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Old 05-02-2014, 08:33 AM
 
29,782 posts, read 34,876,173 times
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Quote:
Originally Posted by Curmudgeon View Post
Let me try to help you wrap your brain around the reality of much of middle and deep southern America. Wages in rural villages and small towns can be as low as $8 an hour and adults do bag groceries and are happy to be employed. Not everyone lives in a coastal state or affluent area with numerous employment opportunities that provide decent wages. Poverty is pervasive as are health issues. There's a whole, wide world outside of New England, you know.
My wife and I were talking about this yesterday while listening to CNBC on the car radio while driving to Northern Virginia. They were talking about the housing market slowing and people preferring to rent. In much of America employment opportunities are limited to a few companies. If they close, new jobs aren't there. If you want to move to where the jobs are and gave to sell, good luck. If you are renting you have the option to move to where the jobs are. My son and DIL are in Northern Virginia and change jobs at will moving up each time. It comes with financial costs living in the area but they come out ahead. In many areas of the country their opportunities as you note would be much more limited. Much of what we discuss in this forum is as you said is pervasive with geography playing a major role.

One of the interesting things about transplanting is to reject your life, career and family if you had lived and worked where you transplanted to based on life there as it was over the years. Many of us would probably not be as well off now. That is a question for those who transplanted.
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Old 05-02-2014, 10:59 AM
 
Location: USA
1,815 posts, read 2,243,650 times
Reputation: 4139
Quote:
Originally Posted by golfingduo View Post
Unless you are not saving it under the title IRA, SEP or KEOGH, or it is a Roth there is a time table to withdraw. IRA and the others are tax defered and at age 70 and a half you need to make RMD's (Required Minimum Distributions). You are in complete control but if it was saved in that way Uncle Sam knows it is there and they have tracked it. They know how much you have and will ask for their cut. Do not miss that RMD because it is 50% penalty on top of the tax of the amount you were supposed to take out of those acounts.
It is not an IRA, SEP or any of those other alphabet soup accounts.

It is my own private portfolio. No penalties, no required withdrawals. Just my money
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Old 05-02-2014, 11:30 AM
 
29,782 posts, read 34,876,173 times
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My post two up should say reflect on your life not reject
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Old 05-02-2014, 11:44 AM
 
Location: Charlotte, NC dreaming of other places
983 posts, read 2,177,919 times
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I am in my late 40th and started saving in my 30th. I was lucky with a real estate sale that increased my nest egg and I am grateful for it. Now I would like to stop working full time in my early 50th and trying to figure out the best way to do it. I work in a field that I can get contract jobs or go back full time if have to (hope not). I have been doing a lot of math on different websites and following different boards to see how to plan this. I am at the point that my 401K is looking very good but I can't withdraw from it till I get to 59.5, if I want to stop working say at 52-55 I need to have savings outside the 401K to cover that time.

So, my biggest question is.. should I continue to max my 401K contributions and have other savings outside the 401K or should I just put all the money into the savings outside the 401K.

My house is not paid for at this time and I think I will downsize eventually when it's time for me to "retire".
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Old 05-02-2014, 01:08 PM
 
Location: SW MO
23,605 posts, read 31,492,863 times
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Quote:
Originally Posted by happehart View Post
I am in my late 40th and started saving in my 30th. I was lucky with a real estate sale that increased my nest egg and I am grateful for it. Now I would like to stop working full time in my early 50th and trying to figure out the best way to do it. I work in a field that I can get contract jobs or go back full time if have to (hope not). I have been doing a lot of math on different websites and following different boards to see how to plan this. I am at the point that my 401K is looking very good but I can't withdraw from it till I get to 59.5, if I want to stop working say at 52-55 I need to have savings outside the 401K to cover that time.

So, my biggest question is.. should I continue to max my 401K contributions and have other savings outside the 401K or should I just put all the money into the savings outside the 401K.

My house is not paid for at this time and I think I will downsize eventually when it's time for me to "retire".
Does you're employer provide any matching funds? That would be a critical factor to me in terms of how much to put where. Beyond that, I'm a firm believer in not putting all your eggs in one basket and having some handily available funds for an emergency and just for fun.
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Old 05-02-2014, 01:13 PM
 
Location: Charlotte, NC dreaming of other places
983 posts, read 2,177,919 times
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Thanks Crum, unfortunately my employer doesn't match anything, should have thought about this when I was hired..

My emergency fund is in good shape now.. it's that other fund that I would like to figure out the best way to deal with it.. the money that I will use between retirement date "whenever that will be" till I can withdraw from my 401K. I posted on another thread that I would like to use up all my money while I can, no need to save it for anyone ;-)
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Old 05-02-2014, 03:32 PM
 
2,683 posts, read 5,209,071 times
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I understand the point but for younger single people with no one to support they can contribute to a 401k in that pay range. I was one that did exactly that and with the company match it amounted to a decent amount, when I left after 3 years my 401k balance was about 1/3 of my ending annual salary and close to 1/2 of my beginning annual salary. Today that 401k balance equals my beginning salary there (11 years later).


Quote:
Originally Posted by Emigrations View Post
The people who are making $20k are more concerned about subsistence than retirement planning. Moreover, employers of such low paid personal probably offer few, if any, benefits. None of that is surprising.
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Old 05-02-2014, 03:52 PM
 
Location: SW MO
23,605 posts, read 31,492,863 times
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Quote:
Originally Posted by happehart View Post
Thanks Crum, unfortunately my employer doesn't match anything, should have thought about this when I was hired..

My emergency fund is in good shape now.. it's that other fund that I would like to figure out the best way to deal with it.. the money that I will use between retirement date "whenever that will be" till I can withdraw from my 401K. I posted on another thread that I would like to use up all my money while I can, no need to save it for anyone ;-)
That's too bad but certainly not uncommon My former employer provided a small match for managers, of which I was one, but that stopped suddenly, never to be seen again. I wouldn't presume to try to steer you in any particular direction. I'm sure others will have savings/investment advice they will be happy to give you. My Magic 8 Ball appears a bit murky!

Last edited by Curmudgeon; 05-02-2014 at 04:19 PM..
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Old 05-02-2014, 10:13 PM
 
Location: Charlotte, NC dreaming of other places
983 posts, read 2,177,919 times
Reputation: 785
Please wash your magic ball and tell me. Mine is broken and that way I am going around asking people. I moved to a new house and been spending money left and right to get the house where it needs to be. I know the move is going to affect my savings this year but will get back on track comes fall.

So here is what I am thinking.. 6 years of retirements before 59.5 at $3500/month including healthcare so total I need to live $252,000 post tax money. after that, spend the 401K then start cashing on SS. I think this is good plan, wouldn't you agree?
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Old 05-02-2014, 10:40 PM
 
Location: Southwest Washington State
21,867 posts, read 14,383,691 times
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Quote:
Originally Posted by golfingduo View Post
To respond to both on these points I would agree that it is surprising that:

1 there are not more 401k plans offered especially in the higher wage earners.
2 that the 20k wage earners are more concerned to making ends meet.

I will offer that there cannot be many families making that 20k wage. I think you can make that bagging groceries at the local Market Basket. I do not see family men and women doing that for a living. I see high school and college kids doing that. That might be just my area but I honestly have difficulty grabbing my mind around that.

Another point that is not made here is what about the 20.1k to 79.9k wage earners. It is a large chunk of workers in that and most of those would be what we would call middle class. A lot of families are 2 income homes and that could put a different spin to it should they have looked at that bracket.

I Golfingduo's world 20k wage earners would have at least access to "my RA" as previously posted in another thread. This is to hope that they would begin to look at the possibilities. Look at what could be even though it is a slow (very slow) growth fund. I think it is just the beginning.
Actually, there are people making around that much per job, and supporting a family. If it is a two parent family, often one member will hold two jobs, and the other might hold down one. Often though, the family is a one parent family, probably headed by a woman. She might be holding down 2 part time jobs and making about $20-25,000. If she is working as an aid in a LTC facility, for instance, she will probably make a little more than minimum wage. If she works in the kitchen, she will probably make less. I volunteered for a time in a food pantry, and I was astonished at the low wages so many hard working people make. The people in the fast food kitchen? Probably immigrants making minimum wage. Landscaping? Probably immigrants, but I don't know how they are paid. Aids in assisted care facilities or LTC places? A little above minimum wage. Waitresses? Less than minimum wage plus tips. A family existing on $25,000 will have to depend on food stamps, community services, federal subsidies for energy assistance (if obtainable) and any help they can find for themselves. They will work, and spend countless hours trying to obtain aid to keep their families afloat. They will not have bank accounts either, probably, but will depend on Pay Day loan places to put their wages on a card for a fee.

At any rate, no, these people are not saving for the future, because every cent they earn is allocated already.
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