Author Topic: Personal Capital blog -- need $100k a year in retirement?  (Read 6200 times)

amf1411

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Personal Capital blog -- need $100k a year in retirement?
« on: January 14, 2014, 09:16:50 AM »
Upon MMM's recommendation, I've checked out and signed up for Personal Capital, so I get an occasional email from them.  Today's email, "So you think being a millionaire in retirement is all biscuits and gravy?" included a link to a blog that has helpful (sarcasm) points like "annual savings rate: $5,000.  Retirement spending: $100,000." and my favorite, "to retire comfortably with only a million, you need to be 75."

http://blog.personalcapital.com/investing/what-it-means-to-be-a-millionaire-at-retirement/

RootofGood

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #1 on: January 14, 2014, 09:22:03 AM »
I read that blog post earlier this morning and felt compelled to mention I'm retired with about that much money at age 33.  Of course I'm not spending $100k per year.  I feel like the OG himself, MMM, in regards to spending $100k per year.  I'm not sure that I would significantly better my life by spending 3x what we spend now. 

the fixer

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #2 on: January 14, 2014, 09:29:57 AM »
Yeah, that's pretty bad. They never once question the assumption of needing $100k/year in retirement, even though they're willing to change retirement age. They just say it's what's needed to be "comfortable." They also never question savings of only $5k/year. I'm definitely not calling them for advice!

SnackDog

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #3 on: January 14, 2014, 09:59:35 AM »
It all depends on your forecast for inflation.  Many people look at the current situation with US government debt, the trade imbalance, unemployment and foreign debt holders and can not see way to avoid a severe round of inflation in the US during the next decade or two.  If that happens, $10 million may not be enough.

the fixer

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #4 on: January 14, 2014, 10:03:26 AM »
I think they're doing the math in constant dollars, since the investment return rate is listed as after-inflation. It would be silly to assume things like savings wouldn't also go up with inflation, so their hypothetical $1M would be in 2014 dollars.

wtjbatman

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #5 on: January 14, 2014, 09:08:45 PM »
There's a thread on Bogleheads right now where a guy believes he is about to be laid off, and he is wondering that since he "only" has $1.2 million in retirement accounts, if he will be able to survive a long retirement (he's 52). Most of the replies are, no way, you'll need to get a similar paying job/another job until you can start collecting SS, etc. What's hilarious to me is he even posted his monthly budget, and it's only around $2200 a month (I think... can't access bogleheads from work).

frugalecon

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #6 on: January 15, 2014, 08:08:36 PM »
One wildcard once one gets to true old age is the cost of assisted living and nursing care. My dad has Alzheimer's, and that meter runs pretty fast once more intensive care is needed. I don't see a lot of acknowledgement of this as a possibility on this board.

Abe

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #7 on: January 16, 2014, 06:57:08 AM »
I think about this a lot as part of my work, and advising patients with a terminal illness.  Many of them are unprepared for the possibility of being dependent on others, both mentally and financially. Working in an intensive care unit often shifts ones' frame of reference such that long-term care and a slow decline is unpalatable. Hospice is an under-recognized option for many that is often the most realistic and less taxing way out.

sherr

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #8 on: January 16, 2014, 08:28:39 AM »
One wildcard once one gets to true old age is the cost of assisted living and nursing care. My dad has Alzheimer's, and that meter runs pretty fast once more intensive care is needed. I don't see a lot of acknowledgement of this as a possibility on this board.

Hospice care as mentioned above is one alternative to intensive care. I actually prefer another option. I believe strongly in a person's right to die. I think the most humane thing for me to do (and vastly preferable for me as an individual) is opt-out of the long slow decline once I reach a certain point. I strongly suspect that death rights in the US will increase before I am old, but if not then I can always take a trip somewhere else.

Of course that is only a choice you can make for yourself to protect your spouse / children, you can't choose it for your parents to protect yourself.

Undecided

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #9 on: January 16, 2014, 09:20:52 AM »
One wildcard once one gets to true old age is the cost of assisted living and nursing care. My dad has Alzheimer's, and that meter runs pretty fast once more intensive care is needed. I don't see a lot of acknowledgement of this as a possibility on this board.

Hospice care as mentioned above is one alternative to intensive care. I actually prefer another option. I believe strongly in a person's right to die. I think the most humane thing for me to do (and vastly preferable for me as an individual) is opt-out of the long slow decline once I reach a certain point. I strongly suspect that death rights in the US will increase before I am old, but if not then I can always take a trip somewhere else.

Of course that is only a choice you can make for yourself to protect your spouse / children, you can't choose it for your parents to protect yourself.

If you mean suicide, that's one thing, but in my family we've had a few members who needed very long-term care to be safe and comfortable, but not to be kept alive---in other words, they weren't situations where specifiic medical care was being administered to keep them alive, they just couldn't care for themselves and it cost a great deal of money to care for them.

Jamesqf

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #10 on: January 16, 2014, 12:17:48 PM »
If you mean suicide, that's one thing...

Not suicide, but just deciding when a person actually IS dead.  As for instance a couple of cases recently in the news: the parents of that poor girl in California whose religion won't let them accept that she's dead.  Or Ariel Sharon, who by a reasonable definition died back in 2006, but whose body was kept 'alive' until now.

I've been thinking that not a lot has changed since the time of the ancient Egyptians, who went to great lengths to preserve the body after death.  Seems like only the technology has changed...

frugalecon

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #11 on: January 16, 2014, 01:35:37 PM »


If you mean suicide, that's one thing, but in my family we've had a few members who needed very long-term care to be safe and comfortable, but not to be kept alive---in other words, they weren't situations where specifiic medical care was being administered to keep them alive, they just couldn't care for themselves and it cost a great deal of money to care for them.

That's exactly the situation for my Dad. He is still at home, but he will likely eventually need to live in a setting where he won't be a danger to himself or to others. That could go on for many years, and could easily cost close to $100k a year, or even more in some parts of the country. Of course, if you or your family are unable to pay for that, you end up on Medicaid, and you are placed in whatever quality of facility will take you for what Medicaid is willing to pay.

I only raised this issue b/c, while it is easy to scoff at people who think they ultimately may need more than a Mustachian-level of retirement income, it is important to think about all of the contingencies that can arise in life.

oldtoyota

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #12 on: January 16, 2014, 02:49:38 PM »
One wildcard once one gets to true old age is the cost of assisted living and nursing care. My dad has Alzheimer's, and that meter runs pretty fast once more intensive care is needed. I don't see a lot of acknowledgement of this as a possibility on this board.

I have written nearly this same post before. Well said.


Blindsquirrel

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #13 on: January 18, 2014, 11:19:23 AM »
   Spot on for the cost of Alzheimer's care. The meter runs at $6887 a month for my mother. Thankfully about half is paid by pension+SS+long term care insurance. Still very expensive. Hopefully if I get it someone will be kind enough to feed me a bowl of morphine tablets instead of my Cheerios.

Nords

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Re: Personal Capital blog -- need $100k a year in retirement?
« Reply #14 on: January 18, 2014, 01:10:57 PM »
Hopefully if I get it someone will be kind enough to feed me a bowl of morphine tablets instead of my Cheerios.
Sure, we all joke about that now, but when we're in early-stage Alzheimer's I suspect that we'll be much mellower and more apathetic about the whole issue.  We'd certainly be alarmed about the Dr. Feelgood who's trying to kill us at breakfast.

My Dad's Alzheimer's has made him happier than I can ever remember him being in my entire life.  I'm sorry that it took Alzheimer's to produce that result, but the result is that he's suffering less these days than he did during at least five other decades of his life.