Sadly MMM and others don't mention the whole "all 5% per year after tax gains get reset by 20 years when the world markets crash" scenario. Also he doesn't take into account if you have kids and want to help them with their college education where that leaves you savings wise. Yeah, I'm annoyed to have been trying to save money through the second depression.
Fully agree on this one. Assuming "You can earn 5% investment returns after inflation during your saving years" is the exact reason why so many retirement funds are having problems. %5 after inflation, although that might have worked great in the past, is optimist at best regarding the future.
Be working during the relatively high inflation of the 80s (wages lead inflation), retire during the record low rates of 00s so you're money stretches further/longer is definitely a nicer story then the other way around...
I had been saving money in cash for years went the financial meltdown happened (the stars aligned such that I graduated from college about 4 years before this). I happened to invest around the market low and got great deals. I decided to just hoard all of my money again and wait. With the insane leverage of banks, it shouldn't be too long now. I'm just hoping this time I have a few hundred grand to invest and can retire overnight:
http://etfdailynews.com/2013/01/15/derivatives-and-extreme-u...
