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Originally Posted by bizaro86
One of the reasons for skepticism here is that there is an entire industry around retirement savings. An industry where professionals both provide advice AND have higher earnings when their clients save more. All those freedom 55 ads weren't because life insurance companies deeply care about people, they were because they want you to save more into their products so they earn more fees.
The median income for a senior in Canada is $30k, or $60k for a couple. 40k is tight but possible, especially with a paid off house. Lots of people live on less. That's not what I'm planning for, because I like both nice things and a buffer.
But I think many people don't even try to fund retirement because they hear conversations like the one upthread about, "is 4 million really enough" and decide the whole thing is impossible.
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I totally understand that cynicism, and honestly the financial services industry has done themselves a disservice for decades. But, that doesn't change the math, and the truth is that planning for a paltry income in retirement isn't what most people are looking for. Could you make do on $1500/month or something like that? Sure. People simply don't want to live like that in their golden years. And let's be clear that while the industry has it's failings and shortcomings, there are also a massive amount of benefits that proper financial advice provides. Study after study shows that people who use advisors have better outcomes, and those aren't all conducted by the companies standing to benefit from that. One of the most well-known was by Vanguard who is adored by the DIY investment community.
Quote:
Originally Posted by CliffFletcher
Exactly. When you routinely see professional advice that you need $1 million to retire comfortably in Canada, you can only conclude that either A) Only a fraction of people in one of the richest countries in the world retire comfortably, or B) The person giving the advice has an interest in presenting a distorted picture of what’s normal.
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I think that blanket advice like this is just impossible to be accurate though. If I (as a professional) get asked how much it takes to retire comfortably without knowing anything about the person and their lifestyle, situation or anything else, how in the world can I credibly give an answer? How can anyone? So, what gets thrown out there is a nice round number, and everyone thinks a million bucks is the minimum.
And let's not forget that advisors are going to plan for people to live a longer life than what people might live. I can't call someone when they're 87 years old and say "sorry, you're out of money Joe, but we thought that you'd be dead by now". So, of course advisors are planning for people to live to 95. If we know ahead of time that the end date is here, it answers a lot of financial planning and advice questions...but we just don't. There are a lot of moving parts and factors that have to be considered. I just don't think that it's all nefarious and not just advisors trying to bleed people of disposable income to have them save.