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Using my 'Last-Man-Standing' method (and the 2007 SS table) suggests your odds of reaching 88 are 21.8%. That's ball-park enough to your 25.3% estimate for you to worry, for me to worry. That was my only point. Most people are sure they won't live longer than the money they've budgeted for retirement, and in most cases, they won't. But the consequences of losing that bet are severe, like, they now have to go begging for food at a time of life when charity resources are going to be over-stressed due to so many other people having the same problem.

I think Americans have a very unrealistic view of retirement as being something they have a right to, rather than something they earn. If they hate their day job so much that they want to escape it, they should get a different one. And even when they do 'retire', a new one will be dumped into their lap, namely, the need to manage assets. When I finally realized just how much time effective money-management requires, I realized that I didn't retire. I merely changed jobs. The boss is nicer, and the hours are more flexible. But I'm still putting in as many hours per week as I averaged over the 30 years that I did project work as my means of support, namely, about 25 hours per week. Some years when I was working, we regularly put in 84-hour weeks, especially toward the end of the project. Then we might have a couple months off to fish, to plant gardens, to play with the kids, etc.

But far beyond any monetary benefits, investing is fun. There isn't a day that I'm not engaging new problems, conducting basic research at the same level and intensity as I did in grad school. But, also, 'enough is enough', and I demand that my afternoons and evenings be free, as well as any day or week I want to take off for other other things, like a good fishing trip or checking up on the grandkids. So in that sense, I am retired, and because I've done my financial planning, I know I can sustain that lifestyle indefinitely. My bet is that many people will find themselves having to go back to work or have to go begging. They make no effort to estimate worst-case scenarios and then defend against them. No defenses are fail-proof. But not getting their life-span right isn't a mistake they should be making. Last-Man-Standing planning sets a realistic upper-limit, namely, if you can't fund your retirement until you become the last man or woman still alive in your cohort, you're taking on avoidable risk.

The cost of minimizing that risk (of out-living one's retirement assets) is huge. Of that there can be no doubt. That's why so many people want to fudge their life-span number, so they can reduce their funding requirements. "Well, no one in my family lived past age such-and such. Therefore, I don't have to plan for living any longer, either." BRRZP! WRONG. That is a classic instance of misusing statistics. The sample size is too small to draw valid conclusions. This is an error those working in the field of behavioral finance document all too commonly. That's why I like the impartiality of an actuarial table, converted to a betting table. I can't fudge the fact that I could possibly live to age 108, but probably not much longer. That caps my responsibilities. Therefore, I know how much risk I have to take in my investing, or how much risk I can avoid. And if I guess wrong, Big Whoop! I had fun while I was accumulating some assets that my kids now get to spend, or if they're wise and if I've trained them properly, they'll roll them toward their own retirement, and yet another generation can enjoy the economic freedoms this country does make available to them that work to achieve them. Were my Dad still alive, he'd be gratified to see that his kids have done well due to his support and example, as have his grandkids, as will their kids in turn, an immigrant family that built a niche for themselves in the new world, one dollar at a time, one day at a time, one generation at a time.

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