The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: Rich M on April 23, 2013, 08:58:28 PM
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My wife and I have some interesting friends who have an interesting a financial adviser. This adviser has always told them to keep a huge mortgage, leverage their growing home equity, and get whole life insurance--all ideals that I oppose.
The newest advice is assuming how much one needs to retire. The concept told is that you work five days a week and have two days off. You spend the most money on the weekend when you are not working--going out to eat, seeing movies and shows, etc. Thus, when you retire, you now have seven days a week in this spending mode.
Really?!?!
I'm totally in awe that suddenly that one is retired, they are going to spend and party seven days a week.
People inclined to spend, will do it seven days a week regardless IMO-- going to a coffee shop and unloading $8 on breakfast and coffee then another $10 on lunch. It depends on the person.
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it takes 2 to tango. A slick snake-oil salesman getting his hands on as much commission as possible, and an idiot who is willing to pay it.
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There is a bit of truth in what Mr. Snake Oil is saying. People do seem to spend more, not less, in the first few years after they retire. They fix up the house; they take that dream trip; they visit friends and family. After a few years, though, they settle down into a lower spending pattern, which can last until health declines. Then dollars spent go up, but for health care this time. So think of retirement spending as a "U" shape rather than a gradually increasing straight line. Individual results will vary, of course.
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I thought that was going the other way. As in"since you obviously can't save any money when you spend it all on the weekends, the only way to prepare for retirement is to work seven days a week."
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I spend more during the week. Hanging out with my friends is cheap since I don't drink.