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Post by Deleted on Mar 14, 2011 7:41:10 GMT -5
How to motivate someone or make them see the reason why they need to save NOW not later or the percentage required? We were out with friends Saturday night and we started talking about Japan, end of the world 2012 (yep some people believe in it), savings, retirement and basically why bother? Some of my peers feel they have time (my wife is one of them) and actually said to me on our way home that we could be doing so much more if we did not contribute to our 401K or at least not contribute as much. She currently contributes 20% (I started doing 25%) which comes down to $323.20/biweekly with her company kicking in $32.32/biweekly also. Mine is about $258/weekly and company matches is a profit sharing plan. As for some other friends their argument was: - too much bills for now (yeah like we all don't have them, I am paying slightly over 1k in student loans a month) - they have time (they are all around our age 25 with the oldest there being 29 I think) - Why bother since they might not see it (and with that comes stories of uncles/aunts and others they know that passed away before they got to enjoy their retirement) - And for my wife: we are young and we should enjoy life now, not when we are retired, old, arthritis, blood pressure, diabetes, etc. They all have some pretty valid points in their mind (don't worry I am not running to lower or stop my 401K contribution anytime soon) so how do you convince people like that they need to start saving for retirement? I did not try to convince any of them, just smiled and nod. I even joke on how I am going to empty my accounts so I can enjoy life before 2012 comes... In retrospect, good weekend - Red Lobster on Friday: $65 - Night out with friends on Saturday: $ 56 (bowling and drinks) - Drive to NJ to visit family on Sunday: $49 (gas, damn that thing is getting expensive) - Burger King on our way home : $15.45 (even fast food is getting to expensive) Enjoying my weekend before heading back to work this morning: Priceless But that is all money that could have gone to the ROTH IRA
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Post by Deleted on Mar 14, 2011 7:51:11 GMT -5
And, I am spending more on the here and now. I am trying to have more fun with my kids and spouse. I just bought some Ipod Nanos, went to see Lady Gaga in concert and am probably going to buy the kids a flat screen TV for their Xbox. I have seen too many people who are healthy one minute and then life is over and they never did. Did you get the latest ones? The Ipod nanos I mean... been browsing lately and looking to get one. Been using my wife's pink ipod nano and getting weird looks at the gym
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Post by Deleted on Mar 14, 2011 7:53:25 GMT -5
You don't need to motivate or convince anyone of anything. Just do what you want to do. To each his own. I have seen people squirrel away a lifetime all for naught. And, those who ruined their lives by excess. It can go either way. Nobody has the crystal ball of the future. Yeah it is all a healthy balance but alot of my friends feels it is all or nothing. That if they have to start saving for retirement they will need to give up so much. I am and still planning to go on our second honeymoon this August.
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 7:53:29 GMT -5
They all have some pretty valid points in their mind (don't worry I am not running to lower or stop my 401K contribution anytime soon) so how do you convince people like that they need to start saving for retirement?None of them have valid points. This is 2011, not 1951. Drive to NJ to visit family on SundayWhat? you used to live near me....I am insulted.
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 7:55:18 GMT -5
Yeah it is all a healthy balance but alot of my friends feels it is all or nothing. That if they have to start saving for retirement they will need to give up so much.
It is not about a "healthy" balance. It is about prudent, smart and intelligent financial management. I rid my life of the healthy balance crowd over 15 years ago. It was the best financial decision I made in my life. You seriously need some more intelligent acquaintances.
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Post by Deleted on Mar 14, 2011 7:55:10 GMT -5
Yes, they are freakin' awesome. I got one in the light green. Awesome. I am sold. Nice, now you are making me want to run and get it. They looked pretty cool when we visited the apple store a couple of weeks ago. But convinced myself I can keep on using my wife's pink one for a little longer since I heard they might be coming out with some newer one soon... same reason my wife did not upgrade her phone yet, she has the 3G and rather wait for the 5G instead of upgrading now to a 4G.
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Post by Deleted on Mar 14, 2011 7:58:29 GMT -5
They all have some pretty valid points in their mind (don't worry I am not running to lower or stop my 401K contribution anytime soon) so how do you convince people like that they need to start saving for retirement?None of them have valid points. This is 2011, not 1951 I said in their mind they are some valid points; not that I agree lol ;D My mom's lives in West Orange, NJ
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binl1908
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Post by binl1908 on Mar 14, 2011 8:05:18 GMT -5
When you're young you think you have forever, but take it from someone a bit older, time seems to have passed by very quick. I think you should keep up with your savings, but don't forget about enjoying life also. I am also someone who saved a good portion of my salary from a young age, but I am not a big "toy" collector anyway, so it was easy. I'm living in the same house for nearly 30 yrs, drive an 8 yr old car, etc. I invested pretty well (lucky), so I'm getting ready to retire in a month or so at the ripe old age of 53..
If you keep up your savings, early retirement (or at least an on-time retirement) will be a possibility for you also.
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binl1908
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Post by binl1908 on Mar 14, 2011 8:20:04 GMT -5
Snerdley, your comment on the air conditioning in the car brought back a fun memory. I was driving an old chevy at the time and taught my daughter how to drive in that car. I usually drive with the windows down as I often had cars with no AC. After she got her license, it was also the car I let her drive around town in. At the end of the summer, I was driving her and a few of her friends on an errand on a very hot day and told them to close the windows cause I was turning the AC on. My daughter was flabergasted that the car actually had AC and she had been driving all summer without it !!!
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Post by Deleted on Mar 14, 2011 8:45:43 GMT -5
When you're young you think you have forever, but take it from someone a bit older, time seems to have passed by very quick. I think you should keep up with your savings, but don't forget about enjoying life also. I am also someone who saved a good portion of my salary from a young age, but I am not a big "toy" collector anyway, so it was easy. I'm living in the same house for nearly 30 yrs, drive an 8 yr old car, etc. I invested pretty well (lucky), so I'm getting ready to retire in a month or so at the ripe old age of 53.. If you keep up your savings, early retirement (or at least an on-time retirement) will be a possibility for you also. Thank you. We are both now 25 and if all goes well (knock on wood) we hope to retire somewhat at 65... but I would like to have the financial means to retire at 55 if I want to. But we do intend to enjoy life in the mean time.
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Post by Deleted on Mar 14, 2011 8:49:34 GMT -5
But, at some point in your life, you have to cut loose a little bit and allow yourself to enjoy. What are you saving it all for? To give to the nursing home? Well, at some point that's where mine will go, but it's part of the plan. I'd rather be in a decent nursing home at 90 than in a house that's falling apart because I can't afford to maintain it, dependent on others to drive me everywhere, and with nothing to do but watch TV all day. And I mean "decent", not one of those warehouses where they strap you into a wheelchair all day and plop you in front of the TV. But it does sound as if your friend is a little too worried about the future to enjoy the present. OP, one other advantage to saving for retirement that you can point out to your friends is that, at some point, you realize you could live without the job. I'm at that point, but I keep working because I enjoy it and I'm stashing away still more money, but I don't live in fear of losing my job. That type of security allows you to take risks- when my company was acquired 7 years ago, DH and I decided to ride it out and see what happened rather than panicking and jumping ship. It worked out very well for me. If we'd been in debt up to our eyeballs and living paycheck to paycheck, I probably would have felt pressure to find another job.
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 8:52:37 GMT -5
Thank you. We are both now 25 and if all goes well (knock on wood) we hope to retire somewhat at 65... but I would like to have the financial means to retire at 55 if I want to.
By keeping up your savings at an early age, you'll likely be in great shape much earlier then age 55. Of all the variables that affect wealth creation and retirement savings, the one that has the largest impact is time.
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2kids10horses
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Post by 2kids10horses on Mar 14, 2011 8:55:19 GMT -5
cawiau,
You sure have your challenges in your life! I have noticed that you and your spouse differ on the use of money!
My wife and I agree on most of our money issues, but we, too, disagree on some points. Everyone does.
As to spending for "frivolous" things like Lady GaGa, iPods, Flat Screens, etc... I feel that indulging oneself with these kinds of items from time to time is just fine. It keeps you interested in life. Nobody wants to live under a rock. That said, you shouldn't mortgage your future to the extent that you go bankrupt!
Some things can only be done in the moment. Lady GaGa isn't going to have the voice she has now (or the body!) 10 years from now. If you want to see her at her best, do it now.
I learned to snow ski when I was 25. Skiing was (and IS) expensive. My parents questioned me why I would want to do such a thing. I told them because I wouldn't be able to ski when I was their age. They wanted me to settle down, and buy "stuff". I had rather have "experiences".
It's worked out. Now that I have two kids in high school, my primary focus is on providing "experiences" for them.
There are many ways to afford "experiences" while still putting back something for the future. There are the Entertainer coupon books, GroupOn sites, and on-line discount sites where you can buy tickets for Ringling Brothers Circus, Cirque du Soliel, the zoo, theatre, concerts, Symphonies, etc really cheap.
My wife buys me polo type shirts at the thrift store for 99 cents. Often, these have never been worn. She can get 35 shirts for the price of one this way.
My kids are into music. That is, they play classical music. We got them iPods a couple of years ago. They're still using the old models.
I bought a 35 inch Mitsubishi TV back in 1985 or so. I'm still using it. No flat screen TV, yet. I don't want much TV anymore. We do get the occasional movie from RedBox.
Then again, I have an iPhone. Pure luxury!
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 8:57:41 GMT -5
OP, one other advantage to saving for retirement that you can point out to your friends is that, at some point, you realize you could live without the job. I'm at that point, but I keep working because I enjoy it and I'm stashing away still more money, but I don't live in fear of losing my job. That type of security allows you to take risks- when my company was acquired 7 years ago, DH and I decided to ride it out and see what happened rather than panicking and jumping ship. It worked out very well for me. If we'd been in debt up to our eyeballs and living paycheck to paycheck, I probably would have felt pressure to find another job.
This about says it all. I am in a similar position. The fool I work with is in a very risky position. Two years younger than me, a 16 year old getting ready to go to college, and a 10 year old son. Lives in an extremely high cost of living area, hiddeous taxes, owns two late model cars with big loans, when the company was public, would purchase lots of company stock at the discount, then immediately sell it... took expensive family vacations, etc. He has painted himself and his family into a financial corner.
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Post by Deleted on Mar 14, 2011 9:05:25 GMT -5
cawiau, You sure have your challenges in your life! I have noticed that you and your spouse differ on the use of money! She is starting to get around now but it takes time. Her issue is she has champagne taste on a beer budget.
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 9:08:31 GMT -5
She is starting to get around now but it takes time. Her issue is she has champagne taste on a beer budget.
Sounds like you married someone who is high maintenance and had everything handed to her without having to put in any effort to work for it.
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Post by Deleted on Mar 14, 2011 9:14:55 GMT -5
She is starting to get around now but it takes time. Her issue is she has champagne taste on a beer budget. Sounds like you married someone who is high maintenance and had everything handed to her without having to put in any effort to work for it. I see you met my wife ;D She got used to the lifestyle provided to her by her mom and feels she is somewhat entitled to that same lifestyle without mommy's income. She is forgetting that her mom had her at 35, so was already established in her career and only had 1 child. Her husband passed away when she was 37 of a heart attack and was left with a nice life insurance policy. So off course she could afford the nannies, the nice clothing, vacation, etc. But to be honest, compared to two years ago when we got married she has improved alot.
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thinid
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Post by thinid on Mar 14, 2011 9:34:53 GMT -5
I think of retirement savings like I do insurance: I might not ever need it, but if I do, I'll sure be glad I have it. ;D
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azphx1972
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Post by azphx1972 on Mar 14, 2011 9:40:01 GMT -5
I love talking about retirement savings. There are enough influential sources in society to persuade people that they need to spend and enjoy themselves, but only a little bit in comparison to inspire people to save. I wrote up this little piece three and a half years ago. In that little amount of time, my retirement savings have grown by another 100k despite the up & downs of the market, and my 401k account balance is still approximately double the actual amount I've put in via salary deductions. The best part is I've never felt deprived because I have never seen that 15% portion of my paycheck, and so I've learned to live on what I take home (actually a significantly amount less, but I acknowledge that's partly due to the fact that I earn a great living). So yeah, I think when I'm older I would rather regret not having spent enough than not having saved enough, if given the choice. YMMV though.
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DVM gone riding
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Post by DVM gone riding on Mar 14, 2011 9:50:26 GMT -5
personally I am not convinced your balance is healthy. I think you could live a little bit more and still be good, 25% and 20% into the 401ks and then trying to save and do a Roth on top of that is a lot of savings. To give you an idea I make about the same household income you do (a little less I think but it is just me) and my housing is similar in cost, I save 5% plus3% match plus the Roth IRA and pay close to what you do in SL. I am not rolling in money like some people seem to think I should be and occ I cringe at going out if it has been several times in a row but mostly I think I have a balance. I have also run the numbers and assuming 8% gains and 2% increase yearly salary it puts me at about 2.5 mil in 30 yrs which I think should be reasonable. Look at where your numbers put you, if it is way over the top of what you think you will need maybe your wife is right and you should have more balance??? ps forgive YM for I sinned, but saving/retirment isn't everything
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sapphire12
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Post by sapphire12 on Mar 14, 2011 9:52:15 GMT -5
In a nutshell, you can't. As one who is a bit older than you, I am reaping the benefits of saving for retirement early. It's fun to watch my money work for me. Everyone wants everything now. Yet, many of these people are the first one to complain when something happens. Life is about balance. I live today, but I save for retirement. It is possible to do both. The difference being that I'll be able to retire when I'm first eligible, whereas most of friends will not have that option.
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bimetalaupt
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Post by bimetalaupt on Mar 14, 2011 9:54:23 GMT -5
I think of retirement savings like I do insurance: I might not ever need it, but if I do, I'll sure be glad I have it. ;D I was working for a large Baptist hospital in Abilene and one of those long talks about money and smoking came up.. The hospital would pay for stop smoking drugs and the doctors were paid for also.. It was all about 5% matching that several Pharmacy techs did not use for the 403.. I got my HP 12C and ran the numbers for them.. At first my senior tech told me about a great place to put my HP 12C...Did they really miss the 5%.. No but the 10% made them a real nice retirement pie. The never lost money as most used a lot of bonds and taxes also made the cut nice..So 5% cost them 4% or 3.5% and stop smoking saved them about $25 every other week in health care cost. I never again asked about the cost of the smokes... Just a thought, Bruce Attachments:
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Post by Deleted on Mar 14, 2011 10:05:52 GMT -5
personally I am not convinced your balance is healthy. I think you could live a little bit more and still be good, 25% and 20% into the 401ks and then trying to save and do a Roth on top of that is a lot of savings. To give you an idea I make about the same household income you do (a little less I think but it is just me) and my housing is similar in cost, I save 5% plus3% match plus the Roth IRA and pay close to what you do in SL. I am not rolling in money like some people seem to think I should be and occ I cringe at going out if it has been several times in a row but mostly I think I have a balance. I have also run the numbers and assuming 8% gains and 2% increase yearly salary it puts me at about 2.5 mil in 30 yrs which I think should be reasonable. Look at where your numbers put you, if it is way over the top of what you think you will need maybe your wife is right and you should have more balance??? ps forgive YM for I sinned, but saving/retirment isn't everything We are not trying to max ROTH so might be different in that case. We contributed about $1,500 each into our ROTH last year and might do the same this year or even less since we are saving for something else (honeymoon in august and another trip at the end of the year) We prefer to reduce our tax liability (DINKS) by reducing our taxable income. Yes I know the usual response is - 401K to company match - max ROTH - back to 401k till you max ps forgive YM since I have sinned also.
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Post by Deleted on Mar 14, 2011 10:29:50 GMT -5
How nice of a nursing home do you really need? If I am laying in bed just staring at a TV and can't really do anything, who cares how nice the lobby is? As long as they provide those little blue pills I think I will be a happy camper
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Gardening Grandma
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Post by Gardening Grandma on Mar 14, 2011 10:52:49 GMT -5
How nice of a nursing home do you really need? If I am laying in bed just staring at a TV and can't really do anything, who cares how nice the lobby is? As long as they provide those little blue pills I think I will be a happy camperYou both are kidding, right? I've seen some nursing homes that I'd rather be dead than be in. Odors, drugged elderly people sitting around in wheelchairs because there are no activities for them. Not enough staff so incontinent people are left in their waste.....Food that would make you gag. I visited my aunt in one of those. She was pretty far gone. She didn't get moved enough and developed gangrene. First one foot had to be amputated, then the other. Then they had to amputate from the knee down. She had a feeding tube and was in diapers. (Which were not changed often enough). It's easy to be flippant until you have some first hand experience with the wide variety of nursing homes....
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Post by Deleted on Mar 14, 2011 11:26:59 GMT -5
Here's some depressing reading. money.cnn.com/2011/03/14/news/economy/senior_citizens_elderly_state_budget_cuts/index.htm?hpt=T2Medicaid was not meant to be long-term care insurance for the middle class. States are cutting their Medicaid reimbursement rates to nursing homes and some will be closed. Some also have private patients, but you can gouge them only so much to make up what you lose on Medicaid. I do not want to be looking for another place to stay when I'm in my nineties. And, as the article points out, good programs can keep you from becoming an invalid- exercise, nutrition, prevention of falls, etc. But those are "frills" in a low-budget place.
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telephus44
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Post by telephus44 on Mar 14, 2011 11:40:35 GMT -5
Honestly, I also think you're maybe being a little too aggressive with the retirement savings. I know from reading these boards that you also want to buy a house and have kids, and both of those are being put off because "you can't afford it." If you cut back on the retirement savings, then you wouldn't be putting off a house and kids as long as you already are.
I'm NOT saying to throw in the towel and party it up. But at some point, you need to balance your short term future with your long term future. And if I were your wife, I'd be saying the same thing. I was 28 when my son was born and 30 when I bought my house. If I had put aside 20% instead of 10% for retirement, I'd have had to wait another 5-7 years for both of those.
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 11:46:46 GMT -5
I am not being flippant. But, i realize life has an end, I am not going to live forever, and i don't want supportive measures, tube feedings or any such thing. And, as for being that far gone, what is the point of prolonging the inevitable? At some point, you have a choice to make. And, you can choose to have "everything" done or not. Some people do, some don't.
Spoken like someone who never had an aging relative who has fell victim to Alzheimers.
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Gardening Grandma
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Post by Gardening Grandma on Mar 14, 2011 11:47:24 GMT -5
I am not being flippant. But, i realize life has an end, I am not going to live forever, and i don't want supportive measures, tube feedings or any such thing. And, as for being that far gone, what is the point of prolonging the inevitable? At some point, you have a choice to make. And, you can choose to have "everything" done or not. Some people do, some don't.
I completely agree. My aunt's care (or lack of it) were a result of her daughter's decisions...
But, living in a NH, doesn't necessarily mean being on feeding tubes. There are middle grounds where you might be unable to live alone and care for yourself but not need feeding tubes either. Personally, I want to have the means, should it become necessary, to live in one of the places that is more pleasant to live in.
Spoken like someone who never had an aging relative who has fell victim to Alzheimers.
Thank you and karma for that, SF. (As some of you know, my mother lives in a nh due to Alzheimer's)
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 11:52:02 GMT -5
Thank you and karma for that, SF. (As some of you know, my mother lives in a nh due to Alzheimer's)
My grandmother fell victim to Alzheimers. She was 93 when she died, her mind and faculties were completely gone, other than age related ailments, she was fine. My dad and aunts had to put her in a nursing home, because she would routinely wander out of the house, then forget why she went out, and also forget where she lived. The remaining months of her life she had no idea who her children were. Pretty sad....depressing.
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