What Kills US? is an excellent short video on the real threats to our health and lives in the US. This is behavioral economics at its best – and explores how we obsess to our detriment on “headline risks” such as terrorism and airplane crashes when we would be far better off simply getting more exercise.
Thanks to The Big Picture
The highest housing rental prices in the US are not to be found in New York, DC, Los Angeles or San Francisco. They are in Williston, North Dakota, according to a recent survey. A 700 sq ft apartment in this town of 30,000 rents for an average $2400/mo. This the result of the astonishing oil boom following rapid advances in “fracking” technology.
The standard advice is that you can draw between 3-5% per year from an invested portfolio and have that portfolio last 30 years. There is much debate over what is a “safe” sustainable withdrawal rate but most studies conclude that a 4% draw will survive whatever the markets throw at you over a 30 year period. In your case that would mean $40K a year, increased annually only by inflation.
There are multiple calculators (search “How long will my money last”) that will give you a straight line estimate for different withdrawal rates. These are helpful guides but are far from definitive. The reality is that an investment portfolio of any sort will increase and decrease in value and these unpredictable fluctuations can have a dramatic impact on how long your money will actually last. The more aggressive the investment portfolio, the more volatile your range of outcomes. More upside to how long the money lasts, but also more downside. Generally this is why individuals who are relying on a portfolio to support their current ongoing needs are best advised to invest in a low risk portfolio, one that minimizes the risks of major loss while protecting their savings against purchasing power erosion from inflation. This conservative approach may seem counter-intuitive to some who believe that taking more risk will allow them to earn more and thus take a higher annual % withdrawal. When withdrawal rates are north of 5%, this is a temptation but it is in effect gambling with the odds against you.
Most people want to know whether their savings will last for their lifetimes because it is not much good if they spend money to last 30 years but they last 35. To answer this broader question with any confidence requires two pieces of information: How much you are routinely spending in total out savings and how long you will live.
As for how long you might live, we can only assume “the worst” and that is that you will outlive your expected median life expectancy of 84. Most with educations and some financial means in the US will. Realistically that implies you will have expenses to support for perhaps 35 years from today. Some of your present expenses may decrease in time. Medical for example should decline when you are eligible for Medicare. And you most likely will receive Social Security benefits at age 67 or after thus reducing the required draw from your assets. But other expenses may increase.
The best approach in my estimation is to have a rough plan for what the future holds financially for you and for this you may want to enlist the advice of a CFP in your area.
Originally posted on Nerdwallet
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Older adults who underwent a brief course of brain exercises saw improvements in reasoning skills and processing speed that could be detected as long as 10 years after the course ended, according to results from the largest study ever on cognitive training.
This is from an NBC News report discussing recent research in the field of “brain training.” These mental workout programs are demonstrating positive results in slowing or arresting the trajectory of cognitive function decline in aging adults.
I first became acquainted with this concept after a broadcast series on the topic on our local PBS affiliate. In addition to crossword puzzles, I added Lumosity to my own personal regimen two years ago. (Caveat: I have not seen any studies that compare the results of a consumer brain-training program like Lumosity with the results obtained by the more rigorous methodologies discussed in the research.)
According to the recent PISA study of educational accomplishment, 10th grade students in China are 2 1/2 years ahead of their American counterparts. Two and a half years, for chrissakes! This and other shortcomings of our K-12 system are explored on Fareed Zakaria’s GPS segment entitled “An absolute wake-up call for America.”
Fareed’s panel included the Superintendent of the NY City schools system, the founder of Teach for America, and Sal Khan of the Khan Academy. A few of the major differences they noted between school systems that are at the top of the list (Germany and Finland along with China) and ours. The top-performers:
- Place high societal respect and provide competitive compensation for the teaching profession
- Furnish ample resources for teacher training
- Are open to adopting the best practices from other countries
- Foster active parental involvement
- Have no school-based sports programming, spending the time instead on academics.
These “best practices” would be great enhancements to the US system, difficult but not impossible to achieve over a generation (though the elimination of school sports would most likely be dead on arrival as a suggestion).
But to me the most telling and readily actionable difference the panel discussed was that students in China attend school an average 50 days a year longer than their American counterparts. Over ten years, that is 500 days, or curiously enough about 2 1/2 years. Our kids just don’t spend enough time in class and a simple fix thus might be to start gradually extending the K-12 school year.
We continue to work off an educational calendar based on the needs of our agricultural economy during the 19th century. Overhaul is way past overdue and our failure to invest in and to modernize K-12 educational delivery to meet the needs of the 21st century is jeopardizing our children’s economic futures.