What you need to set aside for retirement

[Razl]

HOW MUCH ARE AMERICANS SAVING, AND HOW MUCH DO THEY NEED TO BE SAVING?

http://www.pbs.org/wgbh/pages/frontline/retirement/world/need.html

I found this PBS story to be a good article that just reinforces what we've been discussing here in prior threads. If nothing else, now I know I'm not a fool for being the biggest 401k stasher in the office.

 

[The One]

you know what? i seriously wonder what will happen when this current gen of workers retire...

everyone is trying to keep up with the jones', 3 mortgages, refis, loans, interest only payments.... saving for retirement is such a foreign concept it should not even be discussed.

when all these people retire (due to health, because they will obviously have to work to age 90) what is gonna happen when they are all pushing carts ?

 

[obbop]

Our imports far exceed exports.

We are a consumer-driven society.

What would happen if everybody save? Well, many would lose their jobs!!!! Hard to save if you aren't working. Hard to keep a consumer-driven society afloat if folks don't spend.

Catch-22, anyone?

But, the top 5 percent on the socio-economic pyramid are doing very very well so....

no problems in the USA!!!!!!

 

[NJC]

What I'd like to do is forget the bleedin' RSP's (mutual funds), sell the house and cash in the equity and enjoy my life NOW when my family is still with me.

Sometimes it seems like we are always waiting for those golden retirement yrs and worrying about having enough $$ instead of enjoying life while we can.

Note this is coming from Joe Thrifty who doesn't spend much anyway..

 

[Pablo]

No surprise at all. I read these stats all the time.

Even I'm putting in 18% and get 4.5% on top of that and STILL NOT ENOUGH!

How can they say $500K will be enough? Enough said....these same people don't save because they spend like teenagers....so when they retire their spending habits will suddenly change?

 

[The_Jeff]

You just need to save more than your neighbors.

There will be a limited number of CNA's, landscapers, etc available for hire.

If social security pays X (and it doesn't even matter what that figure is), hired help will cost X + a premium.

If you have that premium and your neighbor doesn't, you have the help you need.

Which is why I'm cynical of increasing SS payouts really helping anyone all that much because it just raises the demand side of the bar.

 

[Al]

I retired at 55. I was making about 70k ish. I got a year and a half salary as a severence. I have reasonably cheap insurance and no debt. With about 28K/year I am not quite making it. If I chose to cut back a bit I could live on that.

I think the U.S balance of payments deficit, and U.S. nationbal debt is a show stopper. Couple that with 20+ Trillion unfunded mandates due within 25 years...Finalcial Armageddon in the U.S. is a certainty in 5-10 years or possibly less. I'm not sure there are any real answers here.

 

[keith]

It's the less than fully funded federal entitlements that will cause the most pain. Personal debt is but another nail in the coffin.

Retiree benefits grow into 'monster'

"...$510,678 ... debt for every American household"

"Taxpayer liabilities grew 20% in the past two years, 13% above the inflation rate."

Please keep telling me how conservative the current federal administration is. I need a good laugh, while I watch the progress of the invader amnesty bill and sign up for the medicare drug plan.

 

[thooks]

quote:

---

Originally posted by msparks:

Zero debt is the way to go, then living way below your means so that when retirement does hit you will be set.

---

Agreed.

Zero debt (except for a 15 yr mortgage) is the only way to go.

Do this and you will soon be sick at how much money you DO NOT get to spend every year because of payments-

Write down all of your monthly payments for stuff you have financed- cars, Plasma TVs, credit card payments, furniture payments, Home equity line of credit, store cards, etc.

My household income is pretty high, if you consider the average US household income is ~$40,000. I cannot fathom how these people out there are driving a $40k vehicle with $2000 worth of wheels, $1000 worth of tires, custom stereo, Navigation, XM Radio, Cell phone, 42" Wall mount TV, always going somewhere, never cook a meal at home, live in a $900 month apartment, got a personalized tag, new watch every 3 months, $1500 in gold chains, bracelets, got the latest cell phone (and always talking on it), got a $250 pair of sunglasses on, and wearing $300 in clothes, along with a $100 pair of shoes on.


How do they do it?

 

[Razl]

Thooks, it's only a matter of time for those kind of people. In 30 years, instead of sporting a new watch, they wil be sporting a new broom, as in "sweep this mess up, then come see when your done".

Pablo is an exception, but it goes to show with determination and discipline, it is possible to save a lot more than we currently are doing. My combined contribution is 24% into retirement. I got a late start.

NJC, you sound like my wife. She doesn't understand why we put so much into retirement when "we'll be old and grey when we could be enjoying that money right now". I look at her and say, "honey, picture your mother and father who are in their 60s. Do you (or they) think of them as old and grey? Don't you think they wish they could retire now or at least go part time instead of being forced to work another 10-15 years?" That's the position my dad is in to and it crushes me to see him stressed about money.

You have to get out of this mindset that life ends in your 60s.

 

[keith]

quote:

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Originally posted by Razl:
You have to get out of this mindset that life ends in your 60s.

---

You need a bit of fun along the way too. My dad died suddenly and without warning at age 63, the year he was to retire. He missed out on some things because he was waiting for his retirement. A retirement he never got to see one day of.

So don't forget to enjoy the journey, and if it means pushing out retirement a little, weigh the options.

The key is to enjoy what you have and not covet the things you don't have. My neighbors have pools and boats and whatnot, and they all will be working into their 80's to pay for it all. I enjoy taking a ride on a bicycle or fishing or playing guitar, taking the kids to a local team baseball game for $1 entry or car load night at the drive in.

Some people just can't have fun without spending a lot of money, and that's why they are in debt and/or have not funded a retirement plan. Or they think that Social Security should be their primary retirement income

 

[JHZR2]

I agree 100%

My parents were always super cheap... but they gave us the quality of life (two weekend homes, new cars when we got our DLs) that made things nice. My father has permanently been in gas chrisis mode... just think of the thousands of dollars in savings from using economy cars and fuel savings from the last 25 years... even though gas was relatively cheap! My father hasnt owned a car with more than 4 cylinders since his 73 Chevy Nova... Well, now he does, but its a 36 MPG MB diesel, bought second hand with all reciepts and 142k miles on it (currently at 175k and runs like new).

We learned how to have a great time without spending huge quantities of cash on the day to day things.. Heck, we even would go out to eat, but only for lunches... Is the meal any less enjoyable? Nope... is it less money, yes!

Some folks cant afford to balance their savings with their enjoyment. Some do it less or more... But enjoying the moment, and doing so without being dependent on money to make it happen, is an important thing to learn.

it does not mean that you have to own bottom of the barrel stuff, and look like you shop at the thrift shop either...

JMH

 

[moribundman]

I hear one can comfortably retire and still live like a king with a small wallet in Mexico. A Corona, anyone?

 

[mikemc]

"Zero debt is the way to go, then living way below your means so that when retirement does hit you will be set." That's our plan. We are putting every spare dime we have into being debt free next year at age 40. No, we don't have a 5 bedroom house and we don't drive SUV's or luxury cars. You have to decide for yourself if having those things now is worth working longer in your silver years.

 

[XS650]

quote:

---

Originally posted by mikemc:
"Zero debt is the way to go, then living way below your means so that when retirement does hit you will be set." That's our plan. We are putting every spare dime we have into being debt free next year at age 40. No, we don't have a 5 bedroom house and we don't drive SUV's or luxury cars. You have to decide for yourself if having those things now is worth working longer in your silver years.

---

It worked for us, go for it

With a little luck, some good some bad, but mostly good planning and a lot of hard work we were able to retire at 55 and are living higher on the hog than we did while we were working without going into our principle.

[ June 02, 2006, 12:10 AM: Message edited by: XS650 ]

 

[msparks]

I've read that if everyone quit spending and started saving the economy would collapse, but if we did it over say 10-20 years, the economy would actually be stronger because people would effectively have more money to spend since they are not "wasting" 20-30% on credit card/debt interest.

Think about it.

Personally, I live on about 1/2 of what I make. The other 50% is divided between long term savings and shorter term savings for thing I will need to purchase in the future. Like a car or a new bicycle or clothes or whatever. No debt (well the truck is still financed for about 2 more months)

Zero debt is the way to go, then living way below your means so that when retirement does hit you will be set.

 

[The One]

check it out, the pay people save now all you need to do is have $100k when you retire, and it will be like $100 mill because everyone will be homeless and digging through your trash can because they never saved.

 

[cousincletus]

Probably the most important thing to have is a paid for house when you retire. Your daily living expenses will be lower because you won't need 2 cars, gas to work, lunch money, etc. SS will easily pay for utilities and keep you alive but will not be much left over. I got a late start saving for retirement but still plan to retire at 60 (less than 15 years to go).

 

[Pablo]

The funniest dialogs are with mortgage lenders.....especially those hawking interest only loans/cc type HELOC's (same thing basically) - this money that will be pure gravy for them - but to you - "Hey guy - $300-$400 a month is nothing" ........precisely (it becomes nothing!)

 

[kc8adu]

quote:

---

Originally posted by thooks:

quote:

---

Originally posted by msparks:

Zero debt is the way to go, then living way below your means so that when retirement does hit you will be set.

---

Agreed.

Zero debt (except for a 15 yr mortgage) is the only way to go.

Do this and you will soon be sick at how much money you DO NOT get to spend every year because of payments-

Write down all of your monthly payments for stuff you have financed- cars, Plasma TVs, credit card payments, furniture payments, Home equity line of credit, store cards, etc.

My household income is pretty high, if you consider the average US household income is ~$40,000. I cannot fathom how these people out there are driving a $40k vehicle with $2000 worth of wheels, $1000 worth of tires, custom stereo, Navigation, XM Radio, Cell phone, 42" Wall mount TV, always going somewhere, never cook a meal at home, live in a $900 month apartment, got a personalized tag, new watch every 3 months, $1500 in gold chains, bracelets, got the latest cell phone (and always talking on it), got a $250 pair of sunglasses on, and wearing $300 in clothes, along with a $100 pair of shoes on.


How do they do it?

---

selling crack?