Always Read The Comments

A few days ago we looked at a Yahoo article about Gen-Xers that said those folks (my folks) believe they need $1.2 million to retire but only expect to have $771,000. Of course the median balances in their 401ks are a small fraction of the $771,000 figure and the older part of the cohort is kind of getting short on time. 

Yahoo updated the article and while I didn't read it again I did go back to read new comments and I found a couple that provide testimony things we've been talking about forever.

A woman now 60 said she was not able to start saving until she was 40 and now has $500,000 accumulated. While there can come a point where it really is too late, that age is later than most people might think. We've laid out numbers where someone can start at 50 and while they may not accumulate all they need starting at that age, it is not a stretch to build up enough to create a useful income stream. 

If $500,000 isn't enough for the lady who started at 40 and is now 60, odds are pretty good that whatever she has in equities will double by the time she is 70. According to Copilot, over the last 100 years, in 80% of rolling ten year periods, the Dow Jones doubled if dividends are reinvested. The S&P 500 doesn't go back 100 years. Maybe she doesn't want to work 10 more years but it's an option and, making a bunch of assumptions, maybe she'd get lucky and the S&P 500 would double in less than 10 years and she'd be retiring with a good bit more than her current $500,000.

Quick detour to a conversation I had with one of the guys on the fire department yesterday. He's a two or three years older but semi-retired quite a while ago. He works one week a month for the company he and his partners sold. He said that his advisor teases him about how conservative he is. On a scale of 1-10, he's at 99. I did not ask him for any details but he made a comment about his wife's spending. I told him the S&P 500 is going to double whether he's invested or not so he might as well own some stock. I told him the path to 13,668 is unknowable, but it's going to happen at some point. 

Another commenter mentioned BMI. Health is our greatest source of wealth he said. I'll add that every aspect of getting older is easier when you're fit and have good body composition. You're less likely to be shelling out for prescriptions, spending time in doctors' offices and less likely to have aches and pains common to getting older. Being fit and having good body composition also allows for more optionality which might pertain to the next comment.

A 57 year old said he recently lost his job and is trying to find work. He lamented some bad financial decisions he made a long the way. He said he needs to find work by the summer but also implied that he might be able to retire now if he can't find a job. In making biggish financial decisions, I would encourage taking the viewpoint of what the older you might think, could the future you be worse off because you bought a $150,000 car?

This guy knows what's up.

Another commenter said that the AI bubble is going to pop right when Gen-X need their portfolios the most. Anyone agreeing with the commenter should set some cash aside now in case the commenter turns out to be correct.

Finally, there were many comments taking a pessimistic view on getting older related to being frail and other aspects of physical and cognitive deterioration common to old age. The tone was it's expensive and it's inevitable. Yes it could be expensive (less so if family is involved) but it is not inevitable. There is probably a selection bias to where I live but staying physically active and mentally active greatly reduces the odds of become frail and suffering other forms of deterioration or at least pushing that sort of outcome back by quite a few years. 

Our fire department has always had guys in their late 60's and early 70's able to do the arduous pack test (annual physical requirement to hike 3 miles in 45 minutes or less, wearing a 45 pound pack). Someone who stays fit enough to successfully pack test at 70 is many years from being frail if ever. There is a moderate version (2 miles, 30 minutes with 25 pounds) and I would say anyone able to do that at 70 is many years away from being frail, if ever. 

For most people, this sort of outcome will come down to habits related to diet and exercise, far less of a determinant is genetics (google it). An anecdote about genetics from my family. My father was always thin and always walked. he made it to 88 before 55 years of smoking cigars caught up to him. He had a brother who was one year younger and was overweight his entire life and didn't make it to 80. As far as cognitive deterioration, google "Type 3 diabetes" and decide for yourself.

Deadlifts, squats and farmers carry will take care of the strength part, hiking at a fast past will take care of maintaining gait speed and cutting sugar/processed foods will take care of body composition. But you should do more than just those three weight exercises.

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