Deleted
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Post by Deleted on Feb 23, 2011 12:05:27 GMT -5
Here is another article about retirement that I have found on WSJ : online.wsj.com/article/SB10001424052748703959604576152792748707356.html?mod=WSJ_hpp_sections_personalfinanceWhile I understand this is an article about the baby boomers but I think it affect more than the baby boomers. A co-worker that is 38, married with 3 kids and a stay at home wife, is only contributing 1% to his 401K (I think it also has to do with the pension). Two of my close friends from high school that has been working as long as mine are not contributing anything right now (granted they are 26 like me and not 38 and feel like they have time). Some of the boomers had at least a added security such as a pension but what about people of my generation and a bit older... what will happen? another good point listed in the artile: What can be done to get my generation to save more? Heck, trying to get my wife to save more is an issue
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MN-Investor
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Post by MN-Investor on Feb 23, 2011 12:16:17 GMT -5
"What can be done to get my generation to save more? Heck, trying to get my wife to save more is an issue " Well, in a few years, my generation (I'm 58) can be a shining bad example. Nothing like some videos about retired people eating cat food to drive home to the younger set that they have to save.
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wodehouse
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Post by wodehouse on Feb 23, 2011 12:23:36 GMT -5
Whatever happened to those elderly Russian pensioners shown sweeping the streets with thatched brooms in Moscow in the 1990's after 'the fall'? Having to live on mere pennies while inflation skyrocketed. That could be our future. Well, some of us...some of those Russians made off quite well.
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Post by Savoir Faire-Demogague in NJ on Feb 23, 2011 12:39:36 GMT -5
My position is we are living in a free country. Everyone has the freedom to make their own choices. If one makes the choice to not take advantage of retirement savings options, then they will be SOOL when they hit their retirement years.
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Post by Deleted on Feb 23, 2011 14:28:30 GMT -5
My position is we are living in a free country. Everyone has the freedom to make their own choices. If one makes the choice to not take advantage of retirement savings options, then they will be SOOL when they hit their retirement years. I understand but when they are close to you, it is harder to go: hey, it's their retirement, their life. I know I am not their keeper but sometimes you want to shake them and say: WAKE UP!
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Post by Savoir Faire-Demogague in NJ on Feb 23, 2011 14:56:11 GMT -5
I understand but when they are close to you, it is harder to go: hey, it's their retirement, their life. I know I am not their keeper but sometimes you want to shake them and say: WAKE UP
My modus operandi is to mind my own business. I could really give a rats-toosh what someone else is doing or if they are digging their own grave. The best thing I ever did in my life is get divorced. I've controlled my own life for 22 years, and not had to deal with constant complaining, pissing and moaning, and whining about everyting and anything. I set my own goals, and stuck to my plan. No philosophizing, no BS, no hand wringing, etc.
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comom1
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Post by comom1 on Feb 23, 2011 15:01:08 GMT -5
I understand but when they are close to you, it is harder to go: hey, it's their retirement, their life. I know I am not their keeper but sometimes you want to shake them and say: WAKE UPMy modus operandi is to mind my own business. I could really give a rats-toosh what someone else is doing or if they are digging their own grave. The best thing I ever did in my life is get divorced. I've controlled my own life for 22 years, and not had to deal with constant complaining, pissing and moaning, and whining about everyting and anything. I set my own goals, and stuck to my plan. No philosophizing, no BS, no hand wringing, etc. Gee, SF, I'll bet your ex-wife feels exactly the same way.....
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Wisconsin Beth
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Post by Wisconsin Beth on Feb 23, 2011 15:01:22 GMT -5
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Post by Deleted on Feb 23, 2011 15:01:31 GMT -5
The boomers have done stupid stuff, and I say this as one of them. Why does someone have a large mortgage at age 60? I think it was this article that also mentioned a woman struggling to pay off her kids' college loans. One woman I knew from my church, a dentist, once told me she'd filed BK 3 times. She was famous for her flamboyant outfits, including co-ordinating hats and (in one case) red cowboy boots.
Slow and steady. Live on less than you make. Don't get into credit card debt. Make savings a habit. Simple rules, but hard for some people to follow, I guess.
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souldoubt
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Post by souldoubt on Feb 23, 2011 15:03:56 GMT -5
I agree about looking out for myself but as someone who is 28 paying into a system (SS) that I don't count on at all I worry about how an aging uprepared population will react when retirement isn't everything they thought it would be. There's going to be a lot of voters who will be pretty po'd even though they only have themselves to blame and politicians have generally shown that's one voting group they don't want to piss off.
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zibazinski
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Post by zibazinski on Feb 23, 2011 15:05:16 GMT -5
Those that didn't save will be bailed out at the expense of those that did.
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Post by Savoir Faire-Demogague in NJ on Feb 23, 2011 15:05:21 GMT -5
Gee, SF, I'll bet your ex-wife feels exactly the same way.....
I am worth more than her and I am employed. At the funeral home(back in Sept 2009) when we were with the director, she did not even have money to pay 1/2 the cost. I whipped out my check book are wrote a check for 1/2 the fee without blinking an eye. Besides, she put on a ton of weight.
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runewell
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Post by runewell on Feb 23, 2011 15:06:21 GMT -5
My modus operandi is to mind my own business. Which is why you have 695 posts advising others what to do?
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Post by Savoir Faire-Demogague in NJ on Feb 23, 2011 15:18:31 GMT -5
Which is why you have 695 posts advising others what to do? Just trying to spread the love.... I have that many posts already? I was closing in on 40,000 on the msn forums....
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stats45
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Post by stats45 on Feb 23, 2011 15:22:07 GMT -5
The calculation is based on a household with income before retirement of $88,000 will need an after retirement income of around $74k. In this scenario, housholds instead have an income around $44k.
Should people save more? Of course. Will there be scores of older Americans rooming in flop houses eating cat food? Not quite.
There is one thing that sticks out to me though. Social Security will continue to be a huge part of retirement income for generations to come. For a while it looked like 401(k)'s, savings, and investments would crowd out Social Security leading to a partially privatized or two-tier system. This looks less likely the more SS is the largest portion of retirement income for households in retirement.
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jeffreymo
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Post by jeffreymo on Feb 23, 2011 15:28:40 GMT -5
My MIL gave us a scare the other day. She's the main breadwinner and made the comment that her employer announced that January 1st they would offer a 100% match up to the first 6% of employee contributions. She said "that's too enticing to pass up, so I started having 6% deducted so I could take advantage of the free money". I guess it's never too late, but at 59 years old I'd love to know what her strategy has been up until this point.
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Post by Savoir Faire-Demogague in NJ on Feb 23, 2011 15:35:52 GMT -5
I guess it's never too late, but at 59 years old I'd love to know what her strategy has been up until this point.
What is interesting about the boomer generation, of which I am part of, is that we were the first generation to obtain higher education in droves, like no other demographic before it.
Yet, a large segment of my generation walks around in a fog.
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NastyWoman
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Post by NastyWoman on Feb 23, 2011 15:44:37 GMT -5
The calculation is based on a household with income before retirement of $88,000 will need an after retirement income of around $74k. In this scenario, housholds instead have an income around $44k. I think that this statement is not as "correct" as commonly assumed. It really should be replacement of 85% of your spending v. 85% of your earnings. A person who lives on 50% of his earnings really only needs to replace 42.5% of their income while a person spending more than he makes... well you get the drift.
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dancinmama
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Post by dancinmama on Feb 23, 2011 15:55:14 GMT -5
Here is another article about retirement that I have found on WSJ : online.wsj.com/article/SB10001424052748703959604576152792748707356.html?mod=WSJ_hpp_sections_personalfinanceWhile I understand this is an article about the baby boomers but I think it affect more than the baby boomers. A co-worker that is 38, married with 3 kids and a stay at home wife, is only contributing 1% to his 401K (I think it also has to do with the pension). What can be done to get my generation to save more? Heck, trying to get my wife to save more is an issue The problem with many baby boomers is that they were "programmed" to believe that they would be receiving a pension. At the same time, the corporate culture of being a "lifer" (working for the same company your entire career) began to change. People became a lot more mobile and did not think twice about switching companies. While DH and I made short term sacrifices by not jumping ship (which in those days was tempting because it usually resulted in a 10% increase in pay) AND contributing the max to his 401k from the first day he became eligible (delayed buying a home AND starting a family), many of our contemporaries were not making the same sacrifices. They jumped from company to company to increase their take-home pay and put off thinking about contributing to their 401Ks until they were already struggling with mortgage payments and the costs of raising a family. This has cost them in the long run because you have to STAY with the same company for YEARS in order to garner any kind of "decent" pension. And even though DH will have been with his company for over 31 years by the time he takes early retirement next year, if it were not for making the maximum contributions to his 401K and making some VERY risky investment moves (I used to day trade his company's stock within his 401K) there is no way he could even consider it. My biggest piece of advice to young people would be to contribute as much as possible as early as possible. Take the bitter medicine of maximizing 401K contributions ASAP. It may seem hard at first, but after you adjust to that initial reduction in take-home pay, you won't even notice it. If you already have budgetary obligations that eat up most or all of your take-home pay, then UP your contributions according to any salary increases you get and continue to do so year after year until your contributions are maxed out. With the extinction of defined benefit plans in the private sector (DH's Fortune 500 company has not offered them to new hires since 2006), maximizing contributions to a 401K or IRA is more important that it has ever been in the past.
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dancinmama
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Post by dancinmama on Feb 23, 2011 15:57:12 GMT -5
I guess it's never too late, but at 59 years old I'd love to know what her strategy has been up until this point. What is interesting about the boomer generation, of which I am part of, is that we were the first generation to obtain higher education in droves, like no other demographic before it. Yet, a large segment of my generation walks around in a fog. I couldn't agree with you more. Most in our generation seem to be financially inept.
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wodehouse
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Post by wodehouse on Feb 23, 2011 16:07:56 GMT -5
SF, that "fog" is the smoke haze from the 1960's.
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haapai
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Post by haapai on Feb 23, 2011 17:11:07 GMT -5
What can be done to get my generation to save more?
More stories about the gut-wrench details of the "working until I die" strategy might help. You can learn a lot by talking to people a decade or two older than you and some of their stories are chilling. The stories of people turning down early retirement incentives and working until two days before their spouse or parent dies will take your breath away. Generally speaking, these stories come in version A (safe for work) and a version B that only gets told after someone has left your workplace. Version B is a lot more raw and probably a lot more honest.
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jkapp
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Post by jkapp on Feb 23, 2011 17:34:51 GMT -5
My position is we are living in a free country. Everyone has the freedom to make their own choices. If one makes the choice to not take advantage of retirement savings options, then they will be SOOL when they hit their retirement years. I understand but when they are close to you, it is harder to go: hey, it's their retirement, their life. I know I am not their keeper but sometimes you want to shake them and say: WAKE UP! They need to follow the Golden Girls path and start figuring out their "retirement groups:" A bunch of retirees who live together and share expenses...
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jkapp
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Post by jkapp on Feb 23, 2011 17:51:07 GMT -5
The boomers have done stupid stuff, and I say this as one of them. Why does someone have a large mortgage at age 60? I think it was this article that also mentioned a woman struggling to pay off her kids' college loans. One woman I knew from my church, a dentist, once told me she'd filed BK 3 times. She was famous for her flamboyant outfits, including co-ordinating hats and (in one case) red cowboy boots. Slow and steady. Live on less than you make. Don't get into credit card debt. Make savings a habit. Simple rules, but hard for some people to follow, I guess. I think you hit a good point right there...the purpose of a 30 year mortgage is to pay it during your working years and have it paid off in your retirement. Too many older Americans pay on their house for 30 years or more and then sell it to buy a new "retirement" home - which starts the whole process all over again (unless they were able to get more from the sale of their old home than the price of the new one, which is a gamble).
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Post by Deleted on Feb 23, 2011 19:22:32 GMT -5
I struggle with this issue since I am 57 and want to retire at 66. There are other factors in play like an older husband, but I really want the house paid for or the ability to withdraw that much money every month. Pay your mortgage first. I can coupon the food, and we can cut down to one car. The house is the variable I can't control since it is such a large chunk of my take home. Or at least that is how I perceive it.
And I want to have money in my old age. I am buying my oldest grandchild a year of college. I may not can do that for all, but I do want to help them. I buy all the stuff they sell and help with back-to-school expenses like new shoes. It's tough being a parent these days. I don't want to become Scrooge just because I quit working. It's fun taking them to places like The Polar Express every Christmas and all our other silly traditions.
But only time will tell how the planning will play out. We can plan all we want, but God ultimately decides. That is a paraphrase of John Milton; I was scared I would get it wrong. Lol.
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NoNamePerson
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Post by NoNamePerson on Feb 24, 2011 9:56:46 GMT -5
I so agree I've been controlling my life for 29 yrs. Feels good. Guess I should add that I pretty much controlled my life when I was married
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zibazinski
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Post by zibazinski on Feb 24, 2011 9:59:59 GMT -5
I have been single for 11 years now but have a DF and I have to admit, the thought of actually having to consider another's feelings/views/wants is kinda scary. Maybe if I had gotten remarried sooner or if my EX hadn't been such a tyrant, I'd be less afraid but it does lurk. I love DF and he is a nice man but I also married a nice man and he turned out to be not-so-nice so it's scary. I like not sharing a bathroom and just vegging at night if I feel like it.
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The J
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Post by The J on Feb 24, 2011 12:04:18 GMT -5
I think our generation will be helped by seeing our parents, aunts and uncles struggle.
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emma1420
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Post by emma1420 on Feb 24, 2011 18:01:27 GMT -5
I think our generation will be helped by seeing our parents, aunts and uncles struggle. I agree. My mom is a boomer and she will never ever be able to retire. She's in her late 50's now, she is in debt up to her eyeballs. She spent her entire life spending her way through as much money as she could get her hands on, and it's only now that she's five or six years away from retirement that she realizes that she won't be able to afford to. That is all I need to see to know that I will do everything in my power to make sure that I don't end up in the same situation.
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ameiko
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Post by ameiko on Feb 24, 2011 20:38:42 GMT -5
Some people would probably point out this is a reason to return to pension systems. They forget that many pension funds were underfunded and raided; not seeing the improvement. This is why the states are having big issues now- not enough funding to cover promises and the chickens have come home to roost.
Same thing with Social Security; revenues are down and that includes SS. Combined with a raided and thus non existent trust fund and we are kinda screwed. I'll stick with the 401k and the like- I have more control.
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