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Old 03-08-2018, 12:07 PM
 
Location: Grove City, Ohio
10,133 posts, read 12,385,819 times
Reputation: 13976

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Saving is extremely important if that is all you have but for many there is much, much more.

Take two couples and we will start with Jack and Nancy. Nancy and Jack have a combined social security and pension benefit of $3,000 monthly and a savings of $500,000.

Dan and Sally have a combined social security and pension benefit of $5,000 monthly and a savings of only $100,000.

Who would you rather be? Would you rather be Dan and Sally if all they had was $2,000 in retirement savings?

I personally know a couple who planned their retirement around social security. He was self employed and she worked for him as an employee. They both maxed out their salaries reaching the social security cap which they did for decades. They also waited to age 70 to collect benefits and today they are getting a combined social security benefit in excess of $7,000 monthly.

With a combined social security income of $84,000 Based on the worksheet provided in the most recent IRS Publication 915, their Social Security benefit(s) of $84,000 will be 6% taxable increasing your taxable income by $5,000 and creating a federal income tax liability of $1,100.

That's $82,900 take home..... If they didn't have any savings are we supposed to cry for them?
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Old 03-08-2018, 12:37 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by nicet4 View Post
Saving is extremely important if that is all you have but for many there is much, much more.

Take two couples and we will start with Jack and Nancy. Nancy and Jack have a combined social security and pension benefit of $3,000 monthly and a savings of $500,000.

Dan and Sally have a combined social security and pension benefit of $5,000 monthly and a savings of only $100,000.

Who would you rather be? Would you rather be Dan and Sally if all they had was $2,000 in retirement savings?

I personally know a couple who planned their retirement around social security. He was self employed and she worked for him as an employee. They both maxed out their salaries reaching the social security cap which they did for decades. They also waited to age 70 to collect benefits and today they are getting a combined social security benefit in excess of $7,000 monthly.

With a combined social security income of $84,000 Based on the worksheet provided in the most recent IRS Publication 915, their Social Security benefit(s) of $84,000 will be 6% taxable increasing your taxable income by $5,000 and creating a federal income tax liability of $1,100.

That's $82,900 take home..... If they didn't have any savings are we supposed to cry for them?
You are asking a good question that really can't be discussed in this forum if you use numbers above a certain dollar amount. Which is better higher fixed income or higher portfolio wealth. Or as is the case for a number of people who have both which is most important. There is no substitute for liquid assets and no substitute for fixed income.
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Old 03-08-2018, 12:55 PM
 
2,276 posts, read 848,910 times
Reputation: 3934
It will only get worse as the politicians work to cut back or eliminate Social Security and Medicare benefits.
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Old 03-08-2018, 01:19 PM
 
333 posts, read 249,140 times
Reputation: 499
Quote:
Originally Posted by LauraC View Post
Lack of planning and a longer life expectancy is cited.



Comments?
I save my money and don't waste my money on services or new vehicles like that 42% are.

Go be poor somewhere else...
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Old 03-08-2018, 01:50 PM
 
Location: Las Vegas
13,888 posts, read 25,327,549 times
Reputation: 26385
Median income for an average family in the US is @ 55K. https://www.census.gov/library/visua...ncome-map.html

That means half the families in the US make less. So you roll back your expectation of a Middle Class lifestyle and settle for less. The bottom line is more than half of us are barely making it so it should be no shock we are not saving for retirement. We can't even afford health insurance. We are already doing without things we need, not just things we want.

It's a fact wages have been stagnant for 40+ years now while at the same time a huge number of good jobs with benefits and pensions are gone. The safety net keeps getting smaller and smaller. We need to make some hard choices. Don't be too quick to judge those folks with the cool phone. That phone may well be all they have for entertainment/communication/and job hunting. They probably still live in their parent's basement. And one job isn't enough anymore, they probably have 2 plus side gigs.
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Old 03-08-2018, 01:58 PM
 
Location: Ohio
19,916 posts, read 14,238,717 times
Reputation: 16096
Quote:
Originally Posted by MLSFan View Post
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
That was true only for State and local government, and federal government employees. In the private sector employees paid into Social Security. My father has his pension from a private sector plan and receives Social Security.

Note that in 2016, the federal Pension Benefit Guaranty Corporation spent $5.6 Billion of your tax dollars to cover 861,000 retirees under employer pension plans that failed.
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Old 03-08-2018, 02:16 PM
 
6,316 posts, read 5,055,910 times
Reputation: 12830
Quote:
Originally Posted by Mircea View Post
That was true only for State and local government, and federal government employees. In the private sector employees paid into Social Security. My father has his pension from a private sector plan and receives Social Security.

Note that in 2016, the federal Pension Benefit Guaranty Corporation spent $5.6 Billion of your tax dollars to cover 861,000 retirees under employer pension plans that failed.
yes - even the military pays into SS. So if you retire, you get a pension, SS and maybe VA disability compensation - triple dipper right there!
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Old 03-08-2018, 02:16 PM
 
Location: the Old Dominion
295 posts, read 149,594 times
Reputation: 1382
Default ...the beginning of wisdom...

Quote:
Originally Posted by LauraC View Post
Lack of planning and a longer life expectancy is cited.



Comments?
Also bad decisions. That could fall under Lack of Planning. A good friend of mine retired four years ahead of me. I visit him about twice a week. He is a homebody. Very intelligent, but as I am learning from unguarded comments from him and his wife, poor money-decision makers. One of the few retired from Federal employment and did not buy back his military time AND thinks it was the right decision.
Also, he did not pay off his social security quarters. Not sure how this could be detrimental, but I am thinking he should have taken care of this one as well. Three weeks ago, his wife was sweating the need for seven hundred dollars. The anxiety caused her shingles to go into overdrive. I offered to help, but he declined with some embarrassment.
Other questionable money decisions. Definitely not money savvy.
I say all this because of late I realize he is on his way to becoming poor. I feel sorry for him. And very thankful for my financial situation.
City-Data members, let us keep helping each other with good advice.
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Old 03-08-2018, 02:26 PM
 
6,316 posts, read 5,055,910 times
Reputation: 12830
Quote:
Originally Posted by JohnnyLackland View Post
Also bad decisions. That could fall under Lack of Planning. A good friend of mine retired four years ahead of me. I visit him about twice a week. He is a homebody. Very intelligent, but as I am learning from unguarded comments from him and his wife, poor money-decision makers. One of the few retired from Federal employment and did not buy back his military time AND thinks it was the right decision.
Also, he did not pay off his social security quarters. Not sure how this could be detrimental, but I am thinking he should have taken care of this one as well. Three weeks ago, his wife was sweating the need for seven hundred dollars. The anxiety caused her shingles to go into overdrive. I offered to help, but he declined with some embarrassment.
Other questionable money decisions. Definitely not money savvy.
I say all this because of late I realize he is on his way to becoming poor. I feel sorry for him. And very thankful for my financial situation.
City-Data members, let us keep helping each other with good advice.
If he served in the military, there are some years in there that will double your SS quarters for military service. Wonder if he has looked into this. Should be automatic, but you never know.

My roommate is retired civil service, but always had another side job for the SS benefits.
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Old 03-08-2018, 02:28 PM
 
6,316 posts, read 5,055,910 times
Reputation: 12830
Quote:
Originally Posted by JohnnyLackland View Post
Also bad decisions. That could fall under Lack of Planning. A good friend of mine retired four years ahead of me. I visit him about twice a week. He is a homebody. Very intelligent, but as I am learning from unguarded comments from him and his wife, poor money-decision makers. One of the few retired from Federal employment and did not buy back his military time AND thinks it was the right decision.
Also, he did not pay off his social security quarters. Not sure how this could be detrimental, but I am thinking he should have taken care of this one as well. Three weeks ago, his wife was sweating the need for seven hundred dollars. The anxiety caused her shingles to go into overdrive. I offered to help, but he declined with some embarrassment.
Other questionable money decisions. Definitely not money savvy.
I say all this because of late I realize he is on his way to becoming poor. I feel sorry for him. And very thankful for my financial situation.
City-Data members, let us keep helping each other with good advice.
And maybe his wife is over-reacting.

I have a relative that has thousands upon thousands in the bank, but practically breaks down if she has to spend 100 dollars on home repairs.
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