Early Retirement?

[crisi]

No problem

I just want to make the point that deciding whether to stop treatments is a difficult decision. I think most people would say that it's not worth $1,000,000 to keep a terminal patient alive one more year when there is no chance of recovery. But I don't think any politician would get elected if he or she came out and said "Under my healthcare plan if you're going to cost more than $3000 per day to keep you alive we're going to just let you die!"


This is why healthcare discussions in this country drive me crazy. Everyone has an opinion but no one knows what they are talking about. It's easy for a politician to blame insurance companies or trial lawyers for high healthcare costs and for the ignorant public to believe them. But it's all BS.

It's been awhile since I left the healthcare field. I left Cigna in 2010, I spent my last year helping CIGNA do financial forecasts for different Obamacare scenarios to see which scenarios maximized profits and we passed that info on to our lobbyists who then tried to influence the legislation. I know, I'm going to hell, right? But back when I was in the healthcare field I'm pretty sure I heard that people spend like 30% of their entire lifetime healthcare expenses in their final year of life.

So if you live to 100 you'll spend as much in year 100 as you did in years 0-30, 31-60, 61-90, etc.

That's a huge driver of healthcare costs we just don't want to talk about. It's easier to blame CIGNA or evil trial lawyers than blame Grandpa for wanting to live another year.

We went through that with my brother in law and it was pretty obvious from early on in his terminal diagnosis that he'd be a very expensive patient - the choices he was making were to trade quality of life for quantity of life, and any procedure that was going to extend it was something he wanted.

(And I think part of the reason he ended up there was because early on he traded quality of life for risk - he chose less invasive chemo because the more invasive chemo would give him nerve damage in his hands and ringing in his ears, he was a musician. He choose less invasive surgery because more invasive surgery would have left him impotent - he was 47, Humans are lousy at risk analysis).

I also have a friend whose daughter was born after a difficult labor. The first three months were a struggle to keep her alive, and now she lives with severe CP. She's a delightful girl - but she is a VERY EXPENSIVE girl from a health care standpoint (she also costs as much as 20 students in the school system). My friend even said when she was an infant "from a cost perspective, we should let her go, but she's our daughter."

 

[crisi]

The formula is simple, but the numbers are very personal. Someone living on 30K/year may very well start saving early but still fall well short of any reasonable retirement goals and may not have the ability to live below his/her means, but most of the experts more or less ignore the fact that a person of such modest means throughout his working years isn't likely to have retirement expectations of world travel or indulging expensive hobbies either.

I think it is important to keep in mind, whatever your retirement goals, that most of the experts are being paid in some way by the financial planning industry and thus have a vested interest in making even the most dedicated savers feel that they need the services of those sponsors. I think that's where a lot of the absolute dollar goals come in - because if you tell Joe and Jane Blue-collar that they need to be saving a million dollars if they hope to retire, they're going to feel like they need professional help (or a miracle) to make that happen.

The flip is true as well - many people are not self aware enough to realize that the ideal retirement portrayed in Money Magazine isn't acheiveable unless those numbers get huge. They don't have to get huge, and that isn't the ideal retirement for everyone - but when travel and two homes is pushed on you for 50 years of your working life, its easy to fall into the trap - and feel like a failure.

People need to be self aware - AND aware of how they are being manipulated. Brokers would LOVE to manage more of my money - they tell me I need to save more because every dollar I have with them the take a management fee from. So their advertising to save more for a happy retirement is not any different than Disney advertising how perfect your week will be if you spend it with Disney, or how beautiful you will be if you buy a certain shampoo.

My mother in law and her husband are retired on a very small income - far smaller than I'd want to live on - but she survives (with a little help from us). Her and her husband are in their own home. They have plenty of food. They are able to keep a Netflix subscription. If much of her knitting comes from garage sale yarn rather than the fancy yarn shop - she is still happy knitting it. They get social security plus he has a pension from 30 years working for the University. But I'm really not sure what would happen without that pension.

My parents have a larger income - so they get to spend a month in the South in the Winter - a luxury my mother in law can't afford. My dad can keep a fishing boat. They can eat out more often. They live in a nicer house than my mother in law. We don't have to help - they can pay their own association fees for lawn mowing and snow shoveling (one of the expenses we pick up for my mother in law is the kid who mows and shovels). Social Security and savings.

 

[eliza61]

I think one of the lessons of the recent economic downturn is that what a lot of people today consider necessities, really aren't. A smartphone probably isn't, and replacing it with the latest model the second it comes out certainly isn't. Throwing out your working TV for the latest model isn't either. You get my drift, but for a lot of folks THOSE are necessities.

You know TV, I wonder how much of that though is "perception". I haven't volunteered with the poor in a few years, since before my dh got sick but when I did, none of them upgraded their phones constantly. very rarely. most had tracphones or income based phones which didn't give them the latest technology.

The people I see trading in and up can afford it. so it's no biggie for them. Same thing with cars. the folks I see trading in leases and getting new cars can very well afford them but the poor get the stigma of some how not having the right priorities. they're driving what we call "hoopdies" LOL like my sons car. I'm finally getting him a new car this month because he's driving a 30 year old Nissan with 260K miles on it. We'll actually he's getting my car and mama is moving up.

I remember a few years ago, there was a big urban myth that people in the hood were driving Cadillac Escalades which made my coworkers in Camden laugh hysterically.

I haven't worked with my church in 2012 but they are still serving the same area.

I just wonder if the reason folks are not saving for retirement is really as simple as "stop buying cell phones" .

Just some thought.

interestingly enough, usually the folks I know who trade up, do it at the end of their 2 year agreement when it's free. I have sprint and I haven't "paid" for a smartphone in years. I simply wait until the 2 years are up when I can upgrade and voila, new phone, zero money unless you count I'm now locked into another 2 year contract.

 

[tvguy]

You know TV, I wonder how much of that though is "perception". I haven't volunteered with the poor in a few years, since before my dh got sick but when I did, none of them upgraded their phones constantly. very rarely. most had tracphones or income based phones which didn't give them the latest technology.

The people I see trading in and up can afford it. so it's no biggie for them. Same thing with cars. the folks I see trading in leases and getting new cars can very well afford them but the poor get the stigma of some how not having the right priorities. they're driving what we call "hoopdies" LOL like my sons car. I'm finally getting him a new car this month because he's driving a 30 year old Nissan with 260K miles on it. We'll actually he's getting my car and mama is moving up.

I remember a few years ago, there was a big urban myth that people in the hood were driving Cadillac Escalades which made my coworkers in Camden laugh hysterically.

I haven't worked with my church in 2012 but they are still serving the same area.

I just wonder if the reason folks are not saving for retirement is really as simple as "stop buying cell phones" .

Just some thought.

interestingly enough, usually the folks I know who trade up, do it at the end of their 2 year agreement when it's free. I have sprint and I haven't "paid" for a smartphone in years. I simply wait until the 2 years are up when I can upgrade and voila, new phone, zero money unless you count I'm now locked into another 2 year contract.

I can't speak about low income folks and upgrading, but $200 every year over 35 years to upgrade adds up adds up to thousands of dollars with compounded interest if saved for retirement. Not as simple as just not upgrading cell phones, just shows how just a little thought can add up to thousands of dollars. Upgrade half as often, don't buy the extra cost cable channels you don't watch much, only replace your TV when it dies, not when there is a new model out.

 

[judydvc]

The flip is true as well - many people are not self aware enough to realize that the ideal retirement portrayed in Money Magazine isn't acheiveable unless those numbers get huge. They don't have to get huge, and that isn't the ideal retirement for everyone - but when travel and two homes is pushed on you for 50 years of your working life, its easy to fall into the trap - and feel like a failure. People need to be self aware - AND aware of how they are being manipulated. Brokers would LOVE to manage more of my money - they tell me I need to save more because every dollar I have with them the take a management fee from. So their advertising to save more for a happy retirement is not any different than Disney advertising how perfect your week will be if you spend it with Disney, or how beautiful you will be if you buy a certain shampoo. My mother in law and her husband are retired on a very small income - far smaller than I'd want to live on - but she survives (with a little help from us). Her and her husband are in their own home. They have plenty of food. They are able to keep a Netflix subscription. If much of her knitting comes from garage sale yarn rather than the fancy yarn shop - she is still happy knitting it. They get social security plus he has a pension from 30 years working for the University. But I'm really not sure what would happen without that pension. My parents have a larger income - so they get to spend a month in the South in the Winter - a luxury my mother in law can't afford. My dad can keep a fishing boat. They can eat out more often. They live in a nicer house than my mother in law. We don't have to help - they can pay their own association fees for lawn mowing and snow shoveling (one of the expenses we pick up for my mother in law is the kid who mows and shovels). Social Security and savings.

So true! Right now I'm looking at retiring in the next year (I will be 65 later this year). It does seem like there are many who want a cut of your money! My mother who is comfortable is helpful with suggestions about downsizing but my sister (she and my BIL don't have as much saved and have more bills) is looking at having someone help them manage their money. I've been reading a lot but I am suspicious of people who want to help for a fee.