Jane

Comments:

• I wonder what the assumptions are about retirement needs. The results said my investments were well above target for my age, but also said I needed more to retire with half my current income. Does that mean to retire immediately, in my 50s? Does that mean that the assumption is being made that Social Security will provide the other half? Or is the assumption that I will need only half my income to spend in retirement?

  Post: Two-Minute Checkup

  Link to comment from August 7, 2022

• I'm in my fifties and have been calculating and saving for retirement since my twenties. I have otherwise intelligent friends whose dangerously unrealistic retirement plan is to work until they die. But what it took for us to save for retirement, own a home, and raise three kids through paid off college in a one income family on a median or less household income took more planning, research, determination, record keeping, and self control than I have seen anyone around me, rich or poor, willing and able to put in. We had to live differently than the people around us, which is isolating. We had to have good luck with our health, the economy, and marriage. We, and our children, needed to be able to be happy being independent and introverted. We have wide ranging DIY skills. My personality leans towards taking the long view, organization, responsibility, and security, without the effort those traits take for some, and I like math. I learned about investing from an employer long ago. He and his wife were well educated, uber-frugal, hippie farmers who came from well-to-do families that gave them money confidence, free legal and financial advice, and inheritances early in life. He gave me Money magazine to read and a lot of frank discussions. A natural investigator who wanted to homeschool my future children (i.e. never have two incomes), I did a lot of library research on money management and investing, and consistently followed through in my actions, for decades thereafter. Without that chance encounter, though, I do not know if I would have gotten the message that it was possible, acceptable, and worthwhile to study up on money. Before that, I knew one ought to save, but thinking strategically about budgets and investing in more detail seemed shameful and greedy. What I have seen elsewhere is people who know and save little, however hard working, sensible, and responsible they seem to be otherwise, and people who are in a better position because their jobs provide pensions, retirement programs/advice, good insurance, and they have professional advisors. In other words, I don't think it's that hard to not know much about money, mostly because fears and prejudices block rational thought. It's also not hard to be unlucky. Having the backstops of enough money and professional help can lend calm and confidence for financial decision making and planning, while constant feelings of lack and risk distort thinking. I have watched long-struggling people without retirement savings spend an inheritance on little luxuries without putting a dime aside. While I cannot imagine that myself, I have read enough about money psychology and cognitive biases in general to recognize that is a common, deeply ingrained pattern. So I don't have a tidy conclusion. Sometimes I see other people's situations and improvements seem obvious and doable to me, but whatever keeps them from seeing it seems strong and deep.

  Post: Retirement Is Coming

  Link to comment from August 7, 2022