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60% seems high, but...
Old 03-27-2009, 03:42 PM   #1
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60% seems high, but...

I guess that I'm out of the loop, if there is a loop on this, but this 60% number seems high to me even though I believe that it should be higher today than a couple of years ago.

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Sixty percent of workers over the age of 60 say, according to a CareerBuilder.com survey that questioned 8,000 employees, retirement isn't in the immediate future. These workers intend to remain in the office due to the impact of the recession on their long-term savings.
Amy Winter : Personal Finance : Retirement Delay Becomes More Common Among Older Employees - Townhall.com
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Old 03-27-2009, 03:54 PM   #2
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Not out of the loop in my opinion. The survey was done online at Careerbuilder.com. How many 60'ish folks wrapping up in stable enviornments do you think responded? I bet a lot of folks with good jobs have never even gone onto that website. Now had it been done in a grocery store on a Saturday, I might give it some credence. I agree with you higher now than a year ago. Also, many work until they get to SS even if they have a DBP. They want more money once retired and many had paltry savings even before this current melt down.
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Old 03-27-2009, 04:22 PM   #3
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Let's see, in 2006 the median net worth of households headed by someone between the ages of 60 and 69 was $209,000 (as per the Washington Post). That included home equity. And that was before the huge drop in real estate and stock prices. I think that it's safe to say that the median net worth is probably much lower now than it was in 2006 (according the the WSJ, average net worths were down 18% in 2008, and older Americans were disproportionally hit because they had more to lose. USA Today puts the drop at 23% since late 2007). So we are looking more or less at a median net worth around $167,000 for households in their 60's (again including home equity).

So unless you receive a fat pension and/or a solid SS benefit, if your net worth stands at $167,000 or less it's probably wise to keep working for as long as your body allows you to do it...
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Old 03-27-2009, 04:52 PM   #4
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Let's see, in 2006 the median net worth of households headed by someone between the ages of 60 and 69 was $209,000 (as per the Washington Post). That included home equity. And that was before the huge drop in real estate and stock prices.
OK, you convinced me. I didn't realize it, but relative to the median I'm rich after all! But then in 2006, I was a mere child at the tender age of 57.

I think probably that median reflects the fact that some people in the upper end of that age group have a full, generous pension in place. The rest of us have to build more of a nestegg.
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Old 03-27-2009, 05:02 PM   #5
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So unless you receive a fat pension and/or a solid SS benefit, if your net worth stands at $167,000 or less it's probably wise to keep working for as long as your body allows you to do it...
IMO, this is why the surveys showing that so many people over 50 have investments of less than $100,000 is useless without context.

Someone over 50 with a 401K balance of $60,000 and no pension might as well forget about retirement. Someone over 50 with no 401K at all but with a secure job and a generous pension can retire much more easily despite having zero personal investments -- and even more so if you added in retiree health insurance.

I suspect that for typical middle-class people in that situation with 25+ years of creditable pension service and retiree health insurance, if you included the present cash value of their pensions and retiree health insurance you'd probably add $500K to $1M+ to someone's "imputed" net worth. And studies that only look at personal retirement savings without considering their pension, health insurance and SS status is misleading at best.
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Old 03-27-2009, 05:04 PM   #6
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I think probably that median reflects the fact that some people in the upper end of that age group have a full, generous pension in place. The rest of us have to build more of a nestegg.
I do not think that that point can be stressed enough, especially for those under age 35 or so.
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Old 03-27-2009, 05:13 PM   #7
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Someone over 50 with a 401K balance of $60,000 and no pension might as well forget about retirement.
But don't forget that one of the great things about reading this board, is hearing the inspirational stories of those who manage to retire against all odds. So I wouldn't say that they might as well forget about retirement entirely (and go spend that $60K on gambling, booze, gluttony, and women so that they die young with clogged arteries and a smile on their faces), so much as to realize that reaching retirement will be quite a huge and formidable challenge.
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Old 03-27-2009, 05:13 PM   #8
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Ironic that this story was just posted by the AP, about Cuba's graying population and the retirement situation there--according to the article, "The minimum monthly pension was worth about $92 in 1989. Adjusted for inflation, it is now the equivalent of $9.50." (I know this is comparing cigars to apples but thought it was interesting):

Cuba boosts retirement age as population goes gray

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Faced with an aging population and a life expectancy of 77.3 years, nearly the same as the U.S., Cuba's government has raised the retirement threshold by five years, to 60 for women and 65 for men, delaying the second jobs many have counted on to make ends meet in their old age.
About 90 percent of Cubans have government jobs, and now both sexes must work at least 30 years, not 25, to get a full pension.
"Retirement in Cuba was already no picnic. Now it's more complicated," said Oscar Espinosa Chepe, a state-trained economist turned political dissident.
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Old 03-27-2009, 05:30 PM   #9
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So I wouldn't say that they might as well forget about retirement entirely (and go spend that $60K on gambling, booze, gluttony, and women so that they die young with clogged arteries and a smile on their faces), so much as to realize that reaching retirement will be quite a huge and formidable challenge.
Okay, I'll amend that: if they live simply, have a modest and paid off house and no debt, such a couple can probably scrape by if they both start collecting SS at 70.
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Old 03-27-2009, 05:31 PM   #10
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Faced with an aging population and a life expectancy of 77.3 years, nearly the same as the U.S., Cuba's government has raised the retirement threshold by five years, to 60 for women and 65 for men, delaying the second jobs many have counted on to make ends meet in their old age.
Oh, that's real fair. Women live 5-7 years longer than men AND get to retire 5 years earlier?!?!
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Old 03-27-2009, 05:39 PM   #11
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Oh, that's real fair. Women live 5-7 years longer than men AND get to retire 5 years earlier?!?!
Sounds great! But one would have to live in Cuba.
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Old 03-27-2009, 06:00 PM   #12
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Cuba's government has raised the retirement threshold by five years, to 60 for women and 65 for men,
Communism's idea of equality of all?
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Old 03-27-2009, 06:03 PM   #13
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Ironic that this story was just posted by the AP, about Cuba's graying population and the retirement situation there--according to the article, "The minimum monthly pension was worth about $92 in 1989. Adjusted for inflation, it is now the equivalent of $9.50." (I know this is comparing cigars to apples but thought it was interesting):
I like this part:

"The government says 3 million people attended town-hall meetings to discuss the potential retirement age increase last year, with 99.1 percent supporting it. Workers who attended say many complained, but didn't dare oppose the measure in a public show of hands."

I guess the 0.9 percent who didn't vote for it were crippled and couldn't raise their arms.
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Old 03-27-2009, 06:12 PM   #14
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IMO, this is why the surveys showing that so many people over 50 have investments of less than $100,000 is useless without context.

Someone over 50 with a 401K balance of $60,000 and no pension might as well forget about retirement. Someone over 50 with no 401K at all but with a secure job and a generous pension can retire much more easily despite having zero personal investments -- and even more so if you added in retiree health insurance.

I suspect that for typical middle-class people in that situation with 25+ years of creditable pension service and retiree health insurance, if you included the present cash value of their pensions and retiree health insurance you'd probably add $500K to $1M+ to someone's "imputed" net worth. And studies that only look at personal retirement savings without considering their pension, health insurance and SS status is misleading at best.
Who are those typical middle-class people who have worked 25 years for the same company and are getting $40K a year in pension benefits plus subsidized health insurance? I don't know of any in real life personally, though there are quite a few on this board which is to be expected. I think people getting generous pensions are the exception rather than the rule and I don't believe there is anything typical about them. Most of the people I know who are getting money from a pension get just a few hundred dollars a month in benefits.
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Old 03-27-2009, 06:18 PM   #15
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Who are those typical middle-class people who have worked 25 years for the same company and are getting $40K a year in pension benefits plus subsidized health insurance?
Good grief, I'm not talking about the typical person but the typical middle-class household which fits that specific description I gave.

But many who are in city, county and state plans are on a 3% per year plan, with a typical maximum of 90% after 30 years. So someone there for 25-30 years might get 75-90% of working salary in retirement plus health benefits. For many of that group that can easily be $40K.

Not all, but many. IN THAT GROUP. And note that I said $500K to $1M which really means $20-40K per year on the 4% model. Not sure why you chose to treat the MAXIMUM in the range as the typical household I was describing.

Methinks you grossly misunderstood the context in which I used the word "typical."
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Old 03-27-2009, 06:32 PM   #16
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Methinks you grossly misunderstood the context in which I used the word "typical."
Methinks you're right. Sorry.
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Old 03-27-2009, 06:37 PM   #17
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No one in my family(to my knowledge) has over $200,000 in net worth yet they either are retired or plan to retire when eligible for S.S. A couple have pensions but not all. It can be done.
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Old 03-27-2009, 10:04 PM   #18
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Who are those typical middle-class people who have worked 25 years for the same company and are getting $40K a year in pension benefits plus subsidized health insurance? I don't know of any in real life personally
You might know more than you think.
For example, did you went to a public school? A lot of public school teachers would meet these criteria. Firefighters and LEOs. Military. Air traffic controllers. Airline pilots. Automotive workers. Older Federal employees (CSRS better than FERS).
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