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Originally Posted by SportyandMisty
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It is no secret that I turn 40 this year.
Funny, I would have surmised from your earlier post that you were older.
Quote:
Originally Posted by SportyandMisty
I retired at 50, and of course I don't draw SS (I'm 53 now), and I don't ever expect to get a penny from SS. I did my own retirement planning based on savings. Others are free to save... or not... it is their choice.
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Or, to drive the nail home, he is paying $4,590 a year and is getting a future value of only $212,938.88. If he simply took that money and buried it in the dirt, he would have, after 48 years, $220,320! The bottom line is that, for today's 21-year-old, Social Security is a negative return.
Actually, this employee is paying 7.65% and his employer is paying 7.65%. So, the employee's outlay is reduced 50% to $2,295, unless he is self-employed, of course.
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Interesting thread. I've enjoyed all the comments. Much food for thought here.
On the matter of $3,000 month retirement income, sorry that surely wouldn't cut it for me. $4,000 - $5,000 month necessary, unfortunately. Single parent, having worked 52 years, earning an average income, nothing near 6 figures, shifting money from a HELOC in order to max out 401K and IRAs because for me the annual tax savings from deductible interest and sheltering salary from taxes was significant. Also worked past retirement age and collected and saved Social Security to further shore up these retirement funds. In addition, I still need to maintain my house. Yes, it would be better now to sell the property, but real estate market is not exactly booming. So, instead I need to plan to maintain the place to the tune of $5,000 to $10,000 per year until I can sell it.
Planned to work until I was 70 or older, but employer did a mass layoff last year and I was included. Older workers close to retirement were particularly looked at. This idea of raising retirement age to 70 is totally unrealistic, because even if people are capable of doing their jobs, the employers very likely won't keep them on. End result, "early" retirement at a reduced benefit. I am one of those under 100K a year people whose Social Security benefit is 50% of my income. That plus a small employer pension, rental income and withdrawal from retirement funds almost get me to where I need to be.
By my calculation, present value of all past contributions from me and my employer is about $355,000, which over a period of 25 years - assuming I live that long and an interest rate of 3.5% - provides exactly I am receiving today. For me this is peace of mind. Given how little discretionary income I had, I could not have saved enough, over and above my IRAs and 401K, to grow to even 50% of that $355,000, or an additional $177,500.
If I die soon, I will not reap the entire reward, but, for now, I do have peace of mind up to a point. I don't recommend anyone retire with a mortgage and home maintenance and huge property taxes, but I had no choice. I will probably return to work, if I can. Taking a civil service test on Monday. We'll see if the govt practices what they preach.