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The converse of that is that a lot of people save for future retirement because they have an unrealistic picture of their future selves. They imagine themselves being rich retirees, when their nestegg has been eroded not just by inflation, but by at least one serious downturn in the value of securities during their working lifetime. I know plenty of people who expected to retire at about 50, and then lost a sizable chunk of what they thought was their retirement.
They also fail to consider the fact that when they reach 70, they will lack the stamina and enthusiasm and even the basic sound body or an energetic mate to be able to do all the things that they will wish they had spent their money doing when they were younger. Your seventies is no time to start backpacking through South America or climbing mountains or driving a Porsche -- it just isn't in you anymore, and you've let it all slip through your fingers. And you just wind up in a high-class nursing home, dimly aware of your surroundings.
Lots of truth there! You said a mouthfull. Unrealistic visions can involve a few things:
Something as simple as arthritis (non-specific, not a full blown rheumatoid thing) can really put a limit on what you can or even care to do. A good many people develop this or other ailments, as early as their mid to late 50's. More often then the average person thinks.
As for money? Just the lack of interest on savings and now worthless CD's have put a crimp in a lot of retirees budgets. (You don't put money in anything risky if its what you plan to live on and you are actually already retired.)
Who you are at age 40 is not cecessarily who you are at 60..What you actually will want to do after you retire is difficult for many to accurately assess. Once freed from a job, the possibilites become endless and changing your mind about who you are, what you like to do, etc, is not so unusual.
median wages are lower now than there were 15 years ago. Meanwhile, the cost of many necessities (energy, housing, an health care) have been increasing faster than the rate of inflation during that time period. A a result, many people have barely enough money to pay for necessities.
This is all true. Most people just don't make a lot of money. The median salary for a U S worker is approx. $28k. Add to this the misguided sense so many have that they should pay for their kids' college, even at the expense of their own retirement security, and you see why so many people of/near retirement age are broke-dicks who will have to work until they physically cannot.
Quote:
Originally Posted by Just_the_facts
median wages are lower now than there were 15 years ago. Meanwhile, the cost of many necessities (energy, housing, an health care) have been increasing faster than the rate of inflation during that time period. A a result, many people have barely enough money to pay for necessities.
I'm assuming by your post that you don't have kids. If you do at some point and struggling now, how do you expect to survive (possibly on one salary) and w extra mouths to feed?
Who said I was struggling? I'm just pointing out that saving for retirement is easier said than done when you have legit expenses and live in an expensive part of the country (Southern CA).
I don't see how the majority of people in these times has enough money to put 10% (at least I know some who put more but they live with their parents) of their pay towards retirement AND $6k a year (per adult/spouse) towards an IRA unless you 1- live at home with the parents, 2- live in a cheap part of the country with a decent salary, or 3- happen to make 6 figures.
Even people living in cheaper parts of the country have a hard time because who happens to normally have an additional $6k a year to put towards an IRA?
I feel blessed right now to be able to put that 10% aside each month into a retirement account! But again, not struggling
This is all true. Most people just don't make a lot of money. The median salary for a U S worker is approx. $28k. Add to this the misguided sense so many have that they should pay for their kids' college, even at the expense of their own retirement security, and you see why so many people of/near retirement age are broke-dicks who will have to work until they physically cannot.
Exactly, so say you put 10% into retirement, that's $2800/year.
Then you do an IRA, that's $5500/year if you are under 50.
Combined that's $8300 per year, or 30% of your income.
VS. someone making $100k year, 10% would be $10k plus $5500, which would be 15.5% or 16% of the income, HALF what a person making 1/3 of the salary would be dishing out.
I just don't think people living beyond there means is the only reason people can't save enough for retirement.
And like was already mentioned, cost of living is much higher than it used to be.
Who said I was struggling? I'm just pointing out that saving for retirement is easier said than done when you have legit expenses and live in an expensive part of the country (Southern CA).
I don't see how the majority of people in these times has enough money to put 10% (at least I know some who put more but they live with their parents) of their pay towards retirement AND $6k a year (per adult/spouse) towards an IRA unless you 1- live at home with the parents, 2- live in a cheap part of the country with a decent salary, or 3- happen to make 6 figures.
Even people living in cheaper parts of the country have a hard time because who happens to normally have an additional $6k a year to put towards an IRA?
I feel blessed right now to be able to put that 10% aside each month into a retirement account! But again, not struggling
Life is all about choices. You choose to live in a very expensive part of the country.
I guess I look at things a little differently than you.
I look at it like we live in the greatest country in the world with the opportunity to do anything you want if you put your mind to it. Let's keep that in the basis of conversantion. This is not North Korea or any other banana republic. In so many ways we are given things throughout life that our older parents and grandparents didn't have. To name a few we have Medicaid/Medicare, free school, free school lunches, assistance w utility bills, food stamps, wic, earned income credit, etc....
No one ever said saving was easy. It's very hard in a lot of cases. Don't you think I'd rather be doing something else on my time off instead of warning extra money as a tax preparer? I choose to do this instead of complain and whine like a lot of people do. But the reason I do it is so I can have a better retirement and help provide for my kids.
Like I said in an earlier post, society's version today of 'sacrifice' in a lot of cases is either samsung or Apple or digital vs basic. Let's be honest.
I know more than a few people in their 70s who are of very sound mind and body, active, and plenty engaged in life. One of them actually does do some mountain climbing.
Others are enthusiastic travelers. My mom is in her 70s and routinely travels by bus through Central America and Mexico, alone.
So while you never know how you're going to fare, just assuming you're going to be a few steps away from a vegetable at 70 isn't just depressing, it's inaccurate.
Assuming that you will be fit and energetic is inaccurate, too. Unless you can provide some statistical evidence to the contrary, one is much more likely to be fit and active in his 30s and 40s, than in his 70's, so take it when you can get it.
Of course, there are outliers. I have a friend who is 67, had congestive heart failure ten years ago and was given a maximum of ten years to live, and this spring she is going to Lithuania to do volunteer work on an organic farm. And she never saved a cent, because it's not necessary to sacrifice and deprive yourself in your early years in order to find happiness and fulfillment in your later years. It is much more useful to just discipline your life so you can live on less then six figures and never get accustomed to what lavish applications of money can buy in the first place.
Lots of truth there! You said a mouthfull. Unrealistic visions can involve a few things:
Something as simple as arthritis (non-specific, not a full blown rheumatoid thing) can really put a limit on what you can or even care to do. A good many people develop this or other ailments, as early as their mid to late 50's. More often then the average person thinks.
As for money? Just the lack of interest on savings and now worthless CD's have put a crimp in a lot of retirees budgets. (You don't put money in anything risky if its what you plan to live on and you are actually already retired.)
Who you are at age 40 is not cecessarily who you are at 60..What you actually will want to do after you retire is difficult for many to accurately assess. Once freed from a job, the possibilites become endless and changing your mind about who you are, what you like to do, etc, is not so unusual.
AS SAID THOUSANDS OF TIME ,cd's and cash instruments are the riskiest choice a retiree can make unless they have withdrawal rates under 2%.
for someone living on their nest egg 2% may be a very low pay check from savings ..
you can not make a general comment like you did about risk ( "As for money? Just the lack of interest on savings and now worthless CD's have put a crimp in a lot of retirees budgets. (You don't put money in anything risky if its what you plan to live on and you are actually already retired.) "
that advice would be flat out wrong for many that need more substantial rates of withdrawal.
believing our own bull-sh*t to be true can be very dangerous. the actual studies show just the opposite.
cash instruments have killed off more retirements than anything else.
Last edited by mathjak107; 02-11-2014 at 07:10 AM..
I work next to a guy that has met the age requirement (55 years of age) to retire but cannot due to kids in High school and college and mortgage payment for nice big house in suburbs. So now he has to work many years past retirement age in order to pay for these things because he has the attitude you only live once. I always tease him by saying just think you could be home chillin instead of putting up with all this bs at work here. He counters that he enjoys working and maybe he does enjoy some aspects of the job but other times he gets so pissed off because he is forced to work overtime that he walks off the job in the morning claiming stress or sickness. So now he's trapped to work at a job that is becoming more unpleasant as time passes by. He didn't save enough because he had to keep up with the Joneses and now he has to work where as he could enjoying his 50's retired.
Sounds like my office (USPS)
Fortunately, I love my new mail route. I get to deliver to a luxurious retirement home
One might go down to the thread entitled "1600 people apply for 36 jobs" to understand why people aren't saving enough for retirement.
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