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Some people think they need to make as much as they do working.
When I look at my check I see lots and lots of things getting deducted from it.
My take home pay ends up being less than half of my gross.
I'll also have everything paid off. There's another big chunk I get to keep.
So, I figure if I don't retire before I reach 67 (or even 70), I won't need that much extra cash at all.
Even though I won't have a million, I expect to have plenty of play money.
I'll have a Medicare supplement and I'm considering long term care coverage.
If you have assets, you need insurance.
Unfortunately we at the local, state and national level are running up cost and debt that isn't sustainable and at some there will be a reckoning. Hopefully not a purge but something will eventually give.
Well, if Trump is elected, maybe he'll just toss us all over the wall.
I'd just like to add that as much as some of you hate that "your" tax money is paying for low income benefits, it might give you comfort to know it is there should you end up needing it, too.
And we really need to change how the stay-at-home parent is rewarded by no, or very little social security retirement benefits. Which, just so happens to affect many more women than men. And even if they work, they don't normally earn near as much, which means less pension, less SS benefits, etc.
And just an FYI, the only reason I'm on SSI and not SSDI, is because of when I applied for SSDI. How is the average, even an educated average working person, supposed to know that you shouldn't wait for the workers comp and the state disability to run out before applying for SSDI - which is based on your most recent work credits - which will be too far in the past, if you wait until all the other money runs out first?
I had the work credits. I just applied for it too late. And, by the way, it is insurance. That I paid into.
Some secret information: The average salary in 1926 was $1313.1926 Time Capsule
Adjusted for value of the dollar at the time, about $18000 today. Average SS payout is about $1300 a month. So you'd be $2400 a yr short. $60k of savings should cover that. By the way, this was during the Roaring Twenties, the most prosperous time in US history until the 1940's.
I think the OP is wrong about the average retiree having $200,000-$300,000 when they retire. There have been several articles that say that the average savings at retirement is $25,000.
Everyone's situation is different as well as the way we envision living after we retire.
Without SS or that pension, the retirement calculators say I'm going to need 3.2 million to retire. That seems SO hopeless!
Something is wrong and you need help from a financial advisor. You have a family income of $80K a year as you mentioned. Social Security combined might be $20-$35K a year and you'd need another $40K a year to come from a pension or by withdrawing 4% a year from your saves. I don't know what your pension would pay, but let's just focus on the additional $40K a year coming from savings. If you had 1.0 million, not 3.2M, but just 1M, 4% of that would be $40K a year. So something is wrong in whatever retirement calculation you are doing. But you mentioned a pension, so you wouldn't even need to take out that $40K a year from savings, it might be half that, which would mean you'd only need $500K in savings at retirement.
This is what I think you should do. Talk with an accountant who does financial planning for a fee, but doesn't have anything to sell you like annuities or whatever. You want someone who will interview you, and crunch the numbers for you to give you options with retiring at different ages for either just one of you or both of you. I know personally with large brokerage houses they have retirement programs they can run for you for free. The Financial Advisor has done this for us, and it takes all this into account and comes up with a probability in percentages for different outcomes based on your assets and investments. The number that comes back with a 95% probability of an after-tax income, you can use that to compare apples to applies. For example, you at at $80K a year now, after taxes that might be $60K a year. OK, if retirement plan they run says you have a 95% probability at retire and have an after-tax income of $56K a year, then you can determine if you could live on having $45K a year to spend. Then take a look at the cost of spending money know a year minus spending you don't have in retirement. In retirement you don't have a 401(k), Term Life Insurance, perhaps not a mortgage, etc.
As for the pension, what is likely to happen if you have a pension now, is they will offer you a lump-sum of it at some point. But as for Social Security, don't believe it won't be there because there are many things they can do right now to help it. For example, Social Security contributions are based on gross income. Once you reach, I think it's $118K a year for you as an individual they stop taking out payments to Social Security from your paycheck. I think the current max paid into a year by the employee is over $7K. They could easily increase the limit to $130K or $150K, and the max paid in a year be $10-$12K. My math isn't exact, but the point is, they have plenty of options and time to change it. So don't believe in the doom and gloom that Social Security won't be there at all.
As someone from a working class family in a godawful area of the country, I just don't see the need for the financial estimates a lot of the talking heads on here put forth.
As long as you have some financial cushion of at least $100k to cover the big stuff and can cash flow day to day stuff, you're probably fine in this area. If you need years of SNF care, you're screwed unless you're extremely wealthy.
We plan to sell all of our belongings and move to another country where living is cheaper. Hopefully we can do this before the private medical insurance system empties our accounts.
I watched this happen to my friend's mom and dad. She had Alzheimer and his dad took care of her. Then he suddenly passed away and since she required full time care and my fraiend and his wife were still working she had to be put into nursing home. There they charged her $10k a month until they drained all her savings and retirement accounts.
Then she went on medicaid and passed away while medical professionals/personnel lived high life.
But 20 years or more in the future the law will probably provide for assisted suicide as an option not to be a financial burden on society or family.
I am very much against this ethically but ground work for this is already being laid for this. Holland is currently first country trying to pass this law. Not talking mercy killing rather personal choice assisted suicide.
We plan to sell all of our belongings and move to another country where living is cheaper. Hopefully we can do this before the private medical insurance system empties our accounts.
I watched this happen to my friend's mom and dad. She had Alzheimer and his dad took care of her. Then he suddenly passed away and since she required full time care and my fraiend and his wife were still working she had to be put into nursing home. There they charged her $10k a month until they drained all her savings and retirement accounts.
Then she went on medicaid and passed away while medical professionals/personnel lived high life.
But 20 years or more in the future the law will probably provide for assisted suicide as an option not to be a financial burden on society or family.
I am very much against this ethically but ground work for this is already being laid for this. Holland is currently first country trying to pass this law. Not talking mercy killing rather personal choice assisted suicide.
Police officers put their lives on the line and also hold the lives of others in their hands. I want them to have secure employment, not have to wonder where their next rent payment is coming from. Bad police = unsafe community.
Would you rather they look for bribes from criminal elements to supplement their pay? Because that's what you get in countries that don't pay their law enforcement much.
My Uncle died in the line of duty as a Deputy... believe me he was not in it for the money.
A lot of my friends had LEO Dads and many had second jobs... often in uniform as private even security to make ends meet... my own father was a deputy for a short period of time.
I know first hand how far the pendulum has swung.
How can a struggling city like Oakland with one of the highest California Tax rates continue to fund pension streams in the millions for retired public safety?
In my Uncle's case he had a 10k death benefit that he paid half the premium and the department the other half... no survivors benefit, tuition free college for kids, special funds and assistance for the grieving family left behind.
Last edited by Ultrarunner; 11-05-2016 at 11:47 PM..
Pensions are somewhat rare and difficult to find and be a beneficiary of these days, many having been replaced by 401(k)'s.
One does not need a pension to retire.
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.
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