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Post by Deleted on Jun 18, 2011 11:16:34 GMT -5
your income may not grow at the rate you expect or you may even have to take a pay cut.
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Post by BeenThere...DoneThat... on Jun 18, 2011 11:23:35 GMT -5
...another reason why we are not planning "our retirement" using conventional wisdom...
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Post by Savoir Faire-Demogague in NJ on Jun 18, 2011 11:24:14 GMT -5
Income plateauing depends on what one's career is. Even if you are not in a high growth career, by the time you reach your 40th birthday, you would have at least 18 years in the work force. Assuming one is single, they could easily have $1 million in assets, including a 401K, Roth, etc., which would be growing. My career earning potential saw rapid growth when I turned 40, and in the 5-6 year following the age.
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phil5185
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Post by phil5185 on Jun 18, 2011 12:31:11 GMT -5
the way they used to think about the value of real estate or stocks: that it will always go up Actually, I still think that way, I've seldom seen a decade that they didn't 'always go up'. And I have the patience to wait a decade (it isn't like you need all of your retirement money one morning, 3% or 4% is enough for most years.
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gooddecisions
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Post by gooddecisions on Jun 18, 2011 18:14:24 GMT -5
I hate most retirement calculators. I would prefer just to put in a flat amount, like 20,0000 and skip whatever precentage that might be in regards to my salary and whatever works out to be an employer match.
I think the younger generations experiencing nothing but flunctuations in the job market will be more realistic about the notion of salaries only going up.
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dancinmama
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Post by dancinmama on Jun 18, 2011 18:20:48 GMT -5
There is another post about the same article except southernsusanna only gave a synopsis. Here is what I posted on that thread:
Very interesting and probably true for most.
It doesn't hold true for my DH. Since age 49 he's gotten (2) job promotions resulting in a 92% increase in pay from what he was earning in October of 2005. I'm pretty sure that NOW (at age 54) he IS fairly close to the top of his pay scale for his labor grade. Actually he is already doing a director's job (is managing three departments and reports directly to the VP), but because of the economic environment, he will never get the title or the pay. His job is a real headache, so I don't think he'd take it (the promotion to director) even if offered even though he's already doing the job. He's decided that life is too short and plans to retire in 2012.
In order to get the promotions (and pay increases) he had to relocate (thank goodness his company paid for EVERYTHING). He could never have reached the level he is at now at his previous location which was a remote field site where moving up the ladder was extremely limited.
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dancinmama
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Post by dancinmama on Jun 18, 2011 18:26:52 GMT -5
I might add that DH's company will lay off several hundred workers before the end of the year and there are more than just a few people who are scared shitless. They KNOW that they will not be able to find replacement jobs earning anywhere close to what they are earning now.
DH is planning on retiring next year at age 55 anyway because that is what we have been planning since he turned 24 and started contributing to his 401k. He is sleeping peacefully at night while many, many co-workers are having constant panic attacks.
This is just another example of why it is so important to save as early as possible and as much as you can when planning for your retirement. It gives you options later down the road.
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Post by Deleted on Jun 18, 2011 18:41:21 GMT -5
Yes, this is the article I read. I thought it was interesting, too. I always change those online calculators to indicate 0% raises expected because that's a fact of life for me.
I just didn't recognize that it was that widespread.
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dancinmama
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Post by dancinmama on Jun 18, 2011 20:06:09 GMT -5
I appreciate the frankness of the article, but when the hell are we going to get some good news?
And what do you folks in your 20s and early 30s think of what is going on right now? How much do you think about the state of the economy and how it might effect your retirement? How does it affect your outlook overall regarding your financial future?
Even though in our day we had our own "bumps in the road", they didn't last that long and overall the future usually looked pretty bright.
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Post by Deleted on Jun 18, 2011 21:36:28 GMT -5
Dancinmama, I agree with your comment about when we are going to get some good news.
Everything I seem to read lately says we are never going to be able to retire. I am luckier than some with a teacher's pension, but it honestly scares me. I can't imagine how my kids feel in their 30s.
I have to be an ostrich about it sometimes. I fund my other retirement accounts as best I can and try not to think about it. I don't ignore the problem, but what are we supposed to do exactly? I'm fairly frugal so I guess it will all be ok.
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Sum Dum Gai
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Post by Sum Dum Gai on Jun 20, 2011 16:03:50 GMT -5
And what do you folks in your 20s and early 30s think of what is going on right now? How much do you think about the state of the economy and how it might effect your retirement? How does it affect your outlook overall regarding your financial future? It's something my kids probably won't really remember. To them it'll be a period of history that they learned about in school. My kids are 9 and 10 right now by the way. In other words, in a couple years the economy will most likely pick up and this whole thing will be a funky footnote on the historic market and housing price chart. I'm young enough, and I imagine quite a few twenty and even thirty somethings are as well, that the recession didn't really wipe out much of my personal wealth. Part of being young is not having much or any wealth. We're still in the building phase. I tell myself that I probably got to buy a lot of stock and our house while prices were low which will boost my net worth by quite a bit later. That said, I don't really expect to receive very much from SS when I'm old. That has nothing to do with the latest recession though, economists have been saying since 83 that SS the way it's currently structured can't afford the boomers.
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giramomma
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Post by giramomma on Jun 20, 2011 17:04:00 GMT -5
And what do you folks in your 20s and early 30s think of what is going on right now? How much do you think about the state of the economy and how it might effect your retirement? How does it affect your outlook overall regarding your financial future? I think right now is part of an economic cycle. I also don't see where the economy is hitting, other than housing prices. I also don't live in a city that has much manufacturing to begin with. I don't worry about how things might affect me 25-30 years down the road. There's just too much that can happen in that time. I could be dead by then. I think our financial future will be OK, as long as we remain sensible.
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midjd
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Post by midjd on Jun 20, 2011 17:56:56 GMT -5
I think I started out a bit more frugal (or at least money-conscious) than some my age, but this recession has definitely enhanced it. Still, I do think things will recover, and those who are teenagers or younger probably won't remember it much. And I know quite a few people my age who have not changed a thing (no EFs, huge car payments, no retirement contributions) - which is a little discouraging.
My grandpa was born in 1925 so remembers the Depression reasonably well. It has dramatically affected his (and my great uncles') attitude toward money. But quite a few people his age are spendthrifts, so I don't think these things have the same effect on everyone.
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