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 hooked on YouTube
In addition to history, archaeology 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.
Read: This 66-year-old ended up living in a van 18 years ago. Now, he’s turned his lifestyle into a lucrative video business.
I never knew there were so many experts out there. My favorites are those who give advice after disclosing they aren’t expert advisers. 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?
Find more retirement advice and news at MarketWatch Retirement
One of my YouTube favorites is a retired financial adviser. 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.
Read: Planning to retire early? Watch out for these tax traps
“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.
Here’s another good question from a video: “How much does the average person need in retirement funds to retire comfortably?”
Well, if that average person had a nest egg of $1 million, they could generate an average $40,000. So, I guess the answer is $1 million—on average, that is. Oh yeah, define “comfortably.”
Read: We have $7 million for retirement but ‘I feel bad about not working’ — should I retire anyway?
Online experts will find ways to figure out how long that $1 million will last in retirement—with no details about your situation required. OK, how about one detail: Where do you live? Here are your chances by city.
Sometimes, the questioner provides more details. “We live in Maine. This is a pretty expensive state to live in. For those of you who also live in Maine or another similarly expensive state, I wonder, what would you consider a reasonable monthly budget for two?”
To that I might say, “What’s your monthly budget today?”
All it takes to make any retirement plan …….