Marvin glances down at his notes. He says on his frequent buying trips to Europe, he always tried to bring home a piece by Fabergé—jewelry, crystal, flatware. Each cost a few thousand dollars. In time, he would resell them. Last year, Marvin says, he sold a jade ladle for $110,000, more than twenty times what he originally paid. He also invested a bit of money in a string of women’s clothing stores in Kalamazoo, Grand Rapids, and other points in Michigan. And then there was the stamp collection he’d built, planning to sell it off piecemeal, as an annuity. Neither scheme worked out. Okay, you lose some.
But not until he retired did Marvin learn the greatest lesson of all: It wasn’t money that would yield his greatest pleasures, it was figuring out how to be needed. Sure, he makes time for fun, indulging his good fortune, traveling with Carole to Europe, India, wherever the spirit moves. Mostly, though, he exercises his need to be needed. He’s a go-to man at the Council of Senior Centers and Services of New York City, the umbrella organization that coordinates efforts on behalf of 300,000 older New Yorkers. Marvin advises on financial and strategic issues. He’s a big brother to any grown-up in need of mentoring who wanders across his path. And through it all, Marvin is an irrepressible champion of why there is no better place to grow old than right here. When I interject that a lot of people mention college towns as a way to get by on a modest Number, Marvin nearly combusts. “College towns?” he says, eyebrows arched. “If you want culture and excitement, hell, this is the greatest college town on earth! And there are an infinite number of ways to be needed. Wealthy people? They can be very lonely. Poor people? Their needs are obvious!”
Now the punch line: Yes, Marvin and Carole can afford to be nice. Their New York Number sits at “$5 million plus,” Marvin says. What the plus is is irrelevant. Financially speaking, Marvin did well. But that’s just the half of it. The other half is that Marvin is now doing good.
And yet—everybody wants to know, How much do I need? Where is that formula? They want to pick up a magazine, riffle straight to the page that will reveal, precisely, the specific New York Number needed to gain release from a temple of financial doubt. Financial advisers are not amused by such impatience, warning that the New York Number is not something you can do while standing at a magazine rack, a cappuccino in one hand. They tell you that the New York Number is a ganglia of risks that need to weighed, assessed, factored in.
The risk of rising health-care costs: Some advisers contend that a healthy person who leaves his job at 55 should have about $260,000 set aside just for unforeseen medical expenses. To amass this much—this will sting just for a moment—you need to invest (sensibly) $5,260 a year, if you possess the foresight, discipline, and the means to start saving, beginning at age 35.
The risk of inflation: Thanks to years of low interest rates, we don’t think much about how rising inflation can fry, poach, and scramble a nest egg, all at the same time. The costs of milk, medicines, and Metamucil go up, while the buying power of your holdings goes down. A 3 percent annual inflation rate over 25 years—higher than we’re used to, not unreasonable to expect—means that you’ll need twice as much money to live on as you do today. Let’s not get into what happens at 5 percent.
The risk of investing: If you’re gun-shy with your investments, as people are when they grow older, and insist on keeping your New York Number in CDs, bonds, or under the mattress, a rise in the cost of living will erode your “supersafe” portfolio. If, on the other hand, you keep your New York Number mostly in the stock market, just pray that you retire (and expire) over the right 30-year span—i.e., when the bulls are running.
No quick-and-dirty formula can be refined enough to take into account variables such as the future of Social Security; the fate of the death tax; how much you think you should leave your kids, if anything; the impact of disasters, natural or man-made; not to mention the fact you might find yourself getting birthday greetings on national TV by an immortal Willard Scott. Want to live to be 100? Great. It’ll cost you.