Thursday, March 30, 2017

Lies, Damn Lies, and Retirement Quizes

March 30, 2017
MarketWatch: Most Americans failed this eight-question retirement quiz

Q: About what percentage of your savings do many financial experts suggest you withdraw annually in retirement?

Why would I even care what "many" financial experts would suggest? Many financial experts suggest many things, especially when it concerns the money of others. Take Ben "There's No Housing Bubble to Go Bust" (2005) Bernanke or Ken "Housing Boom!" (2007) Fisher, for examples.

Q: Given the current average life expectancy, if you want to retire at age 65, about how long would you need your retirement savings to last?

The correct answer is 87, or 22 years after a retirement age of 65, according to Social Security Administration data.

No, the correct answer is not the life expectancy of people similar to you. You need your money to last until you actually do die. 87 would have been horrible advice to my mom, who died at age 93 this year, and to both of her brothers who lived into their 90s. Don't even get me started on my aunt currently rooting for Gonzaga at the age of 94!

I know that there are 6 other questions to heckle, but I must stop at 25%. My time is still worth something to me. Using advanced statistical algorithms based on mood, available sunshine, expected life expectancy, and current video game addictions, I currently estimate it to be exactly $6.77 per hour. I know it is below the federal minimum wage, but it's a fact. Trust me.

P.S. Eddie Lampert, if you are reading this then please don't build up your hopes that I will be shopping at Sears just because my free time is only currently worth $6.77. I still consider it to be worth far more than temporary shopping experiences at any mall. It doesn't help your cause that I recently bought a video game on my phone for just 99 cents, and have experienced nearly 100 hours of enjoyment from it so far. A penny an hour? See? My free time is practically priceless by comparison! ;)


Stagflationary Mark said...

They say that we should live each day like it's our last.

I'm just not willing to embrace the risk of spending my retirement nest egg in just one day though.

Instead, my plan is to spend each day frugally so that I don't ever have to sit in an office, behind a desk, working for "the man" again.

But hey, maybe that's just me. :)

Anonymous said...

Hey Mark. I have appreciated the blog over the years. I have a little story about the company I work for. They used to have just a couple of health plan options. Now they are migrating more towards the HMO plan. You probably know the plan. The one where you get a credit card to pay for expenses and you can put extra money into it to act as a savings plan. Imagine using insurance as your investment account and as a bank.

Anyway I chose the later plan, but I did my due diligence and looked up the details of the plan. So you get a credit card good only for medical expenses, but you can technically buy anything on that card. If you do you pay a penalty and one to the government. Well lets just say the bank of insurance has no ability to resolve fraud. If you card gets used you are on the hook for everything. Now comes the investment options. Extra money can be invested in a range of mutual funds. I am sure you can imagine. 12B-1 fees, front and back end loads like you would not believe.

We have a company meeting about the new plan so people could ask questions. I waited my turn then let loose. You should have seen the expressions of disbelief as I explained the failings of the plan and how bad it was for the employees. Then I kid you not the HR guy looks over at me and says. "Our company would not do this to us."

Lets just say its a good thing this was not a tryout for cage match.

The company I work for offers very limited investment options. I just picked one of the only index funds they offer. Needless to say this is through Fidelity. Guess who is one of the largest shareholders in the company? It is Fidelity. I also took a look at the CEOs parachute. 54 million dollars. If he completely burns the whole thing down just 34 million. They have one guy on the board that is 99 years old. Seriously.

Take care Mark.

Stagflationary Mark said...


Great story!!

Then I kid you not the HR guy looks over at me and says. "Our company would not do this to us."

Yeah, right. And I'm the king of the universe, and have some wonderful solar systems I'd love to sell you. Cheap. Hahaha!

In the 1990s, my company decided to switch 401k plans. I was fully invested in stocks at the time. Without informing me until after the fact, they decided to move me directly to cash during the transition.

Needless to say, I was VERY upset. I went to HR and aired my gripe. I said that it was unfair to expose me to that kind of risk. I was told there was no risk. I was sitting safely in cash.

I tried to explain, to no avail, that if the market rises 10% while I am sitting in cash, they move me back into stocks after the transition, then I'm out the 10% I could have made. Worse, if the market then falls 10% after that, then I'd actually have a loss of 10%. Who would be paying me back for that? It's not like I ever agreed to be sitting in cash.

I was assured that wouldn't happen. There is no risk when sitting in cash. It was like talking to someone completely clueless to investments, risk, and basic math. Sigh.

Fortunately, the market did nothing while I was in cash. Otherwise, I would have had a LOT more to say, publicly if need be! (Much like you did.)

P.S. Had the market fallen 10% while I was sitting in cash, risen 10% after they moved me back into stocks, then I would also have had something to say. I would have sarcastically pointed out to the HR person that I just made 10% on their "riskless" cash investment. Will wonders ever cease? Doubt they would have understood the sarcasm though. Probably would have just smiled and given me a very undeserved "I told you so."

Rob Dawg said...

If paternal family history is any guide I should go out and buy that Audi R8 yesterday.

Stagflationary Mark said...

Rob Dawg,

There's never been a better time to buy an Audi R8! They just aren't making any more 2016 models! Buy now or be priced out forever!!

It's so simple. Just create a GoFundMe account and share your story! You know, like this person. ;)

mab said...

I like to help others so I often do some micro lending. In reality, it's more like nano lending as in approaching zero. Hey, it's the thought that counts.

mab said...

I currently estimate it to be exactly $6.77 per hour. I know it is below the federal minimum wage, but it's a fact. Trust me.

That's an odd number.

Stagflationary Mark said...


Congratulations on being at the forefront of the nano lending boom! ;)

The unsecured loans will average $10,000 Tanzanian shillings (US $5), Tigo said.

Stagflationary Mark said...


That's an odd number.

You seem skeptical of the accuracy. Look, it's got two sevens in it. Everyone loves sevens! ;)

mab said...

You seem skeptical of the accuracy.

I was just pointing out that it was an "odd" number. Not that it "even" matters.

Stagflationary Mark said...


Well, it's $3.23 cheaper, isn't it? It's not ten. You see, most blokes, you know, will be working for ten. You're paid ten here, all the way up, all the way up, all the way up, you're paid ten at your job. Where can you go from there? Where?

mab said...

Have you ever been to Stonehenge?

Stagflationary Mark said...

In 'Spinal Tap,' there's the fake historical quality of 'Stonehenge.' It's something the musicians look at with a mystical reverence. In folk music, it's the seriousness with which these people approach their 'art.' - Christopher Guest