Are you saving enough for retirement?

[Mephisto]

Originally Posted by Sylvanfan

My Dad died suddenly at 67 while he was still working albeit in a less than full time role. His parents both died young and he came from a large and poor farm family. He never really worried about saving for retirement. So he had the attitude of I'll play a round of golf today and not worry about it.

I'm quite the opposite. I'd like to play more golf, or get back into playing hockey, maybe even skiing. But I don't because I worry that that $100 should be saved to buy soup when I'm 85 and starving on the streets.

Without context as to your Father's health at the time of his unfortunate passing, or your ancestor's medical history, this seems like an over the top reaction?

[Slava]

Originally Posted by PaperBagger'14

I have family members that are a cautionary tale for not enjoying life before old age hits. My Dad retired early due to a lifelong health condition that, while serious, isn’t immediately life threatening. He had also saved up the money in order to live a nice retirement and sacrificed somewhat during his healthy years to do so.

Fast forward to year 8 of his retirement and through some secondary health issues he is almost unable to walk. Golf is done for him, any sports or high intensity activity is impossible. Anything that requires balance on your feet cannot be done.

My advice to anyone who’s worried about saving enough for retirement is that if you’re going to invest financially into your retirement, you should also be investing physically into it as well. You don’t need to be the strongest or fastest or bendiest, but regular cardio, moderate weighted exercise and regular stretching will make your last years much better than my dads.

For me personally, this kind of thing has had an enormous impact on me. I’ve seen a fair number of clients work hard, save really well and retire only to get sick and pass away. It’s really hard. For me that meant a few changes. I tried to start doing things that I know I want to do “one day”. I took a few trips and have a few more on the docket that I want to do. I started to try to use my leisure time for activities I like and not just wasting time. Things I can do today that I enjoy whereas when I’m say 75 I won’t be able to.

Above all, I’ve worked to make myself strike more of a balance between saving and not spending and enjoying things today. For me, that’s not always easy because I’m not a spender.

I’ve also changed my thoughts on how long I’ll work, and I’m planning on working longer. I know that might sound counterintuitive, but I know myself well enough to realize that I probably need a reason to get out of bed each day and something to keep me going. That probably means work in a reduced capacity for more years.

[Johnny199r]

I'm a big believer in having balance between living now and saving/planning for later.

However, the stories I always hear about going too extreme one way always seem to rest on the side of being overly cautious and dying or being in ill healthy before being able to enjoy retirement. Does that happen to some people? Absolutely.

No one seems to ever bring up the other side, which is how miserable it is to have to continue to work after your body has broken down in old age or how miserable it is to live your remaining years in grinding poverty. I know more people in that predicament than I do people who dropped dead around their retirement date.

Yes, we never know when we're going to go so we should enjoy life, but the idea that as a result we aren't going to plan for life in old age and just completely YOLO is preposterous.

[Slava]

Originally Posted by Johnny199r

I'm a big believer in having balance between living now and saving/planning for later.

However, the stories I always hear about going too extreme one way always seem to rest on the side of being overly cautious and dying or being in ill healthy before being able to enjoy retirement. Does that happen to some people? Absolutely.

No one seems to ever bring up the other side, which is how miserable it is to have to continue to work after your body has broken down in old age or how miserable it is to live your remaining years in grinding poverty. I know more people in that predicament than I do people who dropped dead around their retirement date.

Yes, we never know when we're going to go so we should enjoy life, but the idea that as a result we aren't going to plan for life in old age and just completely YOLO is preposterous.

Yeah, and I think this makes financial planning so important. I understand that people need to live now, but there is a balance, and finding that balance is difficult. Particularly as you get closer to retirement, you want to be sure that you can both enjoy life today and have enough money for the future. I get that people can "wing it", and come out fine, but that's just not for me.

[puckedoff]

I thought $2.4MM would be my number, but apparently $4MM isn't enough so maybe I have a further way to go than I realized....

[DoubleF]

Originally Posted by PepsiFree

I don’t disagree with what you’re saying here but the thing people kind of ignore in all this is that people aren’t without mistakes either. People are prone to outdated thinking, simple mistakes, misguided advice, or narrow minded-ness. Many AI, right now, are at a human level. Call it a junior position. Knows enough to help, but makes some mistakes. You wouldn’t hire a junior whatever and just let them run off with zero oversight and never check their work. And, just like those people, the more you train the AI with what’s right and what’s wrong, the more you improve it.

Someone mentioned AI not being able to give advice that’s more about “intuition” than basic knowledge but, you know, it will. ChatGPT, right now, can learn a lot about you and how you think and make decisions, and functionally provide therapeutic or “life advice” based on that knowledge. This isn’t just analyzing financial algorithms and charting the best course based on that, it’s pulling from history, determining what constituted good advice and what constituted bad advice, and charting the most advantageous path based on your goals.

A lot of the things we think are uniquely human are pretty easy to learn. And a lot of jobs people think are special or take some unique human characteristic to perform well really aren’t.

And that’s just talking about the best of the best. Let’s be honest, people who pretend they’re some experts at their job might just be average in the grand scheme of things. And average is not going to be difficult to beat when AI is training on the best.

Yeah, but your post heavily emphasized point was that these products can basically be deployed at this stage with barely any oversight required. I don't disagree with the rest of your post, but I heavily disagreed on this specific point. As of a few months ago, these programs are still not ready. They're close, but I don't know how close it is where it can be considered primary reliable vs secondary reliable.

The biggest difference is that the AI will just spit out an answer without knowing the question was incorrectly posed. As much as there is a ton of human incompetence out there, either it's easy to identify the human incompetence, or the humans themselves will declare their incompetence and refuse the to do the work. AI will not do this. It will always think it is spitting out a really damn good answer, even when in reality, it should say, "Not enough information to conclude" instead.

[RichieRich]

Originally Posted by PaperBagger'14

I have family members that are a cautionary tale for not enjoying life before old age hits. My Dad retired early due to a lifelong health condition that, while serious, isn’t immediately life threatening. He had also saved up the money in order to live a nice retirement and sacrificed somewhat during his healthy years to do so.

Fast forward to year 8 of his retirement and through some secondary health issues he is almost unable to walk. Golf is done for him, any sports or high intensity activity is impossible. Anything that requires balance on your feet cannot be done.

My advice to anyone who’s worried about saving enough for retirement is that if you’re going to invest financially into your retirement, you should also be investing physically into it as well. You don’t need to be the strongest or fastest or bendiest, but regular cardio, moderate weighted exercise and regular stretching will make your last years much better than my dads.

Thank you for this. I feel strongly about this too and try to live this and be an example of it for my family. While I’m far from being “old” it pains me (emotionally) when I’ve read quite a few of this CP readership complaining of physical problems from mid 30’s onwards.

It really pains me that our society places such poor value on good health. Site lots of talk but so little action.
Health wise the vast majority of people could and should and are able to do better. Financially it’s more ok to be just ok, because then you have time to enjoy the present and the future. Cat-food frugality doesn’t make sense when you have no lives left to enjoy the fun stuff.

[RichieRich]

Originally Posted by puckedoff

I thought $2.4MM would be my number, but apparently $4MM isn't enough so maybe I have a further way to go than I realized....

I figure $2.4M’ish should be plenty and that $4M would be extravagant.
$2.4M should throw off about $100k/yr plus CPP/OAS. that should be putting you in upper echelons of income nationally.

I figure $1M is too close to deluxe cat food level ($40k/yr plus partial CPP/OAS) provided zero debts and low cost of living for single person. Millenial Revolution and Mr Money Moustache however would argue that’s still plenty enough.

[chemgear]

Originally Posted by RichieRich

I figure $2.4M’ish should be plenty and that $4M would be extravagant.
$2.4M should throw off about $100k/yr plus CPP/OAS. that should be putting you in upper echelons of income nationally.

I figure $1M is too close to deluxe cat food level ($40k/yr plus partial CPP/OAS) provided zero debts and low cost of living for single person. Millenial Revolution and Mr Money Moustache however would argue that’s still plenty enough.

I'm kinda disappointed to be honest, thought this would be much higher. Considering the username.

[RichieRich]

Originally Posted by Shazam

Account for 3% inflation.

The 4% withdrawal is predicated on a 7% (or better) historical return based upon a 3% CPI. So 4+3=7% should be your average minimum return. Of course CPI varies and your actual withdrawals will vary yearly (and as you get older), but the general intent is based upon long term averages. Also why you should apparantly have a year or two cash cushion prior to retirement.

That Firecalc internet site I mentioned a few pages back also lets you play with returns, CPI, MERs, CPP/OAS, and lump sums such as major withdrawal or major inflow (inheritance), and time to retirement and time in retirement.

[RichieRich]

Originally Posted by chemgear

I'm kinda disappointed to be honest, thought this would be much higher. Considering the username.

The joke is that my wife made me a millionaire.
I used to be a multi millionaire!

(All joking of course)

[kevman]

Originally Posted by RichieRich

I figure $2.4M’ish should be plenty and that $4M would be extravagant.
$2.4M should throw off about $100k/yr plus CPP/OAS. that should be putting you in upper echelons of income nationally.

I figure $1M is too close to deluxe cat food level ($40k/yr plus partial CPP/OAS) provided zero debts and low cost of living for single person. Millenial Revolution and Mr Money Moustache however would argue that’s still plenty enough.

I heard an interview of his on the radio once and as soon as he started talking about drinking Olive Oil because of it's high calories/$ value, I knew his advice wasn't for me.

The thing with keeping your health in check is, no matter how hard you work at it, you'll never be as young as you are today. (And that's OK, but that's a whole other topic for discussion.) So IMO it's about finding balance. Which is why I was in the "I wouldn't retire instantly if I won $4 million today" crowd. There are things I would spend that money on to leverage my youth that, while you can still do when you're old, are better when you're young. Like cat-skiing.

[jmac98]

I’m personally more comfortable with the human component for investing, more so, an advisor. I respect and appreciate those in favor of AI and/or self-managing a portfolio and realizing added benefit, but that avenue isn’t for everyone, myself included. Even when AI becomes factored into use by advisors on my behalf, I’m still personally in a place that I appreciate someone working in an industry who’s knowledge is specialized and to whom can make informed decisions on my behalf in a world they’re engulfed.

I use the same strategy or logic for other aspects in my life, say household repairs. I’m not lazy by any stretch. I will do some basic electrical or plumbing or auto repair or what have you. I’ve changed ceiling fans and replaced faucets, etc. But when a job I could likely tackle begins to get a bit more involved and/or could conceivably take 2,3,4 hours of my time to complete as willing but rudimentary participant, I’m much more apt to work overtime in my own field doing what I know and am familiar with, and using that money earned to pay a plumber to do their job the right way. In the end, I’m still investing time and effort into a project, but I’m allocating and distributing the work and resources more appropriately. At least as I deem it.

With respect to AI and technology in general, it can be quite overwhelming for some and is accepted and embraced on a person to person basis. Some people love to be ahead of the curve, many will advance with it as society moves it along to the general masses, and some will refrain and opt for familiarity and hold on to what they know for as long as they can. It’s why our grandparents still have landlines at home. It’s why many wish to review bills first and pay each month versus auto withdrawal and trusting all is accurate behind the scenes. It’s why some still invest exclusively with their bank via a savings account.

Many people will find simplicity in doing certain things (eg investing) on their own and promote the time and savings they make through self-management, yet fast food restaurants are as popular as ever and companies like Skip the Dishes seem to be absolutely thriving. Where individuals will find value in not hiring an advisor for their investment and do it themselves, they’ll pay someone to shop and deliver their groceries for them, or drop off dinner rather than picking it up or making their own meal.

It’s all about where you wish to allocate your time, energy, and funds I suppose, and at what level of comfort to each.

The nice thing is, there’s room for everyone in all of this. Investing, shopping, household repairs, and everything in between. What works for me doesn’t work for you and vice versa.

This thread has been interesting to read of late and what I’ve enjoyed most is that along with differing views, there’s been a nice level of respect in the conversation to those involved. Forums are so often laced with vitriol and hate, but it’s been a pleasure to learn and appreciate the varying viewpoints and counter offerings without having to sort through anger and ignorance.

[Shazam]

Don't forget too as you get older you might need help with this sort of stuff. Also consider your spouse - how well can they handle finances?

[Slava]

Originally Posted by Shazam

Don't forget too as you get older you might need help with this sort of stuff. Also consider your spouse - how well can they handle finances?

Oh man, this is a huge factor. I not only see this all the time. I see this all too frequently because the husband was managing things and maybe had money all over the place, and their wife had no idea about it. I can relate in the sense that my wife has no interest and no idea about it (not that it's hidden, she just leaves it all to me). But, she has specific instructions where "if I don't make it home today, here's who to call and here's how to proceed" (after the soul crushing grief, of course).

[Shazam]

"Call Slava... and clear my browser history..."

[Hackey]

Originally Posted by Sylvanfan

My Dad died suddenly at 67 while he was still working albeit in a less than full time role. His parents both died young and he came from a large and poor farm family. He never really worried about saving for retirement. So he had the attitude of I'll play a round of golf today and not worry about it.

I'm quite the opposite. I'd like to play more golf, or get back into playing hockey, maybe even skiing. But I don't because I worry that that $100 should be saved to buy soup when I'm 85 and starving on the streets.

I'm definitely overpreparing at this stage in my life but its because the peace of mind I get from that outweighs most of the immediate gratification I could get from spending. I try to stay as healthy as possible and want to live as long as I can but I also think if for whatever reason life ends earlier than I hoped, I've at least left my kids with something to help them out if I'm not there. That thought is more satisfying to me than what I may have missed out on. Having said that I think everyone needs to ensure they are still enjoying life and making sure they're fulfilled. Neither extreme is good but I'm definitely happier with a little less pleasure for a little more peace of mind.

[Slava]

Originally Posted by Shazam

"Call Slava... and clear my browser history..."

Maybe not in the order? I should offer a service where I clear people's browser history as part of an estate package.

[Winsor_Pilates]

Originally Posted by Slava

Oh man, this is a huge factor. I not only see this all the time. I see this all too frequently because the husband was managing things and maybe had money all over the place, and their wife had no idea about it. I can relate in the sense that my wife has no interest and no idea about it (not that it's hidden, she just leaves it all to me). But, she has specific instructions where "if I don't make it home today, here's who to call and here's how to proceed" (after the soul crushing grief, of course).

Same with my wife, but damn is she ever good at spending it!

[Sliver]

Originally Posted by Hackey

I'm definitely overpreparing at this stage in my life but its because the peace of mind I get from that outweighs most of the immediate gratification I could get from spending. I try to stay as healthy as possible and want to live as long as I can but I also think if for whatever reason life ends earlier than I hoped, I've at least left my kids with something to help them out if I'm not there. That thought is more satisfying to me than what I may have missed out on. Having said that I think everyone needs to ensure they are still enjoying life and making sure they're fulfilled. Neither extreme is good but I'm definitely happier with a little less pleasure for a little more peace of mind.

Yeah, this sums me up as well.

The older I get, the less gratification I get from spending, anyway. Like, there's not a lot I can purchase that gets me stoked. I like a pretty minimalist house without any clutter, so that's a factor, too. More stuff = more problems. You have to balance your ownership of material possessions with the time it takes maintain/store them, so limiting how much crap I have is something I need to be mindful of. Wish I could float young me some cash - that dude would have had a blast with a few bucks in his pocket.