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Old 04-19-2014, 07:04 PM
 
Location: Jamestown, NY
7,841 posts, read 7,329,858 times
Reputation: 13779

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Quote:
Originally Posted by Caltovegas View Post
When a person gets to age 62 how long do they expect to live? I say retire as soon as you can. Do it on your terms or life will make the decision for you. My option age is going to be age 60. That's just me.
Well, to each his own. I figure there's no point in retiring if I have to work part time or if I have to live in reduced circumstances.
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Old 04-19-2014, 07:10 PM
 
Location: Jamestown, NY
7,841 posts, read 7,329,858 times
Reputation: 13779
Quote:
Originally Posted by TuborgP View Post
Add to that mix the millions who adapted to the new economy and are prospering as greedy investors, perhaps not greedy but adaptive Americans. I am curious if you have figured out that the secret is a hunger for investing is their a reason you are on the sideline? Many funds can be opened with $100.
I agree. I've been squirreling away modest sums through the 403b program and have a pretty nice portfolio now. Because I have SS and a pension, I won't need that for retirement expenses early on but it will be there, growing nicely, if I need it down the road. If I die early, my family, my critters, and my favorite charities will benefit.
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Old 04-19-2014, 07:28 PM
 
Location: Subconscious Syncope, USA (Northeastern US)
2,367 posts, read 1,636,166 times
Reputation: 3814
Quote:
Originally Posted by s1alker View Post
I'm talking about someone who has made less than 20 bucks an hour their entire life for whatever reason. Places that pay that low generally do not have a 401k or pension plan. A low wage worker will have very little (if any) money to save after living expenses are paid.
There are after-tax Roth IRAs out there that you can put $5,500 or $6,500 a year into. Where will you get that money from? Low-paid people like us get income tax refunds. Sure, we can always think of something we need. An island getaway, or whatever - but you will need money when you cant work anymore too, so put it in the Roth IRA, and getaway to your backyard or back porch.

If you are already over 50, I think you can put more than that limit in, as a 'catchup'. Dont be greedy. Put it into a guaranteed interest section of the plan, and if it allows you to develop portfolios, do that after you have a nice little egg built and guaranteed not to loose anything. Since its after-tax money, there is no tax on it when you withdraw it. (May be tax on the interest or capital gains, idk...). You cant put $5500 a year in? So what! Put what you can - then you wont be able to blow it before you are considering retiring.

If you do eventually get into the stocks with future contributions (leave that nest egg in the guaranteed interest section of the Roth IRA be, and still contribute to it, vary your investments over a few different things like Large Cap Growth Fund, Large Cap Value Fund, and Mid Cap Growth Fund, and then forget about them for the most part. Maybe check them every 6 months, but thats it. Stock and bond based investments are over the long haul, and honestly watching them rise and fall on a daily basis will drive you nuts.

Keep track of what these investments have gained and lost. If you gain $100, and then lose $50. Dont scream, "OMG! I lost $50!!!!" You didnt. You didnt lose any of what you invested at all. You actually are $50 over your initial investment.

There will hopefully be the odd part-time job, to keep you busy in retirement, and supplement your income. If you know you absolutely HAVE to go out and blow that income tax refund (which will be bigger if you invest in the Roth IRA due to the savings credit you earn for saving toward retirement), then yes - SS and maybe even Social Services will be all you have to look forward to.

A penny saved is two pennies earned, so cut out the stupid stuff you waste money on now, in preparation for your future. Taking your own coffee, breakfast, and lunch to work with you can save you close to $20 or more a day. Change your shopping habits - never pay full retail, and buy things only on sale.

Stock up in preparation of things you bought on sale running out. Example: A 200 foot roll of Reynolds Aluminum Foil normally costs about $9.99 when not on sale, but will go on sale for $6.99. Buy 2 to 4 if you know you or your family uses foil on a regular basis, when its on sale. You are prepared to run out, and if you bought 4 thats $12 in your pocket over the long haul.

Reconfigure your witholding rate. If you are single, claim Single 0. You will have a little less pocket money now, and a bigger refund later.

If you are married, and both work, the one who earns the most claims Married 0, and the other claims married 1 - again, for a bigger refund.

If you usually do your own taxes, splurge on a trip to H & R Block or something. They can give you lots of tips on how to get a bigger refund. If they dont volunteer the info, ASK for it.

When you get the refund, if you are single, put it in the Roth IRA. If you are married, split it between the 2 of you and both put it in the Roth IRA. You will both get credit for saving for retirement on your next tax return.

Last edited by ConeyGirl52; 04-19-2014 at 07:46 PM..
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Old 04-19-2014, 07:54 PM
 
Location: Los Angeles area
14,018 posts, read 17,737,509 times
Reputation: 32304
Quote:
Originally Posted by Linda_d View Post
That's the problem with "average". The extremes are leveled out but that doesn't mean that the average applies to many. A more useful figure would be the median SS retirement benefit, which would be the point where half recipients get above and half below. All I found on line was averages no median numbers.

A distribution chart/graph would be an even better illustration of how many retirees get how much. I didn't even bother looking for that.
The average may not be so terribly different from the median in the case of SS retirement benefits because of the unusual nature of the distribution. There are not any outliers on the up side because SS benefits are capped at the level that wages subject to FICA taxes are capped, and in a sense even more than that because high wage earners get a smaller percentage back. There are outliers on the low side, but the entire range of benefits, from lowest to highest, is rather narrow.
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Old 04-19-2014, 08:35 PM
 
29,782 posts, read 34,867,277 times
Reputation: 11705
Quote:
Originally Posted by Linda_d View Post
I agree. I've been squirreling away modest sums through the 403b program and have a pretty nice portfolio now. Because I have SS and a pension, I won't need that for retirement expenses early on but it will be there, growing nicely, if I need it down the road. If I die early, my family, my critters, and my favorite charities will benefit.
Congrats and I know the feeling
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Old 04-19-2014, 09:17 PM
mlb
 
Location: North Monterey County
3,181 posts, read 2,856,933 times
Reputation: 4876
Quote:
Originally Posted by mysticaltyger View Post
This was kind of what I was thinking if we're talking about the higher end of the so-called "low-wage" range. I don't make much more than $20 yet I sock away 13K in my retirement plan. And I live in the high cost SF Bay Area. If I made $20 an hour just in an average cost area, I'd probably be able to save the same or more than I do now, even though I'd be making be less money.
This is me.... I've only made north of $20 an hour the last 4 years of my career - and will for the next 5-6. But I have been able to stash away $14K a year for about a dozen years... But I don't live in an expensive area so it's much easier to do so.

This conversation - about how low wagers survive - reminds me of my grandparents generation - where my great aunt who never married moved in with my grandparents to make ends meet. The generation before that did the same.... You pool your resources within the family. It's just what was done. My folks generation is the first in my family to not have multiple generations living together to survive.

My mother's unmarried sister was a teacher - and retired on a state teaching pension and social security. Almost unheard of for that era. She bought her own home and subsequently her own condo - and lived very well.

But they were VERY scrupulous savers. All of them.
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Old 04-19-2014, 09:19 PM
 
Location: southern california
55,667 posts, read 74,620,384 times
Reputation: 48173
its very doable. save. live below your means work 2nd job dont marry or have kids put extra in in 401 and 457.
do buy backs at end buy low cost property fix up learn a skill like laying tile and do that as part of your fix up. keep property that you buy, do not flip or sell. rent it out get a good property manager. live clean and stay out of debt pay off prop and buy another use the income from prior to make quadruple payments on current domino strategy. keep buying low price propety fix up and rent out and pay off. keep doing it.
stop seeing yourself as a victim in low pay. i passed up most of my bosses long ago. my wage was not that much different from yours. been retired 7 years doing very very well.
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Old 04-19-2014, 09:55 PM
 
Location: NE Mississippi
13,668 posts, read 8,577,038 times
Reputation: 19868
Quote:
Originally Posted by s1alker View Post
I'm talking about someone who has made less than 20 bucks an hour their entire life for whatever reason. Places that pay that low generally do not have a 401k or pension plan. A low wage worker will have very little (if any) money to save after living expenses are paid.
He generally 'retires' by going on Medicaid.
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Old 04-19-2014, 10:00 PM
 
Location: In the Pearl of the Purchase, Ky
7,414 posts, read 12,947,561 times
Reputation: 30975
There was a little old lady who used to babysit my brother and I and she also watched my mother when she was little. Mama always checked on her and she would call my mother if she needed help with something she got in the mail ("I can't get no understanding out of it."). She lived in a local housing project and had a son who did nothing but steal from her. 4 or 5 years before she died at age 98, Mama asked her one time how she managed to make it on just her social security. This always stuck with me. She said,"I pays what I owes, and make do on the rest."
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Old 04-20-2014, 02:00 AM
 
26,102 posts, read 28,500,170 times
Reputation: 24809
Quote:
Originally Posted by texdav View Post
Historically its the bottom 35% never own a home according to federal government. Its got into the low 70% on ownership up to 2008 and they want to correct the loans that made it happen. Geithner announced early on that administration aimed to get back to historic average.just as congress enacted consumer protection that basic eliminates many being able to make such a decision on credit use.
This is true, but it doesn't account for the fact that people are not necessarily in the same income quintile their whole lives. I.E. Someone might be in the bottom 20% when they're young, move up to the middle quintile in their prime earning years, and then move back down to the bottom 20% in old age. But it's possible they bought a house and paid it off in their prime earning years and are yet in the lowest income quintile in their older years. Maybe not common, but certainly not impossible.
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