Tuesday, December 12, 2006

It's too late for me, but maybe not you!

An 6'X8' retirement shack may be more than Dada should expect!

Over the brief history of this blog, there have been a few occasions when I've joked around about having to eventually forfeit our home under increasingly dire economic circumstances brought on by the follies of our government we trust to "protect" us.

"There's a new freeway bridge just a couple of blocks from here," I've said kiddingly. "And if we're fortunate enough to be in one of the earlier waves of new dispossessed, we might be able to claim a spot towards the bridge's underside middle where the hordes of homeless will insulate us from the cold in winter and heat of summer."

But I'm not so sure that's a joke after reading another one of those articles in our local newspaper yesterday. You know, one of those by some recurring financial adviser that tells us, in order to retire in these United States, you'll need a nest egg of about $1 million!

Now, one of the descriptions I chose to set the mood for this blog when it began back in June, 2005 was a quote from a little book entitled "E.T. 101." It takes a light approach to some serious shit, much like my humor about being homeless. "E.T. 101" is a book supposedly channeled from aliens. And looking down on us from above, they posit: "Keep in mind that this planet is no model for rational thought, and that what passes for sanity here is sending chills down the spine of the remainder of the universe."

I'm sure that was said in regards to our endless, senseless wars, unending genocides, the starvation of masses, etc. But I'm sure it could also be applied to articles by financial advisers telling us we Americans need $1 million in retirement if we're to live comfortably and avoid all those unpleasantries the rest of the world seems to be drowning in.

So when I say each of us needs about $1 million before we can retire here in this country, juxtapose that with what's going on in other places like Iraq, or Darfur. Suddenly, reading about how much we need to stay comfortable, to avoid living under a bridge and retire comfortably reinforces the E.T.'s claim that, "what passes for sanity here is sending chills down the spine of the remainder of the universe."

But let's assume that we all buy into this retirement requirement. Pretend that's rational for a second. (And it may be!) If so, me and Mrs. Dada are doomed. It looks like the underside of a freeway overpass for us.

However, before you get too depressed, take heart. If you are not yet retired, if you have a few years to go, there may be hope for you. As the article tells us, if you are 40 and have managed to save $50,000 towards retirement to this point, there is still hope for you to reach that magic retirement goal of the $1 million nest egg. All you need do is stash away $500/month at annual growth rate of 6% and,"Voila!," you'll reach the necessary $1 million goal by age 84! Now here's the sad news: Life expectancy for a male in the U.S. is 75.4 years. That's a white male. (If you're a black male, you can expect to expire shortly before your 70th birthday.)

The point here being, whether you're a white or black male and only have $50,000 saved by age 40, you and I may get to know each other one day--underneath a freeway bridge (if I live long enough). Oh, and as for you ladies out there, white or black, you can expect to expire by 80.5 and 76.1 years respectively. So we'll see you under the bridge also.

But here's the one encouraging note for those of you who are 40 with a current retirement savings total of $50,000. If you up your monthly contribution towards your retirement to $1,653 each and every month the article tells us, and you take greater risks with that money earning a 13% return on your money (!!!) , you can attain the mythical $1 million American retirement requirement by age 65! (In that case, we probably won't be sharing a spot under a bridge, you lucky bastards!)

This leaves me with only one question. What fucking Universe are the financial advisers who write this shit living in? Obviously, not the same one as me.


D.K. Raed said...

Dada, the financial planners advice I recall is: take your pre-retirement annual income amount, multiply by 80%, then multiply that by 23. The resultant number is supposed to be the amount you need to have personally saved before you retire. Don't have it yet? Don't retire!

Oh, the kicker was this amount was only supposed to represent 1-leg of the 3-legged stool ... Social Security being 1-leg and company pension money the other.

Re: your financial planners advice ... what person earning $50K/yr, hoping to retire at 65, can save $1600/mo? That's a 38% savings rate, and we all know how little americans save.

The universe they live in is a mythical pre-enron, pre-bushiraqwardeficit, abundant social security place. The real universe's 3-legged stool has a small or no company pension leg, doesn't comprehend the tremendous increase in middle class taxes we are facing to finance endless wars, and hasn't read the fine print on their annual social security stmnt.

Expect a lot of wobbly stools to arrive under the freeway bridge in the not-too-distant future. All who exceed projected life spans can expect Vonnegut-Monkey-Houses (built by haliburton) to pop up where you get your choice of final poison. ~~ D.K.

meldonna said...

I suspect saving and retirement planning is so ignored in this country because most folks see this kind of retirement planning, so unrealistic in the physical world that they live in, and they simply no longer pay attention. Even owning your own home is no hedge anymore, property taxes being what they are. That little shack on the prairie is starting to look better and better, Dada. If I didn't know it appraised for $90K in today's market.

On the positive side, we won't be lonely in our retirement. All crowded up under that I-10 overpass. We can call it Dubyaville!

Can you pass that can of beans, brother?

azgoddess said...

i'm wondering how much of this 1M will be from social security? you knwo that money we paid in? sigh

D.K. Raed said...

mel's comment & dada's picture reminds me that those little shacks are still to be found all over the west and down south, hidden away in long-forgotten lonely places. Clean 'em up, fill the cracks with old newspapers, plant some potatoes & I think we've got our final redoubts. hey, they were good enough for our pioneer ancestors. but you gotta bring your own wobbly stools, for kindling. better than the detention camps ~~ D.K.

dada said...

Thanks Deke for further expounding on the perfect retirement goals, hence, perfect retirement plan. It just further illustrates how far out in outer space these financial wizards are from.

"Chigura Donada financial planners! "Chigura Donada!" (Leave the Earth!)

They should all be jettisoned. (Ah, perhaps--at last--some practical use for the space shuttle?)

dada said...

Note: The picture I chose for this is of my grandfather and a son (one of my uncles). Not to give you the wrong impression as to my age, it was taken decades and decades before I was born~grin. (I was an unplanned mid-life accident that happened nearly two decades after my last sibling was born.)

But grandfather pictured here immigrated to Canada first, then the U.S. after serving in the 1870 Franco-Prussian war. Landing in Wisconsin, he began the family dynasty in this country. I don't think they ever lived in a woodshed like the one in the picture. But some of his descendants may.

And, yes, we'll all be in good company.

D.k. Raed said...

A happy accident, I'm sure! My youngest sister had her 5th child at age 40. My grandma had her last child when she was 48. In both cases, the last was the best. Though it does make for some unusual family relationships when an aunt is only a couple yrs older than her neices & nephews & is a harley-driving mama to boot. or in my sister's case, when her youngest will only be couple yrs older than her first grandchildren.

so was your grandda a franco or a prussian? ~~ D.K.

enigma4ever said...

Oh what good news, I can save the Golden Egg the same time I get off the NO FLY list- wow- 84 is gonna be my best year yet...wow. Dada you always find ways to help me feel so cheery about the future.

Bless you for sharing the 3 legged stool theories...unless they are built by the Amish they tend to tip don't they ? But I guess we need the wobble stool theory to comfort us at night as we keep warm in the shack- and Mel- well I will share beans if I have them.....always.

Well, I gonna always have my shack- and always room for you all. In California I managed and lived in a Decrepid Victorian Boarding House that was disintergrating daily- it had bugs galore and wood rot- nice little wobble when you would walk to the other side of the room and oh the lovely noises that building would make when it was windy or stormy....but I was always trying to paint it, make gardens and curtains, no one who lived there really realized how rotted it was...and Bean, popcorn and mac&cheese can bring comfort to anyone for monthes....(ask mr6-6 ?)...

After watching the Katrina videos I know for sure that that shack in Dada's pic is surely better than any Fucking FEMA trailer...( it just needs a bit of paint and a 3legged stool or 2)

I know in the end there will be NO retirement- only all of us taking care of each other...cause the govt sure as shit is only good at abandoning people.

dada said...

My grandfather (whom I never knew) was a Franco and my nephew is--as you said, DK--a year and 1/2 younger than I.

dada said...

e4e -- Thanks for the great offer. A shack beats the freeway any day. And why do I get 60's flashbacks just thinking of a bunch of us communing in your Decrepid Victorian California Boarding House?

enigma4ever said...

Oh Dada....the rooming house was all that it was- a Flophouse with Enigma's paint job...no glory but very homey;....now I am in downtown Cleveland...very urban and very gritty and living in an old Office building- lofts- converted into apts...8th floor...four blocks from Lake Erie...but Most of the buildings on my block are being mothballed- and I fear that soon I willbe Imminent Domained and have to move somewhere else- trying to hold off while I job hunt- and yes I would like to live with others and might end up doing that .....soon I will need to move...but I do miss the days when bunchs of us did use to rent houses together....it was wonderful.....those were the days....

meldonna said...

I'm with you, E...lived in a few impromptu communes myself. The soul of an old hippie lives on in me. You can bet your sweet bippy on it!

Speaking of back in the day...I remember my Mom telling me when I was a teenager that when she was in high school, she took Basic Economics, and the rule was "never spent more on monthly rent than you bring home in one week, after taxes". There's some wisdom to that. And I can't remember a time in my life where I've ever made enough money to follow that dictum! The last time I came close I was sharing an apartment with two other folks -- even split three ways, it always seems rent is higher than that one check.

Ah, well. There's one of the big reasons I'm moving out of one of the most expensive cities in the country...

D.K. Raed said...

Mel, that's the 25% rule! It really was possible in our parent's generation. Banks used it as a criteria in approving home loans. By the 80's , it was up to 33%, 90's saw 50%. I lost track of it then. But the idea is sound, mere shelter should not consume so much income.

ps, I have mixed feelings about those shared dwellings. my socialistic tendencies end when I am the one doing all the work while others make excuses. plus I have privacy issues (like expecting there would be one scoop left of ice cream I bought). guess it all depends on the specific group involved. ~~ D.K.

D.K. Raed said...

oh, sorry to sound so negative. I was obviously involved with some selfish ice cream addicted swine back in the day, so perhaps I enabled their behavior. Didn't mean to denigrate all communal living. I still do have mixed feelings, though. ~~ D.K.

meldonna said...

The pseudo-commune works best when everyone can have their own room (and keep your ice-cream in a mini-fridge). You're still going to have bathroom/kitchen issues...but we are living post-Survivor. Sometimes, unfortunately, you have to vote someone off the Island.