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The first step is to establish universal availability. The 401k plan is the greatest retirement innovation since Medicare, but it requires an employer to set one up. Many if not most don't bother. Two or three States have plans to make them available. Let's get the rest on board. And make them available to contract employees.
People don't need 401k plans to save. They can just put the money aside. Sure, they lose the pre-tax advantage, but at least they have money saved.
One of Suze Ormand's books got me out of debt c. 2002, post the 9/11 market slump. Not only was I in debt, my investments tanked for a while. It didn't scold but it did give some good clear practical info on how to accomplish what I wanted to do (tanking my credit card debt).
Her advice worked. In that book, she was as critical of herself as of other folks, so I am skeptical that you could call the style a "scolding" style. Women are often accused of scolding when they are just talking forcefully. We aren't allowed to do this by some.
The death of my credit card debt was like dawn breaking over my money landscape and I am very grateful for her advice. I am more a book reader than a media person, so I don't know much of her except for that incredibly helpful book, which often talked about her own struggles with money.
I really enjoyed reading your post, so glad you posted it. If you can remember the name of the 2002 book by Suze Ormand, I'd love to get it. Credit cards were not my friend, I owe, I owe.
There have been some posts about how some of us post, etc. Shaming, scolding, etc. I don't think those ways of talking are especially useful. When I first got on C-D, I asked some questions and a few answered with what was probably excellent information. But their knowledge was far above what I knew and sometimes the way they wrote it, I definitely felt like they thought I was stupid. Well, I'm not stupid, but lacked information that I was hoping to get in language I could "understand." Money is not my strong suit. Investments, savings, spending habit, etc. were all pretty deep to me.
I guess what I am trying to say in not such a great way is that when we write something, we don't get the tone it was delivered in, the facial expressions, etc. Sometimes it just comes out flat, sometimes hurtful. A person who is new to this forum may not understand how the other poster is trying to communicate. And some postings have been out and out hurtful and insulting.
Some patience and understanding is needed. Not all of us are accounting geniuses. And I'm talking about me.
This is a small article that we seem to do here often. Some of the things we say to people are meant to shame them into making this decision or that. Notice people I said some not all. Some of our points are made nicely but hopefully the tips and points we make for folks are taken and evaluated. I think this is the beauty of this forum.
Anyway the reason I started this thread is something I found out on the net. Here is a quote from it that I thought we should consider as we give advise to those who are searching.
I never heard of Chris Ramsey until this article so I am not promoting him. I think what I am promoting here is for us to understand that some people do need tough love and others gentle persuasion. Use facts not fear to make your points.
Well -- let me tell you -- there's an old adage, you can lead a horse to water, but you can't make him drink. Actually the Dorothy Parker witticism fits better here, the one for using the word horticulture in a sentence. You can lead a ***** to culture, but you can't make her think.
Anyhow -- unless you are teacher, who is teaching the subject of retirement finance, it's best to keep one's mouth clamped shut tight.
How people save or not is none of your business. If you make it your business, you might find your friends dwindling. If they ask, you can talk about it, but more in the line of recommending books or websites.
You can see it on here. My husband and I chose to live somewhat frugally, and save a lot of money and invest it. Others refuse to live frugally, and chose to find ways to up their earning power to achieve their goals. Others refuse to do anything.
The information is out there. There truly is a strategy for everyone, all it takes is looking.
Let's liken this to embroidery. There's tons of types and styles, whitework, blackwork, goldwork, crewel, stumpwork, and so many more -- and there's lots of videos and websites to show you all the kinds out there.... but first, you have to want to learn about embroidery. If you aren't interested, all the videos in the world aren't going to make you pick up a needle and start embroidering.
Yeh, stay out of other people's business. These days, from what I've read, it's the very young people who don't understand how to use credit cards. They think it's play money. Maybe someone should tell them.
But for anyone above millennial age, leave them alone. The information is out out there and available already. I used to love investing until my ex, a CPA who knew all the sneaky tricks, stole my investments and most of my savings. I knew what I was doing but even smart people can be conned by a con artist. (Bernie Maldoff?) So I don't want or need to be lectured. It's over and done with and no one could have known what he was doing. I think there's too much nagging on this forum about money. Retirement is about a lot more things than just money anyway.
Sure, advise the millennials about not buying so many gadgets and using credit cards wisely. But once they're past that age, stop nagging. If they don't want to know, they will suffer the consequences later.
100% agreement with both, especially RTB. I started, likely like you, as soon as I got my first job out of college in 1980. 401k match amount plus 1% to start, with adding half any raise each year. Let time do the work. Divorces and change of jobs sidetracked that too many times when younger, but I never stopped, and you just accept that is the way it is. Next you know, you are saving 30%, and have high six figures (or low 7 if you manage to never divorce) saved, for what seemed little effort. That becomes the level of income you get used to living at, and continuing at that level in retirement is easy.
When I First started working I had a good engineer friend just a few years from retirement (thank you Tom, if you are still alive) that gave me more insightful fatherly advice than I ever got my whole life from my own Dad. And the importance of saving and letting time do the work, and living below (or correctly at) your means was at the head of the list. Listening to him was easily the smartest financial move I ever made. The idea of not saving in retirement seems almost giddy to me. It's a solid 20-25% drain against income, after taxes that I Will not have again, once I retire! Add no more SS payments and no mortgage, and I should have trouble spending my income, I hope!.
I agree with everything you said except the sentence I bolded. Unless you're retiring when you're very old - I think you have to save in retirement. To protect against the consequences of inflation - higher than expected expenses - lower than expected income - etc. Even if your personal rate of inflation is very low - say 1%/year - you'll still need about $1.22 in 20 years to buy what $1 buys today.
Also - I think you have to keep "very old age" kind of expenses in the back of your mind. I know people here talk about long term care insurance a lot. But some people don't need assisted living - much less skilled nursing. And want to live at home as long as possible. OTOH - they do need a lot more (non-skilled) help at home. To do cleaning - wash clothes - shop - prepare meals - etc. The kinds of thing insurance doesn't cover. My father now pays about $1000/month for the extra help he needs (and he lives in senior "independent living" - which covers a fair amount to start with). And - the older he gets - the more help he will need along these lines.
BTW - it was very easy for us to save a lot when we were young. Because we made more money earlier than we expected - before we had a "big deal" lifestyle. We did splurge a little then - but we saved a lot too. Also - we were in a very high tax bracket before the Reagan "tax reform acts" (the smaller one in 1981 and the larger one in 1986) - so putting money into tax-deferred accounts made a lot of sense for us then as well. Robyn
100% agreement with both, especially RTB. I started, likely like you, as soon as I got my first job out of college in 1980. 401k match amount plus 1% to start, with adding half any raise each year. Let time do the work. Divorces and change of jobs sidetracked that too many times when younger, but I never stopped, and you just accept that is the way it is. Next you know, you are saving 30%, and have high six figures (or low 7 if you manage to never divorce) saved, for what seemed little effort. That becomes the level of income you get used to living at, and continuing at that level in retirement is easy.
When I First started working I had a good engineer friend just a few years from retirement (thank you Tom, if you are still alive) that gave me more insightful fatherly advice than I ever got my whole life from my own Dad. And the importance of saving and letting time do the work, and living below (or correctly at) your means was at the head of the list. Listening to him was easily the smartest financial move I ever made. The idea of not saving in retirement seems almost giddy to me. It's a solid 20-25% drain against income, after taxes that I Will not have again, once I retire! Add no more SS payments and no mortgage, and I should have trouble spending my income, I hope!.
I had the exact same experience as you; a fatherly colleague when I was young took me under his wing and taught me everything about investing, saving and saving for retirement. I took it in like a sponge and lived my life that way- at or below my means and no lavish spending. At 50 now, my wife and I are sitting on a tremendous (to me...) amount of money to retire with. We will retire at 62, 12 years for me, 8 for her, that's the plan.....
...How people save or not is none of your business. If you make it your business, you might find your friends dwindling. If they ask, you can talk about it, but more in the line of recommending books or websites...
I've actually had some people approach me locally - out of the blue - to ask about investing and legal stuff. Some were mere acquaintances. And I always do my best to give the soundest advice I can. Have gotten some positive feedback over the years.
I will admit to expressing my opinion when someone tells me they're doing or planning to do something super stupid (this wasn't unusual when it came to some women I played golf and tennis with - I don't pry - but when someone tells me something stupid I speak my mind). For example - signing a will that gives a husband 100% if the woman dies - but allowing the husband to write a will that ties up all assets in trusts if the husband dies. With the same lawyer advising both spouses! I have seen similar conflicts of interest when it comes to divorce proceedings - where the women acted like doormats. Mind you - these women weren't 85 - they were 45. Overall - I really don't care about having "friends" who are too stupid to seek good advice or to listen to it (mostly what I advised a lot of these people to do was to seek good independent counsel - nothing earth-shattering about that - but most didn't listen). Robyn
I should have worded your bolded statement "The idea that I will no longer feel like I am required to save for retirement almost makes me giddy". My fixed incomes will far exceed my expenses, (by 30-50k per year) and once I start SS at 70, I will not need my savings (which will still be quite large for me) to live, and have many years left for them to grow, in addition to whatever after tax savings I endorse as I age. My very old age is not something I anticipate being concerned over, financially. If my income, assets and savings put me in the top 15 to 20% of retirees, but I live like the top 50%, then I will have acomplished what I set out to do.
To in_newengland and tallysmom: are you asking that no one offer any sound advice based on proven published studies that have been rigorously viewed by other experts, and that we should keep our mounths shut, and just offer pleasantries so everyone feels good, because once past the age of 40, they automatically are smart enough to know better and will just suffer the consequences if they are wrong, well after there is any chance to do something about it? I sure hope not.....
Retirement is a lot more than just money, and if people aren't interested in the money threads, then they shouldn't read them. I sure don't read the ones about embroidery or book clubs, or over 55 communities because I have no interest to learn anything about them and no input to offer. Retirement may be more than just money but you can be dang sure having plenty makes decisions a lot easier than having too little. No one is bragging about how much money they have, or nagging anyone to live like they live. They are offering insights to others in similar situations. Just because someone has an income of 100k in retirement does not mean they are not just as concerned with preserving their equity and principal and minimizing taxes, legally, which requires totally different approaches than someone who will live on just SS the rest of their life. It Is not insulting or personal, just factual.
Agree. I'm not ever intentionally trying to shame anyone. That's just etiquette. I don't KNOW anyone here, nor do I consider anyone here a personal friend so their behavior or posts is of no consequence to me. Shame is only valid when the shameee(?)
Shamu.
Those whales, you know how they spend.
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