The Retirement Information Out There Serves Only One Party – Hint: It’s Not You.
My bank is a well-established company which has been around for quite some time. They do everything from issuing mortgages to helping you invest your money. And of course as it says everywhere on their website, they have my best interest in mind.
A bank is a complicated system with many regulatory bodies controlling what it does. But the basics is that you deposit your money with them and they use your money to make more money. In return they offer you a rate of return on your money market or CD or savings account.
So, Dr. Mo decided to use the nifty little online tool that my bank has to see how much I would need to have saved up for retirement. And lemme get right to the juicy ‘facts’, my bank says I need at the very least $10,190,933.
Yes, that’s in today’s dollars. And they must be right, I mean a company wouldn’t throw such facts out randomly. After all, this is my life they would be potentially ruining or helping.
Let’s Look At These Numbers In Detail
So I need $249,900 a year of gross income according to my bank’s little online tool by ag 67. This stated amount is pre-tax which means I would need somewhere around $175,000 in net income.
Now let me see, I’m no math genius but if I just took $175,000 out of my $10 million every year it would take me … 57 years before I depleted this stash of cash.
If I kept this money in a simple savings account I wouldn’t be taxed on the withdrawals so I wouldn’t need to take out $249,900.
So at age 67 I could spend $175,000 a year from my $10,000,000 and I would run out once I hit age… 124. Interesting. Again, I’m no mathematician but…
Oh wait, maybe I made a mistake. Maybe they meant that I actually need the whole $249,000 a year, and that is a net amount. Okay, so $10,000,000 divided by $249,000 would be… 40. So I could spend $249k every year until age … 107?!
Is life expectancy going up that fast? Last I checked diabetes, cancer and resistant bacteria were on the rise.
What About Social Security And Pensions?
I’m wondering, if I worked until age 67 wouldn’t I get social security? (the answer is of-fucking-course yes). And if I work for 3 decades wouldn’t I get a pension? (I hope to god that you picked a job with a pension if you decided to spend 3 decades of your life working for the man).
I wonder what happened to those numbers? Did the online tool just forget about them? There is a button that allows you to add SS into the calculation but certainly doesn’t seem to make a difference in the real calculations (see below).
A $249,000 Lifestyle In Retirement
Assuming my old wrinkly ass needed a quarter mill a year to live a comfortable lifestyle, wtf could I spend it on?
The tool had an option to add a spouse but I’m sure I would need $100 million saved if I added another person so let’s keep this a little more realistic and a little less sci-fi.
Realistically, I would have a paid off house, an expensive monthly healthcare bill, own a car, have a few pets, take a few vacation, have a hobby I spend on and have food expenses.
I wouldn’t be commuting so my car expenses and maintenance can’t be that high. Let’s say I eat out every day and that I take one fancy vacation every month.
- Food/Eating Out: $1,500/mo
- Housing Stuff: $1,000/mo
- Car Stuff: $500/mo
- Health Expenses/Insurance: $1,500/mo
- Vacation: $5,000/mo
- Utilities: $500/mo
- Cell/Internet: $200/mo
- Hobby: $1,000/mo
The above total would be $134,000/yr or $11,200/mo. Not even close to $249,000 is it? Shit, not even close to $175,000. And this is with an absolutely ridiculous budget of a $5k vacations every-single-month.
So What Gives?
Well, capitalism is the answer.
It’s the same reason that 100,000,000 humans have been murdered by other humans in the 20th century alone. 100 million humans murdered for the reason of land, borders, water, religion, and most important of all, oil.
The company that published these numbers didn’t make a mistake designing this online tool, they are just greedy and the majority of people allow themselves to be manipulated because they give into their fears.
This bank wants as much of our money as they possibly can have. When I play around with the numbers they turn the charts red, a pop-up says “Danger” that I might not have enough money to live a comfortable retirement etc.
Manipulation by instilling fear.
Aimed at a population that already has a healthy dose of fear and feelings of uncertainty regarding personal finances.
Funny isn’t it. We slave the majority of our day at our jobs to obtain something that we don’t fully know what to do with. Sounds like a great thing for some asshole to exploit.
Shame on Wall Street. And shame on us if we don’t do a quick napkin math to determine how much we really need for retirement.
Don’t let fear run your life, seek out facts and act on them.