Quote:
Originally Posted by Enoch Root
Sorry, but I don't agree with this, and it is a good example of what I was referring to about bad advice. Saving enough does not mean sacrificing the now, for a better retirement. When saving for reasonable goals, most people don't even notice the money they are putting away. It isn't about being draconian, it's about proper evaluation of where you are now and where you want to be - and striking a reasonable balance. If the savings levels that are required to achieve your goals ARE draconian - if they will result in sacrificing too much today, then they are unreasonable goals, and should be adjusted. This is all part of the process that an advisor will walk you through.
Wow. All I can say to that is that, if that is a reasonable outcome for you, then great - your savings requirements will be pretty modest.
But the reason most people seek advice, or at least ask the questions, is that they don't want their retirement to be 'living off CPP'.
|
Saving by definition absolutely means sacrificing now. You may not notice it but every dollar you sacrifice today is a dollar not spent on something you enjoy. There is no free lunch. I absolutely agree that an evaluation of your life plan and how savings, working years and spending all factor into how much you should save. It’s why I objected to the generic advice of save more.
And if there is generic advice it’s find a way to spend less while still enjoying life.
I think you misinterpreted my comment on CPP. I meant that it’s an okay worst case outcome. I think most planning is way to conservative and fails to discuss the trade off of assuming high inflation, higher than expected spending, higher than expected medical, lower than expected returns and longer than expected life. You can choose to cover all of these potential outcomes or you can say I will cover 95% of them and if the 5% occurs I will adjust lifestyle or in the worst case still have a reasonable life.
Why I think this risk discussion is important is that the cost to mitigate the risk is time. It comes down to risking a few years of cat food vs an extra year of retirement. I think the upside benefit is under valued versus the downside risk.
I do agree with you that most people benefit from some kind of planning advice. Inflation, ROIs compound interest, etc are not intuitive concepts. I think the biggest value is the forcing of asking the lifestyle questions and hopefully it drives people into assessing whether rampant consumerism truly makes them happy.