6 ms·

What Retirement with Less Than $1M Looks Like in America

45 points by paulette449 4y ago

Supermancho 4y ago
https://archive.is/SWZUq https://archive.is/SWZUq
ianai 4y ago
They should really have a synopsis for non-subscribers. Might help pull in new subscribers-as why subscribe to something if you don’t know what you’ll get? Compounded by the hell of modern subscription cancellation. (I recently got an Economist subscription and it’s way better than expected, but I would have never known has I not bit the bullet…)
- ghaff 4y ago
  The Economist is good as is The New York Times (although different). I probably wouldn't (and haven't) gotten the WSJ in addition to either of those unless I really felt the need for a daily financial publication.
- lindbergh 4y ago
  What I wish more newspaper did is to allow one to pay for a single article (whose price could depend on the length/depth of the article).
  - bombcar 4y ago
    These things are newspapers; you used to be able to buy one down at the corner for a buck. So just make it so you can Apple Pay your way to a day's access to the current news for a buck. Once someone has done it two or three times, offer a subscription to them.
    - marak830 4y ago
      This. As someone living in Japan, I would love an option to drop a dollar to read the economist or such for a day. I rarely subscribe as, between work and a new son, rarely have time to keep up to date on a particular site, and the background stress of paying for something I'm not using is frustrating.
      - skeeter2020 4y ago
        >> I would love an option to drop a dollar to read the economist or such for a day. Except an issue of the economist is like 8 bucks
        marak830 4y ago
        That is a very good point :-)
- NSMutableSet 4y ago
  Being asked to pay money for "journalism" is insulting when you consider that readers are the product. Most of the money is made from sponsored content masquerading as unbiased news articles and advertisements.
  - ghaff 4y ago
    Yup. There's always some excuse not to pay for something.
  - scottLobster 4y ago
    I mean, people paid subscription fees for physical newspapers, and they made money on ads too..
  - qikInNdOutReply 4y ago
    Try to see the regular payment, as a sort of inverted slice of ransom. Which the public can withdraw en mass, the moment they feel betrayed. Creating a kind of attachement of the employee to the employer (You).
- AlwaysRock 4y ago
  Always look for the archive link in the comment.
ghaff 4y ago
Note that many of these folks have much less than $1m in savings though most seem to own houses and one probably has decent income from rental properties. So overall--perhaps not surprising given this is the WSJ, these folks are not exactly scraping by off social security even if they're not "wealthy" either.
- bombcar 4y ago
  Life expectancy at 65 is something like 85 - 20 years. You can divide the savings by 20 and get some sort of expected possible burn rate if you dig into capital. These aren't really the "sob stories" I would be looking for.
  - ghaff 4y ago
    I suppose an alternative take is that the moral is, even if you don't have $1m+ in the bank, it's not actually the end of the world--especially if you own a house.
    - bombcar 4y ago
      That's the much MUCH better way to look at it - too many people see these "you must have ten billion dollars saved for retirement by age 25" and just give up. It's not a pass/fail exam, and amount saved is useful (and the biggest one is reducing or removing your housing expense through ownership; though once you're old enough it may be worth considering how many years of renting you could buy for the price of the house, and what that would include).
imwithstoopid 4y ago
$1 million will be a king's ransom compared to Gen X's retirement plans last time I checked known stats on Gen X retirement savings, the national average was under $100k...Gen X is the first generation that is almost entirely dependent on 401k for bonus points, Gen Xers in large cities are more likely renters than owners, so they won't even be able to sell a property to prop up the low 401k balance the Gen X retirement bailout is probably already unavoidable and will be in the trillions everyone says its fine because they love what they do and will do it forever...do they really think there will be a hot market for 67 year old React devs?
- JackFr 4y ago
  Say’s Law. Supply will create demand. You don’t need a hot market. You just need a market.
- dmm 4y ago
  > the Gen X retirement bailout is probably already unavoidable and will be in the trillions State governments are going to get huge bailouts too. Most state pension funds are way underfunded. The my state's DOT pension is <60% funded, and that's assuming 7+% average returns.
  - ragnot 4y ago
    So expect massive inflation in the future?
    - jmoak3 4y ago
      Yes. We’ve written too many checks that we can’t possibly hope to cash. If the fed gets in the way of the fiscal policy makers and their spending, they will obliterate it - it only exists because of a law passed by congress anyway. Here’s a taste: https://www.rickscott.senate.gov/2023/3/sens-rick-scott-and-elizabeth-warren-lead-legislation-to-establish-independent-ig-oversight-at-the-federal-reserve https://www.rickscott.senate.gov/2023/3/sens-rick-scott-and-... Edit: That SAID, anything can happen. These breakthroughs with AI could very likely change all of that.
pilarphosol 4y ago
[dead]
prirun 4y ago
> She recently bargained the couple’s monthly cable and cellphone bill to $300 from $400 and cut her restaurant budget to $70 a month from $150. I can't believe what some people pay for cable and cellphone service. I pay $23/mo for cellphone service and cut the cable cord many years ago.
- ghaff 4y ago
  $100 for cellphone from one of the major carriers. Yes, there are bargains out there but there are also reasons to go with the majors. Personally, I dropped cable a few years ago but I just don't watch live TV now. If you're going to get something like YouTubeTV you're not saving that much over cable TV. (And I assume the person is also paying for Internet.) And the fact is that someone like my dad is not messing around with streaming TV.
  - brewdad 4y ago
    Streaming TV is a different experience than cable but it's not THAT hard. I push one power button and my TV, soundbar and streaming device power up. That same button shuts everything down when I'm done watching. If they ever get out of sync, pressing the home button forces things back in sync. The interface for YoutubeTV looks an awful lot like the interface for a cable guide. There's a small learning curve but it can't take more than 15 minutes to understand 90% of what you'd ever want to do. $73 a month all in is a heck of a lot less than the $90 plus taxes and fees + cable box rental fees (per tv) plus sport network and local network carriage fees, DVR fees, etc. Last time I looked, I couldn't get 2 TVs with an equivalent package for less than $140 from my cable company and that included a contract and the need to renegotiate every 12-24 months.
    - ghaff 4y ago
      I think you made my point for me. Look, my dad, who is otherwise quite sharp, still doesn't really grok the difference between text messages and email even though I have to go through this every few months, most recently this morning. He doesn't know and doesn't want to know anything more complicated than turning on the TV and changing the channel.
scottLobster 4y ago
"Mr. Jones’s retirement account took a hit in 2008 and never recovered. Spooked by the S&P 500’s 38.49% decline in 2008, he sold his stocks and invested in a stable value fund that earned about 1% a year, said the couple’s son-in-law, Jon Older, a doctor who has managed the portfolio since 2018. Dr. Older moved 35% of the balance into a low-cost stock index fund and the rest into an intermediate Treasury bond index fund." So he missed out on one of the best stock market rallies in history out of ignorance and fear. Ouch.
- refurb 4y ago
  The market is up 3x since then. Bad move.
- ghaff 4y ago
  I'm guessing quite a few people panicked and pulled out their money after it dropped 40% or whatever--especially if they were close to retirement.
- imwithstoopid 4y ago
  > So he missed out on one of the best stock market rallies in history not alone though...every VC who poured $30 million into a cashflow-negative startup eight years ago has also missed out on turning it into $100 million with the click of a mouse
  - ghaff 4y ago
    I know someone who became an angel investor after they retired maybe 15 years ago as sort of a combination hobby and investment mechanism. He is by no means starving but he told me that he could have saved himself a whole lot of trouble and money by just putting the investment dollars into a NASDAQ index. (He does still do some angel investing but only in a small number of companies he feels particularly strongly about.)
BXlnt2EachOther 4y ago
Random inflation trivia if these retirees wanted $1M (nominal dollars, as a goalpost) for retirement while headed into their prime earning years: "The Millionaire Next Door" was published in 1996. $1M then has the purchasing power of ~$1.92M today.
wing-_-nuts 4y ago
I love the headline, as if retiring with 1M or more is common. News flash, that's the reality of 80% of America. Hell, where I grew up, people mostly just relied on social security. Retirement wasn't lavish, but they still enjoyed it. I get the feeling that financial advisors push high savings / low spending for retirement so hard because they get a 1%+ cut of assets under management, and there's nobody complaining when their client dies with a pile of money. It's one thing to be responsible, but it's easy to over do it.
- scottLobster 4y ago
  Social security is basically poverty wages at this point. Back in the day it went further, and people didn't live as long. Nowadays a 65 year old might reasonably expect to live into their 80s if not 90s with advances in healthcare, that takes a lot of funding. Plus some of us would like something to leave for our kids/grand-kids, although I get that's not a priority for everyone. Personally my family on both sides came up from hooverville levels of poverty in the depression to middle class post WWII, to my parents being the first in their families to get advanced degrees and making it into the upper middle class. I'm a recipient of inheritance from both of said generations which has seriously improved my quality of life, it's my duty to at least maintain that status for my immediate family, and given that the lower rungs of the socioeconomic ladder are fewer and further between than they used to be, that means leaving substantial amounts to my kids/grandkids. Maybe in another generation or two we'll have enough familial wealth to live off the interest if we want. Sooner if I'm lucky.
  - readthenotes1 4y ago
    You are showing some age with the 65-year-old retirement. Full retirement is 67 for people born 1960 or after in the US. It was raised in the 1980s, so no riots...
    - ghaff 4y ago
      You can retire earlier but if you want to retire earlier (and have no reason to believe you may not live long) you probably shouldn't start drawing social security until your full retirement age unless you need to.

45 points by paulette449 4y ago

https://archive.is/SWZUq https://archive.is/SWZUq

They should really have a synopsis for non-subscribers. Might help pull in new subscribers-as why subscribe to something if you don’t know what you’ll get? Compounded by the hell of modern subscription cancellation. (I recently got an Economist subscription and it’s way better than expected, but I would have never known has I not bit the bullet…)

ghaff 4y ago
The Economist is good as is The New York Times (although different). I probably wouldn't (and haven't) gotten the WSJ in addition to either of those unless I really felt the need for a daily financial publication.
lindbergh 4y ago
What I wish more newspaper did is to allow one to pay for a single article (whose price could depend on the length/depth of the article).
- bombcar 4y ago
  These things are newspapers; you used to be able to buy one down at the corner for a buck. So just make it so you can Apple Pay your way to a day's access to the current news for a buck. Once someone has done it two or three times, offer a subscription to them.
  - marak830 4y ago
    This. As someone living in Japan, I would love an option to drop a dollar to read the economist or such for a day. I rarely subscribe as, between work and a new son, rarely have time to keep up to date on a particular site, and the background stress of paying for something I'm not using is frustrating.
    - skeeter2020 4y ago
      >> I would love an option to drop a dollar to read the economist or such for a day. Except an issue of the economist is like 8 bucks
      - marak830 4y ago
        That is a very good point :-)
NSMutableSet 4y ago
Being asked to pay money for "journalism" is insulting when you consider that readers are the product. Most of the money is made from sponsored content masquerading as unbiased news articles and advertisements.
- ghaff 4y ago
  Yup. There's always some excuse not to pay for something.
- scottLobster 4y ago
  I mean, people paid subscription fees for physical newspapers, and they made money on ads too..
- qikInNdOutReply 4y ago
  Try to see the regular payment, as a sort of inverted slice of ransom. Which the public can withdraw en mass, the moment they feel betrayed. Creating a kind of attachement of the employee to the employer (You).
AlwaysRock 4y ago
Always look for the archive link in the comment.

ghaff 4y ago

Note that many of these folks have much less than $1m in savings though most seem to own houses and one probably has decent income from rental properties. So overall--perhaps not surprising given this is the WSJ, these folks are not exactly scraping by off social security even if they're not "wealthy" either.

bombcar 4y ago
Life expectancy at 65 is something like 85 - 20 years. You can divide the savings by 20 and get some sort of expected possible burn rate if you dig into capital. These aren't really the "sob stories" I would be looking for.
- ghaff 4y ago
  I suppose an alternative take is that the moral is, even if you don't have $1m+ in the bank, it's not actually the end of the world--especially if you own a house.
  - bombcar 4y ago
    That's the much MUCH better way to look at it - too many people see these "you must have ten billion dollars saved for retirement by age 25" and just give up. It's not a pass/fail exam, and amount saved is useful (and the biggest one is reducing or removing your housing expense through ownership; though once you're old enough it may be worth considering how many years of renting you could buy for the price of the house, and what that would include).

imwithstoopid 4y ago

$1 million will be a king's ransom compared to Gen X's retirement plans last time I checked known stats on Gen X retirement savings, the national average was under $100k...Gen X is the first generation that is almost entirely dependent on 401k for bonus points, Gen Xers in large cities are more likely renters than owners, so they won't even be able to sell a property to prop up the low 401k balance the Gen X retirement bailout is probably already unavoidable and will be in the trillions everyone says its fine because they love what they do and will do it forever...do they really think there will be a hot market for 67 year old React devs?

JackFr 4y ago
Say’s Law. Supply will create demand. You don’t need a hot market. You just need a market.
dmm 4y ago
> the Gen X retirement bailout is probably already unavoidable and will be in the trillions State governments are going to get huge bailouts too. Most state pension funds are way underfunded. The my state's DOT pension is <60% funded, and that's assuming 7+% average returns.
- ragnot 4y ago
  So expect massive inflation in the future?
  - jmoak3 4y ago
    Yes. We’ve written too many checks that we can’t possibly hope to cash. If the fed gets in the way of the fiscal policy makers and their spending, they will obliterate it - it only exists because of a law passed by congress anyway. Here’s a taste: https://www.rickscott.senate.gov/2023/3/sens-rick-scott-and-elizabeth-warren-lead-legislation-to-establish-independent-ig-oversight-at-the-federal-reserve https://www.rickscott.senate.gov/2023/3/sens-rick-scott-and-... Edit: That SAID, anything can happen. These breakthroughs with AI could very likely change all of that.

pilarphosol 4y ago

[dead]

prirun 4y ago

> She recently bargained the couple’s monthly cable and cellphone bill to $300 from $400 and cut her restaurant budget to $70 a month from $150. I can't believe what some people pay for cable and cellphone service. I pay $23/mo for cellphone service and cut the cable cord many years ago.

ghaff 4y ago
$100 for cellphone from one of the major carriers. Yes, there are bargains out there but there are also reasons to go with the majors. Personally, I dropped cable a few years ago but I just don't watch live TV now. If you're going to get something like YouTubeTV you're not saving that much over cable TV. (And I assume the person is also paying for Internet.) And the fact is that someone like my dad is not messing around with streaming TV.
- brewdad 4y ago
  Streaming TV is a different experience than cable but it's not THAT hard. I push one power button and my TV, soundbar and streaming device power up. That same button shuts everything down when I'm done watching. If they ever get out of sync, pressing the home button forces things back in sync. The interface for YoutubeTV looks an awful lot like the interface for a cable guide. There's a small learning curve but it can't take more than 15 minutes to understand 90% of what you'd ever want to do. $73 a month all in is a heck of a lot less than the $90 plus taxes and fees + cable box rental fees (per tv) plus sport network and local network carriage fees, DVR fees, etc. Last time I looked, I couldn't get 2 TVs with an equivalent package for less than $140 from my cable company and that included a contract and the need to renegotiate every 12-24 months.
  - ghaff 4y ago
    I think you made my point for me. Look, my dad, who is otherwise quite sharp, still doesn't really grok the difference between text messages and email even though I have to go through this every few months, most recently this morning. He doesn't know and doesn't want to know anything more complicated than turning on the TV and changing the channel.

scottLobster 4y ago

"Mr. Jones’s retirement account took a hit in 2008 and never recovered. Spooked by the S&P 500’s 38.49% decline in 2008, he sold his stocks and invested in a stable value fund that earned about 1% a year, said the couple’s son-in-law, Jon Older, a doctor who has managed the portfolio since 2018. Dr. Older moved 35% of the balance into a low-cost stock index fund and the rest into an intermediate Treasury bond index fund." So he missed out on one of the best stock market rallies in history out of ignorance and fear. Ouch.

refurb 4y ago
The market is up 3x since then. Bad move.
ghaff 4y ago
I'm guessing quite a few people panicked and pulled out their money after it dropped 40% or whatever--especially if they were close to retirement.
imwithstoopid 4y ago
> So he missed out on one of the best stock market rallies in history not alone though...every VC who poured $30 million into a cashflow-negative startup eight years ago has also missed out on turning it into $100 million with the click of a mouse
- ghaff 4y ago
  I know someone who became an angel investor after they retired maybe 15 years ago as sort of a combination hobby and investment mechanism. He is by no means starving but he told me that he could have saved himself a whole lot of trouble and money by just putting the investment dollars into a NASDAQ index. (He does still do some angel investing but only in a small number of companies he feels particularly strongly about.)

BXlnt2EachOther 4y ago

Random inflation trivia if these retirees wanted $1M (nominal dollars, as a goalpost) for retirement while headed into their prime earning years: "The Millionaire Next Door" was published in 1996. $1M then has the purchasing power of ~$1.92M today.

wing-_-nuts 4y ago

I love the headline, as if retiring with 1M or more is common. News flash, that's the reality of 80% of America. Hell, where I grew up, people mostly just relied on social security. Retirement wasn't lavish, but they still enjoyed it. I get the feeling that financial advisors push high savings / low spending for retirement so hard because they get a 1%+ cut of assets under management, and there's nobody complaining when their client dies with a pile of money. It's one thing to be responsible, but it's easy to over do it.

scottLobster 4y ago
Social security is basically poverty wages at this point. Back in the day it went further, and people didn't live as long. Nowadays a 65 year old might reasonably expect to live into their 80s if not 90s with advances in healthcare, that takes a lot of funding. Plus some of us would like something to leave for our kids/grand-kids, although I get that's not a priority for everyone. Personally my family on both sides came up from hooverville levels of poverty in the depression to middle class post WWII, to my parents being the first in their families to get advanced degrees and making it into the upper middle class. I'm a recipient of inheritance from both of said generations which has seriously improved my quality of life, it's my duty to at least maintain that status for my immediate family, and given that the lower rungs of the socioeconomic ladder are fewer and further between than they used to be, that means leaving substantial amounts to my kids/grandkids. Maybe in another generation or two we'll have enough familial wealth to live off the interest if we want. Sooner if I'm lucky.
- readthenotes1 4y ago
  You are showing some age with the 65-year-old retirement. Full retirement is 67 for people born 1960 or after in the US. It was raised in the 1980s, so no riots...
  - ghaff 4y ago
    You can retire earlier but if you want to retire earlier (and have no reason to believe you may not live long) you probably shouldn't start drawing social security until your full retirement age unless you need to.