Many of my friends and family report they can't afford to retire! (state, retired)
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The folks who can't retire should have migrated here to California years ago. Get a union job. Do a menial job like issuing tickets for expired parking meters. Make in excess of 100k. Retire at 55 with 50% of your highest annual salary. Also free medical care. The average union pension here is around 65k with policeman and firefighters making even more. The rest of us non union people are paying for this through higher taxes.
Not sure where you got your average pension data but you're way off. The average Calpers pension is around $3k a month for someone that probably worked for close to 30 years and never made close to $50k a year. And No, most do not have paid Healthcare in retirement.
Now that I have crossed the threshold of my sixth decade I've discovered it's not my physical health that is wearing down but my psychological and emotional well being... I am just tired of work. It's hard to explain ... maybe it's just me ... but it's an existential fatigue. There's a lot of responsibilities and sometimes after working five days in a row I need an entire day just to "chill." Can anyone relate to that?
I DEFINITELY hear you on that one! IMHO, it is easy to empathize. I'm there myself!
"Tote that barge, lift that bale" about sums it up best in my case.
Glad you found something fulfilling to do. Personally, I think I'm going to just move away from Metro, relax a spell, and get stabilized. An awful lot is going to change in the "transition" timeframe:
1. find place to live
2. throw stuff out
3. move
4. settle in (throw more stuff out. Mutter at myself for having paid to transport stuff I'm now throwing out)
5. find used RV
6. embark upon Grand Tour of National Parks
I've got zero desire to ever work again. I've still got working papers and problem sets from years
ago that I can't bear to incinerate, because that particular degree was so taxing. So I keep them "just in case". It is a recurring nightmare still - I'd hate to have to go through the reconstruction process to solve that particular problem again. Took the tar right out of me, lol!
I DEFINITELY hear you on that one! IMHO, it is easy to empathize. I'm there myself!
"Tote that barge, lift that bale" about sums it up best in my case.
Glad you found something fulfilling to do. Personally, I think I'm going to just move away from Metro, relax a spell, and get stabilized. An awful lot is going to change in the "transition" timeframe:
1. find place to live
2. throw stuff out
3. move
4. settle in (throw more stuff out. Mutter at myself for having paid to transport stuff I'm now throwing out)
5. find used RV
6. embark upon Grand Tour of National Parks
I've got zero desire to ever work again. I've still got working papers and problem sets from years
ago that I can't bear to incinerate, because that particular degree was so taxing. So I keep them "just in case". It is a recurring nightmare still - I'd hate to have to go through the reconstruction process to solve that particular problem again. Took the tar right out of me, lol!
I suggest getting that RV, downsize, put the remainder in storage and take off. After a couple of years you could look for a permanent place to live, or not. You will save a lot of rent/mortgage money until then.
I don't intend to single your pessimistic post out ... but it is one of many on this thread expressing a similar attitude about savings/retirement targeted to essentially my age group (OK, I'm only a couple years older than your example) ...
But I found it was easy to accumulate well in excess of 7 figures net assets in the time frame you cite.
With a diesel tech job and my own independent auto/motorcycle repair shop, I was well able to bring home in excess of $30K per year back in the early 1970's.
My modest 900 sq ft brick house back then cost me $18K. My PITI was $163/month. Left me adequate money to support my family and put aside 20% of my post-tax income each month for investments. How? by living well below our means and living frugally ... I, too, am a product of depression-era parents and other than a mortgage, carried no debt. We always paid cash for our purchases or paid the CC's in full every month. Most of our expenditures beyond necessities were on hard assets ... my hobby of restoring cars for resale generally yielded good profits for my time/energy/investment.
As my income rose through the years, I traded up in housing. It was a big deal for me when the $18K house became a $22K house to a $27K house to a $89K house ... which gave me enough equity to almost pay for a $63K new house. Of course, in later years, A $225K house traded out for a $325K house, but the equity kept the mortgage payment the same. And so forth, in due course we live on a paid for farm/ranch worth far more than that today. It's a multi-purpose use of our resources ... a place to live, to raise crops and livestock, and have my workshops at home.
I can't claim that I was ever an astute good investor ... then or now. I did best in the things I know such as vehicles or ... in time, real estate. What money I did invest in the stock market rarely returned much, if any, net profit; overall, I lost money in the market buying the stuff that my "broker" touted as the "hot deal" at the time. My broker tells me my SEP IRA now is getting about a 4% ROI, which isn't a great return given the posts by others here about seeing much better returns to be had. But my real estate investments, all paid for ... have appreciated greatly over the years and kick out a high 5-figure net annual income.
I know many folk my age who have done much better financially than I did over the same time frame; they were a lot smarter than I about playing the markets and their investments.
As well, I know some who haven't done as well ... most of them spent their disposable income on "keeping up with the Jones's" or on partying and good times as a way of life.
The key here was that most everybody had the opportunity to do well financially over the long term to our '60's ages. The ones who didn't do well aggressively chose not to invest in themselves or their futures; it was no accident that they don't have any real assets today. Some did very well but got greedy and speculated on investments that looked "too good to be true" ... and lost their shirts. High Risks/High Returns investment schemes are for those who can afford the risk and not a good idea for the average income earner. "betting the farm" on one turn of the dice isn't very prudent, IMO, when preservation of capital was still a concern.
I'd really have to disagree with your assessment that this is an unrealistic thread. I see way too many people around me who have been successful in the time frame under review here.
No offense taken, but you're missing the point and my post was slightly poorly worded. This was my commenting to the OP. The OP mentioned stocks as a way to retire. In 1972 you didn't have anyone reporting on the stock boom from the 80s about historical returns, blah, blah, blah. Your example made my case for me since you admitted that you made your money from everything, but the stock market, lol. So I actually agree with you, but you agree with me implicitly as well.
Quote:
Originally Posted by jrkliny
I am not sure I understand. Are you telling me that someone who is black or partly black or from Arkansas spends money faster than they earn it? They cannot learn about money and saving and investing? Somehow my illiterate and ignorant grandfather had some sort of advantage?
I don't know any males who made 6 figure incomes back in the 70s. I lost a couple of years to service in Vietnam and even with a degree and some experience, I had a hard time finding a job. When I finally found one, it paid $6600/year.
First of all, only one of my grandparents was from Arkansas, the other from Alabama. Both worked their way to California (I'm not sure if they met in Louisiana or Oklahoma, but my grandmother spent time in both states before she had enough money to get to California).
Yes, someone that is black in the F'ING Jim Crow south had it harder than your European grandfather despite him being illiterate. Is this a serious question? Do you NOT know about Jim Crow laws? You know 1% black = 100% black in terms of legal segregation? You know the ones that had things like SEGREGATED public libraries where black only libraries were severely underfunded while white only libraries were not? In other words, a black person did not have the same access to the same books your grandfather had regardless of literacy. That's why I mentioned they worked to get the hell out of there and move to California.
Quote:
Originally Posted by Submariner
It is not ridiculous.
I was born in 1959. My parents were 6 and 8 when the market crashed. In the following decade their family's farms were foreclosed on, they were evicted, their families made the 'grapes of wrath' migration West, where they became migrant farm workers. When I was 6 [1965] my parents finally got up the economic ladder high enough to become home owners.
By the time my parents reached their 80s their net worth was over $500k. They never touched the stock market.
It is ridiculous to assume that everyone thinks like you do. Your parents' story proves my point. The OP is saying someone born in 1950 (not 1950) is going to put money into stocks that didn't exist (as proven by other posts here) and retire a millionaire, easy as 1-2-3. No one born in 1950 was in high school like I was learning about the historic stock boom of the 90s. There wasn't even tax deferred retirement accounts at that time. I'm not saying it's impossible (except for things like S&P 500, etc), just that it's highly unlikely and therefore ridiculous to assume that people think in this manner. Most of us learn from our parents. I gave my family's example to show a point. Someone born in 1950 would most likely have looked for a job that had benefits and a pension.
If you include the financial impact of things like divorce and outsourcing/downsizing, it sounds even more farfetched.
I think it has a lot to do with the demise of pensions. I came from a family that held mostly state or union jobs. My relatives all retired as soon as they had enough years in to do so. When you have that security of a lifetime pension, you're more likely to retire earlier. Now many workers have to rely on SS more so they will work much longer to get a full benefit. Most of the union guys I know retired at 62 or even earlier, SS was more of beer money fund than for survival.
Not sure where you got your average pension data but you're way off. The average Calpers pension is around $3k a month for someone that probably worked for close to 30 years and never made close to $50k a year. And No, most do not have paid Healthcare in retirement.
That's still far more generous than most anything in the private sector at that wage level. Someone earning under $50k in high cost, prestigious California is going to have a hard time saving much.
That's still far more generous than most anything in the private sector at that wage level. Someone earning under $50k in high cost, prestigious California is going to have a hard time saving much.
And that person probably had to go into debt to get a degree to make that.
That's still far more generous than most anything in the private sector at that wage level. Someone earning under $50k in high cost, prestigious California is going to have a hard time saving much.
The employee contributed a percentage of their salary to earn the pension
That would depend on the funds that were available in the 401k plan. 9% of salary, plus a not uncommon 3% match, could mean even more. At my company, since they eliminated pensions for new hires, increased the match to start at 4% and IIRC, after 10 years it becomes 6%. So for a 9% outlay and instant 45 - 66% return, plus growth on that 13 to 15% savings, it COULD be as good or better. But that's the big difference. While it could be better or worse, you own it all vs a pension where you own nothing, and may lose much or all of it in the wrong circumstances. So while my pension is insured under PGBC, and will be less than the max they cover, if PGBC folds, because so few companies are paying the premiums as they drop pensions, then my pension is only covered by the faith of ethics in the company.. And that is a pretty poor guarantee. So that is why I Did 401k, IRA, & ROTH even with a nice pension. 4 legged stool. My retirement savings are capable of generating about the same as my pension will and I saved on average a bit more than 9% from my pay..
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