Author Topic: Don't Retire Early!  (Read 15704 times)

Timmmy

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Don't Retire Early!
« on: May 26, 2015, 12:18:39 PM »
http://www.msn.com/en-us/money/retirement/why-retiring-in-your-30s-is-a-terrible-idea/ar-BBkfEic

So many flaws in the logic in this article.  Feel free to pick apart. 


Edit: Link fixed
« Last Edit: May 26, 2015, 12:45:04 PM by Timmmy »

Kris

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Re: Don't Retire Early!
« Reply #1 on: May 26, 2015, 12:22:27 PM »
Good god, that's a poorly written article.  I love how they leap from the GCC folks immediately to pro athletes.  Yeah.  That's exactly the same thing.  Not to mention all the ridiculous assumptions.  What a moronic waste of bandwidth.

arebelspy

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Re: Don't Retire Early!
« Reply #2 on: May 26, 2015, 12:32:44 PM »
Link in OP didn't work for me, but this did:
http://www.msn.com/en-us/money/retirement/why-retiring-in-your-30s-is-a-terrible-idea/ar-BBkfEic

Wow that adviser quoted throughout just doesn't get it.

It's just sad, more than anything else.
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Cheddar Stacker

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Re: Don't Retire Early!
« Reply #3 on: May 26, 2015, 12:43:25 PM »
It might be good advice for normal people. Maybe.

Quote
Continuing to earn income would not only prolong contributions to, and delay withdrawals from, a retirement portfolio, but allow you to keep up with your friends' and family's spending as they continue to earn.

Not a goal of mine.

Quote
What if you were supposed to be the next Steve Jobs, but because you didn't even try, that didn't happen?

Apparently you are only allowed to create things/succeed if you are in your current career working 40+ hours/week for pay. Also, while I aspire to do great things, come on, Steve Jobs. 1 in 10 million at best will ever achieve that level of success.
« Last Edit: May 26, 2015, 12:56:30 PM by Cheddar Stacker »

Sam E

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Re: Don't Retire Early!
« Reply #4 on: May 26, 2015, 12:46:27 PM »
I think it's interesting (sad) that "keeping up with friends' and family's spending" is one of the things he mentions as a boon to continuing in your career. And that he equates retirement with being a lazy do-nothing with nothing to contribute to society. The article offers part time nonprofit work as a substitute for retirement rather than a supplement to it... Basically the advisor and author are the very definition of not getting it. I won't what it's like living with this kind of Stockholm syndrome for wage slavery...

MsSindy

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Re: Don't Retire Early!
« Reply #5 on: May 26, 2015, 12:46:57 PM »
Yeah, and if you're a work-aholic like Steve Jobs, then you're really not entertaining the idea of early retirement - useless comparison.

MgoSam

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Re: Don't Retire Early!
« Reply #6 on: May 26, 2015, 01:10:24 PM »
Couldn't help but think of Billy Madison.....

"what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul."

Clean Shaven

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Re: Don't Retire Early!
« Reply #7 on: May 26, 2015, 01:13:46 PM »
Note: the article refers to Jeremy and Winnie, who are the "Go Curry Cracker" bloggers.

WildJager

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Re: Don't Retire Early!
« Reply #8 on: May 26, 2015, 01:21:27 PM »
Eh, the article does touch upon the concept that retiring to nothing can make people wither away.  But there is a stark difference between retiring from a typical job and filling your time with life fulfilling objectives.  Retiring does close some doors... but that's a choice for individuals to make.  The difference is whether you live to work, or simply work to live right now.  For those who enjoy life outside of a pre-defined construct, early retirement can open more doors than it closes.  ER is not for those who derive full satisfaction from their current duties.

dsmexpat

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Re: Don't Retire Early!
« Reply #9 on: May 26, 2015, 01:23:21 PM »
What if you were supposed to die young of pancreatic cancer but because you retired early that didn't happen? What then!?!?

forummm

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Re: Don't Retire Early!
« Reply #10 on: May 26, 2015, 01:31:30 PM »
Did you guys know that "working prevents you from spending money"? Weird, my co-workers didn't seem to get that memo.

Lian

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Re: Don't Retire Early!
« Reply #11 on: May 26, 2015, 01:35:24 PM »
A particularly odd assumption is that anyone who is successful and highly skilled enough to retire in their 30’s is just going to shut down and veg out in retirement. The article equates ‘retirement’ to being done with life instead of to financial freedom.

frugledoc

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Re: Don't Retire Early!
« Reply #12 on: May 26, 2015, 01:37:29 PM »
Some of that article struck a chord with me.  I am pretty obsessed with becoming financially independent but will probably continue to work unless it becomes unenjoyable, which is a distinct possibility as I work for the UK NHS.

Elderwood17

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Re: Don't Retire Early!
« Reply #13 on: May 26, 2015, 01:54:26 PM »
A particularly odd assumption is that anyone who is successful and highly skilled enough to retire in their 30’s is just going to shut down and veg out in retirement. The article equates ‘retirement’ to being done with life instead of to financial freedom.

I agree.  I would also argue you are more likely to become the next Steve Jobs of I retire early and am free to pursue only those things that interest me the most.

MgoSam

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Re: Don't Retire Early!
« Reply #14 on: May 26, 2015, 02:07:32 PM »
A particularly odd assumption is that anyone who is successful and highly skilled enough to retire in their 30’s is just going to shut down and veg out in retirement. The article equates ‘retirement’ to being done with life instead of to financial freedom.

I agree.  I would also argue you are more likely to become the next Steve Jobs of I retire early and am free to pursue only those things that interest me the most.

Or that someone would want to be a Steve Jobs? It may be shocking to most people, but I really don't care to become a billionaire, or a celebrity, or anything like that.

Sam E

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Re: Don't Retire Early!
« Reply #15 on: May 26, 2015, 02:27:35 PM »
Did you guys know that "working prevents you from spending money"? Weird, my co-workers didn't seem to get that memo.

Even more fascinating, did you know that outside of going to work 40+ hours per week, the ONLY alternative to spending money without limitation is to lock yourself inside your home and never do anything but stare at a TV alone all day?

MgoSam

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Re: Don't Retire Early!
« Reply #16 on: May 26, 2015, 02:39:18 PM »
Did you guys know that "working prevents you from spending money"? Weird, my co-workers didn't seem to get that memo.

Even more fascinating, did you know that outside of going to work 40+ hours per week, the ONLY alternative to spending money without limitation is to lock yourself inside your home and never do anything but stare at a TV alone all day?

Staring at TV might lead to some expensive purchases, especially if you get hooked into the HSN or something like that.

nereo

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Re: Don't Retire Early!
« Reply #17 on: May 26, 2015, 02:56:24 PM »
Quote
...a $10MM portfolio might be sufficient for one young retiree, while being way too little for another who wants a higher standard of living.
Jeez, I can't imagine what living on 'only' $1,000 a day must feel like.  Better save a lot more.  ::eyeroll::

Quote
Chances are I might spend 20, 30 to 40 years in retirement if I retire at age 50.  That's a lot of time, so if I retire in my mid-30s, that money will have to last me 50-plus years, and I just don't see how that happens.
Wait... let me get this straight.  a VP at Hartford funds can see how a potential 40 year retirement would work, but can't understand how a 50 year retirement would work?  Hint - it's the same damn thing.  If your money lasts 40 years, odds are it'll last 50+.

Quote
Working keeps you occupied and prevents you from spending money
WHERE DO THEY FIND THESE IDIOTS??  Most retirees find that their expenditures go DOWN after a few years, to about 80% of pre-retirement levels.

Quote
At it's worst, an extremely early retirement means that you're just aren't doing anything
I wasn't aware that I had to sit at home in the dark once ER kicked in.  Rather than spending 40 hours a week working, I was planning on using that time to do stuff I enjoy!

TheGrimSqueaker

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Re: Don't Retire Early!
« Reply #18 on: May 26, 2015, 03:42:14 PM »

WHERE DO THEY FIND THESE IDIOTS??


More importantly, how do these idiots manage to feed themselves?

gillstone

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Re: Don't Retire Early!
« Reply #19 on: May 26, 2015, 04:06:26 PM »
Notice they talk to financial planners who work with high earners.  If their clients retire early the portfolios won't grow as much and their annual service percentage won't be as big.  Its like foxes saying you should leave the henhouse open more often.

Also note that they take the Internet Retirement Police view on retirement that you have to be completely nonproductive and cannot engage in any passions or hobbies.

forummm

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Re: Don't Retire Early!
« Reply #20 on: May 26, 2015, 04:19:02 PM »

WHERE DO THEY FIND THESE IDIOTS??


More importantly, how do these idiots manage to feed themselves?

Expensively.

arebelspy

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Re: Don't Retire Early!
« Reply #21 on: May 26, 2015, 04:21:29 PM »
They find ignorant masses who listen to them, and then they siphon money from those people.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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forummm

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Re: Don't Retire Early!
« Reply #22 on: May 26, 2015, 04:23:26 PM »
A particularly odd assumption is that anyone who is successful and highly skilled enough to retire in their 30’s is just going to shut down and veg out in retirement. The article equates ‘retirement’ to being done with life instead of to financial freedom.

I agree.  I would also argue you are more likely to become the next Steve Jobs of I retire early and am free to pursue only those things that interest me the most.

Or that someone would want to be a Steve Jobs? It may be shocking to most people, but I really don't care to become a billionaire, or a celebrity, or anything like that.

I don't know. It could be fun to be a serious jerk to everyone, hold them to really high standards, think really highly of yourself--that you're stuff is all "insanely great", have no privacy, work your entire life into your deathbed, and have everyone talk about you like a god because you led a group that created a different kind of telephone.

arebelspy

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Re: Don't Retire Early!
« Reply #23 on: May 27, 2015, 09:06:14 AM »
A particularly odd assumption is that anyone who is successful and highly skilled enough to retire in their 30’s is just going to shut down and veg out in retirement. The article equates ‘retirement’ to being done with life instead of to financial freedom.

I agree.  I would also argue you are more likely to become the next Steve Jobs of I retire early and am free to pursue only those things that interest me the most.

Or that someone would want to be a Steve Jobs? It may be shocking to most people, but I really don't care to become a billionaire, or a celebrity, or anything like that.

I don't know. It could be fun to be a serious jerk to everyone, hold them to really high standards, think really highly of yourself--that you're stuff is all "insanely great", have no privacy, work your entire life into your deathbed, and have everyone talk about you like a god because you led a group that created a different kind of telephone.

That doesn't sound like a fulfilling life to me.

But I think Steve probably did have a fulfilling life, so I'm thinking that's mostly a mischaracterization.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

celticmyst08

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Re: Don't Retire Early!
« Reply #24 on: May 27, 2015, 09:17:40 AM »
"$10 million portfolio might be sufficient for one young retiree, while being way too little for another individual who wants a higher standard of living."

Good lord, at the 4% rule that's $400k/year. Wtf kind of person needs that much money to retire?! Even 1% of that is $100k/year, which is way more than I ever want to spend. DH and I plan for ~$40k/year spending, and that's what we consider luxury -- allowing for a lot of travel and fun money!

southernhippie

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Re: Don't Retire Early!
« Reply #25 on: May 27, 2015, 09:21:04 AM »
Couldn't help but think of Billy Madison.....

"what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul."

There is no better response than that one

MgoSam

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Re: Don't Retire Early!
« Reply #26 on: May 27, 2015, 09:24:39 AM »
A particularly odd assumption is that anyone who is successful and highly skilled enough to retire in their 30’s is just going to shut down and veg out in retirement. The article equates ‘retirement’ to being done with life instead of to financial freedom.

I agree.  I would also argue you are more likely to become the next Steve Jobs of I retire early and am free to pursue only those things that interest me the most.

Or that someone would want to be a Steve Jobs? It may be shocking to most people, but I really don't care to become a billionaire, or a celebrity, or anything like that.

I don't know. It could be fun to be a serious jerk to everyone, hold them to really high standards, think really highly of yourself--that you're stuff is all "insanely great", have no privacy, work your entire life into your deathbed, and have everyone talk about you like a god because you led a group that created a different kind of telephone.

That doesn't sound like a fulfilling life to me.

But I think Steve probably did have a fulfilling life, so I'm thinking that's mostly a mischaracterization.  :)

That's kinda the impression I got after reading Walter Isaacson's biography. Don't misunderstand, I respect Steve Jobs, but likely am better off having no personal interactions with the man.

slugline

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Re: Don't Retire Early!
« Reply #27 on: May 27, 2015, 09:32:27 AM »
"$10 million portfolio might be sufficient for one young retiree, while being way too little for another individual who wants a higher standard of living."

Good lord, at the 4% rule that's $400k/year. Wtf kind of person needs that much money to retire?! Even 1% of that is $100k/year, which is way more than I ever want to spend. DH and I plan for ~$40k/year spending, and that's what we consider luxury -- allowing for a lot of travel and fun money!

Right. Even if you don't invest it at all and keep it in cash with 0% return, that's still $140K every year for 70 years. You'd have to make a special effort to not be OK with that lump sum. :)

chops

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Re: Don't Retire Early!
« Reply #28 on: May 27, 2015, 09:33:15 AM »
Notice they talk to financial planners who work with high earners.  If their clients retire early the portfolios won't grow as much and their annual service percentage won't be as big.  Its like foxes saying you should leave the henhouse open more often.

+1.  The whole article is based on the foxes' perspective.  What this means to me is actually really exciting news. 

The foxes are actually getting concerned and responding now that the MMMs and the GCCs are getting major media attention.  There are a lot of high net worth folks that are probably mentioning FIRE these days to their financial planners, and that scares the shit out of them. 

 - Chops

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Re: Don't Retire Early!
« Reply #29 on: May 27, 2015, 10:11:02 AM »
I agree with one point in the article…that is that I DID want a higher standard of living and that is why I planned for, achieved and FIRE'd at 49.  I now hear sounds, see sights, sense smells that passed silently by my overstimulated senses which were overwhelmed by worry from manufactured Corporate problems and challenges which in the end only numbed me to the beautiful world around me.

Now I take joy in walking out on the deck in the early morning with a fresh cup of coffee, listening to leaves dancing in the breeze, enjoy the smell of the earth, water and flowers.   I even now enjoy taking the slow, scenic route getting to my destination, enjoying the journey and its splendid surprises along the way.  AAAHHH, indeed I found a higher standard of living in retirement…all on a low, self-induced (and planned) low, fixed income.  And the best part is I will get a raise when I turn 62 and start to draw social security.

I planned my drawdown of savings and retirement funds using a zero-growth rate and I will still live a good life of travel, beer/wine, friends and the great outdoors.  If my savings grows then great but it won't add to my standard of living because freedom
 doesn't cost a nickel.

Best of luck to the author and contributors to this article as they just don't get it.  Higher standard of living does not EVER mean more spending!

nereo

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Re: Don't Retire Early!
« Reply #30 on: May 27, 2015, 10:24:54 AM »
I agree with one point in the article…that is that I DID want a higher standard of living and that is why I planned for, achieved and FIRE'd at 49.  ...
Best of luck to the author and contributors to this article as they just don't get it.  Higher standard of living does not EVER mean more spending!
There's "higher standard of living" and then there's freaking ridiculous levels of projected consumption. The mere suggestion that a $10MM portfolio might be "way too little" is insane.  If you can't live off $1,000 per day after taxes ...well... wow.  just wow.

forummm

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Re: Don't Retire Early!
« Reply #31 on: May 27, 2015, 10:37:46 AM »
A particularly odd assumption is that anyone who is successful and highly skilled enough to retire in their 30’s is just going to shut down and veg out in retirement. The article equates ‘retirement’ to being done with life instead of to financial freedom.

I agree.  I would also argue you are more likely to become the next Steve Jobs of I retire early and am free to pursue only those things that interest me the most.

Or that someone would want to be a Steve Jobs? It may be shocking to most people, but I really don't care to become a billionaire, or a celebrity, or anything like that.

I don't know. It could be fun to be a serious jerk to everyone, hold them to really high standards, think really highly of yourself--that you're stuff is all "insanely great", have no privacy, work your entire life into your deathbed, and have everyone talk about you like a god because you led a group that created a different kind of telephone.

That doesn't sound like a fulfilling life to me.

But I think Steve probably did have a fulfilling life, so I'm thinking that's mostly a mischaracterization.  :)

Of course. How else could I inflect the one-sided dramatization for sarcastic effect?

Clearly, for him, Apple was what he wanted to do his whole life. But I'm not like him.

Eric

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Re: Don't Retire Early!
« Reply #32 on: May 27, 2015, 01:54:37 PM »
Notice they talk to financial planners who work with high earners.  If their clients retire early the portfolios won't grow as much and their annual service percentage won't be as big.  Its like foxes saying you should leave the henhouse open more often.

+1.  The whole article is based on the foxes' perspective. 

Actually, what the fox says makes even more sense than the quotes in this article.

chops

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Re: Don't Retire Early!
« Reply #33 on: May 27, 2015, 05:42:21 PM »
+1.  The whole article is based on the foxes' perspective. 
[/quote]



Actually, what the fox says makes even more sense than the quotes in this article.
[/quote]

Nicely done.  truth.

mohawkbrah

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Re: Don't Retire Early!
« Reply #34 on: May 28, 2015, 04:17:13 AM »
"working keeps you occupied and gives you structure"

sounds like a wage slave that's been brainwashed...

Squirrel away

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Re: Don't Retire Early!
« Reply #35 on: May 28, 2015, 04:30:24 AM »
What a stupid article, it makes it sound like people who retire early just go into some sort of inactive trance for the rest of their life.:D

Abe

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Re: Don't Retire Early!
« Reply #36 on: May 28, 2015, 06:08:39 AM »
It's a well known fact that people are financially independent, once achieving that level of wealth, turn into zombies. That's why one should always give their money to financial advisors, so they can save you from that terrible fate.

cerebus

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Re: Don't Retire Early!
« Reply #37 on: May 28, 2015, 06:46:53 AM »
This article makes me want to retire more and makes me feel sorry for the financial adviser whose imagination has been so stunted that he can't conceive of a self-identity outside of working for someone else for his entire life. It's pitiful.

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Re: Don't Retire Early!
« Reply #38 on: May 28, 2015, 07:25:00 AM »
WHERE DO THEY FIND THESE IDIOTS??
More importantly, how do these idiots manage to feed themselves?
Expensively.
Room service, yo. You deserve it.

mizzourah2006

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Re: Don't Retire Early!
« Reply #39 on: May 28, 2015, 08:03:59 AM »
I think being in these forums and living a more frugal lifestyle causes us to forget how the average person lives. my in-laws were in town this weekend. They just retired about 2 years ago in their early 50s with pensions that were the equivalent to about 75% of their final year's salary. My father-in-law and I were talking about saving and retirement and he said that he not only wants both of their pensions, but also is pulling money out of a fund with about 350k in it at a rate that he expects to be gone by the time he can collect Social Security. He said he did not want to take a pay cut when he retired. Together I would be willing to bet their pensions alone are between 140-150k/yr. It's expensive to live a "normal" life, especially the normal life that someone that has the ability to retire early has likely become accustomed to.

This article is probably pretty accurate when it comes to your average person.

nereo

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Re: Don't Retire Early!
« Reply #40 on: May 28, 2015, 09:31:09 AM »
I think being in these forums and living a more frugal lifestyle causes us to forget how the average person lives. my in-laws were in town this weekend. They just retired about 2 years ago in their early 50s with pensions that were the equivalent to about 75% of their final year's salary. My father-in-law and I were talking about saving and retirement and he said that he not only wants both of their pensions, but also is pulling money out of a fund with about 350k in it at a rate that he expects to be gone by the time he can collect Social Security. He said he did not want to take a pay cut when he retired. Together I would be willing to bet their pensions alone are between 140-150k/yr. It's expensive to live a "normal" life, especially the normal life that someone that has the ability to retire early has likely become accustomed to.

This article is probably pretty accurate when it comes to your average person.
No, it isn't.  Median household income in the United states is about $50,500.  The top 25% have incomes of 'just' $85k, and even the 95th percentile earns less than $200k/year.  Excluding home equity, no age group has a median savings anywhere close to $200k

In no way does having $10MM in retirement - equivalent to $300-400k/year in WR - equate to 'your average person'.
If you convince yourself that spending even $200k/year is 'normal' then you have lost touch with how the vast majority of people in the wealthiest country on earth actually live.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

mizzourah2006

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Re: Don't Retire Early!
« Reply #41 on: May 28, 2015, 12:15:53 PM »
I think being in these forums and living a more frugal lifestyle causes us to forget how the average person lives. my in-laws were in town this weekend. They just retired about 2 years ago in their early 50s with pensions that were the equivalent to about 75% of their final year's salary. My father-in-law and I were talking about saving and retirement and he said that he not only wants both of their pensions, but also is pulling money out of a fund with about 350k in it at a rate that he expects to be gone by the time he can collect Social Security. He said he did not want to take a pay cut when he retired. Together I would be willing to bet their pensions alone are between 140-150k/yr. It's expensive to live a "normal" life, especially the normal life that someone that has the ability to retire early has likely become accustomed to.

This article is probably pretty accurate when it comes to your average person.
No, it isn't.  Median household income in the United states is about $50,500.  The top 25% have incomes of 'just' $85k, and even the 95th percentile earns less than $200k/year.  Excluding home equity, no age group has a median savings anywhere close to $200k

In no way does having $10MM in retirement - equivalent to $300-400k/year in WR - equate to 'your average person'.
If you convince yourself that spending even $200k/year is 'normal' then you have lost touch with how the vast majority of people in the wealthiest country on earth actually live.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

Did you not read what I wrote? I wasn't talking about your average person's income, I was talking about the spending habits of your average person and it being difficult for a person with your average spending habits to retire early which is exactly why I mentioned my in-laws that didn't even want to take a pay cut when they retired.

If we are speaking of your actual average person, which average people do you know that are retiring early?



nereo

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Re: Don't Retire Early!
« Reply #42 on: May 28, 2015, 01:25:19 PM »
I think being in these forums and living a more frugal lifestyle causes us to forget how the average person lives. my in-laws were in town this weekend. They just retired about 2 years ago in their early 50s with pensions that were the equivalent to about 75% of their final year's salary. My father-in-law and I were talking about saving and retirement and he said that he not only wants both of their pensions, but also is pulling money out of a fund with about 350k in it at a rate that he expects to be gone by the time he can collect Social Security. He said he did not want to take a pay cut when he retired. Together I would be willing to bet their pensions alone are between 140-150k/yr. It's expensive to live a "normal" life, especially the normal life that someone that has the ability to retire early has likely become accustomed to.

This article is probably pretty accurate when it comes to your average person.
No, it isn't.  Median household income in the United states is about $50,500.  The top 25% have incomes of 'just' $85k, and even the 95th percentile earns less than $200k/year.  Excluding home equity, no age group has a median savings anywhere close to $200k

In no way does having $10MM in retirement - equivalent to $300-400k/year in WR - equate to 'your average person'.
If you convince yourself that spending even $200k/year is 'normal' then you have lost touch with how the vast majority of people in the wealthiest country on earth actually live.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

Did you not read what I wrote? I wasn't talking about your average person's income, I was talking about the spending habits of your average person and it being difficult for a person with your average spending habits to retire early which is exactly why I mentioned my in-laws that didn't even want to take a pay cut when they retired.

If we are speaking of your actual average person, which average people do you know that are retiring early?
I've (re)read your post, and I've (re)read the article.  The part of your post I take issue with I highlighted in bold.  I still cannot fathom how you think the article is accurate for your average person.  If you are trying to suggest that the average person is horrible with money, then I agree and we can just end the discussion here.

Where I see this as having taken a hard-right-turn-off-a-cliff from reality is the suggestion that the 'average' person cannot live on $10MM worth of investments, or the insinuation that working keeps you from spending money (when, for the average person, the opposite is true), or that people who retire become inactive and are 'just not doing anything'.

mizzourah2006

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Re: Don't Retire Early!
« Reply #43 on: May 28, 2015, 01:58:48 PM »

I've (re)read your post, and I've (re)read the article.  The part of your post I take issue with I highlighted in bold.  I still cannot fathom how you think the article is accurate for your average person.  If you are trying to suggest that the average person is horrible with money, then I agree and we can just end the discussion here.

Where I see this as having taken a hard-right-turn-off-a-cliff from reality is the suggestion that the 'average' person cannot live on $10MM worth of investments, or the insinuation that working keeps you from spending money (when, for the average person, the opposite is true), or that people who retire become inactive and are 'just not doing anything'.

That 10mm worth investments and just not doing anything were two small parts of the entire article, which is why I said pretty accurate. I was referencing the fact that many people spend as much as they can. Thus a statement like this:

Quote
“Chances are I might spend 20, 30 to 40 years in retirement if I retire in my 50s. That's a lot of time, so if I retire in my mid-30s, that money will have to last me 50-plus years, and I just don't see how it happens.”

would be true for most people that try to retire early. I wasn't saying everything the author said was true, but that the general premise of the article, i.e. that spending 40-50 years in retirement would likely leave your average individual broke based off of the fact that your average person has terrible spending habits.

Also, I know several people that have retired with 1.5-3 million dollar nest eggs (lump sum pension distributions) and blown it in 5-6 years only to have to go back to work again, so 10mm over 40-50 years for someone with "normal" spending habits may not be enough.

Again, I think we forget that we look at money and it's ability to produce a passive income for us in a completely different manner than most people.  I was not trying to infer that every single point the author made was accurate and was focusing on the ability to live off of a nest egg (which 10mm is a bit extreme, because there are very few 30 year old's that will have that type of money) likely being difficult for your average person with average spending habits.
« Last Edit: May 28, 2015, 02:00:39 PM by mizzourah2006 »

Sam E

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Re: Don't Retire Early!
« Reply #44 on: May 28, 2015, 02:00:06 PM »
I think being in these forums and living a more frugal lifestyle causes us to forget how the average person lives. my in-laws were in town this weekend. They just retired about 2 years ago in their early 50s with pensions that were the equivalent to about 75% of their final year's salary. My father-in-law and I were talking about saving and retirement and he said that he not only wants both of their pensions, but also is pulling money out of a fund with about 350k in it at a rate that he expects to be gone by the time he can collect Social Security. He said he did not want to take a pay cut when he retired. Together I would be willing to bet their pensions alone are between 140-150k/yr. It's expensive to live a "normal" life, especially the normal life that someone that has the ability to retire early has likely become accustomed to.

This article is probably pretty accurate when it comes to your average person.
No, it isn't.  Median household income in the United states is about $50,500.  The top 25% have incomes of 'just' $85k, and even the 95th percentile earns less than $200k/year.  Excluding home equity, no age group has a median savings anywhere close to $200k

In no way does having $10MM in retirement - equivalent to $300-400k/year in WR - equate to 'your average person'.
If you convince yourself that spending even $200k/year is 'normal' then you have lost touch with how the vast majority of people in the wealthiest country on earth actually live.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

Did you not read what I wrote? I wasn't talking about your average person's income, I was talking about the spending habits of your average person and it being difficult for a person with your average spending habits to retire early which is exactly why I mentioned my in-laws that didn't even want to take a pay cut when they retired.

If we are speaking of your actual average person, which average people do you know that are retiring early?
I've (re)read your post, and I've (re)read the article.  The part of your post I take issue with I highlighted in bold.  I still cannot fathom how you think the article is accurate for your average person.  If you are trying to suggest that the average person is horrible with money, then I agree and we can just end the discussion here.

Where I see this as having taken a hard-right-turn-off-a-cliff from reality is the suggestion that the 'average' person cannot live on $10MM worth of investments, or the insinuation that working keeps you from spending money (when, for the average person, the opposite is true), or that people who retire become inactive and are 'just not doing anything'.

The average person, given 10 million dollars, would probably buy a huge multimillion dollar house, brand new luxury cars, maybe a boat... The average person allows their spending to inflate to whatever their available income is. I think that's his point. Not that an average person couldn't live forever on $10MM, but that the average person would find ways to spend it all very quickly given such a windfall. Just look at lottery winners who go instantly broke.

nereo

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Re: Don't Retire Early!
« Reply #45 on: May 28, 2015, 02:19:51 PM »

would be true for most people that try to retire early. I wasn't saying everything the author said was true, but that the general premise of the article, i.e. that spending 40-50 years in retirement would likely leave your average individual broke based off of the fact that your average person has terrible spending habits.

Ok - I understand what you mean now.  As I said, if your point is that average people are horrible with money, I've got no argument with you there

Quote
Also, I know several people that have retired with 1.5-3 million dollar nest eggs (lump sum pension distributions) and blown it in 5-6 years only to have to go back to work again, so 10mm over 40-50 years for someone with "normal" spending habits may not be enough.
Here's where I divert though.  1.5MM to 3MM isn't in the same ballpark as 10MM - especially when it's being managed by a competent advisor.  6% of 1.5MM is $90k, and runs you a very reasonable risk of depleting your assets in under 10 years - that's still in the realm of what I'd call "average spending".  OTOH, 3% of $10MM is $300k which puts spending in the 1% category, and runs very little risk of running out.
That's all I was trying to say - that there's absolutely nothing normal about the spending you can do with $10MM - even over 50 year time frames.

arebelspy

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Re: Don't Retire Early!
« Reply #46 on: May 28, 2015, 02:32:43 PM »

would be true for most people that try to retire early. I wasn't saying everything the author said was true, but that the general premise of the article, i.e. that spending 40-50 years in retirement would likely leave your average individual broke based off of the fact that your average person has terrible spending habits.

Ok - I understand what you mean now.  As I said, if your point is that average people are horrible with money, I've got no argument with you there

Quote
Also, I know several people that have retired with 1.5-3 million dollar nest eggs (lump sum pension distributions) and blown it in 5-6 years only to have to go back to work again, so 10mm over 40-50 years for someone with "normal" spending habits may not be enough.
Here's where I divert though.  1.5MM to 3MM isn't in the same ballpark as 10MM - especially when it's being managed by a competent advisor.  6% of 1.5MM is $90k, and runs you a very reasonable risk of depleting your assets in under 10 years - that's still in the realm of what I'd call "average spending".  OTOH, 3% of $10MM is $300k which puts spending in the 1% category, and runs very little risk of running out.
That's all I was trying to say - that there's absolutely nothing normal about the spending you can do with $10MM - even over 50 year time frames.

If they had no idea how much they had, and kept their spending to normal (ridiculous) levels, yes.

Otherwise maybe not.

Though anyone likely to save their way there will be fine.  But anyone getting a windfall of that likely won't have normal ridiculous low 6-figure spending. They'll go out and blow 2MM on a house, 300k on a sports car, etc. and run through it quickly.
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nereo

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Re: Don't Retire Early!
« Reply #47 on: May 28, 2015, 03:38:00 PM »
(snip)
If they had no idea how much they had, and kept their spending to normal (ridiculous) levels, yes.

Otherwise maybe not.

Though anyone likely to save their way there will be fine.  But anyone getting a windfall of that likely won't have normal ridiculous low 6-figure spending. They'll go out and blow 2MM on a house, 300k on a sports car, etc. and run through it quickly.
Absolutely.  I agree the average person could blow $10MM very quickly.  My only issue is that it would not be average spending.
It's the difference between the average behavior of a typical person and the typical spending of an average person.

The discussion seems to all hinge on which we are talking about.  So... I agree with everyone now :-)

Sid Hoffman

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Re: Don't Retire Early!
« Reply #48 on: May 28, 2015, 03:50:36 PM »
I think it's interesting that often I hear people saying early retirement is foolish because you would be doing the same thing every day and would get bored.  Instead you should go to work, so you can... do the same thing every day, but with the added bonus of potentially inflexible hours, higher stress, no income security, less flexibility for relocation and perhaps repetitive motion injuries.

Retired or not, you're always going to have some degree of sameness to the things you do.  A retiree simply has more flexibility in how same or different they want any one given day to be to the days prior or following.

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Re: Don't Retire Early!
« Reply #49 on: May 28, 2015, 06:14:47 PM »
Some of that article struck a chord with me.  I am pretty obsessed with becoming financially independent but will probably continue to work unless it becomes unenjoyable, which is a distinct possibility as I work for the UK NHS.

Ditto.  I like my work.  If I could retire today I would probably still work, but the day I didn't like it anymore... I'm out.  I would like that option.

Quote from: nereo
Wait... let me get this straight.  a VP at Hartford funds can see how a potential 40 year retirement would work, but can't understand how a 50 year retirement would work?  Hint - it's the same damn thing.  If your money lasts 40 years, odds are it'll last 50+.

Have you seen the fees on their funds?  Nope, you probably can't retire for 50 years using their funds.  However your advisor probably could.