Quote:
Originally Posted by Slava
Well, that bolded part is why there are financial advisors/planners. Each situation is different, along with the wants/needs of those people.
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Exactly.
But my main point was that the average blog or word of mouth for this retirement career advice, rule of thumbs and casual conversation are mostly ideals for requirements and not the realities of the average person. Is this concept in your opinion a bit far fetched?
A good retirement plan should consist of hundreds of data points and advice from multiple professionals in several different fields. (Ie: lawyer, accountant, financial planner, doctor etc.). But the vast majority of people treat it like a 5 step plan to weight loss, to their detriment. Furthermore, these blogs and rule of thumbs likely are supposed to help to open up the discussion of retirement and then individuals meeting the multiple professionals to fine tune the details on the path to take. But this part I don't always see happen.
On top of this the amount of idiotic post retirement schemes are on the rise by self proclaimed professionals. I'm listening to stories of individuals paying hundreds of thousands in extra tax because they took moronic moves to prevent probate issues that will never arise. I'm listening to loan forgiveness schemes to children that while kinda legit, create a #### ton of unnecessary admin work and fees to the bastards proposing them. Seriously, just gift the cash tax free to your kid and draft up a letter explaining as such. Don't listen to those morons who have a conflict of interest and are creating a scenario where the estate tries to write off a loan to reduce taxes, but then creates a taxable event in the hands of the kids. Or someone moronic enough to draft up legal documentation that causes assets to get stuck in legal limbo, because they put a minor as a beneficiary.
But... I'm rambling about numbers because that's what everyone wants to distill retirement into for casual conversation.
I may be the minority for this opinion, but numbers should be one of the last things you look at in a retirement plan.
But people soften up or try to pass off things as obvious when I explain retiring with money is pointless without health, happiness, relationships, a clear goal/timeline, mind frame etc. Most people try and figure out the money first and these other things later and barely end up accomplishing any of it. Their legacy is also not as positive as they think it is if going down this path.
If prioritizing money over other things is a recipe for failure prior to retirement, why do so many retirement plans start with it? Why don't more people call out this weirdly backwards approach?
It's too similar to a car salesman tactic to me and it annoys me. "Let's figure out your monthly payments and go from there." I don't have the solution, but the logic of creating fake spending numbers to calculate an amount you need just feels suspect to me. This on top of seeing so many retirees with too much money because they didn't realize they could just pull out enough to top up their CPP/OAS vs fully self find their retirement.
If I were to look at an improved solution though, I'd suggest people keep track of their cash flow. Humans are creatures of habit, so past behavior is probably a good predictor of future behavior.
If you lived life spending $40K a year type life style, even if your activities completely change, I cannot imagine you'd start living life as a $100K lifestyle. The only caveat is unless you had no clue how to spend excess money. How much you want to spend doesn't vary intensely. It's ingrained in you. You might have that fist few years of mad money blip, but then it usually normalizes back to approximately how you were before. Once you get older, how you lived the last 5 years likely is a great prediction on how you want to live the next 5 years. You'll spend our be frugal to that range of spending as much as possible.