LogFAQs > #954945578

adjl posted...

I don't think anyone with a modicum of financial sense means "I'm just going to take all the money I have now and hope it lasts me until I die" when they talking about retiring. It's a given that any retirement plan involves investment so you have actual income to keep you going and your savings can do more than just sit there uselessly until you reach the bottom of the barrel. That's not to say that nobody tries to retire like that, but it's very clearly not a good idea, and most people at least understand that the concept of investing exists.

The way I've always seen planning for retirement is paying in and retirement as cashing out. I'm imagine that's how the vast majority of people would view it. Now what the young people -- the ones so young that they've never lost anyone to old age -- don't seem to understand is that, no matter how well you plan, if you live to the bitter end you will almost inevitably run out of money. Every relative, relation of a friend, etc, has had that money run out by hospice and either switched to government aid (which, by the way, was why Obama was promoting his end of life counseling plans promoting things like assisted suicide -- once somebody is on government aid at that stage, it's a huge moneysink)

Now, you're talking about a modicum of financial sense, but anybody with a modicum of financial sense wouldn't necessarily retire when they have that kind of a windfall unless they were already a few years out. Most people would still work afterward because who the fuck knows what could happen.

But as much as you try to say "most people," that's not how most lotto winners actually operate. The only lotto winner I personally met took the cash in his late 50s and planned on just running out the money. afaik, he's still alive, although I guess he'd be getting up there in years.

adjl posted...

That's not necessarily a prerequisite for planning retirement (or whatever) around receiving a large lump sum. If the interest you're paying on that debt is lower than your RoI, you may actually be better off investing the money and making minimum payments on the debt. Other factors can come into play, like improving your debt:income ratio to get better terms on a mortgage, or simply the peace of mind that comes from being debt-free, but defaulting to "I must pay down my debt before anything else" isn't always the optimal course of action.

For a mortgage, yes. For a lot of other debt, probably not. But as a person who's gone out of his way to avoid debt, I'm not going to be as debt-savvy as chronic borrowers. I didn't even take a college loan, I just picked a less expensive school where I knew I could cover the costs.

---

(\/)(\/)|-|
There are precious few at ease / With moral ambiguities / So we act as though they don't exist.