How Much for Retirement

[2002 Maxima SE]

Originally Posted By: Pop_Rivit
It depends on how you want to live when you retire, and if you plan to fully retire or remain at least partially productive.

The problem is that most 20 and 30 somethings are too wrapped up in car payments (or leases), jumbo size house payments and credit card debt to actually invest in their own future. There is a lot of opportunity with the available investments, as well as the advice that's available today, and even on a modest income you should easily be able to invest and end up with more than 1 million dollars by the time retirement looms.

Can you retire on a modest pension or savings? Sure. Would you want to retire on a modest pension or savings? I sure wouldn't. That being said, in my opinion, if you retire today you should have at least 1.5 million in investments to retire on, over and above a pension or social security.

The investments my wife and I made when we were in our 20's and 30's are the ones that, over time, have netted us the highest return. I doubt that I'll ever fully retire (it's too much fun being productive) but if I do ever decide to completely hang my hat up, we will be comfortable on the investments we made 30 and 40 years ago. We were guided by a good investment counselor and it's paid off handsomely. We also never wrapped ourselves up in car payments (or even worse, a lease), huge house payments or credit card debt. We built most of our home equity in sweat equity, and it's something that I don't often see in younger people today.


Nice post!

I am a 30 something who has followed this rationale at an early age. We bought a house we could afford (not the max we were approved) and have had the same cars for 10+ years. Yeah, I get the itch on the cars (I'm a car nut) but I hold off on scratching as long as possible.

Looking at my portfolio, I am pretty much where I was in 2009...very little growth (adding money) and very little loss (good broker who got us in some great investments to shore up the losses). All in all I think we're OK, but I don't see how 4% (conservative) growth per year is possible with how rocky the market has been the last few years.

 

[Mr Nice]

How much do you have to pay your broker ?

Will you stay in NC after you retire ?
I have family in NC and I'm really thinking about retiring there.

 

[2002 Maxima SE]

My broker gets paid on sales commission...it's a small percentage of my portfolio. We may stay in NC...the land/housing is pretty cheap. I guess it all depends on where the kids wind up.

 

[L_Sludger]

Originally Posted By: Pablo
It's not easy. As I stated in another thread, I wish I had been saving more earlier. Everyone needs to be more investment savvy.

I'm not sure what to say about the people who saved zero. I'm sure some will expect to be bailed out....



nup, they can expect to work until they kick it.

 

[VNTS]

It really isnt a question of how much, it is a question of much you can save.

In 2007, Avg account balance(401K saving etc) for 55-64 yr old houselhod was only 271K $, median was only 100K$

http://www.401kplanning.org/top-401k-pla...ent-age-groups/


I would say most will never reach 1 million $ when they retire. so most must make do with a lot less.

Myself,I find this article interesting to bench mark where I stand.

I have my house paid off, no loans and decent 401K plus savings.

 

[CivicFan]

It's more useful to look at the median (half are above, half are below) - it's a better measurement for a large set of observations.

 

[crinkles]

I don't care anymore. The hope is to pay for a small farm cash, build a small cottage and have minimal expenses, and live off the land as far as possible. it just aint worth worrying about - sure, save as much as you'd like to and sleep sound at night. do what you can do.

the whole concept of retirement also [censored] me - i'd much rather be doing something, like cashies on the side one day.

 

[Shannow]

I'm watching people retiring around me at 58, 59, 60 ATM, and can't touch my retirement until 67...them on defined benefits, us having to pay now to get later.

It's a crock and a scam, the creators of the "Ponzi" scheme expecting us to pay them now, and pay our own way later...while negative gearing their way through multiple properties at taxpayer's expense.

 

[crinkles]

Originally Posted By: Shannow
I'm watching people retiring around me at 58, 59, 60 ATM, and can't touch my retirement until 67...them on defined benefits, us having to pay now to get later.

It's a crock and a scam, the creators of the "Ponzi" scheme expecting us to pay them now, and pay our own way later...while negative gearing their way through multiple properties at taxpayer's expense.


I'm all for hoarding my own cash in the bank rather than the pension savings rort. Kind of condescending that I need compulsion when I am a reasonable person.

 

[VNTS]

Originally Posted By: CivicFan
It's more useful to look at the median (half are above, half are below) - it's a better measurement for a large set of observations.


I guess it doesnt matter, but I chuckle when I read all these articles saying you at min need a million$ to retire when reality is that most are lucky to have 100K saved and many even less.

My concern is that under the current regime and their pay your fair share non-sense, I have to wonder if in the future there will be a means test to receive SS and medicare, so anyone who did due diligence and saved will be penalized while folks who went on fancy vacations, bought new cars, paid for educations and look poor on paper will get SS and Medicare.

Just makes one wownder with the current climate in Washington.

 

[CivicFan]

Originally Posted By: VNTS
Originally Posted By: CivicFan
It's more useful to look at the median (half are above, half are below) - it's a better measurement for a large set of observations.


I guess it doesnt matter, but I chuckle when I read all these articles saying you at min need a million$ to retire when reality is that most are lucky to have 100K saved and many even less.

My concern is that under the current regime and their pay your fair share non-sense, I have to wonder if in the future there will be a means test to receive SS and medicare, so anyone who did due diligence and saved will be penalized while folks who went on fancy vacations, bought new cars, paid for educations and look poor on paper will get SS and Medicare.

Just makes one wownder with the current climate in Washington.


That has been one of the proposals. Things like that usually apply to people above a certain theshold - for example, people making more than $106k do not pay payroll taxes so it would be fair if they did not get SS or Medicare either.

 

[VNTS]

People who make more than the 106K threshold, do not pay SS on their income above 106K , but do pay on the 1 st 106K, lets be clear.

Their SS is based on the max of 106K not on anything above that too.

Fail to see your logic on why they should not recevie SS or medicare if they have paid into SS and medicare funds their whole life. Everyone pays 6.2% in every year.

My concern is when one retires you would have to fill out some form showing all your investments, assets etc, like financial aid form for studdents. Competant people who have saved money for their childrens edcuation usually get screwed versus people with same income who have spent everything on vacations, nice lifestyle like going out to eat, fancy cars etc.

 

[javacontour]

Originally Posted By: CivicFan
Originally Posted By: VNTS
Originally Posted By: CivicFan
It's more useful to look at the median (half are above, half are below) - it's a better measurement for a large set of observations.


I guess it doesnt matter, but I chuckle when I read all these articles saying you at min need a million$ to retire when reality is that most are lucky to have 100K saved and many even less.

My concern is that under the current regime and their pay your fair share non-sense, I have to wonder if in the future there will be a means test to receive SS and medicare, so anyone who did due diligence and saved will be penalized while folks who went on fancy vacations, bought new cars, paid for educations and look poor on paper will get SS and Medicare.

Just makes one wownder with the current climate in Washington.


That has been one of the proposals. Things like that usually apply to people above a certain theshold - for example, people making more than $106k do not pay payroll taxes so it would be fair if they did not get SS or Medicare either.


Not totally true. The 106K cutoff is for the Retirement and Disability benefits, or about 85% of those taxes. There is no income ceiling for paying into the Medicare payroll tax system. You pay that portion of payroll taxes above 106K. You just stop paying into the retirement and disability portion, if I recall correctly. Certainly the retirement portion. I'm not as sure about the disability portion, but believe that is part of the same tax. FICA taxes are essentially Social Security and Medicare. Only the SSI portion drops out at the income ceiling.

As stated before, you pay full FICA taxes on the first 106K income. You simply pay no more SSI after you've paid SSI taxes on the first 106K. It was sold this way when the program was designed because it was called an INSURANCE program (Social Security Insurance) and not a handout. So everyone paid into the insurance pool up to an income ceiling, but not after that.

Congress would not approve the program back in it's inception if the wealthy were taxes to pay retirement benefits for others. That was considered a wealth transfer program, and congress would not go along with that. To make the program acceptable to all, those getting the benefits were those who were expected to pay into the program. That's why there is a cap on how much income is taxed for SSI.

 

[CivicFan]

Did my post say otherwise?

 

[javacontour]

Originally Posted By: CivicFan
Did my post say otherwise?


Yes,you said they don't pay payroll taxes. They do, even above 106K. They simply don't pay the SSI portion.

Your statement saying they don't pay payroll taxes above 106K is incorrect.

 

[CivicFan]

Originally Posted By: javacontour
Originally Posted By: CivicFan
Did my post say otherwise?


Yes,you said they don't pay payroll taxes. They do, even above 106K. They simply don't pay the SSI portion.

Your statement saying they don't pay payroll taxes above 106K is incorrect.


OK, I reread... I was talking about the 4.2% payroll tax for SS.

 

[Pablo]

Originally Posted By: CivicFan
...people making more than $106k do not pay payroll taxes so it would be fair if they did not get SS or Medicare either.


What the heck are you smoking? Of course they pay payroll taxes. Sure there is a cut off limit, but they pay the tax, I can assure you. This is the hate the rich [censored] that passes for logic in USA today. Trust me. Upper income people pay taxes. Flip it around.....and see who actually doesn't pay taxes.

 

[Shannow]

Kerry Packer was pretty good at not paying taxes. Rupert was also pretty good at it in the day.

 

[Pablo]

Originally Posted By: Shannow
Kerry Packer was pretty good at not paying taxes. Rupert was also pretty good at it in the day.


Trust me, there are weasels in every income bracket. Is this your jab at people with means?

 

[CivicFan]

Originally Posted By: Pablo
Originally Posted By: Shannow
Kerry Packer was pretty good at not paying taxes. Rupert was also pretty good at it in the day.


Trust me, there are weasels in every income bracket. Is this your jab at people with means?


The cards are stacked in their favor because they are the ones holding the cards. There is nothing wrong in talking about the reality.