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Less than half of those surveyed (48 percent) have tried to calculate how much money they'll need in retirement, and more than one-third (39 percent) simply guess rather than doing a systematic retirement needs analysis.
That is plain nuts! I think a lot of people won't do a budget because they fear it will just confirm their suspicions. Living within your means doesn't mean it can't be enjoyable even if it is less than you were originally planning.
Quote:
46 percent of retirees said in 2016 they had retired earlier than planned, often for a hardship such as a health problem or disability. Two-thirds (67 percent) of current workers say they plan to work for pay in retirement, whereas only about one-fourth (27 percent) of current retirees say they've actually done so.
I need a second and maybe third plan - what if I can't work past 62 for some reason (economic or medical)?
Quote:
Almost two-thirds (65 percent) of workers expect to be able to live on a retirement income that's less than half of their pre-retirement household income.
This doesn't surprise me but I make enough where half isn't a crazy low number. When it is 2/3 of the population then it does include a lot of people with low numbers.
That is plain nuts! I think a lot of people won't do a budget because they fear it will just confirm their suspicions. Living within your means doesn't mean it can't be enjoyable even if it is less than you were originally planning.
I need a second and maybe third plan - what if I can't work past 62 for some reason (economic or medical)?
This doesn't surprise me but I make enough where half isn't a crazy low number. When it is 2/3 of the population then it does include a lot of people with low numbers.
Many if not most Americans don't have a functioning solid financial plan for their current life. Why would you think they would have one for down the road or the out years. There is also statistical comfort for many at a middle or higher income level. As you noted they can look at what the median family income is in any given area and find comfort if their retirement income will be at or above. As has been noted many times before if you don't have much to work with financially in during your working years is it reasonable to think that person will have much in retirement?
Of course, the majority of people don't have any sort of systematic financial plan for retirement. The majority of US adults lack even very basic mathematical skills; i.e., numeracy. They cannot develop or understand a financial plan without basic math skills. In numeracy testing, US adults rank lower than adults from almost every other 1st or 2nd world country. I should not exaggerate, US adults do tie in skills with Spanish adults. Sixty percent of Americans are at the level where they either do not understand or struggle with math as simple as fractions, ratios, and reading simple graphs and charts.
I guess what really scares me about that article is the number of people headed for insolvency in retirement that don't have to be. There are a bunch of people whose numbers won't work no matter how many ways you run them. But there are lots of people who could make a few adjustments and be okay. I get a little annoyed with a couple of people I know who are planning retirements that are absolutely underfunded but they don't want to see numbers that say maybe they can't afford the nice condo at the beach even though they likely could afford a third row cottage. That is usually the big one you could adjust IME - the cost of the roof you choose to keep over your head. You can't adjust for unknowns but at least make sure the math works for known costs.
Of course, the majority of people don't have any sort of systematic financial plan for retirement. The majority of US adults lack even very basic mathematical skills; i.e., numeracy. They cannot develop or understand a financial plan without basic math skills. In numeracy testing, US adults rank lower than adults from almost every other 1st or 2nd world country. I should not exaggerate, US adults do tie in skills with Spanish adults. Sixty percent of Americans are at the level where they either do not understand or struggle with math as simple as fractions, ratios, and reading simple graphs and charts.
we gave a fairly simple math test to applicants where i worked . the results were scary
I have been doing a detailed budget for the past 3 years. We were both working FT and expected to for about 5 more years, saving as much as we could. Then my husband was laid off a year later. Since we knew our budget it was easy for us to figure out how much money we needed and we moved to a lower COL area (which we had planned to due upon retirement all along). Without a pension we really needed all of our savings (plus our future SS). My girlfriend has no budget. Has no idea what she spends on anything. BUT, they have 2 pensions and both take their health benefits with them in retirement. For people in that fortunate situation, no, they don't need to know their budget the same as we do. More than enough money is coming in just as if they were still working. In fact, as people on this site will tell you, they are actually doing better in retirement than when they worked! Our health insurance alone is $1500 a month, and that is just the premium. We then have out of pockets & copays. We saved and we will eventually be spending down from our savings. That's why we saved all these years. We just want to be able to have enough to last us until we both die. That's why the budget is so important for us.
I've read tons of those articles. People are not financially prepared to retire. Most of them will eventually be laid off or fired or be forced to quit for declining health reasons.
I've read tons of those articles. People are not financially prepared to retire. Most of them will eventually be laid off or fired or be forced to quit for declining health reasons.
Then what?
There are millions of Americans not of retirement age who are currently at or below the poverty level. They will do what they do until there isn't enough to help the poor do regardless of age.
what is also scary is the myths and misunderstanding that folks believe or have about retirement planning .
they have no clue what the term safe withdrawal rate even means . you see it here all the time .
they think they can buy cd's and inflation adjust 4% or more forever .
surprise!
Ummmmm, as you and others have noted they have nothing to withdraw! So they go along with discussions or say nothing. It is like Jimmy Kimmel stopping people on the street and asking with no coaching on topic what do they consider a safe withdrawal rate.
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