Why do so many assume that retirement means settling for less income?

Discussion in 'Finance' started by pjohns, Apr 30, 2020.

  1. pjohns

    pjohns Well-Known Member

    Joined:
    Jan 21, 2009
    Messages:
    6,916
    Likes Received:
    658
    Trophy Points:
    113
    Gender:
    Male
    t truly does seem odd to me that so many people appear to assume that retirement automatically means less income. (The widow living on nothing but a Social Security check--and with "more month than money," as the old saying goes--is the prototype for this.)

    I retired over 15 years ago; and I am currently far better off, financially, than I ever was previously.

    Of course, my particular case should not be viewed as emblematic of everyone else.

    But neither should that widow, living on "nothing but a Social Security check," be seen as typical of all.

    Comments?
     
  2. cristiansoldier

    cristiansoldier Well-Known Member

    Joined:
    Apr 24, 2014
    Messages:
    4,958
    Likes Received:
    3,400
    Trophy Points:
    113
    I would assume that for most people. If you just told me that you retired 15 years ago, I would assume that your income would be higher 16 years ago than now. The only way that wouldn't be true is if your investments are performing much better now than they were 16 years ago to the level it exceeded your income 16 years ago. Usually when people retire they move a large percentage of their investments to low risk investments which have much smaller returns.
     
  3. Daniel Light

    Daniel Light Well-Known Member

    Joined:
    Mar 12, 2015
    Messages:
    31,455
    Likes Received:
    34,880
    Trophy Points:
    113
    Generalization usually break down when applied to individuals, that said, statistically you would be in the minority.
    Right now, I'm sitting at home making more than my average day rate at work by playing the stock market ... but I know that the present market swings
    are not normal, and this is not the norm.
     
  4. pjohns

    pjohns Well-Known Member

    Joined:
    Jan 21, 2009
    Messages:
    6,916
    Likes Received:
    658
    Trophy Points:
    113
    Gender:
    Male
    That is a good post.

    However, the only "investments" that I have are two IRAs--one originally mine, and one my late wife's--plus, of course, I have several annuities.

    The bumper sticker that reads, "No boss, no job, no income"--although rather humorous--is not at all accurate, in my opinion.
     
  5. pjohns

    pjohns Well-Known Member

    Joined:
    Jan 21, 2009
    Messages:
    6,916
    Likes Received:
    658
    Trophy Points:
    113
    Gender:
    Male
    I know that the first part of this sentence is correct.

    As for the last part, I am really unsure.
     
  6. Starcastle

    Starcastle Well-Known Member

    Joined:
    Nov 29, 2020
    Messages:
    5,534
    Likes Received:
    3,121
    Trophy Points:
    113
    Gender:
    Male
    I started a thread about closed end mutual funds and how the huge yields can deliver superior total returns when you reinvest the distributions. They can also provide a fantastic income for retirement.

    Liberty allstars USA is a blue chip fund that pays a 10% distribution. That means $10,000 income on just $100,000 and $100,000 on a million. The price has appreciated historically at the rate of inflation or higher.

    Obviously when one retires you want all your ducks in a row and number one is to have your house paid for. If you have no more mortgage or rent to pay social security is often enough if there are 2 of you.

    I'm 62 and semi retired. My wife is 55. we are both nurses. When she turns 62 we expect to to have at least $1.5M and our house completely paid for so we won't need much money from our investments. We can use that money to make improvements on the house and buy cars and nice furniture with cash instead of loans.
     
  7. HonestJoe

    HonestJoe Well-Known Member Past Donor

    Joined:
    Oct 28, 2010
    Messages:
    14,767
    Likes Received:
    4,772
    Trophy Points:
    113
    Why would if seem odd when it is true of the vast majority of people. Most retirement income is a function of how much you paid in over your working life and is never going to pay out more than you paid it so for most people is going to result in a smaller income than they had working. There will obviously be all sorts of variations and different circumstances but I don't see how this typical experience would be considered odd.

    "Better off financially" isn't the same as "having more income". Without knowing the specifics of your circumstances, before and since retirement, nobody can reach any conclusion (though I know I wouldn't be willing to share than much personal information to strangers).

    I'm not sure that is typical, as many people will have at least some form of personal retirement income. That said, I'm sure there are a significant number of retirees who do have to rely on social security and other benefits alone due to their circumstances. And it certainly feels more than a little flippant to assert that doesn't need to be the case without any attempt to explain how or why.

    Or were you just boasting about how well off you are. :cool:
     

Share This Page