When a Million Ain't Enough

We're back home, readers. After three and a half glorious weeks on the circumference of Africa, and a few sweet hours on the edge of Europe in Lisbon, we are finally back with our lovable pups in our cute little house in the god-forsaken heat that is the Arizona summer. While we were away though, I finally got back into writing a bit, and reading your blogs, too. It's been a while.

I recently read something great on Garth Turner's "Greater Fool". Garth featured the young and annoyingly successful Millennial Revolution writers, who had the audacity to retire at 31 in true Mustachian fashion. Thirty freaking one. Nothing like seeing your younger compatriots do better than you to make your own goal of leaving the workforce by forty seem lame.

And just listen to their better half on this video defending the Millennial generation against the Boomers' typical criticisms. She's insufferable. Which clouds the fact that, when it comes to the Boomer's Dream of a single, lifelong stable job, a paid off home, and a pension, she's right. That dream is broken.

Still, she could be less smug about it.

But if I seem bitter, that's nothing compared to the comments these whipper snappers got from Garth's wrinkled readers. Here are some of my favorites:

"Garth, you have to stop talking to those F&%#$% digital nomad dorks. Every second millennial I meet calls themselves a digital nomad. They roam the world writing their self-absorbed blogs and posting lame selfies [my correction], that no one gives a damn about, and they barely squeak by financially, often because their blogs are of limited value."

"But I think it’s pretty foolish to think 2 people can retire at 31 with only a million bucks. Even at Garth’s 6% that’s only $60,000 a year now and 30 years from now with 2% inflation that will be less than $30,000 a year in today’s money. A better goal for a 31 year old is north of 2 million. About 2 million plus a house or additional investments beyond 2 million that can pay the rent.

A million dollars just isn’t a lot of money these days." 

"Good luck with what you think your [sic] doing. Wait until you’re anchored with a kid or two. Then we’ll see how well your plan works. A million bucks is no where near what you need to retire unless you plan on living like you’re on welfare. In that case just skip work and get social assistance at 18. You’ll be free as a bird living with crackheads in the nastiest places in the city. Inflation adjusted may I add."

"A million bucks conservatively throws off $50k per year. That's still kraft dinner level as far as I am concerned. Post something when your investments are spinning out $250k."

"Thanks for responding to one of my posts, but a million isn’t going to do it kid. For sure in 1960, maybe in 1980, but not in 2016.

You need more money than you think. Don’t retire yet."

"This story is nothing new. Derek Foster, Money Moustache, Couch Potato guy all have done this before.

But then they find out they can't live anywhere cool for $30k a year and then end up chopping wood and growing carrots out in some log cabin in the woods. Glamorous!
Garth may have helped you but I bet dollar to donuts he doesn’t advocate trying living off your dividends for the rest of your life. You didn't work long enough to earn any CPP. Did you keep any company pension? You know the life expectancy of the average millennial is well over 90 yrs. No kids ever? And are you going to scratch and save for another decade to pop away another million so you can actually have a respectable first world income?

You two better go back to the lab again and really think this through."

It's rare that you can actually hear the bitterness seeping through your computer screen, but these guys pulled it off. Why all the hate, grandpa?

But despite the shade, these angry boomers bring up a couple interesting questions. One: is their basic premise correct? Might early retirees be underestimating their future needs? I think, in general, we in the recent boom of early retirees and early retirement bloggers are likely underestimating our future expenses by a good amount, as I've written about here.

The new, typical early retiree, who amasses his nest egg rapidly, very well might not have certain expenses ever appear in their budgets in the 10 years that they raced to financial independence (like a new roof, or children's braces). These rare-but-real costs will never make their way into an annual budget, so they're missing from the annual expenses-times-twenty-five quick-and-dirty math that so many of us use to calculate the size of said nest egg.

But more to the point of what, I hope, is at the core of these Boomers' criticisms is that we, the young early retirees, don't yet have the life experience to estimate what our future selves will want or need in our annual budgets. I don't want kids now, but might I later? What do medical costs look like when I'm fifty five? I'm fine rocking a $35k budget now, complete with an awesome Toyota Matrix and two Yamaha scooters, but is that still satisfying twenty years from now?

So I have to say that the Boomers have a point. The youthful arrogance that allows us to defy the idea of a traditional retirement is often paired with the requisite youthful ignorance that doesn't know what it doesn't know. So yes, Uncle Joe, with your weird ponytail and your Neil Young albums, a million really might not be enough if future expenses end up being significantly higher than current expenses.

But the solution to an underfunded nest egg is really not that difficult, either. For someone who would want an extra $10,000 a year, a serious misstep for someone who is supposed to pull just $40,000 a year out of their portfolio per the 4% rule, they still only have to find a way to earn $800 a month to get back on track.

For people who manage to amass a million in less than a decade, earning an extra $800 is not all that difficult. The simple answer is to simply find some activity that throws off $10,000 in income over the year. For techy folks like the writers of the Millennial Revolution, this might be a month or two of consulting work. But then again, it might be turning that artsy hobby into an Etsy store. It might be a shift and a half a week at the local library.

At worst, these formerly successful employees could go back in to the workforce for a year or three and save up a small fortune again. (And before I read them in the comments, please save the notion that a formerly awesome employee that's still in her thirties or forties will be forever blacklisted. That's irrational, and fear based.)

But for someone retiring at the ripe old age of 31 (or, um, 40) earning a little extra money is not any huge problem. I'm sure the retirement police will have a field day with the fact that early retirees might, gasp, earn money after their so-called retirement, but with forty or fifty years of retirement, yeah, some cash might come in.

I've got to wonder if these comments were a not-too-subtle way for Boomers to point out they have larger nest eggs to cover their more typical (read: larger) annual expenses? Is this just a way to brag about, and justify, the fact that some Boomers have saved up two or three million over a lifetime of work, so now they can continue spending six figures every year until they die?

Or, worse yet, are they just angry that a younger person has somehow saved more than he or she did, in way less time, and the Boomers want to doom these kids to failure?

In the end, it doesn't really matter. When you publicly write about money, are somewhat successful with that money, and do something drastic with it, like retire at thirty one, a few people are going to have strong opinions about that. That's what you sign up for when you start an early retirement blog and foolishly set up a comments section.

Do you agree? You know we're currently spending about $35,000 a year -- is a million enough to pull the trigger? Let this old effing fogie hear about it in the comments below.


*Photo is from Tony Fischer Photography at Flickr Creative Commons.