Overshooting...............................

 

.....................................longevity estimates:

The financial impact of overshooting longevity estimates isn’t insignificant, the report said. According to one startling calculation, a 65-year-old man who has met his income replacement ratio goal based on age 95, but is then projected to live only up to 86 because of his high cholesterol, may potentially be able to spend an additional $447,000 in retirement.

Seriously?

Compare this...................

In its early Buffett years, Berkshire had a big task ahead: turning a tiny stash into a large and useful company. And it solved that problem by avoiding bureaucracy and relying much on one thoughtful leader for a long, long time as he kept improving and brought in more people like himself. 

Compare this to a typical big-corporation system with much bureaucracy at headquarters and a long succession of CEOs who come in at about age 59, pause little thereafter for quiet thought, and are soon forced out by a fixed retirement age.

-Charlie Munger, as culled from here

Retirement..........................

 .............................is for sissies.

Nevertheless.....................

.............................I've suggested to our kids not to count on it:

 Social Security is the largest source of retirement income for a large number of retirees in this country. The program provides at least 50% of income for 40% of beneficiaries. One out of every 7 people who receive Social Security rely on it to provide at least 90% of their income.

-as culled from here

Life its ownself.........................

.................. Semi-retired but still in the game.

But not all of us........................

. . . we have 10,000 baby boomers retiring every day from now until the end of this decade.

-from this Ben Carlson post, in which he offers answers to six significant questions about the economy

Morgan Housel..................

 .............is one of my favorite writers/thinkers, but I'll likely ignore this sentiment:

One of my goals as a writer is to bow out the moment I realize I’m too old to understand how the game is played anymore.

One reason I'm not retiring............

Believe it or not, most retirements fail for non-financial reasons, rather than for financial ones.

-Mike Drak, from this post

The retirement planning pyramid.....

 ..................may be found here.

No real secrets.  As the Egyptians knew more than 4,000 years ago, if you want something to last, start with a strong foundation.

Am I the only one.....................

................that thinks that Greg Mankiw is being a bit naive here?

Two such problems are global climate change from human carbon emissions and the looming fiscal imbalance as more baby boomers retire and start collecting Social Security and Medicare. These problems are hardly a secret, but few in Washington want to talk about them.

One approach is easy to envision. A tax on carbon emissions would encourage the movement toward cleaner energies and raise revenue for the public purse, helping address both problems.

Probably both..................

I’m sure everyone would love to retire in their 50s, travel the world, and sip Mai Tais on the beach. Unfortunately, reality won’t match up with those expectations. This is why I believe we’re not necessarily facing a retirement crisis in this country, but an expectations crisis.

-Ben Carlson, as extracted from here

In fairness, this has only...................

........................recently become a problem.   Many of us never thought we'd live this long, much less that long:

The short answer is the average person has absolutely no clue on what it takes to have a successful 30-year retirement without running out of money.

-Tony Isola, as loaned from here

Confused about the looming............

..................................................................public pension mess?   

David Merkel offers seven Central Errors that are casting a dark shadow over promises made.  As he notes,  "Pensions are promises. Sadly, promises are often broken. Choose your promiser with care…"   Full post is here.  Cherry-picked excerpts here:

"Before I start, remember that the rich get richer, and the poor poorer even among states.  Unlike what many will tell you though, it is not any conspiracy.  It happens for very natural reasons that are endemic in human behavior.  The so-called experts in this story are not truly experts, but sourcerer’s apprentices who know a few tricks, but don’t truly understand pensions and investing.  And from what little I can tell from here, they still haven’t learned.  I would fire them all, and replace all of the boards in question, and turn the politicians who are responsible out of office.  Let the people of South Carolina figure out what they must do here — I’m a foreigner to them, but they might want to hear my opinion."

"Forewarned is forearmed.  South Carolina is a harbinger of future problems, in their case made worse by opportunists who sold the idea of high-yielding investments to trustees that proved to be a bunch of rubes.  But the high returns were only needed because of the overly high promises made to state employees, and the unwillingness to levy taxes sufficient to fund them."

Might be why I haven't retired yet........

This seems like a major failure...................

.....................of our society, until you stop to remember that this whole "retirement" concept is a fairly recent one. 


"U.S. is poised for a financial retirement crisis. The math is inescapable: We have failed individually and collectively to save enough money for our golden years. This will be a huge issue during the next few decades."

-Barry Ritholtz, as culled from here

More than you want to think about..........

..............................................................social security:


9 "myths" inspected and rejected.  Myth #1:  We don't need to worry about social security for many years.   Reality:


Although 2034 seems to be far away, many of today’s newest retirees would likely still be on the program – turning 80 – and today’s 49-year-olds would be reaching the normal retirement age. At that point, all beneficiaries would face an immediate across-the-board benefit cut of about one-fifth.

If the sums have been done correctly, your (then aged 82) faithful blogger will be losing out on (the 2016 equivalent) $292 per month if, and when, that reduction hits.  By 2034 (Lord willing), your faithful blogger will also have received more than twice in benefits than paid into the system.  Color me not complaining.

Think I'll just keep the one I have...........................

via

On average...........................

On not working forever...................

The Zero Hedge blog points to an obvious fact about Social Security:  there will be some solvency issues.  The big and unanswered questions are why? and what to do?

We could point a finger at the government, as he does:

Ultimately this is a just another chapter in the same story– that government cannot be relied on to provide or produce, only to squander and fail.

Or, we could point a finger at us boomer citizens, as he also does:

The US Government Accountability Office recently released a report showing that tens of millions of Americans haven’t saved a penny for retirement; and roughly half of Baby Boomers have zero retirement savings.

Ultimately though, haven't we, as a society, become confused about the responsibility of control over our own lives?  To wit:

Financial literacy is absolutely critical here, which includes the ability to both generate income and manage money, two things that aren’t taught in the government controlled education system.

Ultimately, learning to rely on yourself is no easy task, but it is an incredible opportunity to become more free.

Can I get an Amen............................................?

Ed Note:  For further understanding, and a lesson in government-speak, you may want to read this.

I will confess to being surprised............

Even though it’s more common to hear about folks working into their 70s, the median age for retirement in America is still 62, which — despite worker plans — hasn’t changed in more than 20 years.
-as excepted from this interesting blog post

I would have thought it would have been closer to 65.  Still, one has learned to doubt statistics.   Plus, one then realizes that it says "median" not average.  At our house, anyway, it is too late for us to retire at 62, so we will just keep chugging along.

Thinking I would double check the source of the median age of retirement, this scientific looking paper was found.  It says the average retirement age for men in 2013 was 64.  So,  I still have time to be average.   The scientific looking paper also offered this interesting quote at its conclusion:

"Monthly Social Security benefits claimed at age 70 are 76 percent higher than those claimed at 62. The fact that people are always amazed when presented with this information suggests that a major educational initiative may be warranted."

We did the math.  In rough numbers, between age 62.5 (takes them a while to get you started) and age 70, I could collect a tad more than $131,000.  If I waited until age 70 for the first check, it would take until age 80 for the advantage of collecting the early money (presuming it is spent, not re-invested) to disappear.  No major educational initiative is warranted.  It is just a choice.  My guess is that many of us citizens would rather have the money sooner (did I tell you we still have kids in college?) than getting a larger check later.  Reasonable people can disagree, and your mileage may vary, but that is the decision we made.