The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: MJP on March 05, 2013, 02:38:14 PM
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https://www.fidelity.com/viewpoints/personal-finance/8X-retirement-savings
I almost lost it while reading this Fidelity article and checking out the potential options they had in the interactive calculator.
For example, the highest bucket they have for income saved annually is 8% increasing to 15%...
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Wow. You'd think their interests would be aligned with people saving more. More savings=more revenues for Fidelity!
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Wow. You'd think their interests would be aligned with people saving more. More savings=more revenues for Fidelity!
While that may be true, more loans and more credit card purchases probably trumps more savings.
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There is a law of diminishing returns for the Fidelity Investments of the world. If you tell people to save more than what they are comfortable with and what the conventional "experts" say, you will alienate them and they will either stop saving altogether or go somewhere else where they hear what they want to hear. The 5 to 12 percent (and of course there's an employer match in the discussion) is what people are willing to accept, given how low in the hierarchy of perceived needs saving for retirement is.
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Fidelity has had some mind-numbing articles recently. Well, it may not be a recent phenomenon but I only recently started paying attention. It's like they post a really Mustachian headline on the front page, but when you click through the article is completely different (even the URLs have different titles!)
"How to Make a $400,000 Portfolio Last"
https://news.fidelity.com/news/article.jhtml?guid=/FidelityNewsPage/pages/fidelity-5-ways-to-make-your-money-last&topic=living-in-retirement
"Planning to retire on $115,000"
https://news.fidelity.com/news/article.jhtml?guid=/FidelityNewsPage/pages/risky-retirement-savings-plan&topic=saving-for-retirement
Original titles can be found here: https://news.fidelity.com/news/ArticlePageFragment.jhtml?key=/pf/content/insights/index.html&nodisclaimer=true
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That graphic just didn't work for me.
Apparently:
-I cannot save more than 15% for retirement
-I cannot retire before 62
-I must spend at least 80% of my previous salary in retirement
-I will earn at least 4.3% real return
and of course If I make more money, I will spend more money and hence I will need to save more for retirement
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Perhaps ironically, the faster your salary grows and the more you earn, the more you need to have saved in order to replace a given proportion of your final salary in retirement. Conversely, the slower your salary grows, the less you may need to have saved at retirement to maintain your lifestyle.
Seems like a perverted game until you realize you can simply spend less.
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That graphic just didn't work for me.
Apparently:
-I cannot save more than 15% for retirement
-I cannot retire before 62
-I must spend at least 80% of my previous salary in retirement
-I will earn at least 4.3% real return
and of course If I make more money, I will spend more money and hence I will need to save more for retirement
My impression was that the return rates were nominal, not real. If there was anything in that graphic that was probably decent, it was those (nominal) return rates. But for what it's worth, I bet you could get 4.3% real even today, if you have the right portfolio mix.