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OP, you didn't factor in social security. Someone with a net worth of $1 million at age 65 should be receiving at least $20k a year in social security on top of the $43k they'd receive from their net worth.
I think many of us in the under 50 age group aren't counting on Social Security to be there. I'm 32 and I doubt I'll ever see a dime of what I've paid in SS over the years. It's a broken system and the president/congress are kicking the can down the road until things are beyond repair. No president wants to tackle the system, it'd almost guarantee an uphill political battle that would result in extreme unpopularity.
I think many of us will have to rely on our own investments to sustain our retirement.
I know I don't have enough to retire, but that won't stop me. I'll continue to work until I can't any longer, then I'll just do without. Plenty of people do this. I expect to have food and shelter, but no satelite TV, dining out or vacations.
OP, you didn't factor in social security. Someone with a net worth of $1 million at age 65 should be receiving at least $20k a year in social security on top of the $43k they'd receive from their net worth.
Not necessarily. My social security is a joke as I've only worked part time for many years. Our net worth comes primarily from investments. At one time we had a million just in real estate. That's at about 650-750 k now. It is however still paying us a good cash flow. We are debt free and have been for over 15 years. I wanted to retire with 2 mil. and probably will if the housing market comes back. My problem is the psychological aspect of not working. I have a very strong work ethic and a severe addiction to making money. Hoe do you go from being a workaholic to retired?
I think many of us in the under 50 age group aren't counting on Social Security to be there. I'm 32 and I doubt I'll ever see a dime of what I've paid in SS over the years. It's a broken system and the president/congress are kicking the can down the road until things are beyond repair. No president wants to tackle the system, it'd almost guarantee an uphill political battle that would result in extreme unpopularity.
I think many of us will have to rely on our own investments to sustain our retirement.
Your approach to Social Security - not counting on it - is a reasonable and prudent one. I don't see how anyone can quarrel with it.
Now having said that, I think you're wrong about not ever seeing a dime from it. True, kicking the can down the road does not inspire confidence in the rationality of our politcians. However, what would really be politically unpopular - to the point of massive outrage - would be to let the system fail completely. Politically, it would be impossible to have large numbers of seniors (many of whom are not as responsible as you and I about retirement planning) become totally destitute. Not only those seniors but also their children and grandchildren would be up in arms.
Now I admit that it's impossible to know for sure what is going to happen that far down the road. It will be 35 years before you turn 67, which is your currently defined "full retirement age" for Social Security, and that age could be raised between now and then as one of the fixes to maintain SS solvency. But I would still disagree with your "beyond repair" phrase. Even if fixes are delayed, the system is maintainable, perhaps with reduced benefits. I say that waiting too long can result in the system not being restorable to its present (2012) state, but "beyond repair" implies that it ceases to exist, and if I were going to be around that long, which I am not (being 68), I would bet that it will not collapse completely.
In my 40's, I've finally got my life in order a bit. Through my 20s and early 30s I worked low pay dead end jobs, got married. I lived frugal all along, no debts (learned from Tightwad Gazette). Got divorced (not my decision, and he payed for it).
Decided to go to college for STEM degree at 34. I went to a cheap enough state college that grants and scholarships paid all my tuition and some living expenses, worked p/t too. Still no debts.
Now I have a nice job (GIS Specialist) but I only bring home 30k/yr. It's not too hard to live on frugally. Old car, ride bike mostly, shop super clearance sales/yard sales, cook food at home (rent apt), no iGadgets (cheap tracfone). I have saved up $20k since I graduated in 2009. Nice to have that money there in case I end up unemployed, etc. I work for a company that has an ESOP retirement and low employee turnover, but nothing is guaranteed.
The dribble of money I'd put in a IRA/401k wouldn't get me very far, probably eaten up by fees/market. No way I'll be able to accumulate millions, plus a pile of money I'll need just for basic health care.
My mother's mother lived to 99. My mom is still doing very well at 82 (pension). I don't think I'll be able to afford to live that long.
Your approach to Social Security - not counting on it - is a reasonable and prudent one. I don't see how anyone can quarrel with it.
Now having said that, I think you're wrong about not ever seeing a dime from it. True, kicking the can down the road does not inspire confidence in the rationality of our politcians. However, what would really be politically unpopular - to the point of massive outrage - would be to let the system fail completely. Politically, it would be impossible to have large numbers of seniors (many of whom are not as responsible as you and I about retirement planning) become totally destitute. Not only those seniors but also their children and grandchildren would be up in arms.
Now I admit that it's impossible to know for sure what is going to happen that far down the road. It will be 35 years before you turn 67, which is your currently defined "full retirement age" for Social Security, and that age could be raised between now and then as one of the fixes to maintain SS solvency. But I would still disagree with your "beyond repair" phrase. Even if fixes are delayed, the system is maintainable, perhaps with reduced benefits. I say that waiting too long can result in the system not being restorable to its present (2012) state, but "beyond repair" implies that it ceases to exist, and if I were going to be around that long, which I am not (being 68), I would bet that it will not collapse completely.
I would agree with your assessment, I guess I'm an eternal pessimist when it comes to social security/medicare (i.e. "We're going to Hell in a handbasket"). The rational side of me believes the system will probably still be there but is going to undergo a fundamental overhaul from its current state. I can see the "full retirement" age being 70+ with the "partial retirement" age being 67.
My view is...if I receive SS at some point during my retirement, I want that amount to simply be icing on the cake. I don't want to be one of the many people who "depend" on SS to subsidize their entire sustenance. Maybe it's a bit brash to say that it'll simply cease to exist, but I think it's prudent to believe it's not going to provide the benefits to my generation as it does to your generation.
My parents are about your age (65 & 70) and they both receive Medicare and Social Security but they aren't dependent upon either to maintain a standard of living. I imagine, from some of your statements, you aren't dependent upon either SS or Medicare either to maintain the lifestyle you have in retirement. I applaud that, I absolutely think more people SHOULD be investing and saving for retirement rather than thinking it'll all fall into place once they reach the magical retirement age.
If you don't mind me asking, when did you retire Escort Rider? Just a bit curious if you waited for full SS to kick in or if you called it quits earlier than that? I've always been interested in how people go about figuring what age is best to hang up their work hat. I live in a city FULL of retirees...I can't go out for breakfast on a Sunday morning in January without hearing about how these blue-haired ladies are barely making it by while they get into their Cadillac. My dad constantly bemoans how much money the government is still taking from him in retirement and how much he has to pay in taxes while he contemplates which golf course he and his friends should play at that morning after coffee.
It's quite interesting being surrounded by retirees...I'm actually thinking it's likely quite beneficial to my own retirement goals hearing how many of them planned for retirement.
I do have "good parents" but in the sense that they've been there for my siblings and I throughout the years; through good times and bad. "Good parents" aren't measure in terms of financial accomplishments but rather in their ability to rear respectful, hard-working, honest, and self-thinking adults from childhood. I DO have good parents but I don't think of them as such in terms of their financial status.
That being said...I am GRATEFUL to have an extra $72K/ year to stick in the bank on top of my current salary. It's certainly nice to have but some will always have MORE than I do and some will always have LESS. I'm fine being in the middle of the road, I don't begrudge anyone who does better than myself.
There are some immensely financially astute people on this forum that I enjoy reading. They've helped me straighten out a few investments and become more in-tune with retirement and saving. I'm thinking of opening a second ROTH IRA from the suggestion of a forum member. It makes sense, in my mind, to contribute to multiple retirement vehicles so I'll have a decent income when I finally decide to hang it up and retire. The financial gains at my age from two ROTH IRA's fully funded until I'm 60 years old could be quite advantageous.
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That being said...I am GRATEFUL to have an extra $72K/ year to stick in the bank on top of my current salary. It's certainly nice to have but some will always have MORE than I do and some will always have LESS. I'm fine being in the middle of the road, I don't begrudge anyone who does better than myself."
LOL!!!!!
Brother, you are FAR ABOVE "middle of the road".
Look up some statistics on income in this country sometime. But good for you! You are verry fortunate but you're not middle class!! Everyone thinks they're the "middle". LOL!!! You're very fortunate but you'll never know what the avg. Joe in this country goes through. That is a very good and fortunate thing for yourself, I'm glad you're grateful!
I agree. I was just mocking the other poster who said you were lucky. If you were "lucky" so were all the other posters in this thread.
I was trying subtly to stress that your parents were financially competent. You weren't any luckier than the other people in this thread.
Of course he was not any luckier than anyone else. Afterall everyone on this thread and probably the whole country has an extra $70,000 a year coming in to play with.
If you don't mind me asking, when did you retire Escort Rider? Just a bit curious if you waited for full SS to kick in or if you called it quits earlier than that? I've always been interested in how people go about figuring what age is best to hang up their work hat. I live in a city FULL of retirees...I can't go out for breakfast on a Sunday morning in January without hearing about how these blue-haired ladies are barely making it by while they get into their Cadillac. My dad constantly bemoans how much money the government is still taking from him in retirement and how much he has to pay in taxes while he contemplates which golf course he and his friends should play at that morning after coffee.
1. I retired at age 61 and a half, but Social Security played no role in that decision one way or the other. I was a public high school teacher for 34 years in a state where we did not fall under SS. Instead, 8% of our salary was deducted and paid into the state pension system. My Social Security wages consisted of part-time jobs I had while in college plus moonlighting jobs and summer jobs I had during my career as a teacher, so I am receiving a pittance from SS - which is just as it should be, i.e., no complaints from me. The main thing, for me, is that qualifying for that pittance also qualified me for Medicare.
2. If you are "interested in how people go about figuring what age is best to hang up their work hat", I would suggest you go to the City-Data Retirement Forum and look through the most recent four or five pages of thread titles. You will be able to spend hours and hours reading there, if you have the patience and the interest.
3. Yeah, lots of people like to complain, so complaining about finances just fits right in. I wouldn't give too much credibility to what you hear in a restaurant; as you suggest yourself, looking at the cars they get into or out of is probably a more accurate guage of their situations.
Poor decisions on my part and some generalities regarding our economy......
I'm gonna work 'til I'm dead or become a ward of the state.
Call me a slave to our government.
Call me stupid for decisions.
All of the above.
Don't do what I did.
But, I'm trying.
Putting what I can into my 401(k), researching some investments (done fairly well with mutual funds and individual stocks), but I just don't see it.
I'm screwed.
And it's my fault.
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Thoughts on the future of Social Security
