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Old 12-30-2015, 11:10 AM
eok
 
6,684 posts, read 3,178,514 times
Reputation: 8464

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Joe sixpack may buy a certain number of sixpacks per week. When he retires, he might buy that many per month. Does that make him a loser? People slow down when they retire. A day is like a few hours. They buy as much stuff per month as they used to buy per week, and it still seems like the same amount, because time goes by at a different rate.

Being a miser is not usually part of a plan. It's an attitude. That you don't need to be buying so much stuff, because you're just as happy without it. And you do need to be shopping around more, and pondering for months things you might buy, which a non-miser is more likely to buy on the spur of the moment. There is nothing about being a miser that makes people unhappy.

Some people seem born to be unhappy, and are far more likely to overspend. Their closets are full of clothes they hate, because they only liked them when they bought them on the spur of the moment. Their houses are cluttered with furniture, and they hate all of it. They hate their vehicles, their gardens, their trees, and often even their pets. They would be much better off as misers, spending more time pondering things, doing things that don't cost money, and shopping for fun, without actually buying stuff.
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Old 12-30-2015, 11:32 AM
 
Location: SoCal
13,347 posts, read 6,382,104 times
Reputation: 9960
Quote:
Originally Posted by nicet4 View Post
Let me make it clear that I was not aiming at, or attacking, anybody.

I fully understand some people have been forced to take it to survive and had I contracted severe rheumatoid arthritis, to where I was unable to work, I could have been on of them. But with 44% taking it at age 62 something tells me not everyone that took it early had to.

But at age 62 I wouldn't have collected social security retirement benefits but disability because disability pays more. That chart clearly shows that at age 62 44% were collecting retirement benefits and not disability.

Many widows are forced to take it early to survive because their husbands didn't, or perhaps couldn't, obtain life insurance to "tide them over" to their full retirement age.
I've been reading lots of retirement literature and I believe only recently did I read to delay taking SS at age 70 for bigger SS check. Before that, perhaps before the crash it was recommended in most things I've read to take it at 62. Perhaps people have been brain washed by what they read.
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Old 12-30-2015, 11:33 AM
 
54 posts, read 46,948 times
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Before social security, the elderly were the poorest age group. Not so anymore.
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Old 12-30-2015, 11:39 AM
 
7,960 posts, read 5,063,154 times
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Quote:
Originally Posted by Burger Fan View Post
But to be fair, if you're diversified enough none of these things should really matter all that much to your 401K in the long run. In the short run yes, absolutely- this year was a bad year for a lot of funds, they're either negative or just breaking even due to the market going nowhere and oil being a bust. But if you're close to retirement your investment should be almost entirely in bonds and other "safe" investments to prevent market meltdowns from wiping you out in the first place.
This year hasn't been all that bad; compare 2000, 2001, 2002, 2007, 2008 and (at least initially) 2009. 2011 saw some wild gyrations, and 2003 was no placid monotonic ascendancy either.

Diversification protects against blunders or gross distortions, but it's very limited in protection against volatility. Bonds? Consider what's been happening lately, and the likely outlook.

I also made the choice of employment with an organization that offers a defined-benefit pension, in exchange for lower annual salary. Unfortunately the generosity of our pensions declined drastically in 1983-1984. But the point isn't to whinge or to envy. Rather, the point is that being an investor entails risks and headaches that are quite distinct from mere personal-finance. People needed to save money and to watch their spending since, probably, ancient Mesopotamia and Egypt. But the necessity of "Joe Sixpack" becoming an investor, is a mere novelty. The full impact of that novelty hasn't yet hit today's retirement situation.
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Old 12-30-2015, 01:12 PM
 
Location: Grove City, Ohio
10,142 posts, read 12,407,945 times
Reputation: 13992
Quote:
Originally Posted by NewbieHere View Post
I've been reading lots of retirement literature and I believe only recently did I read to delay taking SS at age 70 for bigger SS check. Before that, perhaps before the crash it was recommended in most things I've read to take it at 62. Perhaps people have been brain washed by what they read.
I am extremely fortunate that I am still working full time at 67 and I am one of them that's dedicated to putting off until age 70. Just so I do not sound flippant I do count every single passing day.

This is what convinced me to hold my horses and not collect yet.

How much of my social security benefit may be taxed?

Quote:
Did you know that up to 85% of your Social Security Benefits may be subject to income tax? If this is the case you may want to consider repositioning some of your other income to minimize how much of your Social Security Benefit may be taxed and thereby, maximize your retirement income sources.
If you're collecting at FRA and still working making an appreciable income you a good chunk of that free money could disappear in added taxes. Assume married couple getting $36,000 in benefit while husband still works earning $52,000 up to 78% of that $36.000 could be subject to taxes. Maybe $5,000 to $6,000 of that $36,000 going for federal income taxes? If taxes are $600 John and Mary are not getting $3,000 monthly but $2,400 and that $500 every month is a heavy hit as long as John is still working.

But if they wait to 70 John will receive 32% more and together they will collect $3,640 and running just that through the calculator they won't pay any federal taxes.

Most likely they won't pay state either.

So waiting the four extra years isn't just the 8% per year but the reality is it's a difference between $2,400 monthly and $3,640 assuming at 70 John won't work anymore. An extra $1,240 not taxed is a lot of money for a married retired couple every month.

If I elected to draw benefits now I could but with my income 85% of my benefit would be subject to federal income tax and I am not about to collect $4 and pay the government $1 for the privilege.

By waiting to 70 my wife and I will receive in excess of $4,300 in social security benefits alone for over $51,600. Run that through that calculator and I won't way any federal taxes and won't pay state income taxes either.

I admit am one of the many that didn't save like I should have. At age 45 I wasn't worried about retirement and I don't have $1 million in savings. But, as I explain to my wife given our situation, if we can't live comfortably on $1,000/week with the house paid for and no debt then we got a spending and not income problem.

As an added bonus if I happen to pass early my wife picks up my full benefit of slightly over $3,000 and she should be able to be just fine with that. Lot's of married men across the country are raising families on less than that and they wish they had $3,000 left over after the house payment is made.

Note: There are a million variables and nobody is the same. What might work for me might not work for you and like looking through a kaleidoscope if you have a retirement fund to draw from everything could change.
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Old 12-30-2015, 01:52 PM
 
Location: Washington State
18,659 posts, read 9,639,706 times
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Many people like to diss on Baby Boomers but the fact is, they spent the money we gave for SS and now tell us we have to wait longer.

Wife and I didn't trust government and made enough savings to live on in case they screw us out of what they promised and we paid for.
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Old 12-30-2015, 02:06 PM
eok
 
6,684 posts, read 3,178,514 times
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Quote:
Originally Posted by Tall Traveler View Post
Wife and I didn't trust government and made enough savings to live on in case they screw us out of what they promised and we paid for.
They will inflate your savings away. A better plan would be to acquire the skills to do work you love, and keep doing it forever. What makes most people unhappy is having work they don't really like. So they look forward to retirement, expecting to enjoy it more than their work. If it doesn't meet their expectations, they're screwed, because they have no plan B.
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Old 12-30-2015, 02:09 PM
 
Location: Grove City, Ohio
10,142 posts, read 12,407,945 times
Reputation: 13992
Quote:
Originally Posted by eok View Post
They will inflate your savings away. A better plan would be to acquire the skills to do work you love, and keep doing it forever. What makes most people unhappy is having work they don't really like. So they look forward to retirement, expecting to enjoy it more than their work. If it doesn't meet their expectations, they're screwed, because they have no plan B.
Excellent point.

I plan to work full time until I can no longer do it at which time I will go part time. I will go with part time for as long as I am able.

I like my job, I like what I do and for me it is more fun than work.
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Old 12-30-2015, 02:15 PM
 
22,769 posts, read 26,248,228 times
Reputation: 14558
Quote:
Originally Posted by GreenGene View Post
The thread title is the title of an article in today's Washington Post. It says, among other things:

And,

The article also suggested (backed by data from the Organization for Economic Cooperation and Development) that when government retirement programs like Social Security offer more generous benefits, people tend to do less -- in addition to those government retirement programs -- to prepare financially for retirement.
This is misleading.

It's like the story -- you've got 9 guys in a room. They all make $50k/yr. The average income for the room is $50k/yr.

Now Bill Gates walks in. Nothing changed about those 9 guys' incomes, but suddenly the average income for that room is $1.1 billion/year.

In other words, the fact that some older Americans are absurdly rich drives up the average, but the average doesn't tell us very much about the typical American's retirement assets. For what's typical we'd need to look at the median.
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Old 12-30-2015, 02:18 PM
 
Location: Seattle/Dahlonega
547 posts, read 389,240 times
Reputation: 1553
Quote:
Originally Posted by Tall Traveler View Post
Many people like to diss on Baby Boomers but the fact is, they spent the money we gave for SS and now tell us we have to wait longer.

Wife and I didn't trust government and made enough savings to live on in case they screw us out of what they promised and we paid for.
And exactly how did the baby boomers spend the SS money?
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