I spoke the other day about rich people whingeing that they don’t have enough to retire in luxury. In today’s news there is a 67 year old man who hates his job and wants to retire. However the poor thing only has $700K saved up. This only gives him $28K a year in interest. 
Poor old dear still hasn’t paid off his mortgage so how will he manage on that?
How the other half live.
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67 with that amount saved and a significant chunk of your mortgage to pay off is not rich.
Also that money isn’t interest, it’s the estimated rate of withdrawal they’d be able to do without running out of money before dying. The money itself is probably split between stocks and bonds, with more bonds to mitigate risk
It’s incredibly normal to get mad at a 67 year old wanting to retire but not being financially secure enough. What are you talking about?
He is financially secure enough, he just doesn’t want to have to downsize and budget - ie live like a normal person. That’s the point of the post, someone who is wealthy enough to retire is whingeing that he can’t afford to retire when the truth is he absolutely can afford to retire if he’s satisfied with living comfortably rather than luxuriously. Most people nowadays will never own their own home, work multiple jobs and go without heating and meals, barely surviving, while this man complains he can’t both retire right now and keep living an above-average lifestyle.
65% of Americans are homeowners. It’s really not that luxurious, especially with a mortgage.
And what is he to downsize to? Renting? He should just subjugate himself to the whims of landlords while on a fixed income if he wants to retire? In a lot of places $28k a year is barely enough for a one bedroom and a car. I lived in a cockroach infested studio with no car when I made that much. It wasn’t even in a major metro area and I’m young and can walk everywhere.
You’re getting mad at a guy that almost managed to play the game right and scrape by instead of the game that fucks most of us over.
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That he can afford this year. He’ll be stuck on 28k/yr until the day he dies. Consider how much rent has gone up since 2020. How long do you think he’d be able to afford living if rent keeps going up at the rate it has lately? Much less other bills like groceries.
And you might be thinking “Oh, well he can just go to one of those rent controlled 55+ places”, but even those go up eventually, and quite frankly I’m not sure if there are enough of them for all the elderly baby boomers in this country.
I think this might be a classic case of hating the player instead of the game.
Assuming he’s owned his current house for more than 5 years, it’s likely the cheapest housing option available to him. Housing prices have exploded in the past ten years and rent has gone up correspondingly. If he sold his house, he might well be trading $1500/month for $2500/month.
We have literally 3 pieces of information on this person:
- Age 67
- $700k in retirement savings
- “hefty” mortgage
That is nowhere near enough to determine that they’re financially secure. We don’t even know where they live! ~45k a year is not luxurious living anywhere in the US, and their standard of living will only get worse as inflation continues.
Again, just because some people have it worse than this person doesn’t mean this person is in a “good” situation.
could you link to the news story?the numbers we have are painting a pretty different picture. i.e. someone who added very little to their retirement savings and now has enough to retire to just above the US poverty line. I wouldn’t call that comfortable, especially with the medical expenses of being at retirement age. like from the picture you’re painting of this person is of one less well off than the standard of living working people deserve and that our society is capable of providing them.EDIT: realized it wasn’t a text post.
The link to the story is in the post, I think. All we know is “I’m 67 and desperate to retire. My boss is an absolute tyrant and I hate it every day. I have $700K saved but still have a hefty mortgage.”
$28k is more money than I’ve ever had in my entire life lmao. He could downgrade into something that doesn’t require a mortgage and could cash out on stocks/bonds. Like the OP states, he wants to maintain a life of luxury and not have to part with his assets. The rest of us will part ways with possessions, move to different countries, eat fewer meals, give away our pets, etc. if we have to.
This fuck could move into something more affordable in a smaller space, but that would mean having to live like some kind of poor.
Oh yeah he should just cash out the 401k, owe a third of it to the government in income tax just for the hell of it, then start renting and live at the whims of landlords all because some internet socialists are mad an old guy did what most Americans do to retire. If he happens to make it to 80 when he’ll run out of money he can just start working again np.
Not rich compared to jeff bezos maybe. Very rich compared to a huge number of everyday people who’ll never earn their own home, work two jobs to survive and go without food and heating. As far as the mortgage being a problem, downsize?
He ain’t living to 97, so why are we assuming a 4% withdrawal rate? His life expectancy isn’t even half that, 81 is the likely number here.
That math doesn’t work out. 67 year old man has a life expectation of 81, that’s 14 years of withdrawals of 50k per year assuming 0 interest. Since they’re getting interest, it would be more than 50k
And what’re they supposed to do if they live to 82? In retirement planning you want to overestimate how long you’ll live because the alternative really really sucks. In this case they’re assuming a 4% withdrawal rate which is considered “safe” in that there’s only a 5-10% chance you run out of money before 30 years.
There’s only like a 0.1% chance he makes it to 97. Who cares if there’s a 10% chance he’ll run out of money at 97 when there’s a 99.99% chance he’ll be dead. Can’t spend money if you’re dead.
The 4% rule is useful rule of thumb if you’re like 50-60 when you retire. If you’re pushing 70, you can increase it.
Social Security data says that 3.16% of 67 year old men and 7.22% of women live to be 97. Bit high not to take into account when the stakes are putting food on the table.
ok so 97% chance of death. What I said remains correct, his late age of working means he can withdraw more than 4%. 4% is the rule of thumb for people retiring at 55, not at 67
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We don’t know the gender of this person
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Rule of 4% is just for a period of 30 years. The math doesn’t become less correct based on age. It was originally conceived in 1994 for people retiring 62-65. With increases in life expectancy since then I don’t think 67 is too far of a stretch to apply it.
We don’t know the gender of this person
Wow, you’re right. A lot of people in these comments have said they’re a man, but it doesn’t actually say that anywhere.
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$28k/year
my rent alone is about half that and I live on a postage stamp in the boonies. This is not very much money especially when you consider that it is a fixed income and inflation will continue to make things more expensive while this person is in retirement.
28k a year in interest. That’s not counting annuity payments on the principle itself being withdrawn.
A 67 year old man can expect to live to 81 years old per actuarial tables. That’s 14 years of withdrawals, or $50,000 per year on top of the 28k.
And what happens when they turn 82 years old?
Assuming your time of death is a serious gamble in a country with such few safety nets.
Then he will rejoin the rest of us in the prole boat, welcome to America
Personally I’m gonna by sympathetic rather than critical of the 80 year old that now has to choose between working or starving, but maybe that’s just me?
If only we had some sort of pension system or socialized healthcare to help take care of the elderly
Yeah I’m sure an 82 year old will definitely be able to physically work a full-time job at the same salary he had before he retired.
In fact, I’m absolutely positive being retired for 15 years wouldn’t affect getting hired or keeping up with modern technology at all. Stay at home moms famously have no issues getting right back into the work force for great pay after the kids are grown and their ex-husbands leave them for someone a decade younger. I don’t see what the big deal is???
As leftists you do realize our ultimate aim is to improve the material conditions of the working class right?
I’m pointing out how shit the American retirement system is that you are just dumped in the cold when the money runs out. I was also just pointing out people’s math is just wrong in this thread, $28k/year is based on 4% withdrawal and a 30 year expected life span. This 67 year old man doesn’t have a 30 year expected lifespan so the amount would be higher. Sorry for just pointing out that your math is wrong in this thread
Nowhere did I say this was “no big deal” or that this man should be thrown to the streets. You are reading into things that don’t exist and tilting at windmills. This man is in a fairly comfortable position, better than 90% of the American population and all of us will be in at his age. The median amount of wealth Americans have at retirement age is $200,000 according to this, or less than 1/3 of what this home-owning man has. I’m just not weeping for the middle class boomer’s plight when literally everyone else has it worse.
I understand that a lot of people look at those numbers and think that’s an obscene chunk of money, but $28k/yr as a retiree (especially one who doesn’t have fully paid off housing) is not liveable. This person still has property taxes to pay, utilities, groceries, and above all else massively inflated medical expenses (which may very well wreck their body to the point where working is a literal impossibility).
Also, for retirement money you’re not taking the interest but instead slowly doling out what money you have saved up year over year, so the amount you could sustainably take out will shrink over time… which means if you live longer than you expected, now you’re in a position where you have no money at all at the point in your life where your support network has quite literally died off and you have no ability to work anymore.
4% rate of withdrawal is supposed to be “safe” for 30 years, but that’s only a 90-95% chance. So based off that around 1 in 10 or 20 people end up with nothing but social security even before the 30 years is up
Has he tried not buying avocado toast?
He should cancel his netflix subscription, then he can retire immediately.
Probably has that >$100 sports cable package.
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Everyone is acting like this guy is in some horrible situation but I’ll never have 700k and the planet will be an inferno by the I’m 67. I think he’s doing okay.
Honestly sick of hearing about retiries at this point.
This only gives him $28K a year in interest.
Damn, where you getting 4% interest on savings, dawg?
HYSAs are around 3.5-4% right now. But this is estimated safe withdrawal rate, not interest
HYSA
Too poor to know what any of those letters mean.
High yield savings account? I guess? I don’t actually know what I’m talking about, I’m just going out on a limb here.
Correct! I’m using Capital One’s 360 Performance Savings which has 3.6% APY. It’s nice because they don’t have transaction limits like some savings accounts so I can basically treat it like a checking account and get that APY on my whole balance
What’s the catch?
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I just though the rate sounded high, but that’s probably because I’m from Sweden. Raise the interest on loans and lower it on savings, that’s the Nordic model for ya.
You’re getting less return (a little over 0.5%) that you’d be able to get by buying Treasury bills, which are also exempt from state income tax. By basically letting the bank do that for you and skim that half percent off the top for themselves you get much more liquidity and quality of life. This is how all savings accounts work—Capital One and others offering higher rates versus the 0.5% APY a lot of big banks give us them accepting less return on your banking business in hopes of getting you entrenched in their ecosystem.
Brokerages like Fidelity do offer auto roll service for Treasury bills which helps with the QoL issue, but your money still won’t be available at a moment’s notice like it would be in savings
You need money to save in the first place and if you have money to put away, it’d most likely do better in non risky investments but then it’s not liquid
Ooh I might need to get that, I already have a credit card through them and that’s better than what I’m currently doing
You should have one if you can get one.
Also consider using a CD ladder if you have savings youre okay with not accessing for a while (if the rates are better than a high yield saving account)
Yeah Capital One has been pretty good for me as far as banks/CC issuers go. Granted my only experience is them, BofA, and US Bank, and those two aren’t exactly stunners for most people…
Because I have direct deposit with CashApp, I get 4% on my savings account. It’s got $0 in it… But if I could save any I would get a great interest rate! I think PayPal may have something similar.
Yes PayPal also has 4.00% APY right now. Their debit card is also FANTASTIC for cash back, I’ve been meaning to make a post about it for some time
I haven’t been able to save anything. There have been at least 3 different times that I had to drain my 401k just to keep a roof over me.
This old, crusty boomer should just die and leave that money to his kids.
I had a tiny amount saved, like a “get wiped out by medical emergency” amount and then being unemployed has erased most of that
That’s pretty much been my experience.
I mean, that much money comes out to around $1,000 into his retirement each year working (backtesting with testfol.io, assuming he’s a boglehead), which really isn’t a huge amount of money. It’s entirely possible to do that while making less than median American salary ($48,000/year).
Depending on his family arrangement, 28k a year would put him in the bottom 20% of Americans, and only 4k-8k above the American poverty line.
Admittedly, his savings are a bit above average.
real crabs-in-a-bucket hours. love to vilify someone for being a fat cat who put $85/month into retirement savings over their working life. love to criticize the wealthy “other half” who have enough retirement savings to… checks notes live just above the poverty line.
Intersectionality and solidarity?
Fuck that, let’s shit on the elderly and burn bridges!
Median savings at retirement is $200k, less than 1/3 of what this person has. They’re not only “above average” they’re triple the median and in an extremely comfortable position relative to most of their peers
That makes sense, financials tend to be skewed, so mean is a lot higher than median.
And I thought your last post was already absurd. Sheesh, if I ever should get to 67, I would very definitely not have anything saved. Like… how tf do some people think they’re off bad when they have more per year for their retirement than I’ve ever earned in my entire life?
Just go be a sexpat gentryfier in Vietnam, what’s the downside? People hating your guts? Just like home, but with better healthcare, food and neighbors.
Ideally yo would be imprisoned for being a white demon, but the world isn’t a good place.
