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Old 04-01-2015, 11:04 AM
 
Location: San Antonio
7,629 posts, read 14,382,758 times
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I honestly believe there are many who will not fare well in retirement, but it is probably the majority that did not fare well in life in general before retirement that will have the most problems.

I retired just shy of 4 months ago, and my retirement income (without SS yet) is just at $400 less per month than what I was "bringing home" because of our additional paying into income taxes (and we still had to add $$$$ to send them on 15 April) and the 20% into my TSP account pre taxed every year before I retired. Just $400 less per month to NOT have to get up at 3am to be to work by 4:45am, to have to buy uniforms, pack or purchase a lunch, to not have to drive in traffic (at least coming home) daily and the gas it takes....I think I am coming out ahead right now as I KNOW it was costing me more than $400 per month for the privilege of going to work daily. We should enjoy the tax break this next year....as I retired in Dec 14 none enjoyed this go round.

I now put gas into my car on average once per month! I don't think it will be a crisis for those prepared, but can see it a true concern for those that are not making arrangements for their financial needs after work life. If you are living paycheck to paycheck now and not putting any money away for later in life, you will probably be hurting once unable to work.

Last edited by Paka; 04-01-2015 at 11:19 AM..
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Old 04-01-2015, 11:06 AM
 
8,860 posts, read 5,139,069 times
Reputation: 10139
Quote:
Originally Posted by BellaDL View Post
The stats don't lie! The retirement crisis may not feel real to people who have already retired or very close to retirement. All the trends (income growth, widening gap income inequality with the least # of people owns the most, reduction/disappearing of private pension plan, retirement saving, 401K participation rate) all point out a not rosy or even very bleak future for future retirees.

Median Household Income Analysis by Age Bracket

Median Household Income Analysis by Age Bracket
Those aren't the only relevant measures. My mother has none of that, yet is very comfortable. Her home has been owned with no debt for nearly 40 years. Her money is in savings accounts and CDs. She doesn't hit any of the measures you mention.

Yes, many are not prepared. Still, I don't agree we have a crisis.
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Old 04-01-2015, 01:52 PM
 
Location: in the miseries
3,302 posts, read 3,581,162 times
Reputation: 3810
Quote:
Originally Posted by Curmudgeon View Post
Majority of Americans Fear Retirement Crisis

Are negative outlooks self-fulfilling prophesies or do they simply breed and promulgate negativity?

I lean toward the latter. And you?
I lean toward the former.
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Old 04-01-2015, 01:56 PM
 
Location: Near a river
16,042 posts, read 18,982,141 times
Reputation: 15649
Quote:
Originally Posted by loveautumn View Post
there may or may not be a retirement crisis, as discussed many times on this forum. Each person/couple's situation is unique. I know people on each end of the spectrum. However, there is a health care crisis, IMO, which will eat up a large chunk of money for a lot of people.
Great points. Few are secure in this healthcare environment.
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Old 04-01-2015, 01:58 PM
 
Location: Near a river
16,042 posts, read 18,982,141 times
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Quote:
Originally Posted by BellaDL View Post
The stats don't lie! The retirement crisis may not feel real to people who have already retired or very close to retirement. All the trends (income growth, widening gap income inequality with the least # of people owns the most, reduction/disappearing of private pension plan, retirement saving, 401K participation rate) all point out a not rosy or even very bleak future for future retirees.

Median Household Income Analysis by Age Bracket

Median Household Income Analysis by Age Bracket
^^^

And the crisis is not noted or felt by the securely retired on C-D.
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Old 04-01-2015, 02:02 PM
 
Location: Near a river
16,042 posts, read 18,982,141 times
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Quote:
Originally Posted by mateo45 View Post
"Crisis" or not, no one seems to have anticipated the "convergence" of so many factors, and so soon… including increasing life spans, the emerging global economy, changing social trends, hi-tech, and the cascading impact of such large 'demographic groups' (Boomers, Gen-X, Millennials, etc.).

But the basic fact is that all the old notions of 'aging' and "retirement" (and the length to reach 'maturity'.. among others) are all "in transition", and no one's really figured out yet where it's headed in this country (let alone in the fast developing rest of the World)!
I agree. The impact of what you state, above, isn't being felt yet because it hasn't yet reached crisis stage. So much denial occurs before crisis (just like in today's news on the California water situation—suddenly, it's a crisis after years of vague warnings).
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Old 04-01-2015, 02:50 PM
 
Location: Idaho
1,455 posts, read 1,156,015 times
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We don't have to look very far, dig very deep or think very hard to see the downward trend of American retirement readiness.

When I graduated with a very much in-demand engineering degree years ago, I traded better salary offers and living environment for a job which appeared to be the most secure. Within a short time this venerable corporation had the first massive layoff. Few years later, they started to chip away workers' benefits, first retirees' health benefits were reduced, then health insurance in retirement was replaced by a limited amount fund to be used for paying insurance premium, then private pension was replaced by 401K. Every few years or so there would be another wave of layoff, sometimes in successive years. Job security no longer exists in spite of one's best effort to work hard, to stay technically current, to make significant work contribution. One of the persons who got laid off was the technical guru, a pillar of the technical community. The day he got laid off, he left in disgust leaving piles of patent plaques several feet high.

I have seen colleagues so stressed out resulting in health issues. One had a stroke while working, the other had a stroke shortly after the layoff at about the same time his unemployment ran out. His wife worked as a school aide. They had two daughters in college. He is now being cared at home by his wife since her insurance does not pay for home care. I have to wonder how she is able to take care of a paralyzed big man by herself. Another woman who had risen to the top of the technical career ladder when she suffered a very quick and aggressive form of MS which rendered her paralyzed and needed a feeding tube to live, her parents blamed her work since she was very stressed out by her demanding boss just before coming down with the disease.

Every so often, I would run into some former colleagues who got laid off in their 50's and had terrible time finding a job. So they hang around in the area, trying to be sub teachers, delivering pizzas etc They are all college educated (many with advanced degrees) with years of experience in the types of jobs which either no longer exists or in the industry which values only fresh blood, newly graduated YOUNG workers.

Some laid off workers or those who were pushed into early retirements were fortunate enough to have enough seniority to retain the pension and retirement health care benefits of the good old days. Myself and many others belong the 'brave new world' work environment. When I retire, there would not be a pension, I have to rely solely on my 401K, IRA and other savings. The meager balance of the of future health account can only be used to defray COBRA premium.

We have been saving for years and will be comfortable in our retirement. If we had gotten laid off while my daughter was still in college and/or one of us suffered some serious medical issues while being unemployed, my retirement prospect would likely to be very bleak.
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Old 04-01-2015, 04:10 PM
 
Location: Grove City, Ohio
10,135 posts, read 12,390,523 times
Reputation: 13984
Quote:
Originally Posted by Paka View Post
I honestly believe there are many who will not fare well in retirement, but it is probably the majority that did not fare well in life in general before retirement that will have the most problems.

I retired just shy of 4 months ago, and my retirement income (without SS yet) is just at $400 less per month than what I was "bringing home" because of our additional paying into income taxes (and we still had to add $$$$ to send them on 15 April) and the 20% into my TSP account pre taxed every year before I retired. Just $400 less per month to NOT have to get up at 3am to be to work by 4:45am, to have to buy uniforms, pack or purchase a lunch, to not have to drive in traffic (at least coming home) daily and the gas it takes....I think I am coming out ahead right now as I KNOW it was costing me more than $400 per month for the privilege of going to work daily. We should enjoy the tax break this next year....as I retired in Dec 14 none enjoyed this go round.

I now put gas into my car on average once per month! I don't think it will be a crisis for those prepared, but can see it a true concern for those that are not making arrangements for their financial needs after work life. If you are living paycheck to paycheck now and not putting any money away for later in life, you will probably be hurting once unable to work.
I am one of those beyond FRA that are still working because I have to.

I will be honest, I have to work because I didn't save the $600k that many say I should have so I am making up for a good portion of it putting off social security three more years until I am 70.

If you take COLA's out of the picture the average benefits haven't changed much from 2011 and from Pension Rights Center we find in 2013, the average retiree receives an estimated $15,132 a year in Social Security benefits. Couples, where both are receiving benefits receive $24,576 a year. The average for an aged widow or widower is $14,568.

Why so low?

Part of the reason is 44% of retirees appear to have applied for benefits at age 62 taking a full 25% hit on benefits.

If you look at it it appears 51% of beneficiaries started collecting at 63 and at 63 its a 20% hit.

What surprises me most is only 3% waited after FRA to collect when working beyond that while deferring benefits is exactly like socking away tens of thousands every year in an IRA.

So we read about the married couple where both receive benefits of just $24,576 a year but why? Did they take it early because they needed to or did they take it early because they saved so much they didn't need it deciding to retire at 60? How many couples receiving $24,576 could have received 33% more ($32,768 or $32,768*.75=$24,676) if only they had put off taking benefits for four years?

There are exceptions of course but I think a lot of people taking lower benefits were 1)forced to by lack of a job or 2)had enough saved where they didn't need any more money.

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Old 04-01-2015, 04:59 PM
 
71,647 posts, read 71,777,271 times
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working and deferring is the silver bullet of retirement and can make underfunded retirements turn out okay .. but the benefits of delaying are not so clear cut if you retire before fra.

if you retire at 62 and delay taking ss once you figure in lost checks by delaying and spending down your investments in possiblty a bull market the tide can change very quickly making waiting not the best choice.

one thing about the chart that shows the numbers at 62 , it also includes all those collecting before 62 . when you weed out all those already collecting the numbers are much higher at fra.

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Old 04-01-2015, 05:09 PM
 
71,647 posts, read 71,777,271 times
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this is the difference between 62 and 70 when you count the checks you are giving up. but it does not count the fact if you delay you may be spending down down assets for 8 years that should be growing if you took the ss instead. that can be a deal breaker and make early ss the better choice.

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