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Old Yesterday, 11:32 AM
 
Location: North East
90 posts, read 22,497 times
Reputation: 235

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Quote:
Originally Posted by BBMW View Post
Try not paying taxes, car insurance etc., and see what happens. The negative effects are much more immediate than the effect of not saving enough for retirement. Of course this is entirely different from living smaller and saving the excess income. But we're talking about two different, if related things.
And that's why some people don't pay themselves first. They don't get "penalized " right away yet later in life. Immediate yes, but $5000 invested at age 18 averaging 7% becomes $105,000 at age 63 . It's a choice, I see it every day with co workers who claim they can't. Co workers who make the same $$, similar situations. Co workers who think I've been handed a silver spoon. No, I've chosen to invest.
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Old Yesterday, 11:55 AM
 
11,082 posts, read 9,472,023 times
Reputation: 6786
Do you pay your taxes (in all their multifarious forms)? Various insurances? Housing expenses? Do you buy food, toiletries, etc.? If you don't you'll likely be experience problems long before you retire.

Having said that, you sound like the type of person who would live small, to be able to save. That's fine, even advantageous. But that doesn't relieve you of the basic expenses everyone has to. You can just lower them to some extent.

And, of course, the concept of "paying yourself first" can be taken in a number of different ways. There are people who would argue living well now is a form of that, and they'll deal with how they live down the road later. Of course, that may very well come back to bite them in the a$$. I know people like this.

Quote:
Originally Posted by homestead123 View Post
And that's why some people don't pay themselves first. They don't get "penalized " right away yet later in life. Immediate yes, but $5000 invested at age 18 averaging 7% becomes $105,000 at age 63 . It's a choice, I see it every day with co workers who claim they can't. Co workers who make the same $$, similar situations. Co workers who think I've been handed a silver spoon. No, I've chosen to invest.
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Old Yesterday, 12:10 PM
 
Location: North East
90 posts, read 22,497 times
Reputation: 235
Quote:
Originally Posted by BBMW View Post
Do you pay your taxes (in all their multifarious forms)? Various insurances? Housing expenses? Do you buy food, toiletries, etc.? If you don't you'll likely be experience problems long before you retire.

Having said that, you sound like the type of person who would live small, to be able to save. That's fine, even advantageous. But that doesn't relieve you of the basic expenses everyone has to. You can just lower them to some extent.

And, of course, the concept of "paying yourself first" can be taken in a number of different ways. There are people who would argue living well now is a form of that, and they'll deal with how they live down the road later. Of course, that may very well come back to bite them in the a$$. I know people like this.
Lol, sounds like you are saying it's a choice to save or not!
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Old Yesterday, 12:25 PM
 
1,569 posts, read 309,655 times
Reputation: 1816
People are encouraged to live beyond their means. Whether they do or not is their choice.
I've always lived a bit below my means due to having been brought up with the "pay yourself first" mindset.

I always socked money away every paycheck. Still remember way back when it only amounted to $25/month but back then mutual funds accepted those types of low payments and you could buy odd lot shares (1-2 shares) of companies through third party companies (The Moneypaper).

I was so proud when I visited my parents and told them I was a "shareholder" of stock....1 share of Sara Lee
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Old Yesterday, 01:18 PM
 
11,082 posts, read 9,472,023 times
Reputation: 6786
Basically yes.

My only issue was that the way you put it, it sounded like the expenses that are the most necessary to pay were the ones you said not to pay. I may have misread that.

Quote:
Originally Posted by homestead123 View Post
Lol, sounds like you are saying it's a choice to save or not!
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Old Yesterday, 01:34 PM
 
30,000 posts, read 35,096,091 times
Reputation: 11907
Quote:
Originally Posted by homestead123 View Post
I respectfully disagree. I had a few really nasty jobs, didn't pay all that well, but still managed to pay myself first. Like I mentioned, we pay taxes and insurance, CC interest on sooooo much. Why wouldn't you pay yourself first? Choices...
Again, I am wagering most people would have taken their current job if it payed 10% less starting out. My point is, start out small, (1%) and have a goal to work your way up.
The billboards might just be true. " People spend more time planning their vacations than their retirement "
A net income of 15k a year with a one percent investment rate is $150 a year. Yes a start but unless their income rises and often in lower paying jobs they don't after 30 years?
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Old Yesterday, 01:39 PM
 
Location: Ohio
20,187 posts, read 14,385,660 times
Reputation: 16400
Quote:
Originally Posted by BBCjunkie View Post
Things are rarely so cut-and-dried as the linked article would have people believe. There are SOO many possible "no savings" scenarios, such as:

Boomer with no savings and no income except Social Security at the national average ($1400/mo) or below

Boomer with no savings and no income except Social Security above the national average for FRA ($1400 - $2900)

Boomer with no savings and no income except Social Security at max for delayed benefit to 70 (about $3700)
I don't understand why "no savings" is a problem.

The majority of Americans do barely enough just to get by. They don't have Big Plans for retirement, because they don't care.

So, why would they need savings in the first place?

The low income people who are at the "national average" or below don't have Big Plans for retirement. In fact, they never had Big Plans their entire lives, which is why they're low income.

I hope you don't think they're all sad and upset about it, because they ain't.

They're way too busy worried about what everyone else is doing to even notice they don't have any savings.

If you don't have Big Plans, you really don't need savings, so what's the fuss all about?

All this nonsense about everyone's just gotta have savings is just nonsense, but it does make for good click-bait.
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Old Yesterday, 02:03 PM
 
14,317 posts, read 7,646,510 times
Reputation: 26166
The median household income worldwide is a bit under $10K. The poorest of the poor retirees in the United States with nothing but SSI get $9,252 and health care access. Plus, many would get public housing or housing vouchers, food stamps, and the rest. Medicaid would pick up a double occupancy nursing home room.


Do I aspire to that? No. Still, it's a way better deal than more than half the people on the planet.
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Old Yesterday, 02:40 PM
 
1,845 posts, read 652,091 times
Reputation: 3453
Quote:
Originally Posted by Mircea View Post
The majority of Americans do barely enough just to get by. They don't have Big Plans for retirement, because they don't care.

The low income people who are at the "national average" or below don't have Big Plans for retirement. In fact, they never had Big Plans their entire lives, which is why they're low income.

I hope you don't think they're all sad and upset about it, because they ain't.

They're way too busy worried about what everyone else is doing to even notice they don't have any savings.
That's quite a generalization there.

Which "national average" are you using? Because I can't agree or disagree that someone is "low income" (for the purpose of responding to this post) until I know what figure you're refering to:

* National median household income (generally acknowledged to be somewhere between $59K and $62K depending on what article one reads)?

* Average individual yearly wage, calculated from 2017 data (roughly $48K)?

* The statistical dividing line between the "upper and lower 50% of wage earners"? That line was at $29,999 as of 2017. So that sounds like the mean, rather than the median, individual income. (Mean and median being calculated very differently.)

As for the blanket assertion that a certain income group "never had big plans their entire lives, which is why they're low income" ... well, all I can say is Wow. I'm probably considered low income by your standards but I take offense at your assumptions about what my life plans were, what all my decisions were and why I made them, and what things I did and didn't (or do and don't) "worry about" and "notice."

I think I need to take an extended break from this forum, because it's becoming clear that "low(er) income retirees" like myself are very much a fish out of water here.
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Old Yesterday, 02:44 PM
 
2,392 posts, read 836,977 times
Reputation: 6089
Quote:
Originally Posted by Mircea View Post
If you don't have Big Plans, you really don't need savings, so what's the fuss all about?

All this nonsense about everyone's just gotta have savings is just nonsense, but it does make for good click-bait.
I see a lot of retirement-related "suggested posts" on FaceBook. I must click on too many of them! The comments are revealing. They're from people who can't afford hearing aids, new dentures, glasses, etc. who think all those things should be "free" for seniors. Some are struggling with prescription costs or can't afford to get their car repaired. Some have to move out of their houses after losing a spouse because the only income was SS and the household SS just went down by 1/3 and they need go go someplace cheaper. One "couldn't afford" Medigap. Then she got hit with a bill for the 20% Medicare didn't cover when she developed serious health problems.

Savings aren't just for cruises, new SUVs and vacation homes in retirement. They're for basic things that make life more comfortable and worry-free.

Last edited by athena53; Yesterday at 03:10 PM..
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