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Cops and firemen who get a pension after 20 years often come out ahead of people who made more money than them.
Some cops go work for another police department after they retire and end up getting two pensions.
Some work after retirement and end up drawing a pension and SS.
Without having a dime saved in any other kind of retirement account.
That's because those pensions pay out upwards of 90% of the last years salary + COL adjustments. The pensions aren't free though. Cops in Chicago contribute 10% of their salary and the private sector kicks in the rest. The reason government workers make out better is because they can go to the taxpayer to fund any shortfall. Who is the taxpayer going to raid when the investments don't fund the pensions? The government?
That's because those pensions pay out upwards of 90% of the last years salary + COL adjustments. The pensions aren't free though. Cops in Chicago contribute 10% of their salary and the private sector kicks in the rest. The reason government workers make out better is because they can go to the taxpayer to fund any shortfall. Who is the taxpayer going to raid when the investments don't fund the pensions? The government?
Companies use to have pensions, but soon found out they couldn't fund them. The last company I heard that had a pension was the telephone company, but with cell phones taking over I'm sure they've dropped them too.
Companies use to have pensions, but soon found out they couldn't fund them. The last company I heard that had a pension was the telephone company, but with cell phones taking over I'm sure they've dropped them too.
I have been looking at retirement calculators online and all of them say I need way over $1 million to retire. Thats at $85K income and 30 years of age.
The problem shall be is how the retirees in future going to survive when fall far short of $1 million dollars? Looks like the retirement prospects for people in their 30s or younger are WORSE than they are now.
Mathematically, it's impossible for every American to have $1M when they retire or turn 65. The financial industry wants to make you think you need it - am not against it but in reality, we all have to make do with little and to that end, if you have your house paid off, automobiles paid off, kids college paid off - i think you can live with little...
Mathematically, it's impossible for every American to have $1M when they retire or turn 65. The financial industry wants to make you think you need it - am not against it but in reality, we all have to make do with little and to that end, if you have your house paid off, automobiles paid off, kids college paid off - i think you can live with little...
Let the kids pay for their own college. College isn't that expensive if you stay away from the costly universities.
It does not matter the amount of your income. If you are comfortable living on $1,000 a month then you need to replace an inflation adjusted amount when you do infact retire. All you need to do is save a percentage of your income each pay period. Realize that retirement accounts such as a 401K or 403B, if your company offers one, are all about saving a percentage of your income over time. Where I work the minimum one would want to save is 6% to get the full benefit from the employer. They offer 2% a year for everyone. They also have a 50% match up to 3% total additional savings from our income. Putting in 6% means that you now have 9% of your income allready being saved.
For those that are having a hard time starting a savings program try this, start out with the 6% right now. When you consider the tax savings it really won't feel like 6%. With an employer match you are now probably up to 9%. Next increase that you get place it in your retirement account. Lets say that you only have a 2% increase. I just don't see how that will hurt you to place that in a retirement account. Do that every year untill you are at the 10% or higher range. I say shoot for 20% of your income. realize that when you jump into the higher income ranges you will eventually not be able to contribute further. They do max out in how much you can place in them.
When you have between 10% on the minumum and 20% of your income going in then relax and watch what happens. You will need to place your money in an investment product and with a 401K you will have a lot of options. If you are looking at retiring more than 20 years from now I would place the money in stocks. To play it safe follow the Dow Jones Industrial Average. You should have a nice return doing that. Others may have a higher return then that but on average the Dow seems to do well. I wouldn't place my money in bonds as it just will not grow that fast. Some 401K plans will allow you to choose a date in the future that you plan on retiring and help you play it safe. It takes the guess work out of it if you are not into investing for the future.
The saying goes, if you can not afford to do it then plan on working untill you die. My wife and I plan on saving over $5million for our retirement.
Mathematically, it's impossible for every American to have $1M when they retire or turn 65. The financial industry wants to make you think you need it - am not against it but in reality, we all have to make do with little and to that end, if you have your house paid off, automobiles paid off, kids college paid off - i think you can live with little...
It might not be possible for everyone to do it. It is not hard to invest when you are diciplined to do it. Not everyone will make it to the million or higher mark. Still saving a percentage of what ever income someone makes will probably help them to continue living the life that they are used to living.
Personally I never want to make do with little. I want to continue living my California lifestyle. I want to have the money to support traveling. I want to sail a boat, fly an airplane, enjoy my cars. I want to be able to visit our kids and grand kids.
It does not matter the amount of your income. If you are comfortable living on $1,000 a month then you need to replace an inflation adjusted amount when you do infact retire. All you need to do is save a percentage of your income each pay period. Realize that retirement accounts such as a 401K or 403B, if your company offers one, are all about saving a percentage of your income over time. Where I work the minimum one would want to save is 6% to get the full benefit from the employer. They offer 2% a year for everyone. They also have a 50% match up to 3% total additional savings from our income. Putting in 6% means that you now have 9% of your income allready being saved.
For those that are having a hard time starting a savings program try this, start out with the 6% right now. When you consider the tax savings it really won't feel like 6%. With an employer match you are now probably up to 9%. Next increase that you get place it in your retirement account. Lets say that you only have a 2% increase. I just don't see how that will hurt you to place that in a retirement account. Do that every year untill you are at the 10% or higher range. I say shoot for 20% of your income. realize that when you jump into the higher income ranges you will eventually not be able to contribute further. They do max out in how much you can place in them.
When you have between 10% on the minumum and 20% of your income going in then relax and watch what happens. You will need to place your money in an investment product and with a 401K you will have a lot of options. If you are looking at retiring more than 20 years from now I would place the money in stocks. To play it safe follow the Dow Jones Industrial Average. You should have a nice return doing that. Others may have a higher return then that but on average the Dow seems to do well. I wouldn't place my money in bonds as it just will not grow that fast. Some 401K plans will allow you to choose a date in the future that you plan on retiring and help you play it safe. It takes the guess work out of it if you are not into investing for the future.
The saying goes, if you can not afford to do it then plan on working untill you die. My wife and I plan on saving over $5million for our retirement.
The problem is many people have maxed out their paychecks. Meaning they have so many bills there isn't room left to save. It will depend on how many years it will take them to reduce their debt or increase their income before they can begin saving. Also, they have to break the habit of spending every dollar.
Mathematically, it's impossible for every American to have $1M when they retire or turn 65. The financial industry wants to make you think you need it - am not against it but in reality, we all have to make do with little and to that end, if you have your house paid off, automobiles paid off, kids college paid off - i think you can live with little...
It's not impossible at all, but it might mean the business owners have a bit less. $300/month from the time you graduate college until you are in your 60's will give you a bit less than $3 million. Once you adjust for inflation you will still have more than $1 million current dollars in your account. Plus, you will earn more as you gain more experience so than $300 can turn into $1500/month.
It might not be possible for everyone to do it. It is not hard to invest when you are diciplined to do it. Not everyone will make it to the million or higher mark. Still saving a percentage of what ever income someone makes will probably help them to continue living the life that they are used to living.
Personally I never want to make do with little. I want to continue living my California lifestyle. I want to have the money to support traveling. I want to sail a boat, fly an airplane, enjoy my cars. I want to be able to visit our kids and grand kids.
I've done all the traveling I'll ever want. Don't want to sail a boat, fly an airplane or drive fancy cars. My kids and grand kids will either have to live here or pay for their own travel.
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