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Old 08-02-2019, 03:49 PM
 
4,047 posts, read 3,254,842 times
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I never made much money, but Im now comfortably retired. I started saving in my late 20's.I couldnt save 10%, but I could save $20 a week, and thats where I started. The whole point is to START. If you dont start saving, you'll never get there. Cant save 10%? Then save 5. Or 2. But just start. Its funny how once you start, it becomes ingrained, and each pay period, you will pay yourself first. Then pay the bills. And you will make it work. Because you have to.

Time is on your side when young. I dearly wish they would teach this stuff in school. People squander so much money in their 20s, 30s, 40s, then they wake up and figure out they might need to start saving for retirement, and theres decades they wasted of no compounding.

People who dont want to do it will always find excuses not to. People who want a decent retirement and savings will find a way to do it. No matter how much you make. Theres been millions of people making middle classs wages or less who have saved enough for retirement. You just have to start to do it.
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Old 08-02-2019, 05:13 PM
 
Location: Washington state
5,481 posts, read 2,794,972 times
Reputation: 16496
Quote:
Originally Posted by Questions and Comments View Post
I run into so many people who are retirement age that tell me they don't have a dime saved and plan to move in with their kids when they can't work anymore. These are middle-income people who worked non stop since about 1980.

So I did some calculations: If they started working in 1980 and made $10,000 a year to start and put 10% of that in a mutual fund that was 70% stock and 30% bond they would have $650,000 today.

If that person was never promoted during their career and only got cost of living increases and finished with a salary of $35K today, their social security would be $1350 at age 66 (full retirement age). Take 4% out of the $650,000 and you have $2166.00 a month, add Social Security and you have $3516.00 a month. If married double that figure.

Even a poor person who made no more than $35,000 a year can retire comfortably if they just would have saved 10% of their gross salary a year., can't they?
In a perfect world. But that assumes:

1) that a person was making $10,000 to start and no less than $35,000 in their lifetime.

2) that there were never any breaks from work and a person didn't have to start at the bottom again if they got another job.

3) that things never went south: there were no surprises, no medical bills, no weather disasters, no having to take out of the savings to cover anything unexpected.

4) that there were people who could help a person out in case things did go south.

5) that costs didn't rise above someone's income, for instance: rent, food, utilities, car payments, education, home repair, taxes.

6) that there wasn't a huge economic recession that crippled the economy, forced job layoffs and job loss, and hindered rehiring.

7) and the fact that everyone has knowledge of the stock market and knows how to invest.

If all those conditions are met, then yeah, every poor person in the US should have been able to save substantially for retirement. Start ticking off the items above and and you'll understand why a lot of them haven't.


Edited to add: I ticked off all seven of those items. I'm surprised I'm in as good a shape as I am.

Last edited by rodentraiser; 08-02-2019 at 05:21 PM..
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Old 08-02-2019, 06:11 PM
 
Location: The South
5,289 posts, read 3,673,829 times
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Quote:
Originally Posted by rodentraiser View Post
In a perfect world. But that assumes:

1) that a person was making $10,000 to start and no less than $35,000 in their lifetime.

2) that there were never any breaks from work and a person didn't have to start at the bottom again if they got another job.

3) that things never went south: there were no surprises, no medical bills, no weather disasters, no having to take out of the savings to cover anything unexpected.

4) that there were people who could help a person out in case things did go south.

5) that costs didn't rise above someone's income, for instance: rent, food, utilities, car payments, education, home repair, taxes.

6) that there wasn't a huge economic recession that crippled the economy, forced job layoffs and job loss, and hindered rehiring.

7) and the fact that everyone has knowledge of the stock market and knows how to invest.

If all those conditions are met, then yeah, every poor person in the US should have been able to save substantially for retirement. Start ticking off the items above and and you'll understand why a lot of them haven't.


Edited to add: I ticked off all seven of those items. I'm surprised I'm in as good a shape as I am.
See post 91.
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Old Yesterday, 02:37 PM
 
Location: Washington state
5,481 posts, read 2,794,972 times
Reputation: 16496
Quote:
Originally Posted by Southern man View Post
See post 91.
Oh, I saved what I could. I'm not saying I didn't. But when you're making a decent salary and you have to go back to square one and make minimum wage again a couple of times and work your way back up or you hit an emergency or two or three along the way and end up having to use everything you saved just to survive, you don't end up with millions and millions of dollars to retire on.

I would have loved to have paid myself first when I was younger. But I didn't evict myself from an apartment if I didn't pay myself and I didn't shut off the utilities when I didn't pay myself and I didn't send collection letters for bills if I didn't pay myself first. It must be wonderful to have enough money to put aside to pay yourself first, but when you budget down to the last dollar, then other things besides paying yourself become much more important. That is, if you want a roof over your head and heat on in the winter.

It's one of those things that if you've been there, you get it. If you haven't been there, not only will you never get it but you're walking slew-footed on account of how wonderful you think you are and wondering why can't everyone do the same as you did?
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Old Yesterday, 05:19 PM
 
7,389 posts, read 8,716,902 times
Reputation: 9364
The important thing is that young people get the *knowledge* about how to save, how much to save, how to use retirement benefits *if* they have them in a job. Yes we know lots of people here didn't have that starting out, and they walked 10 mi. barefoot in the snow both ways to the lowliest job a human could have, for the $2.50/hr they they were getting. We get it, life sucked for many just starting out and continued to be difficult for years afterwards.

With knowledge comes the ability to start saving *something* when it's possible to do so. And once it is possible to do so, if someone saves even a small portion of their pay each pay period, they'll be better off than if they never saved at all. That's a fact. As the saying goes, Perfect is the enemy of good enough. One does not need to be perfect and life throws curveballs. But over *time* it is possible to save something.
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Old Yesterday, 05:29 PM
 
168 posts, read 91,725 times
Reputation: 531
We got married in 1982 and started to save then. Income was low in the beginning but we stuck with it. However there is no way we could have saved 10% at only 35k a year.
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Old Yesterday, 05:33 PM
 
Location: New Mexico
6,730 posts, read 3,738,646 times
Reputation: 12661
Ten percent of gross is a tough target. I doubt that we did that on an extended period of time. My wife decided to quit work and go back to school for a post-graduate certificate in a special intensive program. We were childless at the time and I think we probably put away more than ten percent for about six or eight months to cover bills while she wasn't working and for her school expenses. We became parents the next year so that was the end of that.
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Old Today, 04:57 AM
 
4,047 posts, read 3,254,842 times
Reputation: 13298
Quote:
Originally Posted by rodentraiser View Post
Oh, I saved what I could. I'm not saying I didn't. But when you're making a decent salary and you have to go back to square one and make minimum wage again a couple of times and work your way back up or you hit an emergency or two or three along the way and end up having to use everything you saved just to survive, you don't end up with millions and millions of dollars to retire on.

I would have loved to have paid myself first when I was younger. But I didn't evict myself from an apartment if I didn't pay myself and I didn't shut off the utilities when I didn't pay myself and I didn't send collection letters for bills if I didn't pay myself first. It must be wonderful to have enough money to put aside to pay yourself first, but when you budget down to the last dollar, then other things besides paying yourself become much more important. That is, if you want a roof over your head and heat on in the winter.

It's one of those things that if you've been there, you get it. If you haven't been there, not only will you never get it but you're walking slew-footed on account of how wonderful you think you are and wondering why can't everyone do the same as you did?
Excuses. Do you think you are the only person who lost their job along the way, had doctor bills to pay, had to go back to step one? More people have had setbacks in their lives, both financial and other, than dont. Who do you think skates thru life with no serious issues impacting them? No one does. So if thats your excuse for not saving, thats on you.

Excuses.
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Old Today, 09:09 AM
 
6,855 posts, read 3,826,518 times
Reputation: 13997
Quote:
Originally Posted by lottamoxie View Post
Consider this perspective

IF a person saved $250/month, every month and invested in an S&P index fund and never touched it, over 40 yrs that fund would, on average, grow to nearly $2M. The trick of course is the amount of time for compounding and the consistency of investing.

It makes you realize it doesn't take huge amounts of $$$ if you can start early because compounding does the heavy lifting. Even if someone could only manage to save/invest 1/2 of that or even 1/4, it would still eventually amount to something that could be considered decent savings over time, it would give people a retirement nest egg that doesn't only rely on SS benefits.
$250 a month? LOL! For decades of my working life, I would have had trouble saving $50/mo., and for most of my beginning years, I had about $3 expendable income and then $10, between paychecks. I was ALWAYS a frugal person with no debt, except for a car loan for a few years, and ultimately a house mortgage for a reasonable amount.

My situation changed in later years, but had it not...these are the people you're critical of for needing Social Security. Altho I retired with a decent retirement account, I do need the Social Security and Medicare programs in my senior years.

I have nieces and a nephew who aren't being schooled in investing and finances. I wish I could take them to the side and tell them the basics, but that would be interfering. I'm just an aunt. These things should be taught in school, so they at least have that knowledge.
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Old Today, 09:18 AM
 
Location: SoCal
13,591 posts, read 6,475,362 times
Reputation: 10163
I helped my kids with retirement, you can call it interfering. They don’t have time to learn about all these things. Those precious young years are not to be waste.
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