DOES ANYONE DOUBT that planning for retirement is unique for each individual? The way we manage money, how we handle debt, our desired lifestyle and our family status are all important variables to consider. From what I observe, however, many people ignore these differences and seek a one-size-fits-all answer.
I’m addicted to YouTube. In addition to history, archeology and general education videos, I watch many retirement planning shows. I also follow retirement groups on Facebook and bloggers who embrace the FIRE (financial independence-retire early) lifestyle. I never knew there were so many experts out there. My favorites are those who give advice after disclosing they aren’t expert advisors.
A question for those who listen to these folks: What makes you think someone else can tell you—in a video or blog post—whether you can retire?
One of my YouTube favorites is a retired financial advisor. He takes questions and then proceeds to construct answers using an Excel spreadsheet. He plugs in his own assumptions, including spending rates based on national averages.
A lot of videos focus on $1 million as the magic number for retirement savings. Several spend time criticizing the 4% withdrawal rate. Others claim to tell you whether you can retire and when.
These experts press forward with advice without asking the person’s annual expenses or desired lifestyle. “I have saved $750,000, can I retire?” Who knows? Tell us about your debts, expenses, emergency fund and how you want to live. But no matter. The experts will just use national averages instead.
“I have $1 million. I’m 60. Can I retire spending $100,000 for the first 10 years, then $75,000 thereafter?” That’s a 10% withdrawal rate. Yeah, no doubt that’ll work fine…