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Old 11-06-2016, 01:09 AM
 
Location: Albuquerque NM
1,656 posts, read 1,521,661 times
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Quote:
Originally Posted by redguard57 View Post
I wonder about this all the time.

Without SS or that pension, the retirement calculators say I'm going to need 3.2 million to retire. That seems SO hopeless! It says I need to be putting about 27% of our income into retirement savings.... you're supposed to save 20% automatically for expenses which we do... we actually save 33% of our income and sometimes closer to 40%... but that doesn't all stay in savings... we use that to be debt free, ie: we bought my wife a new Subaru to replace her 17 year old Pontiac- that was about 15 months worth of savings. We expect the next 36-60 months worth of savings will go towards a down payment on the next house.

According to the calculators, to retire we need to be saving about 47%, more than half of that going toward retirement! WTF!? And that assumes we never lose these jobs, never have kids, never move up to a better house and nothing ever goes wrong like a health issue!!!
Some of the retirement calculators are extremely conservative - assume social security will no longer be available, a real investment return of 2-3%, 35 or more years in retirement living to age 100. No wonder they calculate you need several million dollars to retire. I agree with the previous poster that social security is not going away although there may be some changes. Assuming you retire with your house paid off, some social security and public sector pension, and access to health insurance until Medicare age, $1M in investment savings is probably sufficient.
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Old 11-06-2016, 02:16 AM
 
71,490 posts, read 71,652,652 times
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the calculators make no assumption either way about social security being there or not .

they only stress test the portfolio portion with WHAT YOU TELL IT YOU NEED FROM YOUR PORTFOLIO .

any income you list from outside the portfolio is subtracted out and then the portfolio stress tested either by actual historical data or monte carlo simulations .

so if i need 100k inflation adjusted a year and social security is 40 and pension 20k then all that is subtacted out . the calculators only stress test how many times 40k from my portfolio at my allocations and length of times would have failed .

2% real returns are needed to clear only 30 years at 4% . if you live 31 your income stream may fail .

it also does not count any lump sum expenditures that take a budget over in a year and reduce your starting point the following year from what it should be .

it is only based on experiments done in a lab under controlled circumstances with no human intervention .
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Old 11-06-2016, 05:59 AM
 
Location: USA
6,223 posts, read 5,354,840 times
Reputation: 10636
Quote:
Originally Posted by Coloradomom22 View Post
Pensions are not rare for those already retired. It's the more recently hired employees who are out of luck with a pension, although government jobs still offer them.
You don't necessarily need a pension. A properly funded and managed 401k or IRA can often be quite lucrative.


I know plenty of people who retired with basically nothing. But they pretty much rely on social benefits to make due. The question is on how long the government is able or is willing keep paying out all those benefits.
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Old 11-06-2016, 06:12 AM
 
2,443 posts, read 2,068,483 times
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Quote:
Originally Posted by s1alker View Post
You don't necessarily need a pension. A properly funded and managed 401k or IRA can often be quite lucrative.


I know plenty of people who retired with basically nothing. But they pretty much rely on social benefits to make due. The question is on how long the government is able or is willing keep paying out all those benefits.
I don't think the government will stop paying out social security. After all, would you want to be the President and congress that took away SS. There would be an uproar from the people.

What I do think will happen and it already has is they will keep raising the age to collect SS. Government is hoping many will pass away before collecting anything. Also social security tax will be raised to collect enough for payout.
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Old 11-06-2016, 06:15 AM
 
71,490 posts, read 71,652,652 times
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while you can possibly survive on ss alone the question is do you want to live out the rest of your life on whatever just social security lets you do as well as live where you want to live .

if we had to move away from our kids and grand kids because we could not stay where we wanted to then as long as we could work retiring would not be a choice we would make
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Old 11-06-2016, 06:18 AM
 
Location: USA
6,223 posts, read 5,354,840 times
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Quote:
Originally Posted by mathjak107 View Post
while you can possibly survive on ss alone well as do you want to live out the rest of your life on whatever just social security lets you do as well as live where you want to live .

if we had to move away from our kids and grand kids because we could not stay where we wanted to then as long as we could work retiring would not be a choice we would make

Someone who would only have SS to live on probably was a lifetime low earner. They probably would not miss the things they never had or the expensive city in which they never lived.

I grew up in a relatively small town where many did retire on SS alone. They lived pretty simple and frugal lives. Often they would supplement their food supply with hunting or fishing.
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Old 11-06-2016, 06:20 AM
 
71,490 posts, read 71,652,652 times
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depends , they still may be close to family . my folks were in that position and while they could afford to live here while working , they couldn't when retired .

so they moved and missed out for the most part on all our lives and the lives of their grand kids . they were basically a vacation stop a few times a year .

our kids had very few memories of their grand father. it happened to my wife too . so we are not going to do that to our kids and grand kids if we can help it . if we couldn't stop working and be a part of their lives we would just keep working as long as we could .

but to tell you the truth , i came from a relatively poor family growing up in a nyc housing project . living poor was never going to be an option in my mind and it motivated me over a lifetime to keep pushing .
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Old 11-06-2016, 06:23 AM
 
Location: USA
6,223 posts, read 5,354,840 times
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And don't forget a lot of people don't have big families, or much family left at all when they get to the retirement years. I will be one of those, I never married, never had kids. My brother will probably be my remaining family after my folks are long gone. And he is divorced and childless. The changing social dynamics of society will impact ones retirement as well.
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Old 11-06-2016, 06:31 AM
 
Location: Colorado Springs
4,830 posts, read 4,944,472 times
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Quote:
Originally Posted by mathjak107 View Post
depends , they still may be close to family . my folks were in that position and while they could afford to live here while working , they couldn't when retired .

so they moved and missed out for the most part on all our lives and the lives of their grand kids . they were basically a vacation stop a few times a year .

our kids had very few memories of their grand father. it happened to my wife too . so we are not going to do that to our kids and grand kids if we can help it . if we couldn't stop working and be a part of their lives we would just keep working
That's a very good point. If anything, the present generation of 30 somethings with young children can benefit more from their grandparent's help than previous generations. With a requirement for dual family incomes, it's harder to make a good living. Companies demand longer hours and the cost of housing pressures everybody.

My kids unfortunately chose San Fran because that area has the best opportunities for their careers.

But with a typical generic 60 year old house costing $1M we just can't afford to move there.

So several trips per year will have to do for now.
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Old 11-06-2016, 06:36 AM
 
2,443 posts, read 2,068,483 times
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Quote:
Originally Posted by Vision67 View Post
That's a very good point. If anything, the present generation of 30 somethings with young children can benefit more from their grandparent's help than previous generations. With a requirement for dual family incomes, it's harder to make a good living. Companies demand longer hours and the cost of housing pressures everybody.

My kids unfortunately chose San Fran because that area has the best opportunities for their careers.

But with a typical generic 60 year old house costing $1M we just can't afford to move there.

So several trips per year will have to do for now
.
Perhaps moving within a couple of hours would be better. Possibly more affordable and a lot closer.
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