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Old 03-07-2018, 11:29 PM
11,936 posts, read 20,396,567 times
Reputation: 19329


Originally Posted by jghorton View Post
So many of these "sky is falling" articles are sketchy and vague on details and facts. Quite often the breathless headline hyperbole inferring that millions of retiree age people are about to be living under bridges and eating cat food, has no basis in fact.

For example, some of these editorials are based on the reported amount of "retirement" money people have in savings accounts. Of course, given the absurdly low savings account interest, that's a ridiculous place to keep one's retirement savings anyway. Similar articles randomly poll millennial's or other "future"(?) retirees about whether they are saving or expect to have "enough" for retirement. Others are simply internet opinion-based editorials needed to meet a deadline with X-number of column-inches and little/no accountability for facts.
I have read articles talking about the literalness of people making these gloom and doom articles irrelevant. If the question is how much do you have in a savings account, I literally have nothing in a savings account. I have no savings account.

I have a money market account. But that’s not what the question was.

I’ve actually taken part in an anonymous surveys and there were plenty of questions that were “wiggly”. We have a cash fund, a mutual fund, and retirement funds. I just think of it as our money, probably because we took our 401k’s and transferred them into a brokerage and all our money is in there.

A lot of financial templates, quizzes, surveys chunk money into pots, and I don’t do that. I know how much money we have, in total, and when prompted to chunk it out into this money and that money and over there money I am flummoxed. And if it’s a phone survey with some guy reacting a script, he’s not allowed to unflummox me. So...as the old saying goes, garbage in means garbage out.
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Old 03-07-2018, 11:31 PM
Location: Tucson/Nogales
17,407 posts, read 21,249,654 times
Reputation: 24241
Originally Posted by Blueskyfromrain View Post

I was in a convenience store today and said, wow 5 bucks for a pack of cigarettes? That used to be the carton price. I don't smoke, but I saw one of the employees outside blowing her smoke. This is what I saw out there in the world for over 25 years. Lots of wasted money. When I retired, I had to force myself to not to be so frugal anymore.

I could go into 90% of the homes today and find a wasted 100 per month in their budget. easy. If you're making 8 bucks an hour, maybe cigs are not for you and you might want to cut back on the 'smart' devices. You look stoooopid.
I'm a smoker that's completely aghast when I see someone spending $5-6-7-8 for a pack of cigarettes, particularly someone with a low income, including my smoking co-workers, I haven't bought a pack of cigarettes in 16 years.

A one pound bag of Red Cap Smooth Tobacco, a box of 200 empty filter tubes. Go home, spread the tobacco on a baking sheet, let it dry for a few days, crush it up somewhat fine, sift the tobacco, 4 at a time, into the tubes, twist it at the end. $2-$2.25 a pack, and it's healthier, as it's Indian tobacco with no tar in it!

I make my cigarettes while watching TV!
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Old 03-08-2018, 06:05 AM
Location: RVA
2,167 posts, read 1,267,777 times
Reputation: 4465
Originally Posted by matisse12 View Post
A $40,000 annual pension each plus $30,000 each annually from Social Security?
Yes, easily; I know many couples aged 55 and up, with/will be more like $60k+35k each, based on each of their earnings and none from public sector jobs. They will all retire at 60 or close tonit and delay collecting SS, because of well funded 401ks. Mine alone will be more than 40+30 at age 65, retiring at 62. DW was a teacher for 25 years, and at 65 her total is over $25K. She has a masters and never made more than $45k. None of us/them are even upper or middle management. Most were just technical professionals or at most a manager the last 10 years. You only had to make $30k in the early ‘80s and progress to $100k by the time you were 60 to collect near max SS, which for a 60 yo today is $25k@62, $36k@FRA, and $44k@70.
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Old 03-08-2018, 06:14 AM
10,063 posts, read 4,668,516 times
Reputation: 15307
Originally Posted by Perryinva View Post
Yes, easily; I know many couples aged 55 and up, with/will be more like $60k+35k each, based on each of their earnings and none from public sector jobs. Mine alone will be more than 40+30 at age 65, retiring at 62. DW was a teacher for 25 years, and at 65 her total is over $25K. Nonenof us/them are even upper or middle management. Most were just technical professionals or at most a manager thr last 10 years.
no, its just odd to get both a good pension and social security, because back then, the pension plan fees meant exclusion from having to pay fica, so no social security

if someone wanted full social security, they had to work ten years on top of the 30-40 years at the job with the pension. or well, same time period if they did two jobs concurrently

i think even today some teachers unions are exempt from paying into social security

on condition that social security isnt from the spousal benefit part

edit: unless they delayed ss, for the additional increases past fra
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Old 03-08-2018, 06:30 AM
Location: RVA
2,167 posts, read 1,267,777 times
Reputation: 4465
Florida teachers have/had good pensions and get full SS, better than Virginia. It is state dependent. As I said, all my coworkers are private industry that get/got pensions, were hired in the 80-90- early 2000. Now NEW hires today at all those companys no longer get pensions. So as far as the article is concerned, yes, private pensions are going fast or gone. I’ve paid in max SS for over 35 years, starting in 1981, and this years SS earnings will toss out another max earning year from the 80s. I took lower salaries to get the pension, but worked overtime and always contributed as much as I could afford to 401ks. Inalways hoped it would be worth it, and I think it was a solid safe smart choice. The inflation adjusted earnings is around dropping a $108k year from the ‘80s with this years $128.4k max SS amount. I worked a lot of overtime for a lot of years to make those earnings. Many of my college classmates are far, far wealthier and were far far more successful than I. Some dropped out of sight and no one knows what happened to them. Risk/reward vs safe&steady.
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Old 03-08-2018, 06:42 AM
13,923 posts, read 7,416,674 times
Reputation: 25430
Originally Posted by Perryinva View Post
But your annuity claim is WAY off. Current annuities only pay about a 5.2% of invested amount, with a 1% cola at age 62, male. That’s only about a 30% increase, not even close to the 200-300% you mention. Most people that saved and earned from investing that nest egg would rather hang on to their money , even conservatively invested and meet or beat the annuity.

The exception is using the savings to delay SS, where for instance, instead of $25k at 62, they segment $125k for distribution of $25k for 5 years, and end up with a $37k SS at 67. There one ends up with an annuity that has the flexibility of paying or not at any time, if one has to change their mind or plans, it has spousal benefits, and end up with the equal of a $12k annuity for $125k instead of a purchased $6500 without spousal benefits one for the same amount. And under current law, with that same SS earnings every year one delays and funds their own equal SS income earns them $2900/yr for that $25k or about an 11% annuity rate based on taking SS at 62 or 8% based on taking it at FRA. Both easily beating todays annuities. The only difference is the SS limit of course.

So at 67, a $1M nest egg at 62 is reduced to $875k (assuming earnings and withdrawal of 4% of the remaing $875k), but SS increases to $37k. So now the 67 year old has an income of $37k + $35k from their savings for a $72k income with 51% tax free, instead of $65 income and only 38% tax free. All while still retired at 62, while living with the same income they would have had, had they filed at 62. That’s a huge difference if your retirement income requirement is $50k after taxes.
That's how I do the math. I'm lifetime high income. If I defer to age 70, my Social Security check is $44.5K. Plugging that $1M nest egg into my spreadsheet, I can stop working at age 60 and spend an inflation-adjusted after-tax $50K for the rest of my life.

The original 42% retiring broke number sounds massively low to me. I figure 60% of the country would quickly run out of money soon after they stop working and would be 100% reliant on Social Security 5 years after they retire. 60th percentile for household net worth including home equity for age bracket 55-59 is $262K. Citation: https://dqydj.com/net-worth-by-age-c...united-states/

Most people don't have pensions. Most people don't have a heck of a lot of wealth. Most people don't have anything like 35 strong earnings years so they'll have a fairly small Social Security check. You have about 20% who accumulated enough wealth to retire comfortably and another 20% with public sector or union pensions large enough that they have the income stream.
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Old 03-08-2018, 07:12 AM
Location: Lakewood OH
21,697 posts, read 23,672,920 times
Reputation: 35449
Originally Posted by Serious Conversation View Post
If someone is able to get a $150,000 retirement income based on a standard ~4% annual withdrawal rate, you had to have a big income to get there, or some other investment. A couple making median household income cannot "cut" the fat out of their budget to get to that point. There isn't enough income to stash away/invest to get there in the first place.

I think it's often easy to forget that a significant, chronic health problem would doom most retirement plans. A former coworker of mine is in his late 30s, and was diagnosed with lupus about ten years ago. It has gradually gotten worse, and now he's on permanent dialysis and awaiting a kidney transplant, and has been unable to work for at least year. His finances are probably nuked.
Yes and even if he were able to work, no one will want to hire him because he would raise his employer’s insurance premiums with the cost of the dialysis and lupus treatments.

On a different subject. I did not retire broke exactly. But after my union stole my large 401k account which was the majority of my savings I did lose a great deal. Then later on as I was in the process of recovering my loss, I had to quit a new job and retire much earlier than planned due to a progressively debilitating illness.

So as many here know, I moved from a city with a very high COL to one with a lower COL; one I could afford. If I had remained I would have gone broke. But again there’s broke and then there’s broke. Many might look at my bank statement and consider me as such. It all depends upon one’s point of view I suppose.

Last edited by Minervah; 03-08-2018 at 07:59 AM..
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Old 03-08-2018, 07:49 AM
708 posts, read 502,928 times
Reputation: 1165
Originally Posted by Minervah View Post
I keep hearing about “those folks” but I can honestly say I have never met a single one. I guess I just never hung with the “right crowd.”

The people I know who have struggled to make ends meet never had that opportunity.

I know of a few of them. When you live in a middle class neighborhood you see people trying to make
others think they have more money then they do.. Need a newer car, pickup, boat and toys...then get their
self in debt over their heads and all crashes down...
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Old 03-08-2018, 07:51 AM
71,651 posts, read 71,777,271 times
Reputation: 49241
personally i keep out of others peoples business , their money and their spending . i don't read all these how bad everyone is doing articles nor have an interest . .

i think we all have enough to do worrying about our own financial well being as opposed to what others have or don't have .

Last edited by mathjak107; 03-08-2018 at 08:21 AM..
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Old 03-08-2018, 08:33 AM
Location: The New England part of Ohio
18,678 posts, read 23,258,366 times
Reputation: 48876
Originally Posted by Minervah View Post
“Less talented.” I wonder if that would include my HUD building neighbor who used to be a soloist with the Cleveland Symphony who is retired now due to several strokes which took not only his health but any amount of retirement funds he may have had. In his eighties his performances are no longer of professional quality but he gives concerts for those of us who live here along with his retired violinist and opera singer friends.

Or maybe it would include our professional actor who has appeared in both in the very prestigious Cleveland theaters and in other parts of the country. But most actors don’t earn much money and what they do earn is spent on travel to jobs which can be few and far between. But he is in our senior citizens players group and is happy performing for us.

We also have some pretty fine artists living here. And a damn good poet in our writer’s group.

Intelligence and talent don’t always come from money. I used to get angry and bemoan the loss of my fortune because I think I equated it with the loss of control over my life. But I am proud of the way I have adjusted and I look at the way at others in similar situations have adjusted as well. I have more respect for them than those possessed with a big portfolio of stocks or whatever.

People can be happy and content in many different ways. It doesn’t always take what money can buy. It’s fine to feel secure because you have money but never forget fate doesn’t care how smart, talented or clever you are. You can lose it all in a heartbeat. If that happens, there will be those still in your former position of being well-off who will look down on you because you are no longer one of them. They will include you in that 42% category with all the rest as the untalented, self indulgent people who didn’t plan for their future.

That’s why articles like these are meaningless without proof that each and every one of the 42% or whatever number isn’t meeting some financial goal because they totally squandered their money in the past.
They are meaningless. They are an attempt to equate money with a meaningful life, with talent, creativity and success. Certain things can not be quantified.

Artists, writers, and academics are among the happiest people I know. Many of them decide to live in less costly areas, take inexpensive but educational vacations, eschewing flashy resorts and destinations. Many do not retire because they chose a life path that actually makes them happy, instead of checking to see what STEM career is most in demand.

Much wealth in this country is inherited wealth.

It has little to nothing to do with one's personal value, knowledge base, happiness, wisdom or self worth.

If it did, the man who currently sits in the White House would be the happiest man on earth.

Last edited by sheena12; 03-08-2018 at 09:15 AM..
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