From an email I received today:
I was seven months short of retiring at 68 and two months when I was laid low by Pancreatic cancer. Suffice it to say there have been major and minor surgeries plus I start Chemo followed by radiation therapy next week. {Sharing a blessing – they caught it when there was at worst a 4% chance of survival.}
Obviously, please think of this person, Don, in your prayers and
“For my wife because she is disabled and just about everything is falling on her. I guess I am asking for prayers to grant us the strength of Job.”
Now, we all know our ending is inevitable. There are no two ways around it. You’re going to die as will I, as will my wife, as will your wife…etc.
Jason Isbell reminds us of this inevitably in his song “If We Were Vampires”:
It’s not the long flowing dress that you’re in
Or the light coming off of your skin
The fragile heart you protected for so long
Or the mercy in your sense of right and wrong
It’s not your hands, searching slow in the dark
Or your nails leaving love’s watermark
It’s not the way you talk me off the roof
Your questions like directions to the truth
It’s knowing that this can’t go on forever
Likely, one of us will have to spend some days alone
Maybe we’ll get 40 years together
But one day, I’ll be gone or one day, you’ll be gone
As I get older, I’m 52, and the kids start moving out, I’ve got 2 left at home, I start worrying less about money. Yeah, it’s easy to say when you have some. I get it. I still worry that Youtube will kick me off for good and I’ll have to start from scratch. I see big expenses coming at me with two teenage boys being added to my auto insurance policies. I still have my mortgage, weddings, helping with college and such. But I don’t worry as much as I used to.
Maybe my dogs have calmed me down? Who knows? I actually think it’s because what I see in my day-to-day experience dealing with people who are about to retire. They just don’t spend as much as you’d think. Very, very rarely am I dealing with people who spend more than 100k a year. Some people do, especially on the front end of their retirement, but the vast majority of people I work with don’t, and won’t.
One couple I worked with just yesterday are perfect examples of what I’ve come to see as typical. They live in Florida and told me outright they spent a “lot less than they budgeted for” in their first year in retirement.”
Now the hub has a small pension of about 19k a year. They will turn 60 next year. They have 700k or so to their name and a small house paid for. They spend about 50k a year total and that includes traveling the country seeing the sites in their trailer.
50k divided by 700k is a 7.14% distribution rate, that’s SCARY, isn’t it? But only a fool would look at it like that. It’s 50k – the 19k pension divided by 700k. Thus it’s 31k divided by 700k which is a 4.4% distribution rate. But only a half fool would look at it like THAT either. Why? Because Social Security will kick in in 7 short years!
In 7 years their Social Security between ‘em will be around $3500 a month. (I can’t remember the exact amount but we’ll use this number for simplicity). $3500 times 12 = $42,000. Plus the “small” pension equals $61,000 a year, basically 5k a month income. If you say “what about health care?” I’m gonna ban you!
So they need their $700k to tidy them over until Social Security kicks in at a clip of 4.4% rate of withdrawal. Wow… so SCARY! I’m so scared…
While the 4% rule did a lot of good at getting people to recognize the silliness of linear rates of return, it’s done its share of damage too, and no I do NOT fault Bengen for this. I fault the damn educational and financial industry and their continued need to sell fear.
Just look at the Center For Retirement Research Squared Away blog. It’s a cornucopia of risk, RISK, RISK!!! Makes you wonder who is funding these folks. Oh, lo and behold, titans in the investment and insurance industry.
Any skin in the game there? Nah…that’s crazy talk, amirite?
Who else is funding these folks? Oh, well lookie here:
Only thing shocking to me was I don’t see the name Rockefeller anywhere in here. Oh, their tentacles are no doubt involved somehow but it’d bore me to research it. Any prominent group in America is getting some money from the Rockefeller clan somehow. Center for Budget and Policy Priorities eh? Ford Foundation, eh? Peter Peterson, Bill & Melinda Gates and the list goes on and on.
All these groups serve each other, not you! They want, no NEED you to continue being a cog in their machine. The more you go into the office and plug away you are serving them, NOT YOURSELF. They will sell you bread and circuses to keep you docile, i.e., in debt and entertained.
Then they will tell you to comply with whatever the hell they’re now pushing in order to keep you serving them so you can pay back the debt you’ve accumulated. They’ve offered it but didn’t force you to choose this. YOU CHOSE THIS! I did too, mind you. And I am still choosing it but I’m doing it as limited as I can so at some point I’ll choose it no more. A more perfect example of population control will never found than this.
And thus lies my problem with the 4% rule in that it focuses on the wrong thing, will your MONEY last for 30 years when the real focus should be will YOU last for 30 years? Look at this chart.
52.1% of all average 60 year old males in the US will be dead by the time they turn 82. 83% will be dead by 90. Yet, let’s all plan for 30 years in retirement even though only around 20% of us will even make it that long. And don’t give me the crap about “people are living longer due to technology.” Over the last 2 years you still wanna go with that one???
SO let’s go back to the email that started this whole thing. “I was seven months short of retiring at 68 and two months when I was laid low by Pancreatic cancer.“
You see why I get so pissed at the doomsayers? Yes, there will be some broke people at 92. I think there was this revolutionary guy named Jesus Christ who said “The poor will always be with us.” Not much you can do to prevent yourself from being that 92 year old broke guy. Something tells me working an extra two years won’t do much anyway.
But what’s the likelihood of that happening anyway vs. the likelihood you make an early widow of your wife.
If the worst case scenario is you only have Social Security and a house to live in because of no debt with your wife and dogs by your side, you’re gonna tell me that’s a “failing” retirement? Be my guest. I am saddened for you though.
For the rest of us, be merry and cheerful. Get out of the debt/slavery trap. Share the Good News with your fellow man. Smile, show your face! And pray. PRAY like the world depends on it, because it does. While you’re praying remember Don too, would you?
Blessings…God is good, ALWAYS!
Josh