Retirees: Get ready to live on $190 a month

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Jeremy
Posts: 65
Joined: Fri Sep 24, 2010 8:16 pm

Post by Jeremy »

http://money.cnn.com/2010/12/08/retirem ... /index.htm
"...Americans aren't saving enough, they are underestimating the amount of money they will need in retirement, and they are more likely to end up working through retirement."


DividendGuy
Posts: 441
Joined: Sun Dec 05, 2010 9:58 pm

Post by DividendGuy »

My favorite part is when they say that "72 percent of Americans now expect to work through retirement". What kind of retirement is that? If you're working, then you're not really retired. People have gotta get their act together.


Mo
Posts: 443
Joined: Wed Jul 28, 2010 1:35 pm

Post by Mo »

I always like the implication that something rational-- like eschewing consumerism, or actually budgeting in terms of money in greater than money out (looking at you U.S. gov't) is entirely out of the question...
One 'can make a $5k catch-up contribution'... or make a $24k catch up commitment, your choice.


HSpencer
Posts: 772
Joined: Wed Jul 21, 2010 11:21 pm

Post by HSpencer »

I can't get over the people who are 55-65 years old and STILL paying on a mortgage. Insane. These people jumped on the greed wagon and got themselves a McMansion during the boom of the last decade. Now they are looking at unemployment or retirement age, and still paying on the big house they just had to have. If everyone had been buying space shuttles, I guess these folks would have gotten one of those as well.

First rule for retirement---Have your roof paid for.


dragoncar
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Joined: Fri Oct 29, 2010 7:17 pm

Post by dragoncar »

From the comments of the article (grain of salt): "the survey EXCLUDED fifty somethings with net investments of over 100K and salary over 100"
The study apparently has many other flaws, including the issue of pensions, home equity, etc.
Of course, I still believe there are far too many without adequate retirement prospects.


HSpencer
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Joined: Wed Jul 21, 2010 11:21 pm

Post by HSpencer »

Not saving enough. How can they?
Just one example would be World*Mart. A lot of people have to work for them due to lack of better jobs, or they simply failed to get any workforce training. World*Mart likes to hire most of their people for "38" hours a week. This hiring policy drops any hope of benefits like health care or profit sharing, or any kind of retirement plan. They pay a dollar or two above minimum wage, in many locations. Therefore, it takes each and every cent someone could make to live. Nothing is left for individual savings/retirement accounts.

World*Mart is not the only one doing this. Target, Sears, other retails handle most of their "associates" in a similar manner. Companies who do pay something on retirement plans for their people are either downsized, off- shored or out of business. No, not all, but a lot. Ten Percent (9.8%) unemployment at the last gubbermint admission. This means real unemployment is a whole lot higher.

Not saving enough? Give me a break. In these times, even the folks with an ok financial position (at present) aren't saving enough. And finally, while saving is great for the financial health, two percent (2%) passbook bank accounts are what most people are doing. Most people don't have enough funds to get above that rate.


Seabourne
Posts: 30
Joined: Fri Jul 30, 2010 10:22 pm

Post by Seabourne »

Given the current interest rates, I wouldn't knock having a mortgage at 55 right now. A lot of people have locked in rates under 5%, and you're really getting into an area where someone can reasonable think that they can do better with investments, particularly if they believe that inflation is going to increase. It's not necessarily the silly position to be in that it would seem to be when people are paying 7 and 8% on those loans.


M
Posts: 423
Joined: Wed Sep 29, 2010 7:34 pm

Post by M »

@HSpencer - it could be worse. My neighbor is retired, 68 years old, and owes almost as much money on his house as what it is worth. He's lived there for over 40 years. I didn't even know it was possible to pull something like that off.
Now he barely lives from one social security check to the next, and yet he still dishes out free "financial advice" to anyone who will listen. Such as "don't think about the future, spend your money now, you could die tomorrow."
What is sad is that he's the best example of a retired person I can think of. Everyone else I personally know who "retired" either died shortly afterward or went back to work because they ran out of money.


orinoco
Posts: 74
Joined: Sat Jul 24, 2010 11:28 am
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Post by orinoco »

The BBC here seem to be running a campaign to raise awareness of the issue at the moment. The feature includes various scare stories & a very basic maths lesson. Unfortunately though the 'Your views' page contains a number of stories each of which I would find more persuasive to not join a pension scheme.
I did find this quote particularly amusing though:
I still have not started a pension and I am 36. To be honest isn't that what National Insurance is for? If not then why do we pay it? I would like all the money I have put into NI to be used for me. Wayne Martin, Tilbury, Essex
Did someone say personal responsibility was dead?


Kevin M
Posts: 211
Joined: Thu Jul 22, 2010 8:58 pm

Post by Kevin M »

HSpencer said:

"First rule for retirement---Have your roof paid for."
Amen, brother. I'll never forget the tax return I prepared last year, 55ish year-old attorney refinanced their home to a 30 year fixed and took out cash. I guess he thinks he will still be making $200k when he's 85?


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