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Old 02-22-2016, 09:02 AM
 
Location: USA
6,226 posts, read 5,368,002 times
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A lot of people don't make a priority for saving. Do you really need a $600 iphone every year?

 
Old 02-22-2016, 09:46 AM
 
Location: Florida
4,103 posts, read 4,281,401 times
Reputation: 10056
This makes sense. As costs rise more and more these target goal metrics will spit them out first for us to freak out over. Of course these numbers are asinine, nobody in their right minds can set aside 2 million while living in a middle class lifestyle and raising 2.5 kids.
 
Old 02-22-2016, 09:53 AM
 
1,210 posts, read 710,351 times
Reputation: 2143
It seems to me that pensions require less money put away than each one of us having to save enough to cover our own longevity.
 
Old 02-22-2016, 10:03 AM
 
Location: Shawnee-on-Delaware, PA
3,909 posts, read 3,590,587 times
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Quote:
Originally Posted by Tall Traveler View Post
The article wasn't clear (nor could it be) on who needed $2M, current retirees, Baby Boomers, Gen X, Gen Y, babies today, everyone?

The first word in the article is "Millenials".


I feel better now. I'm a late Boomer and not close to $1M let alone $2M. Might hit the $1M mark in 12 year, tho.
 
Old 02-22-2016, 10:21 AM
 
39,315 posts, read 20,390,256 times
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Quote:
Originally Posted by jtab4994 View Post
The first word in the article is "Millenials".


I feel better now. I'm a late Boomer and not close to $1M let alone $2M. Might hit the $1M mark in 12 year, tho.
You're a Generation Jones. Starting out during Jimmy Carter, watergate, oil crises, gas lines, inflation and recession, 20% interest rates, and no pensions, and a threat to SS. Yes, wasn't our start in life just grand <sarcasm> lol but we went out and did it.

https://www.linkedin.com/pulse/explo...mers-tim-moore
 
Old 02-22-2016, 10:35 AM
 
Location: USA
1,815 posts, read 2,245,143 times
Reputation: 4139
Quote:
Originally Posted by SportyandMisty View Post
On the topic of pensions: pick up a copy of While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis by Roger Lowenstein. ISBN 978-1594201677. Or check out the audio book from the local public library and listen to it while commuting.

Although the book was published in 2008, it is still very current and it does an excellent job of describing the scope of the defined benefit pension problem.


Does this book mention the two tier wage system that went into place at General Motors and probably at those other big companies?


But I'm sure that has nothing to do with why the pension funds are going broke
 
Old 02-22-2016, 10:37 AM
 
Location: Long Island
8,743 posts, read 12,206,059 times
Reputation: 5048
Quote:
Originally Posted by 2sleepy View Post
Was savings account interest .02% when dad told you that?
Hey we just opened a CD for the kids for a whopping 1.5%!

But anyway, compound interest is easy - just start early and keep one eye on it.

Quote:
Originally Posted by s1alker View Post
A lot of people don't make a priority for saving. Do you really need a $600 iphone every year?
But Apple fans got something bigger! After Apple made a commercial poking fun at big phones a couple years before that.
 
Old 02-22-2016, 10:51 AM
 
13,962 posts, read 7,434,967 times
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Quote:
Originally Posted by 2sleepy View Post
In the end taxpayers will be paying for the elimination of defined benefit pensions because as more people retire with social security as their only source of income they will be relying upon social services to survive.
I've been using that as my argument against the "Social Security will be abolished" crowd for years. For the majority of late-boomers and Gen Xers nearing retirement age today, they have some pittance in an IRA/401(k), a home with some equity in it, and their Social Security check. If you abolish the program or slash benefits, those people are going to starve.

It's pretty obvious to me that Social Security is going up 30%. It's just not obvious yet who is going to be paying it. Only 6% of workers max out their Social Security so I don't see how eliminating the $118,500 salary cap can possibly make up that 30% gap. The 6.2% employer/6.2% employee payroll tax kind of has to go up for everyone.
 
Old 02-22-2016, 11:39 AM
 
Location: Florida and New England
1,233 posts, read 1,419,657 times
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Quote:
Originally Posted by BeerGeek40 View Post
Total garbage.
It's not what you make, it's what you spend.
I live below my means, have no mortgage, drive an older car, and in another 9 months will have no debt at all.

You don't need 2 million $$ in order to be able to retire.
$2 million is a target, not the bare minimum. It's not an unreasonable target by the way. With no other retirement income, millennials should target this savings goal.

Social security has a strong future likelihood of becoming an old-folks, needs-tested welfare program and consequently not an income stream to middle-class seniors by the time of millennial retirements. $2 million saved should reliably produce 80,000 per year income in 2050.

Housing costs will be going up, including property taxes. I project a current 1000/ month expense for a 2BR rental (or for tax and maintenance on a paid-in-full 3BR house), so approximately 3000/ month, inflation adjusted to 2050.

Medicare co-pay and premium and other health care costs will be going up, around 500/ month now, adjusted to 1500/ month in 2050.

Income taxes will be going up, around 18% actual (after deductions) at this bracket, say 25% max in 2050: 20,000/ year in 2050 (let's hope it's less, but it's wise to plan for the worst case)

That leaves 6000/ year, or 500/ month for all other expenses (food, car, entertainment).

Maybe $2 million is the bare minimum that millennials should have saved by age 67.
 
Old 02-22-2016, 11:43 AM
 
Location: Gilbert, AZ
3,186 posts, read 1,965,390 times
Reputation: 3328
Quote:
Originally Posted by GeoffD View Post
I've been using that as my argument against the "Social Security will be abolished" crowd for years. For the majority of late-boomers and Gen Xers nearing retirement age today, they have some pittance in an IRA/401(k), a home with some equity in it, and their Social Security check. If you abolish the program or slash benefits, those people are going to starve.

It's pretty obvious to me that Social Security is going up 30%. It's just not obvious yet who is going to be paying it. Only 6% of workers max out their Social Security so I don't see how eliminating the $118,500 salary cap can possibly make up that 30% gap. The 6.2% employer/6.2% employee payroll tax kind of has to go up for everyone.
Certainly it will not be "abolished". I expect the program will continue to see periodic tweaking to extend its solvency. Probably another increase to the FRA (which is just a way to cut benefits). Maybe make SS benefits 100% taxable. Maybe a faster ramp on the income ceiling for some number of years. Etc.
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