What are your biggest pain points with personal finance?

[kork13]

P.S. chanfest22, I find it interesting that you asked what problems we wished someone would solve. When it comes to our finances, isn't it up to us ourselves to do the solving?

I initially started to answer that question as well, but I wasn't able to think of anything, because most strictly financial things, I honestly prefer to handle myself (Okay, except for anything to do with any sort if insurance, I hate dealing with that)... Now, other things in life, I'd be thrilled to have someone else do (like keeping the house clean). But while such outsourcing would have financial consequences, I didn't see them as within the scope of the question.

[chanfest22]

P.S. chanfest22, I find it interesting that you asked what problems we wished someone would solve. When it comes to our finances, isn't it up to us ourselves to do the solving?

@scfr — thanks for sharing this information! What I meant by the question are if there are any tools that one could build to help you answer these questions. As you mention, there probably isn't one perfect answer, but perhaps there may be a tool or service that could help you understand how much you should save for retirement to be comfortable and how much you can expect to withdraw without running into problems, etc. Does that make sense?

[disneysteve]

@scfr — thanks for sharing this information! What I meant by the question are if there are any tools that one could build to help you answer these questions. As you mention, there probably isn't one perfect answer, but perhaps there may be a tool or service that could help you understand how much you should save for retirement to be comfortable and how much you can expect to withdraw without running into problems, etc. Does that make sense?

All of those tools already exist. The internet is full of retirement calculators, savings calculators, retirement spending calculators, and more. I can't think of any financial tools that aren't readily accessible.

Why did you start this thread? Is there some service that you're here to promote?

[chanfest22]

All of those tools already exist. The internet is full of retirement calculators, savings calculators, retirement spending calculators, and more. I can't think of any financial tools that aren't readily accessible.

I understand that a lot of retirement calculators exist already. Yet I keep hearing from folks (including on this thread) that they are unsure how much to save for retirement, how much to withdraw, etc. So I'm not sure if people lack awareness of some of these tools or if the tools are simply not meeting peoples' needs. Do you have any insight on this?

Why did you start this thread? Is there some service that you're here to promote?

I'm trying to understand what kinds of problems people are facing with regards to personal finance. No service to promote

[disneysteve]

I understand that a lot of retirement calculators exist already. Yet I keep hearing from folks (including on this thread) that they are unsure how much to save for retirement, how much to withdraw, etc. So I'm not sure if people lack awareness of some of these tools or if the tools are simply not meeting peoples' needs. Do you have any insight on this?

I think the problem is that any calculator or planner involves making assumptions, some pretty significant assumptions. Nobody knows what the future holds. Will you live to be 70 or 82 or 97? Will Social Security continue to exist in its current form? When will the next bear market strike and how bad will it be and how long will it take to recover? How much will my house sell for 10 years from now? What's going to happen to health insurance in this country?

There is no possible tool that can answer these questions. Yet it is those answers that are truly needed to know how much you need to be adequately prepared. Short of that, we all just have to save as much as we possibly can and hope for the best.

[chanfest22]

I think the problem is that any calculator or planner involves making assumptions, some pretty significant assumptions. Nobody knows what the future holds.

I see, that makes sense. So if I am understanding you correctly, the existing tools out there are as good as they can be given the information available today?

[disneysteve]

I see, that makes sense. So if I am understanding you correctly, the existing tools out there are as good as they can be given the information available today?

Exactly. I'm 52. I'm hoping to retire at 62. I can plug in all of the numbers I have today but I need to guess at the annual return on my portfolio. If my guess is off by 1 or 2 percent, that drastically changes the end result.

I just ran the numbers and the difference of 2% on my portfolio over the next 10 years would be almost $400,000.

I also can't predict what my income will be each of the next 10 years. Heck, I can only make an educated guess at how much I'll earn next year. I'm not even sure how much I will make this year and it's already the end of July. So how do I plug in income figures into a retirement calculator?

[chanfest22]

I also can't predict what my income will be each of the next 10 years. Heck, I can only make an educated guess at how much I'll earn next year. I'm not even sure how much I will make this year and it's already the end of July. So how do I plug in income figures into a retirement calculator?

Yeah, I hear you, that makes sense. Do any of the calculators you have used add error bars or confidence intervals?

[disneysteve]

Do any of the calculators you have used add error bars or confidence intervals?

I haven't really played with any of them so I'm not sure.

[scfr]

I think the problem is that any calculator or planner involves making assumptions, some pretty significant assumptions. Nobody knows what the future holds. Will you live to be 70 or 82 or 97? Will Social Security continue to exist in its current form? When will the next bear market strike and how bad will it be and how long will it take to recover? How much will my house sell for 10 years from now? What's going to happen to health insurance in this country?

There is no possible tool that can answer these questions. Yet it is those answers that are truly needed to know how much you need to be adequately prepared. Short of that, we all just have to save as much as we possibly can and hope for the best.

Right. Results will depend on data inputted. In order to input data about the future, you need to make assumptions. And as the wisest Jedi master said: "Impossible to see the future is."

Even if someone comes up with the very best possible system ever, decades down the road something is going to happen and smart people will realize that the "old" (at one time brand-spanking-new-and-super-smart) rules no longer apply.

I am learning to be at peace with not knowing ... and just so I'm not misunderstood, that does NOT mean that I'm just sticking my head in the sand and doing nothing.

[scfr]

P.S. - For a less philosophical answer: If someone can just tell me what my health care costs will be between now and the age of 100, and guarantee those numbers, I think I'm good to go for the rest of my life.

[Singuy]

Here's one that's probably only a problem for savers.

Opening up (your wallet) and telling yourself that it's okay now...

My parents are the worst offenders. We had a fight the other day about who to get to service our lawns because they like to low ball everyone in the neighborhood and just can't do the normal schedule service everyone else is on(they want people to cut less to save more money).

At the end of the day, it's not even worth the fight. Their NW is about 2 million, retired. Mine is close to 1.6 million now..and yet we tear each other's head off because of an extra 70 dollars/month. I'm in the camp of I don't care..just want reliable service..they are in the camp of "you guys sure like to waste money".

I pay for their electric bill, they had the lawn thing handled..now I took the lawn thing over cause man it shouldn't be that big of a deal.

[FLA]

I had my financial plan all figured out, I had close to 500k in my 401k at age 45 as a single mom nurse. Then I get sick and didn't get better and am now living on disability. So I can no longer contribute to retirement, that greatly disturbs me. And I took a huge salary cut. On SSDI I only make 22k, but starting this month I get another 13k a year in long term disability but this money comes from my former employer, is a really crappy policy and is really hard to keep so I do not count on that money at all. I save it. So my biggest hang up is planning for a new financial future that looks nothing like the one I thought I would have. But I'm really good at stretching a dollar til it screams!

[Gailete]

Here's one that's probably only a problem for savers.

Opening up (your wallet) and telling yourself that it's okay now...

My parents are the worst offenders. We had a fight the other day about who to get to service our lawns because they like to low ball everyone in the neighborhood and just can't do the normal schedule service everyone else is on(they want people to cut less to save more money).

At the end of the day, it's not even worth the fight. Their NW is about 2 million, retired. Mine is close to 1.6 million now..and yet we tear each other's head off because of an extra 70 dollars/month. I'm in the camp of I don't care..just want reliable service..they are in the camp of "you guys sure like to waste money".

I pay for their electric bill, they had the lawn thing handled..now I took the lawn thing over cause man it shouldn't be that big of a deal.

Do you live with your folks? Otherwise why in the world are you paying for their electric or getting in fights about the length of their grass? If you aren't living with them, let them continue on with their frugal ways which is probably how they go to where they are financially in the first place. However if you live with them, then of course you should be contributing something.

[Singuy]

Do you live with your folks? Otherwise why in the world are you paying for their electric or getting in fights about the length of their grass? If you aren't living with them, let them continue on with their frugal ways which is probably how they go to where they are financially in the first place. However if you live with them, then of course you should be contributing something.

No we don't live together. It's very weird how for some reason I ended up paying for their electric bill and they ended up taking care of my lawn.

The electric bill part is perhaps they are out of the country a lot prior to my first born so I had to take care of all the misc costs of maintaining their house while they were away. As for the lawn, I was taking care of it but they claimed they can find someone cheaper..and the cheaper person will only do both houses to get the deal..so they ended up picking up that tab.

I know in the American culture, everything is pretty clear when it comes to bills..but in the Asian culture not so much.