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I doubt it's most, but I agree many are in bad financial shape...
I work with people that really never thought they would live to make it to retirement... they are children of the 50's and 60's and really live for the moment and don't look to the future. Some also believe the Government will come through for them.
Most of the well-off I know... and I'm not talking about very rich, have developed multiple income sources... i.e. pensions from various jobs, income from Real Estate and income from a business or businesses they have built.
OK folks, I've read these posts for about a year or so. Either it's the crowd that this forum attracts or somewhere along the path people didn't learn how to save for the future. So, what is it?
Did many of you never learn about planning for your future?
Was there just not enough income to save for the future?
Was it not important to save for the future?
Why is it that so many people facing retirement are so ill-prepared after 30-40years of working?
Bringing this back because I wanted to start a thread along this lines, but this already existed.
I am actually surprised by 3 things
1) The amt people allocate for their retirement
2) The amt people expect to retire with
3) The no. of people who display above 2 traits.
AMT saved:
I have been pushing a full $17k into my 401k plus an employer matched 6% every year. I am surprised by the number of people who don;t even put money aside into their 401k. I am actually startled by the number of people who have been working for 10 years but barely have contributed to their retirement savings.
Time is money.
Besides 401k, I have been increasing the my equity in the house, cars are paid off and zero credit cards debt. I am saving to establish other income sources. Very few people do that. I expect to have a paid off house before I hit 35.
AMT needed to retire:
People think they'll be taken care of by SS and medicare. They think they'll save eventually.
They want to enjoy life now. Well, guess what, Life is a constant challenge and unexpected directional changes define life. My target has been, that when I retire, I make at least $15k/month from investments besides the SS / medicare / 401k.
That means 20 yrs from now, when I have retired, I should have a 15k a month income, which I should be able to spend on travel / charity / needy folks / kids / vacations etc.
I am just surprised as to how many people disregards the essential virtue of saving now and adapting the lifestyle for the good later.
the truth is even with compounding you are looking at a whole lot less than most folks predict from their limited knowledge . . it isn't as much as you think in real return dollars once alot of the paramters are figured in that most folks leave out of their projections..
i agree with dr wade pfau , i don't think he is off by much if at all.
OK folks, I've read these posts for about a year or so. Either it's the crowd that this forum attracts or somewhere along the path people didn't learn how to save for the future. So, what is it?
Did many of you never learn about planning for your future?
Was there just not enough income to save for the future?
Was it not important to save for the future?
Why is it that so many people facing retirement are so ill-prepared after 30-40years of working?
I've never found this forum to be much different than stats show for retirees in general.
the truth is even with compounding you are looking at a whole lot less than most folks predict from their limited knowledge . . it isn't as much as you think in real return dollars once alot of the paramters are figured in that most folks leave out of their projections..
i agree with dr wade pfau , i don't think he is off by much if at all.
My strategy is more laddered for WR – 2% over as long as I can sustain it, hopefully 10 years, then 3% for another 5 - 10, then ending with 4% or life on the sidewalk. I would never withdraw a flat rate starting at the beginning just because someone suggests a %. There's just too many variables between retirees.
Dr pfau is one of the most respected financial researchers today. His white papers dominate the journal of financial planning setting the stage for financial thinking through out the industry.
That journal is like the american journal of medicine is to the medical community.
It is scarey the amount of influence that dr pfau and michael kitces's research has on the industry causing changes in thinking by the professional financial community on things that have been believed to be true for decades.
You can google him to see his studies.
Last edited by mathjak107; 09-04-2013 at 05:45 PM..
The people I know that are in the worse shape are those that think that somebody else is responsible to take care of them in their retirement years. They are the entitled group that have never taken personal responsibility for anything. They live for today and don't worry about tomorrow because that's the government's job.
I think Detroit would be a good retirement spot for these people.
I fully understand that there are those that are in bad shape due to no fault of their own - life circumstances beyond their control.
I personally feel the reason more people don't save more is because the numbers tossed around for adequate retirement savings(magic number) are way out of whack, and people feel that magic number unattainable, so why try. I just heard some guy saying that he couldn't see retiring without 5 million.... how do you get that when you're bringing home 50K -- it's just not doable.
So I stopped listening to those talking heads jabber jabber. and figured it out on my own. I very well could be wrong, but my projections of the neighborhood of one million should tide us over nicely. Mainly because I'm not afraid to let 1/3 of my money sit in long term more volatile investments. My goal is to not touch any of that 1/3 until about 20 years into retirement.
It's hard to not listen because all those talking heads are the ones people talk about and believe, and if you say -- don't listen to Suze Orman, or Dave Ramsay or whoever the latest talking head is, they really don't know much and say the dumbest things and also act like their advice is carved in stone, when financially NOTHING is carved into stone -- it's easy to NOT trust yourself.
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