U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-02-2017, 08:22 AM
 
Location: Delaware
239 posts, read 154,775 times
Reputation: 524

Advertisements

[quote=
It seems like these issues have gotten short shrift in the retirement press. What would your strategy be if you faced a long term, consistent income decline?[/QUOTE]


Remember the cartoon of the squirrel who stores away the acorns for the long winter? That's what needs to be done for retirement. Instead of starting out life extending oneself and spending more than you earn, you need to live beneath your means and begin saving while your young, regardless of how much money you make. Look at the big picture while you're young charting out your present needs, short range needs, long range plans, emergency funds. As I look back, I started planning for my retirement right after high school. I bit the bullet and struggled as a poor college student, working my way through. At some point I was eating hot dogs every day because they were cheap and all I could afford. I drove a jalopy of a car, which most people probably wouldn't be willing to do. I did not buy new clothes during those years. But, after college graduation, I was able to get a job that had benefits, including a pension plan. The pay at that time wasn't all that great, but in time it got better. In my 30s, I started putting a small amount of money in what is called a 403B plan. In essence, a tax deferred savings plan. I did not touch it, and it grew. When I got raises, I increased my contribution which kept my taxable income lower. In time, the interest that it paid matched what I was contributing. The interest compounded and the money grew more that that thirtysomethibng could have imagined. I was able to retire in my 50's!!!

To sum it up, don't wait until income declines to try and figure out a retirement strategy. Start early.
Reply With Quote Quick reply to this message

 
Old 03-02-2017, 08:24 AM
 
Location: SoCal
13,387 posts, read 6,397,928 times
Reputation: 9970
Quote:
Originally Posted by Serious Conversation View Post
As for them personally, I'm not sure they've really thought it through. Mother is still able to work and earns in the low $30k range, but is not in great health and is probably going to retire and take SS at 62 - hopefully work part-time. He's likely to keep working until at least 65.

They have several small pensions from various companies they worked at, plus some small savings, and SS. If she cuts back her spending (she has hundreds of pairs of shoes - one bedroom was hoarded to the waist with mostly empty packaging before I cleaned it out), I think they will be fine, especially if they get rid of this enormous house and yard. They have no expensive hobbies or tastes - simple folks.

What's crazy is that they have elementary education degrees, but were unable to find teaching jobs in the immediate area back in the early-mid 80s. He got on at the local chemical plant, which paid far better than teaching at the time. He was making $40k in 1991 and is barely making that now. They got a teaching job in a rural town between Columbia and Charleston SC when I was a kid - they hated it, their parents guilt-tripped them by talking about how they'd never see me and moved back. Had they simply stayed there and kept teaching until they could move to a more desirable area, they would be in a much more secure position. That local chemical plant actually pays less starting mechanics less now than it did two decades ago - meanwhile, the minimum K-12 teacher salary here in Kingsport is like $41k. Times sure have changed.

But probably hundreds of thousands, if not millions, of members of that generation were in the same spot. Men who worked in manufacturing and other more traditional "manly" fields, either because they were uneducated or because it simply paid better than traditional white and pink collar work starting out, were often disproportionately downsized in the recession, have had their incomes cut, etc. A lot of that frustration came out with Trump support.
I'm not sure why you started this thread. It sounds like your parents will be fine as you said so. I'm sure people will learn to make do with what they have.
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 09:05 AM
 
Location: Central NY
4,694 posts, read 3,265,052 times
Reputation: 12031
I was white collar for many years. Then the company I worked for was bought out by a bigger company and the layoffs began. We went through years of dreading that tap on the shoulder. I did not receive that tap but in retrospect, I wish I had. When things were really going bad in the area I worked, I asked if I could transfer to another state (at my own expense) if I could find a job with the company in that state. I was given the go-ahead, found a job, interviewed, was hired. That was in 1993. Got there on a Tuesday and was told to make sure all my new state business was taken care of before starting work. That Friday I received a phone call that job was no longer available. So there I was in a state far away from where I had lived, I had family there (in new state) but even that went sour after I got there. A year later I went back "home" and hoped to either go back to my original job or some other job within the company. Was told I had nothing to offer. After 26 years. So I did the temporary job thing for a while, usually getting about $7/hour or less. Went through a lot of my retirement money/savings. Had medical issues/surgeries, insurance did not cover it all. More retirement needed to pay those bills. Eventually took a few courses so I could start applying for jobs that would pay more. Found work in medical/clerical field, made more money but not a lot. Along came another downsizing (even medical type jobs were downsized). I was 64, needed eye surgery, end of my work life.

So now at almost 75, retired since 2010, living in a senior apartment. Feeling like that song by Peggy Lee..... "Is this all there is?" ...... worked for a long time, hoped for good retirement. Didn't work out that way.

Reading this thread, quite a few posters are not doing this alone. Either married or with a SO. While I know being with someone is not a guarantee for a happy life (I'm divorced a very long time), it seems if you have someone to go through it with, maybe have some money to add to what I have, life could be a bit nicer. Or not.
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 09:22 AM
 
3,960 posts, read 3,274,332 times
Reputation: 11400
Those whose incomes fall below a certain level don't count for much in America. They aren't mentioned much in mainstream media, they don't belong to the target demographic of most advertising, and they certainly aren't the normal client choice among financial managers or retirement planners. For the most part, they have become political fodder and little else.

So many Americans were already living at the lower economic margins when the recession hit, tagged by the media as the "working poor," their plight was acknowledged as an economic norm in a nation that has gotten used to to the notion of economic winners and losers. Those who went through this last recession unscathed are the fortunate ones, and there's plenty of them who actually thrived during that time. Being financially prepared for retirement has usually included the dollars from a defined pension benefit, a now endangered species on the labor front. The spin on paying for your own retirement as a far more desirable thing has been a success- for the employers, who at one time were paying into a far more costly pension plan.

The idea of retirement is relatively new, it became popularized by labor unions in the forties bargaining for their members who often were subjected to frequent layoffs and the innovations of labor mechanization, making personal savings a distant goal. The even newer idea of self funded retirement has also escaped those working at the lower earning levels, not having enough money left over to invest being a common experience among the working poor.

Most of the viable self funded retirement plans along with the tax deferred employee contribution plans have assumed a couple of things, one being steady uninterrupted employment, the other, being a hefty compensation rate. Neither have been the norm for America's lower working classes. Strategies? That's for those with disposable income, the rest simply struggle and hope to reach their end before the money runs out.
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 09:54 AM
 
Location: Mount Airy, Maryland
10,489 posts, read 5,955,007 times
Reputation: 16224
I'm in that situation now. I am in sales in a receding industry. I make considerably less money than I made a decade ago and that probably won't change. So yeah planning is difficult, my SS estimates may be high if my income continues to drop, it is impossible to predict with any certainly the amount I will be able to contribute to my 401 and working longer to make less money is not a great option either.


Fortunately I believe I have set us up for a decent retirement if I can just make it that long. Our needs are simple, fortunately for me I travel extensively over the years. So if we won't take another trip to Alaska I'm OK with that, most never get that chance in the first place.
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 10:25 AM
 
Location: Planet Woof
3,139 posts, read 3,518,363 times
Reputation: 9889
I was white collar as well. Many of us ''99ers'' lost everything. Even savings, 401Ks, all of it. No amount of planning years ago would have made a difference.
Unless you went through it, you won't ''get it''. And many didn't and still like to look down at those of us who were never able, in spite of all our efforts, to financially recover from the Recession.
I am more grateful for what I DO have now and can't really complain. I am, however, tired of those who were not devastated by the Recession judging those of us who were.
Karma, baby, karma.
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 10:29 AM
 
Location: USA
1,815 posts, read 2,247,432 times
Reputation: 4139
Quote:
Originally Posted by TuborgP View Post
I understand your question and it is playing out in many pockets in the country. Incomes for many have declined with a changing job market and the needed for a labor force that their skill set doesn't match up with. It is one thing to start out making 30k and over time progressing to 50k. It is entirely different going in the opposite direction. As you correctly note much retirement planning and advice assumes a peak income being reached in your low to mid 50's or later. For these folks peak earning are well in the rear view mirror and retirement is approaching. Not much thinking that I have seen on the topic and what folks should do. There is a discussion on there today and tomorrow is thrown in with folks who have been lower middle class or less all of their life.


I think this new scenario of earning less as you get older (yet there is no age discrimination!), is why the younger people are being pounded almost daily through the media to save, save, save, save.


What they don't say is that you have to leave those savings untouched and not draw on them for every little life emergency
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 11:46 AM
 
7,979 posts, read 5,068,690 times
Reputation: 13643
There are copious examples of responsible, dutiful people who endeavored to manage their money wisely - and who nevertheless fared poorly in wealth-accumulation, either from layoffs or fractious divorce or health crises or whatnot. As many have pointed out, this "karma" thing definitely pervades, and can't be wished away; it's therefore foolish to judge harshly, let alone smugly.

However, living in an environment akin to that of the OP's, I have observed a trend amongst blue-collar men: as their skills improve and their income goes up, they tend to retain the habits of their teens and early 20s, eschewing savings and preferring all sorts of expensive acquisitions. They do fine, so long as construction or the trades or whatever sustains them, remains more or less vibrant. But when buffeted by travails like injury, divorce, job loss and the like, they are entirely unprepared. The fishing boat and the Harley go on Craigslist. And so forth. If somehow fortune again similes on them - for example, getting hired by a construction company, with plenty of overtime hours - there shortly appear a new boat, a new Harley, a new F-350. And the cycle perpetuates. To be fair, these are not persons who avail themselves of social services. They remain doggedly self-sufficient throughout. But they generally lack a long-term perspective on finances, and this invariably hurts them
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 11:46 AM
 
Location: Planet Woof
3,139 posts, read 3,518,363 times
Reputation: 9889
Most people can't save. They are trying to pay the rent and feed their families. It is more prevalent than not. Young or old.
Reply With Quote Quick reply to this message
 
Old 03-02-2017, 11:52 AM
 
Location: Lakewood OH
21,698 posts, read 23,709,402 times
Reputation: 35450
Quote:
Originally Posted by FeelinLow View Post
I was white collar as well. Many of us ''99ers'' lost everything. Even savings, 401Ks, all of it. No amount of planning years ago would have made a difference.
Unless you went through it, you won't ''get it''. And many didn't and still like to look down at those of us who were never able, in spite of all our efforts, to financially recover from the Recession.
I am more grateful for what I DO have now and can't really complain. I am, however, tired of those who were not devastated by the Recession judging those of us who were.
Karma, baby, karma.
Exactly!
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top