Hello KJC, <<Quite fallacious in my opinion...>>
It was probably meant as a thought exercise.
<<prior generations of Americans have had happy and productive retirement years with far, far less than $7M>>
... Times change, and it is difficult to say what a defined benefit retirement package inclusive of medical is worth, especially if interest rate is zero.
<<... saying that the needed $100K in retirement monies supports 2 people (spouse/spouse) ... sounds highly unlikely, if not outright impossible to me>>
... Is the author's point precisely.
<<the author presumes that everyone is going to leave $7M to his/her heirs upon their death. Preposterous!!! ... Fugeddaboutit...>>
... everyone would like to leave something to heirs, but few will be able to, and that I am guessing is the author's point.
<<People are resourceful during their retirement years. They grow vegetable gardens to supplement their retirement income>>
I grew vegetables for own account before achamchen.com here achamchen.com . Trust me on this, it is far far better to be flush with loot than to have to be resourceful :0)
<<Retirement income is not just Social Security/Medicare plus savings. Many people have a defined benefit pension plan and/or a 401(k), 403(b), SEP, IRA or some other retirement vehicle like an annuity. And there's personal savings plus any equity in real estate>>
Average 401K of average babyboomer of avaerage age 47 is around about USD 41k, which will buy some bus tickets, pay some electric bills, last a 2.5 days in a hospital with no particular care, and may leave enough for the USD 5k burial expense.
<<... The truth is that the current generation is far better prepared than were their forefathers>>
... doubtful, because I cannot make the numbers work out on an Excel spreadsheet projected to a standard issue 30 year retirement horizon.
<<Granted, expectations for a grandiose retirement may need to be curbed for some folks, but the vast majority know pretty much what they can and cannot afford on their projected retirement incomes>>
... which is not a lot, and not enough to maintain current life style, never mind grandiose.
<<And the author neglects to point out that retirees actually need less income in retirement than when they were working>>
... fallacy #1. I figure folks may need the same amount or more, else they would be simply sitting in their homes, watching TV, not going to work, and waiting to pass on.
<<Most retirees have no mortgage to pay>>
... Current retirees, perhaps, and even for them, less true by the refinancing. For future retirees, unlikely, unless they lose their house in the mean nasty time and revert to renting, or unless they participate in a repudiation revolution ala Boston Tea Party part deux.
<<Most retirees eat far less in their waning years than they did when they were younger>>
... I suspect folks are hoping to eat the same amount, or less, but better, at higher cost, and more restaurant outings. They will eat far less and far cheaper, perhaps, and that is the author's point.
<<Most retirees make do with far less clothing than they did in middle age>>
I do not dress fancy, just the average Timberland this and Landsend that, and much of what I wear, even to the office, is frayed at the edges, fashionably so; however, I have no particular wish to cut back on already low clothing budget.
<<Most retirees don't drive as often, nor as far, as they did in middle age>>
... yes, but they hope to travel more, study more, and do more interesting things, all presumably costing some money, and may even involve the use of an automobile, unless they are in the hospital a lot, and that takes money too.
<<In fact, other than for health care and pharmaceutical related expenses, most retirees live far more cheaply in retirement than they did when they were younger>>
... Yes, this is probably true, not because folks want to, but because they must.
<<So most retirees can have a successful retirement on far less than the author's prerequisite $7M>>
... I believe the author defined successful retirement as a plush retirement, one where living standard is at least not reduced, and that is, according to the author, out of reach of most, even those in the top 10%.
<<even if that means that they are spending some (or even a good chunk) of the income generating principal>>
I prefer my idea of confiscation, redistribution, evaporation, and revolution. It will feel more satisfying ;0)
Chuigs, Jay |
