October 2, 2020

Offering Retirement Advice and Having Much of It Questioned!

Goodness, it has been a long time since my wife and I were profiled in Money Magazine and on CNN.Com. In fact, it is so long ago, Money is no longer being published, though a digital version is available. I know there are lots of new readers who didn't see this when it was first published. I thought you'd enjoy it today. 

The messages still apply, but the rather snarky pushback I received was not quite as common as it is today. Nothing like a good dose of hate mail to brighten your day!



In one of my braver moments, I decided to look at the comments left on the CNNMoney.com web site about my retirement advice that is also available in October's Money Magazine.

As I expected, many of the comments were negative, some downright hostile. There is something about the Internet that can bring out less than the best in people. In this case, instead of seeing if there is anything to be learned from the experiences of others, many of those who left their thoughts decided to use rudeness and draw incorrect conclusions.


The good news is, I didn't take any of it personally. Human nature is such that we all like to tear down someone else who does something we can't or haven't. It also gave me some quotes that I can use to try and set the record straight. So, here are a few of the quotes and my responses:

"What are they doing for health care? Obviously, none of these people has health insurance or ever goes to the doctor."

 I can't speak for all the other couples in the article, but our situation was pretty clearly spelled out:  We spend 33% of our total yearly income on health care. Betty and I have been on the individual market virtually our entire married life. Except for 4 years early on, we have never been covered by health insurance through work. We do skip or delay some treatments that aren't essential because of the cost. When safe to do so we usually split pills in half to keep prescriptions costs under control.

We both have regular physicals, see the dermatologist yearly, get new glasses every two years, and see a dentist twice a year. Betty gets new hearing aids as required. We have very high deductible health insurance that keeps premiums under control but that means we pay for most everything out of pocket. Betty has several health challenges that she manages the best she can by knowing as much about her problems and treatments as any doctor she deals with.

Are there people who pay a lot more? Sure there are. The article didn't say everyone in America can be exactly like us. It gave a snapshot of our situation so others could decide if they are better or worse off in certain areas.  But to assume we never go to the doctor and still leave a satisfying retirement is kind of silly.

"You can't use the phrase 'low-cost retirement' and Scarsdale, NY in the same sentence."

There was a woman profiled who actually did live in Scarsdale and is living well in retirement on not much money.  Scottsdale isn't exactly low-rent either but we are making it work. Of course, some places are more expensive than others but we choose to live here for all the reasons listed in the article. If someone is living in an expensive community then logic dictates that will be part of the financial calculation to develop a plan for retirement. Could we live on less money somewhere else? Probably. But family, church, and friends are too important. It is part of the cost of retirement we are willing to bear.

"How do you save money like that with the average American living paycheck to paycheck?" 

The implication in the question is that you can't. I would respond that the median income for Americans is over $46,000 a year (more than we live on in high-rent Scottsdale). That average American family is carrying a $15,000 credit card debt, at least one car loan, a hefty first mortgage, and very likely a home equity loan. They are living paycheck to paycheck because they are overextended, over their heads in debt, and unwilling to delay gratification.

If your income situation is much more modest, then saving is a real problem. I am not minimizing the mess the economy has made of millions of lives. But, in that situation you are not likely to be anticipating retirement anytime soon which of course, was the focus of the article. 

"Don't they (the magazine) do articles on folks with a nest egg of $50,000 or less?  

If someone has less than $50,000 in a nest egg and is even thinking about retirement, they are in deep denial. The terrifying fact is the average American at age 50 does have just $50,000 set aside for retirement. That person has no legitimate hope of retiring, unless they want to attempt to survive on a typical monthly social security check of less than $1,200 (before deductions for Medicare).

What worries me the most about the tone of some of the "comments" left on the web site is the obvious lack of grasp of reality and what needs to be done to achieve one's goals. There is an undercurrent of looking to blame others for a lack of planning, of sacrifice, and of common sense.

The sad, horrible fact is that way too many of our fellow citizens will never be able to experience a truly satisfying retirement. For many, that reality is not due to any failure on their part. They are being passed over and trod underfoot by the way our world operates now. Their future is bleak. It should bother us tremendously.

But, the other side of that coin is that many millions could experience a tremendously gratifying retirement experience. But, they are not willing to take personal responsibility for the choices they make today that directly impact their future tomorrow.

Retirement is all about choices. Make the right ones and a satisfying retirement can be yours.


More from the Money Magazine photoshoot


Note: The interview and having a photo crew at our house all morning was an interesting experience. I hope more people today have a better grasp on what retirement requires than some did in 2011.


34 comments:

  1. $15,000 in credit card debt? That blows me away!! I've never had any more than $200.00 on a credit card in my entire life, and I only have two---one for internet purchases and one for local. I was brought up to save for what I wanted to buy. But using cash and checks is starting to catch up with me because I've run into cashiers who treat checks like I'm trying to drive a horse and buggy onto a six lane freeway and curbside food pickups require a credit card now during the pandemic, so I just don't do it.

    Love the photos. Glad you enjoyed the experience of being interviewed.

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    1. Actually, in 2019 the average American family credit card debt was over $16,000, and that was before the pandemic forced a lot of folks to use credit cards to survive. Many of the places we shop now will not accept cash because of virus concerns. Technically, i think that is illegal, but no one is enforcing that particular law at the moment.

      Check? What are they?

      The photo session took several hours, including about 30 minutes in makeup and wardrobe. We felt very Hollywood.

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  2. I am a Canadian/US dual, considering moving to the US to be closer to family. I am wondering how Medicare factors into this. Do you still have the same expenses if you are on Medicare? My impression was that it’s a cheaper alternative to healthcare. Scary times!

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    1. While I'm sure Bob will answer, prior to the affordale health car act, folks who reired over retirement age paid huge amounts during that period before Medicare. I dont know too many people who are not happy to be the age to jump on the medicare wagon, including my sister wh still works by choice.

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    2. Assuming you qualify for Medicare, it is cheaper, though certainly not free. Basic Medicare is $144.60 per month. Supplemental (or medigap) policies can range from $50 to $300 a month. They cover everything that Medicare doesn't. A drug coverage plan averages around $20 -$40 per month since Medicare doesn't cover most drugs. There are still drug costs but the plan cuts them quite heavily.

      An an example Betty and I pay just over $600 a month for total coverage for the two of us.

      Another option are Medicare Advantage Plans which are run by private companies. They cover everything the above does plus occasional extra services. The costs can range from zero to a few hundred a month. There are restrictions on which doctors and hospitals you can use.

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    3. We have had a Medicare Advantage Plan and are super happy with it. Our regular docs were covered and all of the closest five hospitals are covered also. We do not need a supplemental plan at all. Also, I take five maintenance meds and my husband takes four and all are completely free through Medicare.

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    4. I know medical is always a consideration for U.S. retirees and I understand that Medicare helps a lot. I feel fortunate here in Ontario that all my medical is covered and drugs are paid for except for a $100 per year deductible and a $6 dispensing fee co-pay once you've exceeded the deductible. I would say this is a big reason many retirees are sure to stay in-country enough each year to keep their residence status intact. It's not 100% though as dental and eye glasses are paid for out of pocket unless you have private coverage, most retirees don't bother unless it's included in their employer's retirement benefits plan (it sometimes is).

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    5. Replying to ddavidson5647 comment that "drugs are paid for in Ontario". Guessing you mean they are paid for once you are over 65 years of age?

      Thanks, Derek.

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    6. Yes, drugs are paid for everyone in Ontario starting at age 65. Under age 65 people on disability or other social supports are also covered as well as those under 25 (i.e. children & students) without drug coverage through their parents or employer. There is a formulary of drugs that are covered, currently there are 4,400 drugs on the formulary so it's not 100% exhaustive, but it covers most drugs for most people. Certainly for my wife and I plus everyone I know over 65 has all of their drugs covered.

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    7. On a related topic I saw this in the news today. I had no idea...

      Open enrollment season for Medicare enrollees can sometimes be overwhelming because of the wide variety of choices. The average senior will have 47 different health plans to choose from for 2021, up 20% from last year.

      In most years, the majority of seniors turn to independent brokers and insurance agents for help trying to figure out which plan will work best for them. With Covid-19 cases rising across the country, seniors are reluctant to seek help in person this year. In states with big surges, just 9% of Medicare recipients said they plan to meet with a broker in person this year, according to a consumer survey by health insurance consulting firm Deft Research.

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  3. I think a key to retiring in a "high rent" city to have your house paid for. You can either be diligent about paying down your mortgage or you can sell up and move to a "low rent" area. Either way being mortgage free is a solid financial foundation for a successful retirement. Of course that means in retirement you aren't paying any rent or mortgage which makes a huge difference. There are still property taxes and utilities to pay but you have to pay that anywhere unless you are totally off the grid.

    It's the same with debt. The less debt you have when you retire the better off you will be and a mortgage is just another debt. Debt payments also interfere with saving and for sure your lenders will want to be paid regardless of any saving plan you have.

    Regarding savings I have always believed that the biggest mistake people make with retirement savings is that they save what they have left over after paying all their bills. Of course those with a very low income won't have anything left over but people with average income (or above average income) should be able to save something. For most average people if something really needs to be paid, like their rent or mortgage, it gets paid and you need to put saving in the same essential category. Saving is not something you do with left over money because there never is any. It's the old "Pay Yourself First" mantra.

    I also acknowledge that while these things are simple, they aren't easy. It takes planning fortitude and discipline over several decades to make it a reality.

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    1. We adopted the "Pay Yourself First" rule for most of our married lives. I was unemployed for the better part of a year after being fired and before establishing a viable business. That was a time of lots of Mac and Cheese and essentials only. Otherwise, we strived to save at least 15%. Not easy, but was something that was important to us so we were willing to sacrifice to achieve it.

      Good summary, David.

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  4. I am retired with less than fifty thousand dollars, however I have a pension in addition to my social security. The final decision when you ave control should be how much you reuire to live on monthly, and which of many ways you will fulfill those needs. I even know couples who llive very well on two social security paychecks. I agree with the comment above regarding savings, but more importnt than the amount you put in in my opinon is how early you begin, and if you put it somewhere rather than simply in savings. My son is just 30 and already has a working IRA account, even if he only adds the minimm, he will be much beter off having started in his twenties than waiting until later.

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    1. Absolutely, the timing of savings is crucial. Your son is well ahead of the game with an active commitment to a retirement plan at his age.

      Being self-employed for probably 85% of my career, pensions were non=existent. Retirement, emergency funds, and everything else had to come from my business. We are doing just fine, but during this pandemic period we are actually living on not much more than our Social Security checks and the required RMD from an IRA.

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  5. Bob, I think you summed it up quite nicely when you pointed out that times are bad but some people compound their financial woes by not taking personal responsibility for the choices they make that will eventually impact their future lifestyle. (paraphrasing) I suspect the same dynamic applies to the ever increasing numbers of drug addicted and homeless folks living in our parks and stealing from surrounding neighbourhoods. It is not quite as bad here in Canada as some cities in the USA but it is getting there quickly. Times are tough but it doesn't help matters that personal responsibility and foresight seems to be diminishing rapidly in our western culture.

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    1. Our culture does not emphasize personal responsibility nearly enough. Instant gratification remains the driver of our economy. Fingers crossed that the pandemic and economic mess of 2020 will prompt people to rethink that approach.

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  6. So sad you were attacked back when you originally did this. Then again, the American way sadly appears to be the "I can afford that payment" lifestyle. 30y mortgage, 8y car payment, 5y living room furniture, 2y for the new deck. And heck, the car is paid off so I can go buy a new one and start over again.

    In reverse, we were saving saving saving and paying off debt before age 50. We got a lot of harrassing about "you're the boss so we know you can afford a big new home (this from 1 person who just built a big new home after empty nesting). Why are you driving that 17yo car? This from a person who bought 5 new cars over 10 years (my lowest paid staff person at that).

    There is no interest in "how did you accomplish that"? There is only the desire for "you need to live like I do".

    sigh..................

    Signed, Living the life I want, debt-free at 49 and retired at 58 :-)

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    1. Misplaced anger and being forced to reexamine one's decisions are hard for any of us, so I wasn't entirely surprised. I thought the article made it clear that these were our choices and the result was what we wanted: to retire young and see where life takes us...sounds like your path, too.

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  7. Bob your successful retirement rebuts any previous negative comments.
    I wonder how many of us could afford a good retirement if Social Security did not exist? Now add a loss of Medicare on top of that. Most likely that would financially ruin almost all of us. There is a political party that has vowed to kill both of these programs since inception. I suspect the replacements for both would look very similar to the plan for ACA we have never seen. I am quite happy with both existing programs.

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    1. Medicare and Social Security are the foundations that so many retirements are built on. Taking either away, or weakening them substantially so we can continue to give tax cuts to the wealthy, or build a fleet of $50 Billion fighter jets, would be met with the resistance much decisions deserve.

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    2. Yup, Those jets are crazy! We need to continue to get out of being the world policemen or military. Time to care for our own- again. The war machine of retired generals and private industry is amazing though---be cautious that they are waiting in the wings to pounce!
      I did like my tax cut last year though....first time I did not spend hundreds of hours going through receipts to get back 25cents. I'll never forget having a conversation with my dad ( a small business owner). We, making about $40,000 a year, paid significantly more then he did. Time for flat tax as well.

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  8. So, this is just my humble opinion: The reasons the negative comments turned up following your Money article relate to comments that you and ddavidson made. Planning for a successful retirement isn't easy in that it requires discipline and fortitude, and an awful lot of delayed gratification and sacrifice. But these days, social pressure, the media, rapidly advancing technology and society itself undermine delayed gratification and highlight a sense of entitlement and the pleasure of having needs and wants met immediately. While there are certainly planners and savers who are still struggling (and my heart goes out to them), my guess is the majority of comments you mentioned came from people who did not invest their time and effort wisely in planning for and working toward a better tomorrow. Sadly, the play now, worry later method often comes back to bite you.

    Incidentally, I'm absolutely sure I read the article for which you and Betty were interviewed, even though I hadn't yet found your blog. Money magazine was my lifeline when I left banking and found myself holding my 401K and my pension in the form of a lump sum. I asked a broker friend to park the money somewhere safe for me until I could educate myself on investing. I subsequently subscribed to Money magazine and credit the staff with providing excellent information through which I built a solid foundation in investing. It was my privilege to have a personal essay published in the "Money Well Spent" column in that magazine exactly one year after I retired. I was devastated when the decision was made to eliminate the print edition. Yeah, I worked hard on our retirement plans, but Money always had my back. Thanks for publishing the link to the article that you and Betty were featured in - that was very much appreciated!

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    1. Like you, I was a loyal subscriber to Money magazine for many years, and we both made it into print...how interesting! It helped me feel more confident in decisions we were making.

      I'm not sure why they initially contacted me about the story, but it was certainly important to helping the blog grow in its first few years. The photographers gave us a copy of all the photos they took that day..probably in excess of 300. They are fun to look at every now and then.

      I am sure you are right about the comments. I don't think social media was as much a part of everyone's lives even back only 9 years. I remember MySpace was kind of a big deal in the early 2000's and Twitter starting really taking off around 2008. But, magazines and web sites (like CNN.com) were where most people went to air their opinions.

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  9. Thanks for the insightful article Bob. I think you nailed it. The negativity comes from not being able to understand or appreciate what it took to get to the place you are now. Instant gratification is alive and well at the detriment of long term planning.

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    1. We are bombarded with instant gratification messages all day long. It is not surprising that too many of us fall for the promises.

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  10. Great article. I remember when this came out. I never read the comments on line. People will always complain if they aren't getting what you achieved... I think it is human nature. Sorry you took the brunt of it.

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    1. Thanks, Janette. I survived quite nicely. As a matter of fact, Betty and I were on Maui when the article came out, so i didn't have worry about it until I cam home two weeks later!

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  11. So many Americans are out of work, possibly about to lose their homes or apartments, and young folks out of school are not about to find a job in their field. Retirement is probably far from the minds of so many people right now. How many people are having to raid their IRA’s to survive during Covid?America promotes a consumerism culture which undercuts all common sense.Unless you start early, — and who teaches us to do this?? — saving enough for retirement is a crapshoot. Pensions are few and far between. Right now, many households are combining, like during the Depression..with grown kids,sometimes with spouses and kids,moving in with parents once again. Maybe that’s a good thing? It doesn’t appear to me that people in general, in the USA, are able to postpone pleasure in order to save (pre covid) and NOW,certainly CAN’T. I don’t know what to think about the future of the USA.

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    1. Going forward, the concept of retirement may undergo some serious revisions. As you note, pensions are pretty much a thing of the past, and our savings rate is not sufficient to fund much of anything.

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    2. All of that saddens me. young people should be able to work hard,save, and secure their future. What has happened to the American Dream??

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  12. Are you "seeing" what Madeline says Bob with your own children? My children's group (30-40 yr olds) seem to be very serious about their older years. I haven't met one who feels that they will stop working as early as we did. They feel that they can change jobs, companies, ideas and still live a satisfying "retirement". They are saving (I have done so many budget classes in the last few years). Maybe it is because they lived through the recession? I don't know one unemployed- doing whatever it takes to stay in the game. Lots and lots of sideway jobs.
    Although my reference is every different ethnicity, it is not of the "service" class. They need to be addressed sooner rather then later. Those are who SS was first set up for, right? The people who are widowed, orphaned and laborers who need to make their way through through their elder years.
    Saying that, my 60 yr old bil is going to work at Costco. He doesn't NEED the job for money, but misses the interaction with people. And that is what a satisfying retirement is, right, enjoying your older years with choices.

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    1. One of our daughters is having a rough time because her industry shut down in March and isn't likely to be fully back until mid to late 2021.

      She is putting together unemployment checks and part time work to stay independent. She is likely to work into her late 60s. Retirement isn't really her mindset.

      I don't know that many younger people (under 40), but I do believe that retirement for them will look very different than it does for us.

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  13. I always enjoyed reading Money magazine back in the day. I grew up very poor, inherited nothing. I was fearful of money, as to me it meant acceptance or rejection. When I finally got a college degree and two nice job with benefits (Federal and Military) did I start to sock away money. One important caveat is that we have no children and that is a big difference. I enjoy your blog, I always try to learn something new.

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    1. As I became more comfortable with financial matters, I noticed that Money Magazine was really targeted that folks who needed to learn the basics. But, for more years than i can count, it was one of the magazines I really looked forward to each month. I found the stories inspiring and with just enough information to help me feel comfortable in making decisions.

      Frankly, with young people not getting a good basic financial education in school, it is too bad Money isn't still published. For those in their late teens and 20's, it would be a very valuable resource.

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