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$5 million to retire? Radical savers shred trader for backing Suze Orman

MarketWatch logo MarketWatch 11/8/2018 Shawn Langlois

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Jared Dillian, strategist at Mauldin Economics and former head of ETF trading at Lehman Bros., made a lot of good points in his recent take regarding retirement planning entitled, “The ‘radical saving’ trend is based on fantasy.”

But one thing he said really rattled Reddit’s “FIRE” board, where half a million subscribers gather to share their thoughts on the “financial independence, retire early” strategy that’s become a hot-button topic for millennials.

Here’s what set them off:

‘Suze Orman was criticized as being elitist and out-of-touch for suggesting that you might need $5 million to $10 million to retire at 35. But she’s not wrong under her framework, which is that in retirement, you want to live well, not poorly. If you don’t have the ability to fly first class once in a while, you have probably done something wrong.’ —

Dillian, of course, is referring to the Orman comments that went viral last month.

“You need at least $5 million, or $6 million. ... Really, you might need $10 million,” she said in a podcast, expressing her contempt for the “FIRE” movement. “I think it’s just ridiculous. You will get burned if you play with FIRE.”

Read: These numbers show why Suze Orman is right

As for Dillian, a frequent MarketWatch contributor, it’s that “first class” quip that struck a nerve on the Reddit board.

“That quote is really all you need to know about this (guy),” writes DonQuixole. “He’s just another hedonist trying to justify our work till you die system as if expensive things are the key to happiness.”

Supershinythings assumed there’s an ulterior motive at play.

“He’s pushing the Financial Services agenda where they want you to keep working so they can keep bleeding your accounts with underperforming products and quarterly ‘fees’ to do nothing,” he wrote. “Then they can stoke the fear and place themselves as the solution, as long as they keep getting paid.”

Dillian, despite the backlash, did make some valid points.

“The biggest issue with the FIRE movement is that it’s the ultimate bull market (SPX) phenomenon,” Dillian wrote. “FIRE seems to work because the stock market has gone straight up. A bear market will change that.”

True. Youngsters buying into the approach haven’t had to deal with a lasting bear market. Of course, early retirement targets are a lot easier to achieve when stocks are flying like they have been. What happens when the music stops?

He also touched on the benefits of having a regular job.

“What is wrong with working? Why do the FIRE people dislike working so much that they want to quit at age 35?” he asked in his piece. “Working gives people purpose. Most people do not function well with a bunch of unstructured free time. I am one of these people who thinks there is dignity in working, that every job is important no matter how small.”

While some on Reddit agreed with parts of what Dillian had to say, the vast majority seemed to believe in this “too long; didn’t read” synopsis from elarslew: “I made a bunch of radical assumptions about the fire movement, combined it with my own opposing views, and have found that it simply won’t work!”

And Dillian’s response?

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