Poor Bill & Julie, @ age 60 w/$1M can't retire

[Telly]

MSN has had this story from time to time.

Poor Bill and Julie don't know if they can retire on 1 million as they reach age 60:

http://moneycentral.msn.com/content/Retirementandwills/Createaplan/P34205.asp

Maybe this part of their story is a clue:

Bill and Julie ran the numbers and here are the results:

Current yearly earnings (both working): $110,000
Current yearly expenses: $105,000
Estimated yearly retirement needs: $82,500

Oh, but Bill gets: Bill's ex-employer continues to provide health insurance.


Look at those expenses versus earnings! But they are just 2 years from S.S.

I wonder if they make this stuff up!

 

[sgeeeee]

I don't think they have to make these things up. According to the Social Security Administration, 48.1% of Americans over the age of 65 would be below poverty level without social security benefits. Social security benefits make up more than half of all income for 64% of those over 65.

Most Americans just don't save much -- regardless of how much they earn. Bill & Julie, with a saving rate of over 4%, are actually a little bit above average for the US.

It's their lifestyle choices that have gotten them where they are. I'm not sure what their expectations are after years of making these choices. If they are content with a sudden and dramatic reduction in lifestyle or with working till they die, then good for them. If they are surprised, you have to wonder what they were thinking was going to happen for all those years. Choosing to live a consumerism life isn't an inferior choice to living below your means and retiring early as long as you do it knowingly and accept the consequenses.

 

[unclemick]

Maybe we should encourage Dory 36 to expand on '33% that's my story' and send it in - that's the one that caused me to join this forum.

I view these stories with grain of salt - indirect self promotion - 'your so dumb you need to read us'.

 

[Mr._johngalt]

My income would be well below the official poverty
level without social security kicking in soon. I'm
not whining as I made my own bed and now must lie in it. I have no quarrel with those who choose to spend up to their income and/or work until they die. That's
a legitimate choice to make IMHO, just not a road I chose to continue down.

 

[Trace]

I though this was an interesting part of the article:

Grossing $82,500 a year from a $1 million portfolio isn't easy. But it can be done -- especially since Bill and Julie aren't worried about preserving any of that money for their heirs.

A little to risky for me.

 

[Mr._johngalt]

Stuff like this always makes me smile, but I confess
it might be partly due to the obvious disparity in my
situation vs. "poor Bill and Julie". Still think that ER
can be done with mostly just brainpower and willpower.
The balance sheet is definitely secondary in determining
ability to hang it up IHMO. Anyway, like I said, "enough"
is different for everyone. And, in spite of my planning and absolute determination to do a "shoestring" ER,
it wouldn't have come off without a bit of luck along the way.
Right now I'm having mostly problems and setbacks.
It will all turn eventually. Nothing lasts forever.

 

[dex]

Take a look at the author's profile. He should have been able to figure out a plan for these people to live comforably. But the point of the article was fear and that you need help.

But I do believe the vast majority of baby boomers will not be able to retire in the style they have become accostumed. The you can expect the greatest protests and demands for the government to pay more of medical costs and raise social security payments.

Tom Woodruff
is the Ask the Experts forum manager and author of Capitol Connection. Woodruff, who lives in Connecticut, is president of Woodruff Consulting and founder of The Personal Finance Network, an Internet-based financial education service. He was the executive director of the President's Commission on Pension Policy during the Carter administration and president of the Commission on College Retirement. An economist, Woodruff's clients have included major insurance companies, mutual fund companies, unions and national membership organizations.

 

[Cut-Throat]

But I do believe the vast majority of baby boomers will not be able to retire in the style they have become accostumed.

I was just reading an article about this in the paper this morning. Newest surveys indicate that the vast majority of people working today do not plan on retiring. That is their excuse for not saving money.

They plan on dying at their desks. They may be 'letgo' - this could be a shock to their systems.

Today 40% of US Workers are over 45. It will be interesting to see what happens over the next 20 years.

 

[unclemick]

Cut-Throat

I am afraid your right. Over the last few years I've noticed the increasing number's of 'retirement' age persons at work in various places I shop.

LYBM and saving puts one in a minority group - the next 20 years will be interesting!

 

[John Galt]

Hi Cut-Throat! Re. "dying at their desks", it's pretty sad,
unless they love their work. Now that's a different story.
Looking back, I enjoyed a lot of my work over the years.
But.............I never got into a situation where I felt
like doing it forever. I suppose it could be a pleasant
way to live though.

 

[sgeeeee]

They plan on dying at their desks.

That's great news. I was wondering who was going to pay my social security and medicare benefits. If all my neighbors are working till they die, then I should be okay.

 

[unclemick]

Hey Salartguru

Alas you can include a lot of my relatives in that group - I will thank them for my SS and Medicare when I get there.

 

[Cut-Throat]

That's great news.  I was wondering who was going to pay my social security and medicare benefits.  If all my neighbors are working till they die, then I should be okay.

That is exactly what I was thinking ! - If I'm one of the few boomers collecting SS, that will be fine with me! And if a lot of them do die at their desks, they won't put a burden on the system at all.

A lot of the people I worked with a couple years ago, were repeating that mantra "I'm never retiring, because I won't have enough money" -- That kept them spending without a lot of guilt. A lot of these people did not even participate in their 401K - Did not even get the free company match!

 

[John Galt]

Hello Cut-Throat

Even in my "big spender" days I had enough sense to
max. out my 401K first. Opting not to is just like burning money.

John Galt