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Old Today, 09:12 AM
 
1,145 posts, read 353,487 times
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Quote:
Originally Posted by Mircea View Post
Social Security benefits have never been declining, so that's a false claim.
<snip>
That's called "yellow-journalism" but I'd expect that from Forbes.
While I agree on Forbes (they once put words in my mouth in an article early in my career when I was young and naive), SS benefits haven't really kept up with inflation. COLA is based on a particular CPI (CPI-W) that gives more weight to food, clothing, transportation expenses and "other goods and services" and less weight to housing, medical care and recreation. I don't need to tell you what's happened to the costs of medical care, and for many seniors that's a big hit.

Quote:
And, there is a Bill pending now that will solve all of Social Security's problems, and it's quite likely to pass.
Yes, there is, but the study predicting insolvency by 2034 was a rigorous actuarial study and is based on the assumption that the system will continue as is. That's not inaccurate although I agree that it's a very good reason that the system needs fixing.

Finally- I see MANY studies on the average amount people near retirement have saved and results are pretty consistent. A typical one, by the GAO, says the median savings for households in the 55-64 age group, is $107,000. The Social Security Administration estimates that 21% of retired married couples and 43% of retired single seniors live on SS alone. Given that the average monthly benefit for all retired workers is about $1,500, that won't go very far if you need a root canal or a new transmission.

So yes, there are people out there who need to be worried.
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Old Today, 09:14 AM
 
Location: Philadelphia/South Jersey area
2,635 posts, read 1,239,265 times
Reputation: 9022
Quote:
Originally Posted by Pyewackette View Post
Well you don't know me. And it is not crap that you need "millions of dollars to retire". YOU DO need millions, in the form of savings, pension, and SS income. People can usually expect to live another 20 to 30 years after they retire these days. Let's go with 20. Let's assume you have 5 million dollars in the bank. That is a bit over $2k per month. That sounds GREAT to me now (it is actually more than I get), but is usually about a quarter or less of what most people capable of putting that much cash back are used to earning.

And, a lot of retirees have expensive retirement plans that include trips to Tuscany and month long cruises. A lot of said retirees end up having to cancel those plans or else end up running through all their savings, because 5 million dollars is a lot of money to get in one year, but it's a fraction of the income you were making while you were saving it up. Seriously. Even if you had that $5M in cash in the banks, that amounts to 24k per year, assuming you don't actually live longer than 20 years. That isn't even a beer budget That is a bread and water budget. Even if there is only one person in the household.

And as has been mentioned before, one medical crisis and you're wiped out. You seriously don't think you'll hit a single health speed bump after the age of 60? Or your spouse? More likely both.


Then please tell me how millions of retirees are managing to live? because they are. NOw yes of course it depends on you want to live in retirement. If you do plan on living la vida loca you will need more money.


Sorry I am managing to live very very nicely without 5 million lol, without 2 million. Now I don't have a spouse and I will get social security. most folks I know do not factor social security into their plans because one never knows.


So yep, I'm retiring early at 59 without millions, I do have retiree health care so one medical crisis will not wipe me out. the only missing puzzle for me is long term care insurance which I reevaluate annually.


Don't know how old you are but I'm sticking with my original assessment. It's a media, financial industry created hysteria.

Don't believe the hype.
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Old Today, 09:16 AM
 
Location: Philadelphia/South Jersey area
2,635 posts, read 1,239,265 times
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Quote:
Originally Posted by mysticaltyger View Post
I definitely agree with this. But the median net worth of a 65 year old is something less than 300k, and that includes home equity. That's clearly not adequate.
agreed. but there is a wide range between 300k and 5 million that the gurus throw out.

So I guess one question to ask is how they are defining "crisis".

Are we including pensions in this number? When they say you need 5 million to retire are you saying you need 5 million saved or are they also including total ss?
what are folks spending levels.

Last edited by eliza61nyc; Today at 09:30 AM..
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Old Today, 09:28 AM
 
Location: SoCal
11,477 posts, read 5,506,181 times
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Quote:
Originally Posted by mysticaltyger View Post
Big deal. That's only one month.

If you don't think most people are undersaving for retirement (and pretty much everything else), you're not paying attention.
Of course it’s one month, but in the past Americans are known for spending, not saving. I even notice that with my kids. So maybe the frugality trend of Mr Money Mustachio has caught on.

Last edited by NewbieHere; Today at 09:41 AM..
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Old Today, 09:32 AM
 
Location: SoCal
11,477 posts, read 5,506,181 times
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Quote:
Originally Posted by mysticaltyger View Post
I definitely agree with this. But the median net worth of a 65 year old is something less than 300k, and that includes home equity. That's clearly not adequate.
It depends on where they live. Maybe they have a huge pension. My ex-secretary has less than $300k in savings but she has about $30-$40k in pension yearly. In fact she only makes $57k last I talked to her. If she now can survive on $57k, and she rents 2br apartment in not so nice area in LA then she should be alright when she retires. Just one example how these median net worth means nothing.
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Old Today, 09:36 AM
 
Location: Philadelphia/South Jersey area
2,635 posts, read 1,239,265 times
Reputation: 9022
lol, may I make a suggestion,

Why don't you guys go over to the retirement board and ask this question.

You will find quite a number of retirees living, happy healthy lives on much smaller budgets.

No they are not living in fear of medical crisis,no they are not buying tropical islands but they are going on vacations. they go visit the grand kids etc etc.
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Old Today, 09:41 AM
 
708 posts, read 131,428 times
Reputation: 1108
Quote:
Originally Posted by Pyewackette View Post
Translation: I don't believe you because I don't like you and I watch too much Faux News. Now I can't tell the difference between fantasy and reality.
Nope. I believe in data.

The Center for American Progress has never, ever been accused of being non-partisan. It is proud to be highly partisan, obscuring truth in its quest for its partisan agenda:

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In fact, it doesn't provide data at all. It develops position papers -- their view of how America should be.
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Last edited by RationalExpectations; Today at 10:06 AM..
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Old Today, 09:49 AM
 
1,145 posts, read 353,487 times
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Quote:
Originally Posted by NewbieHere View Post
It depends on where they live. Maybe they have a huge pension. My ex-secretary has less than $300k in savings but she has about $30-$40k in pension yearly. In fact she only makes $57k last I talked to her. If she now can survive on $57k, and she rents 2br apartment in not so nice area in LA then she should be alright when she retires. Just one example how these median net worth means nothing.
This is a good point; my FB friends who use "millionaire" as a pejorative are not happy when I point out that the market value (what you'd pay for an annuity) of a $40K/year public service pension is about $1 million if you're age 65. Many of them are retired teachers.

OTOH, there are some pension plans in danger- plenty of headlines on that. One of my neighbors has had his RR pension reduced twice and is now collecting about half of what had been promised. The Railroad Retirement system is a substitute for SS, so they don't get SS. They'll be putting their house on the market soon.
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Old Today, 10:05 AM
 
708 posts, read 131,428 times
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Quote:
Originally Posted by athena53 View Post
OTOH, there are some pension plans in danger- plenty of headlines on that. One of my neighbors has had his RR pension reduced twice and is now collecting about half of what had been promised. The Railroad Retirement system is a substitute for SS, so they don't get SS. They'll be putting their house on the market soon.
Ouch. That must hurt.

I read an academic report of the heavy transportation industry about 15 years ago.

One of its conclusions, of course, was that transportation of goods via rail was incredibly more energy efficient than transportation via the nation's fleet of heavy trucks (Semi Tractors), which get about 7 MPG on diesel fuel.

That wasn't surprising or controversial - everyone knows that.

The authors were studying why much long distance freight was transported via (relatively) energy inefficient Semi Tractor/Trailer rigs rather than via (relatively) much more energy efficient rail.

The econometric models showed RR Pension Costs being a major contributor to more goods going via energy inefficient Semi Tractor/Trailers. That was pretty eye opening.
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Old Today, 10:12 AM
 
12,702 posts, read 6,637,207 times
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Quote:
Originally Posted by mysticaltyger View Post
I definitely agree with this. But the median net worth of a 65 year old is something less than 300k, and that includes home equity. That's clearly not adequate.

More significant, 80th percentile net worth for age 60 to 64 including home equity is only $1 million and it drops off very quickly from there. Very few people who are age 60 these days have pensions. 80th percentile wealth with nothing but a Social Security check isn't a lavish retirement. Anything below 75th percentile is going to be quite lean.
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