Author Topic: 7 Reasons Why Retiring Early is Nearly Impossible These Days (Business Insider)  (Read 5910 times)


MandyM

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The article is pretty thin - they boil it down to social security changes, lack of pensions, and not saving. And two of the reasons that its "impossible" to retire aren't about the possibility to retire, but the desire:

People are living longer and their health is better at older ages.
More people work with their brains rather than brawn.

dude

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The article is pretty thin - they boil it down to social security changes, lack of pensions, and not saving. And two of the reasons that its "impossible" to retire aren't about the possibility to retire, but the desire:

People are living longer and their health is better at older ages.
More people work with their brains rather than brawn.

yep, pretty stupid article that failed to address saving and investing at all.

Middlesbrough

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Oh no! Social Security is getting cut. Ahhhhhhh!


Wake me up when there is a real crisis.

slugline

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yep, pretty stupid article that failed to address saving and investing at all.

They hinted at it when they mentioned the effect of the recession. Even Mustachians close to retirement might have been prompted to work a little longer if their stash had been chopped below their "number," right?

arebelspy

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The article is pretty thin - they boil it down to social security changes, lack of pensions, and not saving. And two of the reasons that its "impossible" to retire aren't about the possibility to retire, but the desire:

People are living longer and their health is better at older ages.
More people work with their brains rather than brawn.

And those first two (SS and pensions) have nothing to do with early retiring - they're money you get late in life, typically for someone who didn't early retire (or at least with the pension, retired as early as it let them, perhaps, but didn't ER through savings).

If you're going to ER, you probably aren't doing it on Social Security funds.  ;)  (Though they may be a safety net later, likely you'll have lots of other funds.)

So really their arguments go:
1) People living longer - not as relevant to ER (if you build a stache that should last forever)
2) People work with their brains?  Huh?  Should give them a reason to ER, to put their brain to good use.  Not relevant.
3) Social Security worry #1 - Relevant to retirement; not as relevant to ER
4) Social Security worry #2 - Relevant to retirement; not as relevant to ER
5) Pension Worry - Relevant to retirement; not as relevant to ER
6) Savings down - well yeah, if you don't save, ER isn't possible.  But savings sure aren't down for someone trying to ER!
7) Job loss - Relevant to retirement; not as relevant to ER

Really, all of these fears are related to retirement.  Someone striving for ER doesn't have to worry as much about a job loss (they're in good financial shape with FU money), don't have to worry about not getting SS (they have other money funding their retirement), don't have to worry as much about living longer, etc..

Trying to ER puts you in BETTER shape to deal with all those things.

Crazy.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
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A_P_

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Quote
Nearly two-thirds of people ages 50 to 64 reported that they lost money in mutual funds, individual stocks or 401(k)-type retirement accounts during the recession.

Oy. Mutual funds and 401(k)'s aren't mutually exclusive. The 401(k) is just the tax-deferred investment vehicle. You can still have stocks or mutual funds in a 401(k). You would think Business Insider would know that.

And yes, most people did lose money from these accounts during the recession. Unfortunately, most also compounded this by making the mistake of pulling out of the market. Those who rode out the market crash would have that money back (and then some) at this point (assuming they were broadly diversified - i.e. in an index fund - to begin with).

shuffler

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The article doesn't even gets its own data straight.
It cites 15.6% of 65+ men in the workforce in 1993, and then the graphic says that it was 15.3% in 2009-2011.

A 0.3% decline in workforce participation sort of argues against the premise that retirement is harder these days.

agent_clone

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I'm not sure about the US, but for Australia I would argue that its probably easier than 30-40 years ago to retire early.  Most people have more disposable income than they did in the past (they just spend it on crap), this means that you have more money to add to the savings pile for early retirement.  The only problem would be the expense of owning your own home if you wanted to go that route.

A_P_

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I'm not sure about the US, but for Australia I would argue that its probably easier than 30-40 years ago to retire early.  Most people have more disposable income than they did in the past (they just spend it on crap), this means that you have more money to add to the savings pile for early retirement.  The only problem would be the expense of owning your own home if you wanted to go that route.
Agreed, it really should be easier than ever before, especially with the rise of dual income families. Unfortunately, most waste their money on crap, as you said. Most also don't know how to properly invest.

strider3700

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A 0.3% decline in workforce participation sort of argues against the premise that retirement is harder these days.

Lately the decline in workforce participation isn't an indicator of retirements but of people not able to find work and running out of unemployment.    I'm not sure what the correct name for them is but it's not retired by any normal sense of the word. 

shuffler

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A 0.3% decline in workforce participation sort of argues against the premise that retirement is harder these days.

Lately the decline in workforce participation isn't an indicator of retirements but of people not able to find work and running out of unemployment.    I'm not sure what the correct name for them is but it's not retired by any normal sense of the word.
That could be (I did say "sort of argues against"), but the article didn't present any data to that affect.
At least a 0.3% decline doesn't reinforce the premise that retirement is harder.

My point was more that the author didn't put very much effort into the article, so I'm not much interested in its conclusions.

wheatfree

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I'm not sure about the US, but for Australia I would argue that its probably easier than 30-40 years ago to retire early.  Most people have more disposable income than they did in the past (they just spend it on crap), this means that you have more money to add to the savings pile for early retirement.  The only problem would be the expense of owning your own home if you wanted to go that route.

The problem is that the majority of people think that that "crap" is necessary.  They honestly believe that what they spend their money on meets their basic minimum needs.  I work with a lot of people making minimum wage (or $1-$2/hr more) and every single one of them has an iphone or a galaxy s-whatever.  It was slow yesterday; I got a good look at all of them.  (Thank you, YouTube.)  No one in that office is suffering from a lack of late model phone with inclusive high-end data plan.  To top it off, on a good day, there are may be 2 people who bring lunch, and I'm one of them.  Most of my minimum wage folks at work have a habit of eating out at for every meal.  No joke.  They come to work, sign in, and go down to the cafeteria (which is not discounted for employees) to get breakfast.   They do the same for lunch, or they order in something from somewhere else because while our cafeteria serves good food, they seem to have a limited number of dishes that they serve repeatedly.  Want to guess what they do for supper?  I frequently hear the "I gotta pick something up on the way home" mantra around quitting time.

You can give these folks a raise, and we have, and they just spend the increase on more of the same.  They can't get ahead because every raise in pay means their minimum set of "needs" rises with it.  While it's really blatantly obvious with my low-end wage folks, I have a co-worker who makes almost twice what I do (which is not minimum wage) and is getting calls from bill collectors, so this phenomenon scales up quite well.  She got a $4-$7/hr pay raise a year ago, due to an increase in the variable shift differential.  After taxes, it was somewhere between $8000 to $10,000 extra per year.  She just traded in her paid off truck about 2 months ago to buy a new car, and this was after telling me that she was getting calls from bill collectors, so she had already more than spent the increase.  She's now looking for a second job and has said more than once that she will never be able to retire.  Well, guess whose fault that is.