Other than the well off, is retirement now a thing of the past? (2015, retirement plan)

[wrl11]

My parents earned little but they were able to retire because they spent little. When I was growing up in the 70s and 80s, were were the only ones of my friends with no color TV (until the 80s, then we got a small one), we never had video games like atari when they came out, I had a cheap record player with a mono speaker, we never had new cars, only old and used ones, I never flew on an airplane until I was in my 20s, etc. Meanwhile many of my friends parents are still working paying off the big houses, new cars, and piles of consumer items they acquired. I guess it depends on how you want to live now because if you leverage up with debt you will not retire unless you are very rich, in which case you would not have leveraged up on debt in the first place because you were rich!

[runswithscissors]

Originally Posted by MongooseHugger

Let's face it, it's getting harder to retire, pensions are becoming a relic of a bygone day (except for the CEO's and the public sector). Social Security and Medicare are in trouble. Do you think we should plan on working till we die?

And, if you do agree that this is more likely, what career paths would be the most viable for this?

There are still companies with pensions, google it. And plenty with 401K matching, albeit there is some questionable value there with the crappy mutual funds they offer. But it IS "free money".

I have to laugh that for at least the past 15 years, all the BRILLIANT post Boomer generations were lecturing the OLD FOGIES how stupid we Boomers were for loyalty to companies. Even knowing those companies had the best on the job and also retirement benefits including pension AND 401K big matching and superb retirement benefits.

I thought job hopping was the COOL THING to do now?

So why should anyone offer pensions?

Meanwhile EVERYONE can save for retirement. It's a choice to live within your means yada yada.

There are also MANY other options during your earning years like in the medical field for example promising to work for a year at a certain facility in exchange for paying for your college or whatnot.

I do have full retirement benefits from the phone company even having taken an "early retirement" incentive and also started my own business. Regardless, I own a modest condo and my complete monthly expense could be as low as 500-700 per month if I HAD to live like that....NOT INCLUDING any assisted living or memory care needs.

THAT is the actual "problem" looming ahead for everyone.

Work until you die WAS how it worked before. Now everyone is "sick of work" at age 50 and want to retire at 55 and live off who knows what until they're 85.

In the 60s and 70s dying at 65 was TYPICAL and people only drew Social Security for a couple of years. And even my grandfather a humble German CLOCKMAKER had income from investments besides that. Because he LIVED within his means while still owning a house and perhaps taking a little driving vacation somewhere once a year. Good thing he did provide for his wife who DID live until 85 LOL. But dementia wasn't rampant then like it is now. You NEVER knew anyone really, with it like today. Maybe a little "hardening of the arteries". Forgetful. NOT full blown cray.

BTW MY generation of Boomers are still retiring nicely in FL purchasing LOTS of new houses in HOAs including 4/3 2500 SQ FT and amenities when there's only two people and these are NOT CEOs.

[Ultrarunner]

Sometimes you can do all the right things and it still doesn't work out... company mergers and acquisitions plus having to reapply for your job can do this.

I made the switch of being self employed to working for a hospital due to the benefits which was the hook to lure me in... I was recruited and did not apply for the initial job.

With each change came a reduction... temporary freeze in the Match is now 9 years.

Losing 80% of the match and profit sharing because of the vesting schedule is another.

Currently I have 3 months of sick leave on the books which will go away this year... co-workers have been using it like crazy... elective surgery topping the list because no one is going to lose.

I don't have the kind of job where I can take off like that... someone has to come in from the outside to cover...

All I am saying is as an employee you can make the right decisions with no guarantees...

4 changes in 19 years with another this year... I still have the same desk.

[nicet4]

Originally Posted by MongooseHugger

Let's face it, it's getting harder to retire, pensions are becoming a relic of a bygone day (except for the CEO's and the public sector). Social Security and Medicare are in trouble. Do you think we should plan on working till we die?

And, if you do agree that this is more likely, what career paths would be the most viable for this?

To set the groundwork I am just short of my 68th birthday and I am not drawing social security yet as my plan is to put off collecting benefits until I reach 70. I will be working for at least two more years and during that time I will be paying social security and medicare taxes just like everyone else.

At my age I am on Medicare.

Since my mid 20's I have never been without health insurance, not even for one second, but I got to tell you Medicare is the best deal I've ever head but everyone needs to recognize it is not free.

Medicare part A is free and what this covers is a lot, but certainly not all, hospital bills.

Part B costs cover most,but not all, of doctor costs and it is not free; I pay $121.80/month for my Part B coverage.

Then there is the supplement plans and I chose the Plan G which covers everything Part A and Part B does not cover with the exception of drugs and the $147 annual deductible. I pay $138.00/month for my supplement.

Part D is drugs and I pay $44/month for my Part D supplement which covers much, but not all, of my drug costs. My out of pocket for drugs is right at $1,000/year so don't go thinking it's all free because it is not.

For my coverage I pay $303.80 which translates to $607.30 every month for the both of us so don't go thinking we get a free ride. A good ride as once I pay the $147 deductible for the year I am done paying for anything other than drugs.

I would like to see what I have become a national one payer system as long as everyone, and I do mean everyone, pays the same I do. A family of four would pay $1,215.20/monthly which might sound high but the deductible for a family would be limited to $588 for the year and there are not any co-pays.

Yeah, I am older, I cost more and I am riskier but, unlike a new family coming into the system, I have been paying Medicare taxes for the last 50 years.

I am making this point because so many millennials seem to think my Medicare and medical is all free when we really spend $8,000 or better every year in premiums and what little out of pocket we have.

Since I first became aware of social security in the 1960's the system was going to run out of money... blah blah... it's a Ponzi scheme blah, blah.... and it was going to go broke. I heard this tale of woe in the 60's, 70's, 80's, 90's, 2000's and on into today. It is all crap.

From CNN Money

1. Can I count on Social Security when I retire?

The latest Social Security Trustees Report projects that the Social Security trust fund will run out of money in just 18 years, or 2033. But even if that forecast proves accurate, it doesn't mean payments will stop. The payroll taxes that Social Security collects from workers and employers will still be able to fund 77% of scheduled benefits.

So the real issue is whether benefits will be cut, not eliminated.

From Motley Fool

So if nothing is done beneficiaries might be faced with a 23% cut in benefits but to avoid tis all we need do is increase the social security tax or raise the cap on earnings.

Yeah, yeah... boo hoo how baby boomers never had their taxes increased..... yeah, right.

When I started working in 1966 my social security tax was 4.2% and over the years I have seen it rise to 7.65% which approaches nearly double.

I also saw the earnings cap go up. I remember in the 1980's the cap was low enough I'd feel like I got a raise come August or September but they raised the cap and I haven't felt that raise in many years now.

Raise rates a little bit (it happened to me too so don't you dare go bawling on my shoulder) and the cap.

Might have to raise the retirement age maybe to 68 since we are all living longer. All during the 80's and 90's my full retirement age was 65 but it turned into 66 and those younger than I am is getting even longer stretching to 70.

There is this thing that companies had pensions but I never had one. My wife does but it's $375/month which helps but won't fund any world cruises.

We do have IRA accounts but there aren't hundreds of thousands of dollars stashed away. We got some but nowhere near what we're told we should have which is one reason I am determined to work to at least 70 and perhaps as long as I am able after.

Waiting to collect is smart because the difference in collecting amount is nearly double by simply waiting from 62 to 70. If your full retirement age benefit (66 years old) is $2,400 if you take it at 62 it will be reduced to $1,800 but waiting to 70 to collect it would increase to $3,168 which really isn't bad when you consider for most people that would be money that would be exempt from state and federal income taxes.

If you are just starting to plan you might find this helpful in making decisions and just playing around with figures How much of my social security benefit may be taxed?

Did you know that up to 85% of your Social Security Benefits may be subject to income tax? If this is the case you may want to consider repositioning some of your other income to minimize how much of your Social Security Benefit may be taxed and thereby, maximize your retirement income sources.

Take a husband who has FRA benefit of $2,400 his wife is entitled to her own benefit or 50% of her husbands whichever is higher. If the wife waits until she is 66 she will receive at least $1,200 and if her husband waits to 70 he will get the $3,168 giving a combined benefit of $4,368 which is equivalent to having a job with a take home paycheck of $1,008/week since zero taxes would be taken out. Who said you can't live on social security alone? If your house is paid for, which it should be by the time you hit 70, how much more cash would the average couple really need to live a comfortable life?

But this whole idea of social security running out of money, it is to the positive right now, is silly in my opinion and made to scare needlessly scare people.

Why are benefits so low? A lot of it has to do with people collecting early so as to attempt to get their money out of the Ponzi scheme before it collapsed.



44% collect at age 62, no wonder so many live poor in retirement.

What does educated people do?



The more educated, and most likely higher paid who will get higher benefits, are the ones waiting the longest.

[InchingWest]

Originally Posted by jribe

not at all. People just need to realize they need to save for their own retirement and not count on things like social security. Social security was never meant to be anyone's sole income in retirement anyway. Working longer will probably continue as people are living longer anyway. Retirement is really on everyone's on list of "to do's" - either you save and plan to retire at an age you want; or you chance it and hope you can scrape by.

Frugality. Some of us have it, others don't. Not my fault that people still choose to smoke, put vacations on credit cards, buy energy drinks, or pretend they can "afford" $60,000 cars with 7 year auto loans, but then trading them in quickly afterwards.

I don't feel sorry for Boomers who have only a couple thousands in retirement savings after literally being handed the greatest economy that ever existed in the history of the planet, but then choosing to run it into the ground by racking up debt and being irresponsible (everything from their own personal finances, to local, state, and federal levels).

[MLSFan]

Originally Posted by nicet4

The more educated, and most likely higher paid who will get higher benefits, are the ones waiting the longest.

higher up is also less physical labor, they can work longer so they delay collecting. the pay scale isnt really why they delay collecting, the jobs simply doesnt wear down the body so they are able to keep working

[nicet4]

Originally Posted by eyeb

higher up is also less physical labor, they can work longer so they delay collecting. the pay scale isnt really why they delay collecting, the jobs simply doesnt wear down the body so they are able to keep working

Which is why I would like to see a two tier type system where extra could be deposited so amounts would increase or retirement age could be reduced.

Totally voluntary that someone could opt into at any time.

John is a roofer, a job that is really hard on the knees, and his portion of ss tax is 6.2% and he has a full retirement age of 68.

As way of example if John pays an additional 3%, raising his rate to 9.2%, John would receive the same amount at age 62 that he would have received at age 68. By same token if John waited to age 68 while paying the additional 3% his benefits would be even larger. Kind of like a government pension plan that would replace some of the company pension plans.

[charlygal]

Originally Posted by nicet4

John is a roofer, a job that is really hard on the knees, and his portion of ss tax is 6.2% and he has a full retirement age of 68.

As way of example if John pays an additional 3%, raising his rate to 9.2%, John would receive the same amount at age 62 that he would have received at age 68. By same token if John waited to age 68 while paying the additional 3% his benefits would be even larger. Kind of like a government pension plan that would replace some of the company pension plans.

Huh? Why would we need to increase the ss tax? If John wants to save that additional 3%, he can open up an IRA account or just sock away the 3% on his own in a mutual fund. He can set it up so that the money is automatically direct deposited out of his paycheck or auto-debited from his bank account. Technology has made saving easier.

[BeerGeek40]

It's possible to not only retire but retire early --- but there is NO MAGIC SOLUTION other than forcing yourself to save money and foregoing things now so that you have money later. You can't retire early AND have a big house AND buy a lot of things, unless you are rich. It's one of the other.

[Ultrarunner]

I've alway planned for the rainy day...

If I were to lose my job I know I would be OK... no debt and a frugal lifestyle go a long way.