacher in Sacramento who is married with three children. “We’d travel cheap and dirty, with immersion in mind.”

"Cheap and dirty" on $65 million? I have no words.

Quote
Others would like enough money to allow them to pursue other interests. Valerie Smaldone, a media personality and brand strategist in New York, who declined to give her age, said she could make it work with a monthly stipend of $10,000 for the rest of her life. She’d like a minimum of $250,000 in retirement income on top of that, which would continue to appreciate yearly.

$10K monthly will apparently cover only Ms. Smaldone's basic needs.

There's a silver lining in this woman's story:

Quote
And then there is Susan Sosnow, a real estate investor and landlord. All Ms. Sosnow, 49, needs to feel secure is $36,000 a year. Really. She nets a fraction of that as a landlord.

Explaining the relatively low figure, she said: “I’m not interested in traveling; I’m interested in creating paradise at home, Candyland. I’m still driving the ’99 Ford Escort wagon I bought for $3,200 cash in 2004. But sometimes it sits in my driveway for a week and I just ride my bike around.”

With just a bit more, she said: “I’d be able to pay my bills, contribute to my I.R.A. and have some left over for home improvements.

slugline

  • Handlebar Stache
  • *****
  • Posts: 1033
  • Location: Houston, TX USA
Re: NYT Article: What's Your Retirement Number?
« Reply #1 on: February 20, 2017, 10:26:07 AM »
Twenty-million-dollar guy represents the ultra-mega-pessimistic  position on the four-percent rule. . . .

prettypaperwork

  • 5 O'Clock Shadow
  • *
  • Posts: 20
Re: NYT Article: What's Your Retirement Number?
« Reply #2 on: February 20, 2017, 10:32:55 AM »
Frightening.
FI by 2026 if all goes as planned.

"Sugar rots your teeth and gives you brain damage."  --Neil, The Young Ones

joleran

  • Stubble
  • **
  • Posts: 127
Re: NYT Article: What's Your Retirement Number?
« Reply #3 on: February 20, 2017, 11:04:38 AM »
Twenty-million-dollar guy represents the ultra-mega-pessimistic  position on the four-percent rule. . . .

At that point, you have to be spending over $250k/yr, every year for 80 years just to run out of cash, assuming you put everything in ultra-safe TIPs.

sirdoug007

  • Pencil Stache
  • ****
  • Posts: 536
  • Age: 36
  • Location: Houston, TX
Re: NYT Article: What's Your Retirement Number?
« Reply #4 on: February 20, 2017, 11:17:34 AM »
This article reads like "how much money would you like to win in the lottery?" rather than how much do you really need to leave your current job and pursue your interests?

$20 million is an insane number.  $800,000/year on 4%! 

Sure, if people are giving away winning lottery tickets, I'll a $300 million powerball...

talltexan

  • Bristles
  • ***
  • Posts: 476
Re: NYT Article: What's Your Retirement Number?
« Reply #5 on: February 20, 2017, 11:30:48 AM »
I've listened to enough Dave Ramsey to be persuaded that $1 - $3 million is within reach of most people with average careers.

I have no real game plan to give those people for reaching $20 million or $65 million.

Laura33

  • Pencil Stache
  • ****
  • Posts: 519
  • Location: Mid-Atlantic
Re: NYT Article: What's Your Retirement Number?
« Reply #6 on: February 20, 2017, 11:49:47 AM »
Eh, I was actually going to make a comment about how bad people are at math, until I realized that the $20MM guy was talking about buying a townhouse with probably half of that.  Still not awesome math, but not quite as far off as I thought.

The $65M "cheap and dirty" traveler was priceless, though.
Laugh while you can, monkey-boy

trashmanz

  • Bristles
  • ***
  • Posts: 276
Re: NYT Article: What's Your Retirement Number?
« Reply #7 on: February 20, 2017, 10:29:15 PM »
I didn't understand this woman: "said she could make it work with a monthly stipend of $10,000 for the rest of her life. She’d like a minimum of $250,000 in retirement income on top of that, which would continue to appreciate yearly."  So 10K a month AND a 250K salary that increases yearly?  Why break it down?  Really she is looking for 370K a year +?  Confusing and wild no matter how you slice it.

clarkfan1979

  • Handlebar Stache
  • *****
  • Posts: 1311
  • Age: 37
  • Location: Kauai & Denver
Re: NYT Article: What's Your Retirement Number?
« Reply #8 on: February 20, 2017, 11:08:00 PM »
I think my net worth really depends on how long I live. Here are my projections.

Age 37: 450K
Age 45: 1 million
Age 55: 2 million
Age 65: 4 million
Age 75: 8 million
Age 85: 16 million



talltexan

  • Bristles
  • ***
  • Posts: 476
Re: NYT Article: What's Your Retirement Number?
« Reply #9 on: February 21, 2017, 07:10:29 AM »
what age do you plan to retire, Clarkfan? Or would it be based on whether you think you're meeting those milestones?

dude

  • Handlebar Stache
  • *****
  • Posts: 1684
Re: NYT Article: What's Your Retirement Number?
« Reply #10 on: February 21, 2017, 09:04:15 AM »
Was going to share this same article.  Unreal.  WTF do these people get these expectations?

Plugra

  • 5 O'Clock Shadow
  • *
  • Posts: 20
Re: NYT Article: What's Your Retirement Number?
« Reply #11 on: February 27, 2017, 07:42:56 PM »
I found the article frightening.  That so many college educated, middle-aged professionals are so clueless about what they'd want/need to enjoy their retirement, and how to finance it, is really disturbing.  To have reached their 50's or 60's and still not understand the math can only mean they are headed for trouble.

Abe

  • Pencil Stache
  • ****
  • Posts: 731
Re: NYT Article: What's Your Retirement Number?
« Reply #12 on: February 28, 2017, 03:43:16 AM »
They'll (except for Ms Sosnow) will all be relying on social security and Medicare. The specific question, she reported in the comments, was "how much money do you need to be happy". It's like asking a kindergartner how much they need to make their awesomest playhouse. I'm not sure if the point of this article is to elicit sympathy or pity. If we're throwing out numbers, I need $325 million - $320m for charity and $5 million for me for $200k per year that increases bi-annually with an additional monthly stipend of 5 tacos.
« Last Edit: February 28, 2017, 03:51:23 AM by Abe »

fattest_foot

  • Bristles
  • ***
  • Posts: 355
Re: NYT Article: What's Your Retirement Number?
« Reply #13 on: February 28, 2017, 08:38:05 AM »
Those numbers are a bit ridiculous, but part of it is definitely mis-education.

I have a finance degree (so I considered myself pretty well versed), and until I found MMM, I was under the impression that I'd probably need $4-5M in order to retire at normal retirement age. Looking back is tough because I can't forget what I know now, but the math made sense at the time. It also mirrored what our financial advisor (Edward Jones) had said, too.

The Shockingly Simple Math article was a real wake up call for me. The number got cut significantly (to about $800k-1M) almost overnight. Oh, and it also cut off about 25 years of work, too.

I'd guess most people think they need significantly more money than they do. By the time their 60's roll around, they probably actually crunch the numbers are realize that they'll be fine in retirement and tens of millions of dollars weren't necessary at all.

Spork

  • Walrus Stache
  • *******
  • Posts: 5459
    • Spork In The Eye
Re: NYT Article: What's Your Retirement Number?
« Reply #14 on: February 28, 2017, 11:18:07 AM »
This does not surprise me a bit.

I've talked to enough people to realize -- people just don't do the math, nor do they have any inkling of their current spending.

I've seen them vastly underestimate.  I've seen them vastly over estimate.  I've had multiple conversations with friends and family where they are going to "hire a guy" to figure out that number for them.  The hard part is figuring out the expenses (and "the guy" can't do that without your input.)  After that, it really isn't that hard to brute force the answer with a simple spreadsheet (easier still with FIRE simulators).
Some will sell their dreams for small desires
Or lose the race to rats
Get caught in ticking traps
And start to dream of somewhere
To relax their restless flight

Alexander0405

  • Stubble
  • **
  • Posts: 155
Re: NYT Article: What's Your Retirement Number?
« Reply #15 on: February 28, 2017, 01:55:52 PM »
... with an additional monthly stipend of 5 tacos.

This would indeed make me happy.  Or at least, elicit a smile as I received and ate my tacos each month.

fuzzy math

  • 5 O'Clock Shadow
  • *
  • Posts: 96
  • Location: West coaster living in the midwest
  • Not a dude
Re: NYT Article: What's Your Retirement Number?
« Reply #16 on: February 28, 2017, 05:47:31 PM »
That last woman is making CANDYLAND at HER HOME !!!
Worthwhile FIRE goals ;)

kayvent

  • Bristles
  • ***
  • Posts: 342
  • Location: Canada
Re: NYT Article: What's Your Retirement Number?
« Reply #17 on: February 28, 2017, 06:30:49 PM »
Twenty-million-dollar guy represents the ultra-mega-pessimistic  position on the four-percent rule. . . .

At that point, you have to be spending over $250k/yr, every year for 80 years just to run out of cash, assuming you put everything in ultra-safe TIPs.

This article reads like "how much money would you like to win in the lottery?" rather than how much do you really need to leave your current job and pursue your interests?

$20 million is an insane number.  $800,000/year on 4%! 

Sure, if people are giving away winning lottery tickets, I'll a $300 million powerball...

I have to assume this is a maths issue. Those deca-millions being listed seem even more ludicrous when broken down into yearly sums. Even with a maths degree and as someone who works with large numbers daily, I didn't realize the scale of those numbers until reading the above two posts. The people must not realize the amount of money they are talking about.

talltexan

  • Bristles
  • ***
  • Posts: 476
Re: NYT Article: What's Your Retirement Number?
« Reply #18 on: March 01, 2017, 08:18:18 AM »
Careful there. People who work longer experience more years of rising incomes, meaning that they wish to replicate their most opulent income during their retirement years.

Mustachians miss out on years of labor-market income growth (although we do experience income growth through the gains in our investments).

Undecided

  • Pencil Stache
  • ****
  • Posts: 850
Re: NYT Article: What's Your Retirement Number?
« Reply #19 on: March 01, 2017, 02:22:05 PM »
Eh, I was actually going to make a comment about how bad people are at math, until I realized that the $20MM guy was talking about buying a townhouse with probably half of that.  Still not awesome math, but not quite as far off as I thought.

Well, the townhouse guy may need two to four million dollars to support his property taxes, too.

Metric Mouse

  • Walrus Stache
  • *******
  • Posts: 5313
  • FU @ 22. F.I.R.E before 23
Re: NYT Article: What's Your Retirement Number?
« Reply #20 on: March 06, 2017, 04:17:36 AM »
Twenty-million-dollar guy represents the ultra-mega-pessimistic  position on the four-percent rule. . . .
Did he even factor in inflation!? /S
Give me one fine day of plain sailing weather and I can mess up anything.

MustacheMathTM

barbaz

  • 5 O'Clock Shadow
  • *
  • Posts: 75
Re: NYT Article: What's Your Retirement Number?
« Reply #21 on: March 06, 2017, 07:49:27 AM »
Twenty-million-dollar guy represents the ultra-mega-pessimistic  position on the four-percent rule. . . .
Did he even factor in inflation!? /S
Ah, the classic .5% safe withdrawal rate.