Author Topic: Advice column letter writer asks how to FIRE, gets no answer  (Read 3691 times)

TheGrimSqueaker

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A nationally syndicated financial advice columnist was a very basic question: at age 55, how much does a person in such-and-such a town need to have saved to retire early?

He responded by throwing out some figures about a monthly budget. At no point did he list a dollar figure or range of dollar figures. Basically, he punted.

Behold the fail.

http://www.uexpress.com/scott-burns/2015/5/21/retirement-is-expensive-if-you-try

There's a reader comment section. It's empty.

surfhb

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Re: Advice column letter writer asks how to FIRE, gets no answer
« Reply #1 on: May 21, 2015, 05:37:09 PM »
Well, to be fair he did give out a number.     I guess he leaves it up to you to do the rest of the math :)

TheGrimSqueaker

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Re: Advice column letter writer asks how to FIRE, gets no answer
« Reply #2 on: May 21, 2015, 10:45:26 PM »
Well, to be fair he did give out a number.     I guess he leaves it up to you to do the rest of the math :)

Which the letter writer could, if she knew what percentage was safe to withdraw each year and how to maximize her earnings.

I'm quite pleased the columnist's living expense estimate was as low as it was, though.

Tjat

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Re: Advice column letter writer asks how to FIRE, gets no answer
« Reply #3 on: May 22, 2015, 05:45:18 AM »
For the first, the idea of retiring in such a high COL area is baffling. However, more of my ire was raised in the second question regarding reasonable fees for financial management firms. Admittedly, I am formally and self-educated in the field, but the idea of paying someone 1-2% to decide how to allocate my money and then look at it quarterly is offensive.

The most I could stomach is to hire a fee-only advisor for a one time consultation to review a specific tax or estate planning question.

zephyr911

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Re: Advice column letter writer asks how to FIRE, gets no answer
« Reply #4 on: May 22, 2015, 06:45:35 AM »
...the idea of retiring in such a high COL area is baffling.
We all have our priorities. I've spent my whole adult life in the Southeast, but my family and all my memories are in three high-COL places (NYC being one of them) and I would like to get back once we're FI. I'm taking full advantage of low COL here to outrun the housing markets there.

The reader is asking the right question to begin with; the answer may help them choose their retirement location.
Quote
However, more of my ire was raised in the second question regarding reasonable fees for financial management firms. Admittedly, I am formally and self-educated in the field, but the idea of paying someone 1-2% to decide how to allocate my money and then look at it quarterly is offensive.

The most I could stomach is to hire a fee-only advisor for a one time consultation to review a specific tax or estate planning question.
Couldn't agree more. I'm not formally educated but I started reading about investments a few months before I finished college. I feel like I knew enough at 21 to FIRE in my 30s, and only missed by failing to apply the knowledge. Anyone could learn enough to do it, if they cared to.

Donovan

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Re: Advice column letter writer asks how to FIRE, gets no answer
« Reply #5 on: May 22, 2015, 06:45:54 AM »
For the first, the idea of retiring in such a high COL area is baffling. However, more of my ire was raised in the second question regarding reasonable fees for financial management firms. Admittedly, I am formally and self-educated in the field, but the idea of paying someone 1-2% to decide how to allocate my money and then look at it quarterly is offensive.

The most I could stomach is to hire a fee-only advisor for a one time consultation to review a specific tax or estate planning question.

For the second half of his answer to that question, though, he says that you need to look at these fees in the light of how much they are costing you in the long run, and even mentions a Vanguard fund as a cheap alternative that tends to beat the managed funds. I can't find anything wrong with that suggestion.

As for his answer to the first question, it's not like the lady asking gave him anything to work with. She doesn't mention income, current savings, ideal COL after retirement, or current spending. Without even one of these data points (especially COL in this case), I don't see how he could have come up with a more targeted answer. To be honest, he probably just should not have answered this question publicly in its current state.

zephyr911

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Re: Advice column letter writer asks how to FIRE, gets no answer
« Reply #6 on: May 22, 2015, 06:54:45 AM »
For the first, the idea of retiring in such a high COL area is baffling. However, more of my ire was raised in the second question regarding reasonable fees for financial management firms. Admittedly, I am formally and self-educated in the field, but the idea of paying someone 1-2% to decide how to allocate my money and then look at it quarterly is offensive.

The most I could stomach is to hire a fee-only advisor for a one time consultation to review a specific tax or estate planning question.

For the second half of his answer to that question, though, he says that you need to look at these fees in the light of how much they are costing you in the long run, and even mentions a Vanguard fund as a cheap alternative that tends to beat the managed funds. I can't find anything wrong with that suggestion.

As for his answer to the first question, it's not like the lady asking gave him anything to work with. She doesn't mention income, current savings, ideal COL after retirement, or current spending. Without even one of these data points (especially COL in this case), I don't see how he could have come up with a more targeted answer. To be honest, he probably just should not have answered this question publicly in its current state.
Columns don't always print letters in their entirety, so it's possible she did actually provide numbers. But as printed, it's asking how to calculate it, not asking the author to calculate the answer for her specific situation. He could have easily said to add up her post-retirement expenses and use the SWR to calculate a 'Stash requirement.