Mark Moss argues the biggest retirement mistake isn't how much you save, but selling down assets at a fixed rate each year. Nearly half of baby boomers have no retirement savings. The median $200,000 generates only $8,000 annually via the 4% rule, while households aged 55-64 spend $78,000 per year.
You've probably heard that Bitcoiners say never sell your Bitcoin, but of course that raises a very obvious question, like how do you retire and pay your expenses without selling? All right, we're gonna shift the entire way that you're thinking about this so you can achieve your goals in a fraction of the time, while most people actually never even achieve them. Now, trying to understand your retirement and how much money you need and what assets to invest in, it's sort of like a puzzle. It's not just really a puzzle, it's actually a math problem. I'm gonna break down the math for you. But the problem is that most people think retirement is some like pre-programmed track that I get good grades, I get a good job, I save for 30 or 40 years, and then I end up to, at this point where I could stop and I could live off of my income. But the problem is twofold. The data shows us this. Number one, nearly half of baby boomers today have no savings. So this pre-programmed track that people are going on It doesn't work. It hasn't worked. Half of people have no savings. That's pretty bad. But it also fails for other reasons. And I'm going to show you why it's fatally flawed. But let's just look at the data here again real quick because it gets even worse. We can see that of the half that actually do have some money, the median savings of these boomers is about $200,000. And it gets even worse. The fatal flaw of traditional retirement planning tells us that based on the 4% rule, the 4% rule means that I'm able to sell 4% of my assets every year to live. And I'm gonna break the math for you. But based off of that, on the $200,000 of median savings of the, of the half that even have it, that retirement income would be about $8,000 per year. But of course it takes a lot more than $8,000 per year to live today. On average, it says here, US households between the ages of 55 and 64 spend over $78,000. Not $8,000, $78,000. Now, this has another flaw, which typically your advisor will tell you that when you retire, you'll spend less money. That sounds pretty bad. When I retire, I want to go enjoy myself. I want to go travel around the world. I want to take my wife all over the place, and I probably want to spend more money than I do right now, not less. Don't worry, we're going to get to all that. But retirement planning fails for one reason, and it's not they didn't save enough. It's not the wrong assets. It's not because of the 4%. Those are all part of it. It's the selling. It's not the timing. That's part of it. It's not the assets. That's part of it. I'm going to show you all that, but it's the selling. You see, they're going to sell down their assets at 4% a year, and I'm going to show you why this is flawed. But then the hope is that— I guess I hope I die before I hit zero.
