This is how it feels to be a millionaire and still feel broke

[dcheesi]

I can't decide if this belongs in Mustashianism or Anti-Mustashian?

https://www.washingtonpost.com/news/get-there/wp/2018/04/19/this-is-how-it-feels-to-be-a-millionaire-and-still-feel-broke/?noredirect=on&utm_term=.b30f66599fc5

Kind of a scare-monger article, but nothing said is technically incorrect, as far as I can tell. Though the idea that $40lk/year plus Social Security is a stretch is kind of laughable. The only real cause for concern I see is large medical bills, but that's a financial threat for just about everyone (who isn't Bill Gates or Jeff Bezos).

[inline five]

The money buys you freedom and partial security. Freedom from a scary job layoff etc. I don't see any reason to be concerned at that age as long as you have set yourself up well during your earning years. Ie no mortgage, low overhead housing (new roof, hvac, efficient insulation, low annual taxes), a newer reliable car, etc.

Going into retirement with lots of bills that you've put off would be tough however.

[jlcnuke]

At no point in the article did the writer say that the woman was going to have any financial difficulties. There's a difference between being scared you won't be able to do something and actually not being able to do something. It's quite possible that a 10 minute evaluation of the woman's finances revealed that she's been worried for nothing and is set for life based on her current spending. It's also possible that her home alone is eating up all of her investment earnings and her minimal SS check would mean living in poverty otherwise. We simply don't have the information to decide.

The author and especially that "advisor" he quoted are ignorant regarding how to make retirement affordable on retirement savings (and the market in general in at least one specific statement made).

[Rosy]

At no point in the article did the writer say that the woman was going to have any financial difficulties. There's a difference between being scared you won't be able to do something and actually not being able to do something. It's quite possible that a 10 minute evaluation of the woman's finances revealed that she's been worried for nothing and is set for life based on her current spending. It's also possible that her home alone is eating up all of her investment earnings and her minimal SS check would mean living in poverty otherwise. We simply don't have the information to decide.

The author and especially that "advisor" he quoted are ignorant regarding how to make retirement affordable on retirement savings (and the market in general in at least one specific statement made).

Exactly, without relevant details this article is worthless. I find it irresponsible and sketchy at best for a "money article" writer to present an important topic in this way. 

[wageslave23]

On balance, I know more people in their 50's or 60's who have no pension, a few hundred thousand in savings, a mortgage, and think they are in a good spot for retirement.  If you only have a few hundred thousand saved up and plan on living on ss, you better have your mortgage paid off and be mustachian as hell.

[Saving4Fire]

On some level I emphasize with the woman in the story.   Having a retirement plan you feel good about upended due to an unexpected job loss must be jarring even if she's fairly financially secure from a modern portfolio theory perspective.   In my book she gets a pass for being kinda irrational. 

My father has similar feelings despite a healthy portfolio.   Your brain can always think of a doomsday scenario where you go broke.

[Laura33]

Holy shit that adviser had it bass-ackwards.  First don't retire in your 60s at all; second, if you are forced to retire, get a job to make whatever you can; and then third, and only if all else fails, get your spending under control.  ???  How about do #3 first, and render 1 and 2 irrelevant?

I like Michelle Singletary a lot.  And I can also see the poor lady's shock when all of her plans went up in smoke -- heck, my mom was terrified that she'd never get by after my stepdad died, even though she had a full-time teaching job, her own company that made multiples of her teaching salary, AND his full SS AND pension.  This for a woman who spends probably $30K/yr, owns three paid-off properties, and could buy and sell me.  It's not a rational response; it's a natural fear response when faced with a major unexpected life change that totally blows apart what you thought your future would be.

But I am livid at that advisor.  Someone needs to hold that lady's hand and walk her through what her options are and how long her money will really last -- not tell her, "yep, you should be terrified, you're basically fucked, sorry, sucks to be you."  I'm sure Michelle at least did that, because that's the kind of person she is, and it just didn't make it into the column.  But boy that advisor's response left me with a bad taste in my mouth.

[Inna]

If you have that much money, you don't know real "broke" anyway. Worrying at night about becoming homeless the next week, skipping a meal so your kids can eat, ...

[inline five]

If you have that much money, you don't know real "broke" anyway. Worrying at night about becoming homeless the next week, skipping a meal so your kids can eat, ...

Honestly my biggest worry when we hit seven figures was losing it all and being "poor" again. And we were 35. And yes I have been poor in a previous life, it sucked and it does scare me to go back to that!

[DreamFIRE]

On balance, I know more people in their 50's or 60's who have no pension, a few hundred thousand in savings, a mortgage, and think they are in a good spot for retirement.  If you only have a few hundred thousand saved up and plan on living on ss, you better have your mortgage paid off and be mustachian as hell.

If they work until 67, maybe 70, and can get the mortgage paid off by then, they should be ok.

I did some SS calculations to see if I could live on SS alone if I worked until 67 or 70, and I could with money left over when working to either age, and that's assuming no stash at all.  Fortunately, I have a stash and plan to retire over a decade earlier.