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Post by Deleted on Jan 14, 2017 12:40:19 GMT -5
Any sane person would save in a bank account before investing with projected negative yields after expenses but have you taken a peek at how long accumulating that amount would take? When you're talking about investing $500 a year, or even $1000 a year, those modest-sounding annual and per-transactions fees can produce scenarios in which investing in equities produces lower yields than Christmas Club savings accounts for the better part of a decade. Please repeat that last part. No return for the better part of a decade. Now try the math again, let's try saving for three years and investing annually. I'm sure that this return is quite a bit better, but is it still anywhere close to what the index investment returned? That second return might be a lot better than bank savings rates, a lot better than what paying off a mortgage or an automobile loan early yields, and still pretty sickly when compared to what the Dow or S & P has done historically. I get kinda bilious (although I have no idea which end that entails) when folks start talking about the market return during that period when I'm pretty sure that there was no return at all for the first five to ten years. Why a decade? At $500/yr savings they'll be at $1000 in two years. The minimum to open a Star or Target fund at Vanguard.
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Plain Old Petunia
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Post by Plain Old Petunia on Jan 14, 2017 14:09:23 GMT -5
I'm not sure if having 130K in investments and retiring today would make you exactly wealthy.... I think the average SS payment is about $1600 which is under 20K a year and you will need your 130K to last at least 20 years... definitely not awful and probably doable -- but not sure if it would qualify as "wealthy"
FWIW: I do firmly believe that saving something from every paycheck (even if it's $10 a month) will eventually be more beneficial than NOT saving at all. I also firmly believe that when you are starting out having a budget/spending plan that spans more than the next paycheck and attempting to stick to it (and revise it and to keep working at it) also is more beneficial than not having a budget/spending plan. Without a 'plan' which forces you to look into the future and to acknowledge where your money is going - your future is literally at the mercy of your next whim (spending money you shouldn't be spending).
Another interesting idea about living a life time in a low paying job would be the idea of "basic guaranteed income" - where everyone? would get a fixed amount every month from the government... and then it's up to them to fill in any gaps with whatever other income they can get. If you don't aspire to a glamourous lifestyle and have some sort of work that you enjoy (that doesn't pay much long term) I imagine it could work rather well.
A few observations on this: Years ago our paper had a personal finance columnist. Someone wrote to him and asked that he be realistic and, instead of giving advice to people with half a million saved for retirement, provide advice to those "who would feel blessed to retire with $50,000 or $100,000". The columnist's advice: "Keep working". I'm 2.5 years into retirement and there's a lot of "stuff happens". Expenses of downsizing. Replace furnace. Replace A/C. This year I owe a boatload of taxes. Future "oh, crap" events will include replacing a car, maybe needing a dental implant or two, or blowing through my medical deductible. I can't tell you what or when but they'll happen. It would be very easy for that $130K to erode over the years, especially if you make the mistake many new retirees make and blow a lot on travel and hobbies early on. Guaranteed minimum income- isn't that what SS is? OK, there's no minimum benefit AFAIK, but the idea was to provide enough for basic needs (with a formula weighted to give lower wage earners a bigger % of their previous average wages). It was always intended that personal savings would supplement that. On traffic fines tied to income: I know that Switzerland does that. I also worked for a sub of Prudential years ago that had a higher medical deductible for lower-income workers. I had the higher deductible (I think it was $1,000 in the 1990s) and it made sense to me. Not perfect, of course since you could be a low wage earner with a spouse who made a lot of money working elsewhere, but it was a start. In practice, there is a minimum. Because if you are on SS, and all of your income is less than $735 per month, you can also draw SSI. The amount of SSI will supplement your other income to get you to $735 per month. ($1103 for a couple).
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Plain Old Petunia
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Post by Plain Old Petunia on Jan 14, 2017 14:12:35 GMT -5
Any sane person would save in a bank account before investing with projected negative yields after expenses but have you taken a peek at how long accumulating that amount would take? When you're talking about investing $500 a year, or even $1000 a year, those modest-sounding annual and per-transactions fees can produce scenarios in which investing in equities produces lower yields than Christmas Club savings accounts for the better part of a decade. Please repeat that last part. No return for the better part of a decade. Now try the math again, let's try saving for three years and investing annually. I'm sure that this return is quite a bit better, but is it still anywhere close to what the index investment returned? That second return might be a lot better than bank savings rates, a lot better than what paying off a mortgage or an automobile loan early yields, and still pretty sickly when compared to what the Dow or S & P has done historically. I get kinda bilious (although I have no idea which end that entails) when folks start talking about the market return during that period when I'm pretty sure that there was no return at all for the first five to ten years. You can open an IRA account at Schwab with $100. You can choose from their list of no trade fee ETFs, or you could invest in their new Target Retirement Funds which use index funds and cost even less than Vanguard. There might be an annual custodial fee, but if so I bet they waive it if you choose electronic delivery of statements. Vanguard does, and Schwab appears to be trying hard to compete with Vanguard.
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Plain Old Petunia
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Post by Plain Old Petunia on Jan 14, 2017 14:19:18 GMT -5
You can start a roth ira for as little as 100 at schwab and invest as little as 1 as followup and they have very low fees so this shouldn't be a burden Plus there is now "my ira" which is ran by the government some how amd had even lowet start points but after you hit a certain level you have to roll it over to a regular service Would an IRA with $100 invested in it be charged an annual "account fee"? Low trading fees and expense ratios are nice, but low-balance fees of as little as $20 a year can take a heck of a bite out of returns on small accounts. Ditto for a hypothetical $2 trading charge on a $25 a month investment. If you keep pouring small amounts of money into these accounts for long enough, the annual rates of return on that investment after fees will eventually turn from negative to something approaching the historical return for what you're buying but, by golly, those early can ROIs stink and stay stinky for quite a long time! I'd love to believe that the things that tiny and rukh had to say about how nobody with that little to invest was possibly getting annual rates of return anywhere close to what the Dow returned are no longer true "because technology", but I am having a spot of trouble believing it. I just looked. On the IRA page, Schwab's website says: So if you choose from their no trade fee ETFs or their own mutual funds, you pay only the expense ratio of the fund or etf you choose. And they do have ultra low costs. For example, their total stock market etf SCHB has an expense ratio of .03.
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beergut
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Post by beergut on Jan 14, 2017 16:26:32 GMT -5
Because of the balance requirement that banks have for free savings accounts. That's just the big stupid banks like WF and US Bank. You can always go somewhere else. Our credit union doesn't charge any fees for a savings accounts. Online banks like Capital One 360 (previously ING) and Ally, don't charge fees. If you go to Treasury Direct you can still buy bonds or open a MyRA, with no fees or minimums. It's earning 2.375% now and you can invest as little as $2 at a time. I swear, this needs to be a technical term used in the financial industry. "Well, Tom, the problem is that he went to one of the BSBs, the big stupid banks, to start investing...." This struck me as absolutely hilarious for some reason, thanks for the smile, MPL.
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beergut
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Post by beergut on Jan 14, 2017 16:33:32 GMT -5
Would an IRA with $100 invested in it be charged an annual "account fee"? Low trading fees and expense ratios are nice, but low-balance fees of as little as $20 a year can take a heck of a bite out of returns on small accounts. Ditto for a hypothetical $2 trading charge on a $25 a month investment. If you keep pouring small amounts of money into these accounts for long enough, the annual rates of return on that investment after fees will eventually turn from negative to something approaching the historical return for what you're buying but, by golly, those early can ROIs stink and stay stinky for quite a long time! I'd love to believe that the things that tiny and rukh had to say about how nobody with that little to invest was possibly getting annual rates of return anywhere close to what the Dow returned are no longer true "because technology", but I am having a spot of trouble believing it. What's wrong with just saving up in a regular bank account until you meet the fund minimums? My first retirement investment ever came from cashing in a $2000 pile of savings bonds. But, there is also Betterment now that just has a few Vanguard index funds and has really low fees and minimum investments. A good place to build up the first $1000 or so then just transfer to Vanguard directly. My first brokerage account was started through sharebuilder, where I literally saved my spare change every day for a few months, calculated how much it came out to, and then started investing that amount. It meant my account started with only $84 a month, but that was enough to get me to $1000 a year. It is such a shame that such a simple option like that isn't available anymore. I do know that they have done studies showing that saving up a large chunk of money in conservative bond funds early on and then going aggressive later with stock mutual funds returns the same or almost the same at retirement as dollar-cost averaging into stock funds from an early age. There are multiple options out there, people just have to want to find them instead of looking for an excuse not to try.
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teen persuasion
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Post by teen persuasion on Jan 15, 2017 12:02:14 GMT -5
A very low-income worker should absolutely not be doing a 401k as their first option. The benefit is a tax savings up front, but with the Saver's Credit they have no tax liability anyway. The only thing that funding a 401k does at that point is to create a needless tax liability later. Do the Roth instead. As much as you can. The numbers (brackets) on the Saver's Credit really are stupid though. It is supposed to be a maximum $1000 credit, but it is designed so that you cannot maximize it. With the personal exemption and the standard deduction in place, you cannot have a tax liability anywhere near high enough to take the maximum credit. It should either be refundable or the break point should be higher. As it is, it's just dumb. It's even more useless if you have kids, since then you also have a few more exemptions, but the phaseout levels remain the same. I'd love it if it was refundable (and better yet, had a state analog - my state has stupid low exemption levels). As it is, I usually only wistfully look at the credit as it is wiped out when our taxable income hits zero from efforts to maximize our fully refundable EITC (matched at 30% by state, also refundable), or partially refundable AOTC. I'd wondered if it might someday be useful when the kids were gone and if we (semi-)retired early, to offset Roth conversion income. Nope - any withdrawals in a several year period disqualify you, so a Roth ladder (while working just a bit to keep pushing to Roth IRA) is not going to work.
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Post by Deleted on Jan 15, 2017 12:16:50 GMT -5
I'm confused. Why couldn't you be able to take the full amount? I'm missing something.
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Post by Deleted on Jan 15, 2017 12:18:34 GMT -5
Ok. So it doesn't work for very low income, but closer to the higher end it might, yes?
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Deleted
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Post by Deleted on Jan 15, 2017 12:22:14 GMT -5
I'm confused. Why couldn't you be able to take the full amount? I'm missing something. Because it's not refundable and the income limit for the 50% credit is so low. People can get the 10% credit up to the full 2K, but the 50% is a joke.
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Deleted
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Post by Deleted on Jan 15, 2017 12:23:06 GMT -5
Ok. That makes sense. Thanks.
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Post by Deleted on Jan 15, 2017 12:32:34 GMT -5
For head of household, the income limit for 50% credit is 27K AGI. After the standard deduction and two personal exemptions taxable income is at most $9500 or so, then there is the $1000 child tax credit. So, no tax due. No Savers Credit. Single is the best shot at 18K max AGI. After standard deduction and personal exemption there is $7650 taxable income, so they can potentially get $765 of the $1000 max. eta: According to TaxAct this year, my Saver's Credit is $657 and my Dependent Care Credit is $150. I'm not getting a nickel of either of those. I wish they wouldn't tell me what it could be.
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Tired Tess
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Post by Tired Tess on Jan 15, 2017 18:30:14 GMT -5
I was also there in the '80s and '90s and I spent every penny I made. My father was a very good man who worked a full-time and part-time job for years and yet we never had money. It went to tuition. Ugh. I'm very grateful they wanted the best education for all 5 of us, but we didn't get any special Xmas gifts or birthday gifts. No AC in our house. One TV, one phone. One car.
When I got my full-time paycheck I spent it on myself. I purchased clothes from a store. No hand me downs from friends or cousins. I purchased a bike!! I purchased a car (and drove my dear Mom all over NJ).
My father made me sign up for the 401K and I hated doing it so I stopped without telling him. My thought was if this was such a good deal why didn't he do it? He did, but had to stop contributing because of constant unemployment.
I am teaching my kids better. I give them articles to read. I show them the bills. I explain how DH and I want to retire and how we plan to do it. I think I'm reaching them.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jan 16, 2017 18:44:23 GMT -5
So $7.25 an hour is $290 a week gross before taxes. Even assuming somehow they don't take out any fed or state taxes, which most do at least a small amount, just Medicare and SS type of thing would have to be 15%. So where does one live indoors and not have to eat road kill on $246.50 a week? I could EASILY live on $246.50 per week. I wouldn't like my life much, and it would probably light a fire under my ass to get something else going- but purely in terms of needs, I could eat and sleep in the climate controlled indoors with one other adult even on that. It's interesting to me that you bring up taxes, and what they'd take out to get to your net assumption of $246.50 per week- yet I note no calculation of possible taxpayer paid benefits? Aren't we repeatedly berated with notions of "Wal-Mart getting subsidies from the tax payers" for not paying their employees enough?
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formerroomate99
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Post by formerroomate99 on Jan 16, 2017 19:10:14 GMT -5
I suppose if said minimum-wage earner chose to never had children... If you're only making minimum wage, you have no business having children. Accidents happen, but there is a thing called adoption.
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973beachbum
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Post by 973beachbum on Jan 17, 2017 10:06:26 GMT -5
So $7.25 an hour is $290 a week gross before taxes. Even assuming somehow they don't take out any fed or state taxes, which most do at least a small amount, just Medicare and SS type of thing would have to be 15%. So where does one live indoors and not have to eat road kill on $246.50 a week? I could EASILY live on $246.50 per week. I wouldn't like my life much, and it would probably light a fire under my ass to get something else going- but purely in terms of needs, I could eat and sleep in the climate controlled indoors with one other adult even on that. It's interesting to me that you bring up taxes, and what they'd take out to get to your net assumption of $246.50 per week- yet I note no calculation of possible taxpayer paid benefits? Aren't we repeatedly berated with notions of "Wal-Mart getting subsidies from the tax payers" for not paying their employees enough? Paul some of my assumptions are because of where I live. I know there are places where a few hundred will rent you someplace but most people don't live in those places which is why they have such low rents. That type of money will only barely get you half of a very small 1 bedroom here even assuming you can find one for under $700 a month. It does happen though so I do concede that. But I did leave out things like subsidies because around here there are none for single adults. There are health insurance but not things like "free" hud housing or utilities type of thing. Even if someone had a family around here the wait lists are years long and a lot of the time they actually close the list. I actually know that because every now and then they "open" the hud secion 8 housing list up and the line at the county office is so long it makes the nightly news. But at least around here no you couldn't rent much by yourself on that salary. They have stories on the news also about no tell motels that rent by the week and I think even they are over $200 a week. I think the biggest problem with the people there though is they would need to stop paying so much ever week in order to be able to save up enough to rent anything.
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formerroomate99
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Post by formerroomate99 on Jan 17, 2017 12:02:02 GMT -5
But 973, how many jobs in your area are actually paying minimum wage? In most parts of this country, it's pretty easy to find jobs that pay more than the minimum wage.
And yes, if housing is sky high and salaries are low, then you might have to resort to a living situation where you are sharing with more than one person and don't have your own bedroom. I did it for most of my college years, as did most of my classmates. We all survived.
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NastyWoman
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Post by NastyWoman on Jan 17, 2017 14:43:20 GMT -5
I suppose if said minimum-wage earner chose to never had children... If you're only making minimum wage, you have no business having children. Accidents happen, but there is a thing called adoption. ...since we don't have a button for this a post will have to do
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formerroomate99
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Post by formerroomate99 on Jan 18, 2017 7:59:38 GMT -5
Just curious, does anybody here really think that saving for retirement is the best use of extra money for someone who is trying to support themselves on minimum wage? I would think saving for some kind of training for a better job or saving to relocate to a place with more opportunity would be a better use of the money.
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973beachbum
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Post by 973beachbum on Jan 18, 2017 9:12:30 GMT -5
But 973, how many jobs in your area are actually paying minimum wage? In most parts of this country, it's pretty easy to find jobs that pay more than the minimum wage. And yes, if housing is sky high and salaries are low, then you might have to resort to a living situation where you are sharing with more than one person and don't have your own bedroom. I did it for most of my college years, as did most of my classmates. We all survived. Most jobs here are going the way of PT and seasonal unfortunately. The "normal" FT job with benefits type of thing is just becoming rare. Parents I know are encouraging kids to move out of the area or at least closer to commuting distance to a better job market. So to answer you question in the summer it is pretty easy to make over min wage by a dollar or two. The problem comes at the end of Sept when they are down to twenty hours a week or laid off entirely until spring.
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gooddecisions
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Post by gooddecisions on Jan 18, 2017 10:50:08 GMT -5
I knew a man who never could get his financial act together. He was 36 when I met him and is 48 now. He gets by and lives pretty well paycheck to paycheck. He has always found somebody willing to rent a room in their house for $100/week. He is not concerned about saving for retirement as he will likely never retire.
That's what you do when you're strapped. You don't get your own one br apartment for $1200+/month plus utilities. You get a cheap cell phone, bus pass and rent a room in somebody's house, at least if you are single.
When my family was poor when I was young, we moved into a basement.
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gs11rmb
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Post by gs11rmb on Jan 18, 2017 11:00:25 GMT -5
Just curious, does anybody here really think that saving for retirement is the best use of extra money for someone who is trying to support themselves on minimum wage? I would think saving for some kind of training for a better job or saving to relocate to a place with more opportunity would be a better use of the money. I think we have to face the fact that there will always be people on the left-hand side of the bell curve when it comes to intelligence and ability. There's often talk about people improving themselves but that is not always possible and we no longer live in a society where as long as you are willing to put in a hard day of physical labor than you can provide for yourself and a family. Are we supposed to tell people that are working to the best of their abilities that they shouldn't try and save for retirement or they shouldn't get married or have children?
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milee
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Post by milee on Jan 18, 2017 11:17:35 GMT -5
Just curious, does anybody here really think that saving for retirement is the best use of extra money for someone who is trying to support themselves on minimum wage? I would think saving for some kind of training for a better job or saving to relocate to a place with more opportunity would be a better use of the money. I think we have to face the fact that there will always be people on the left-hand side of the bell curve when it comes to intelligence and ability. There's often talk about people improving themselves but that is not always possible and we no longer live in a society where as long as you are willing to put in a hard day of physical labor than you can provide for yourself and a family. Are we supposed to tell people that are working to the best of their abilities that they shouldn't try and save for retirement or they shouldn't get married or have children? It's a tough realization for our culture, since this is a change. But I do think it's reasonable to talk about what standard of living is possible on various incomes and what our society wants to (and can) provide. Certain people - even if they're working to the best of their abilities - will not be able to afford certain amenities that right now everybody expects to have. It's still puzzling to me that even the people making minimum wage or on government assistance seem to have smart phones, cable TV and cigarettes. Those are some pretty easy examples of things that you're probably not going to be able to afford on a low income and that IMHO it's reasonable for society to draw the line and say no, we're not raising taxes on the rest of the workers to provide everybody with those things. The line gets tougher when talking about amenities like single vs. shared housing, level of climate control, etc., but those are the types of discussions our society and politicians should be openly having so we can decide as a society what minimum level of amenity we think it's reasonable to support.
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Tiny
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Post by Tiny on Jan 18, 2017 11:35:59 GMT -5
Just curious, does anybody here really think that saving for retirement is the best use of extra money for someone who is trying to support themselves on minimum wage? I would think saving for some kind of training for a better job or saving to relocate to a place with more opportunity would be a better use of the money. I think it depends greatly on what kind of a place one lives in (and if they plan to remain there long term).
I live in a very large urban area... there's lots of opportunities (you might have to look for it, and wait for it, and plan for it, maybe prepare (education? do some grunt work? get your name out there?) ... but opportunities come around regularly). I can't think of many reasons why anyone would assume they will be working a minimum wage job their entire life. OK, for the record I do know a couple of semi-stay at home mom's with hubby's in stable well paying jobs - their 'life plan' didn't include a family with 2 high paid wage earners. These women opted to stay home (but often had part-time jobs/side gigs - crossing guard, worked in the school cafeteria, or some small business clerk/receptionist job). That was the trade off they willingly made to have kids and get those kids thru school (lots of extra cirriculars lots of parent involvement at school and/or Church). One of them kept with the part time work, one went to full time office work, the third one "retired" from paid work and went the full time volunteer route when the kids graduated HS.
That said, thanks to the current election - I have realized that there are vast areas in America with little or no opportunities for much more than min wage/low paying full time employment for anyone who wants it. I can imagine places where there are a limited number of well paying jobs and then limited number of 'min wage' type jobs. The number of jobs doesnt' increase - but the local population does. That means some people will be stuck in low paying jobs their entire life time IF they opt to remain in the area. That means they need to plan their future around NOT having an ever increasing income if they opt to stay where they are. So, I can imagine that there are large groups of people who will spend their 30 years of working being paid a low wage (that does increase - but not any big jumps). They will be treading water their entire working life. They do need to plan their future/retirement based on a life of low wages.
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tallguy
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Post by tallguy on Jan 18, 2017 12:06:20 GMT -5
Just curious, does anybody here really think that saving for retirement is the best use of extra money for someone who is trying to support themselves on minimum wage? I would think saving for some kind of training for a better job or saving to relocate to a place with more opportunity would be a better use of the money. I was having a conversation at work last week. One of the people was there with me when the company started a 401k many years ago. (It wasn't minimum-wage at the time, but maybe not too far above it for some people.) He had been listening to a couple of the other people saying at the time that they weren't going to put their money into it. Then he asked me.... He still remembers how I put it at the time: "If you can afford it, you absolutely HAVE TO do it. If you can't afford it, that is even MORE reason to." It changed his mind, and at least to an extent changed his life. He still thanks me for it. We still talk occasionally about money and retirement, especially considering I semi-retired a year ago. People ask him about me, "Did xxxxxx really retire?" "Yeah, he only works a couple days a week." Some of our conversations start out with me quoting statistics and saying how unbelievable they are, or should be. "One-third of American workers have zero money saved for retirement." Or, "You know, I've been maxing out both my 401k and my Roth for the last few years, but even counting only ONE year's contributions puts me at about the 57th percentile of people for retirement savings." He mentioned last week about all of the people he knows who have nothing saved, and that if it weren't for me he'd be right there with them. So yes, I do believe you should be saving for retirement almost no matter what your income. The greatest benefit you have going for you is time, and letting investments sit for many years is better than trying to catch up later.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jan 18, 2017 22:42:59 GMT -5
The bottom line is that if you make the minimum, you don't qualify for a middle class lifestyle. You don't qualify to get married and have kids. You don't qualify for your own home- you barely qualify for roommates. To me, the discussion is kinda silly. You don't need to save and invest if you make minimum wage. You need to earn yourself a raise and/or a promotion.
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beergut
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Post by beergut on Jan 19, 2017 3:44:54 GMT -5
The bottom line is that if you make the minimum, you don't qualify for a middle class lifestyle. You don't qualify to get married and have kids. You don't qualify for your own home- you barely qualify for roommates. To me, the discussion is kinda silly. You don't need to save and invest if you make minimum wage. You need to earn yourself a raise and/or a promotion. The overriding point, though, is that if you invest even just one hour of minimum wage income each week, you can have a small fortune waiting for you after 30-40 years. Too many people think they can't afford to invest, I'm simply pointing out how little amounts can grow to big gains.
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zibazinski
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Post by zibazinski on Jan 19, 2017 8:13:44 GMT -5
Just curious, does anybody here really think that saving for retirement is the best use of extra money for someone who is trying to support themselves on minimum wage? I would think saving for some kind of training for a better job or saving to relocate to a place with more opportunity would be a better use of the money. I think we have to face the fact that there will always be people on the left-hand side of the bell curve when it comes to intelligence and ability. There's often talk about people improving themselves but that is not always possible and we no longer live in a society where as long as you are willing to put in a hard day of physical labor than you can provide for yourself and a family. Are we supposed to tell people that are working to the best of their abilities that they shouldn't try and save for retirement or they shouldn't get married or have children? Yes. There's no reason to bring innocent children into this mess. Getting married should improve your financial status unless you marry another mouth to feed and not a working person. If you choose not to better yourself, that's your choice. Don't foist it on others.
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Tiny
Senior Associate
Joined: Dec 29, 2010 21:22:34 GMT -5
Posts: 13,488
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Post by Tiny on Jan 19, 2017 12:06:43 GMT -5
The bottom line is that if you make the minimum, you don't qualify for a middle class lifestyle. You don't qualify to get married and have kids. You don't qualify for your own home- you barely qualify for roommates. To me, the discussion is kinda silly. You don't need to save and invest if you make minimum wage. You need to earn yourself a raise and/or a promotion.Yes, but it seems in many areas of the US there aren't any local jobs that can include never ending raises for low end jobs (you can't stay a burger flipper for 30 years and expect your income to go up regularly every year until you are earning 100K per year) AND there is no 'next level' to get promoted to - or actually, what I mean is as an example there are 15 low income jobs and to 1 higher income job... not all of the 15 workers has a place to be PROMOTED to... and even then it may become a case of waiting for the 1 higher income job holder to die (or retire) before they can move up the ladder.
If there isn't an infrastructure of "jobs" available - the only options are to stay and manage on low wages OR move away. Not everyone wants or can leave where they live.
I think this is where the idea of "Basic Income" provided by the government comes in. It would allow the people who don't want to/can't move to a better place to remain having a reasonable lifestyle while working a low paying, dead end job(s) for most or all of their lives. I'm not saying that's bad. The endless striving for money can be an empty unhappy life...
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beergut
Senior Member
Joined: Jan 11, 2011 13:58:39 GMT -5
Posts: 2,184
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Post by beergut on Jan 19, 2017 20:31:01 GMT -5
The bottom line is that if you make the minimum, you don't qualify for a middle class lifestyle. You don't qualify to get married and have kids. You don't qualify for your own home- you barely qualify for roommates. To me, the discussion is kinda silly. You don't need to save and invest if you make minimum wage. You need to earn yourself a raise and/or a promotion.Yes, but it seems in many areas of the US there aren't any local jobs that can include never ending raises for low end jobs (you can't stay a burger flipper for 30 years and expect your income to go up regularly every year until you are earning 100K per year) AND there is no 'next level' to get promoted to - or actually, what I mean is as an example there are 15 low income jobs and to 1 higher income job... not all of the 15 workers has a place to be PROMOTED to... and even then it may become a case of waiting for the 1 higher income job holder to die (or retire) before they can move up the ladder.
If there isn't an infrastructure of "jobs" available - the only options are to stay and manage on low wages OR move away. Not everyone wants or can leave where they live.
I think this is where the idea of "Basic Income" provided by the government comes in. It would allow the people who don't want to/can't move to a better place to remain having a reasonable lifestyle while working a low paying, dead end job(s) for most or all of their lives. I'm not saying that's bad. The endless striving for money can be an empty unhappy life...
If you work flipping burgers for a year or two, there are opportunities to move into management. I see signs all the time on local fast food joints where they are looking for people to work in management. The average assistant manager working at a fast food restaurant makes $27,643 a year. At Whataburger, our local favorite burger joint in Texas, the restaurant manager makes $39,379 per year, per Glassdoor. That isn't a fortune, but it isn't terrible, either. A general manager at Chick-Fil-A makes $46,471 a year. If the GM saves 10% of their income for two years, they have more than enough to qualify for the $5000 franchise fee to open their own Chick-Fil-A restaurant. Franchise owners make about $100k a year starting out. A driver at Domino's Pizza qualifies to go into their franchise owners program after working there for one year. I know of a guy who started out as a driver at a Domino's in Arizona, he now owns all of the franchises in Tucson. There are plenty of so-called 'dead-end' jobs that offer opportunity for advancement and even future wealth, people just need a long-term outlook and the ability to set goals.
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