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Old 09-10-2015, 05:31 PM   #21
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Some research on line indicates employer offers a 6% match up to $18,000, which is almost 75% of a high end clerks salary, and a 'retiree discount of 10%' on purchases. The clerk indicated her husband was retired with a 'very small amount' each month.

My gut feeling is they will be OK, but will draw heavily on state and federal benefits for based on their income bracket.
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Old 09-10-2015, 05:47 PM   #22
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I once broached the subject with a niece suggesting she start saving and perhaps investing. "You mean, like on Wall St?.... NO WAY! I don't want to be one of those people! They're evil".
I'm sure you're relating that incident accurately, but it's still hard for me to wrap my mind around it.

My parents had a completely different mindset. Dad had only four years of primary education in a rural one-room schoolhouse. Mom had a high school education, but in an overcrowded, rundown school system. Yet they were both anxious to improve their lot, both for themselves and their kids. As soon as they were able, they started to dip their toes into the stock market. They got burned in the beginning by believing the "tips" they got, but quickly learned to do their own research and invest in safer vehicles. By the time my Mom died, she had enough left after several years of very expensive assisted living and memory care facilities to leave me over 200K.

What went wrong?
How did our society manage to give the current youthful generations the idea that saving and LBYM is not still right?

The last thing I want to do is turn this into a political argument, but I honestly wonder. I don't understand it.
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Old 09-10-2015, 05:55 PM   #23
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I think there are many ways to skin the retirement cat. I personally know the case of one lady in her mid 60's who lives primarily on social security in a small but well appointed mobile home in SW Oregon. Drives a car that's about 8-9 years old but serviceable. Seems well fed and healthy. As far as I know she has a small amount of savings but doesn't touch it "just in case" I think she is reasonably happy, uses the library a lot, loves music, loves pets so she does regular house sitting for people travelling that need to have their pets cared for. Maybe not the lifestyle that regular posters here would like but frankly she seems a lot happier than many I run into.
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Old 09-10-2015, 06:12 PM   #24
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Depends on the youngsters in question...some of the younger generation that I work with are quite savvy and aren't big spenders at all.

As for the OP's lady, maybe her 15 years were post-kid-raising years, and as W2R suggested, the dad's earnings and SS could be the real bedrock of their retirement. It just amazes me how many women I know who never had to seriously worry about their own retirement. Whether affluent or not, some guy was always in charge of that!

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I
How did our society manage to give the current youthful generations the idea that saving and LBYM is not still right?

The last thing I want to do is turn this into a political argument, but I honestly wonder. I don't understand it.
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Old 09-10-2015, 06:17 PM   #25
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Don't forget...I think a lot of those people in the non-saving world depend on family resources, such as working in the family business or getting inheritances later on. Somehow, they manage since the wealth is passed down. I see a lot of that, too. A good example is the family farm.
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Old 09-10-2015, 06:32 PM   #26
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My parents had a completely different mindset. Dad had only four years of primary education in a rural one-room schoolhouse. Mom had a high school education, but in an overcrowded, rundown school system. Yet they were both anxious to improve their lot, both for themselves and their kids. As soon as they were able, they started to dip their toes into the stock market. They got burned in the beginning by believing the "tips" they got, but quickly learned to do their own research and invest in safer vehicles. By the time my Mom died, she had enough left after several years of very expensive assisted living and memory care facilities to leave me over 200K.
My parents were very similar to yours. My in-laws were the opposite. They mastered (or MIL did, anyway) the LBYM mindset and saved diligently. But they never trusted the stock market. I don't think it's that uncommon in folks who grew up in the depression. Fortunately, interest rates paid by banks were decent. My MIL recently entered memory care. FIL spent about 8 months in a nursing home before passing. Yet there is still plenty of money to pay MIL's bills for many years to come.

There's more than one way to skin a cat. Your parents were probably the outliers for their generation and income group.
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Old 09-10-2015, 07:27 PM   #27
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It amazes me that once most people hit their mid-fifties they realize they are way behind the curve and will most likely not retire until they are seventy or older.

It's sad in a way but they made their choices.
This is very true, but on the flip side of the coin, it is also true that young people today are not earning the same salaries that many of us earned over our lifetimes. I do believe that you can save at least some $$ for retirement on even a fairly low salary, but it is certainly tougher to accumulate the amount you will need in retirement when you are making $12-15/hour, with only a 401K with no employer match, and no good health insurance. I'm fortunate to have a pension, and good health insurance in retirement, but those things are becoming increasingly rare these days. The world is very different for young people these days than it was when I got out of college. I was able to get a decent job, earn a decent wage, and qualify for a pension before I retired. Yes, I also saved a significant portion of my income to supplement the pension, but one of the reasons I was able to do that was because I did earn a fair wage. So, let's not condemn everyone who find themselves in a situation where they have not saved enough to retire. The way things are today, it's not too hard to predict that there will be many more people in this situation in the near future than there are today.
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Old 09-10-2015, 07:55 PM   #28
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I've seen some corporate DB plans that accrue 2% of pay times years of service (depending on age at hire). That would provide a "decent" benefit. Of course it's used as a huge attraction tool.
That's what mine was. Lucky enough to cash in on it.
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Old 09-10-2015, 08:41 PM   #29
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This is very true, but on the flip side of the coin, it is also true that young people today are not earning the same salaries that many of us earned over our lifetimes. I do believe that you can save at least some $$ for retirement on even a fairly low salary, but it is certainly tougher to accumulate the amount you will need in retirement when you are making $12-15/hour, with only a 401K with no employer match, and no good health insurance. I'm fortunate to have a pension, and good health insurance in retirement, but those things are becoming increasingly rare these days. The world is very different for young people these days than it was when I got out of college. I was able to get a decent job, earn a decent wage, and qualify for a pension before I retired. Yes, I also saved a significant portion of my income to supplement the pension, but one of the reasons I was able to do that was because I did earn a fair wage. So, let's not condemn everyone who find themselves in a situation where they have not saved enough to retire. The way things are today, it's not too hard to predict that there will be many more people in this situation in the near future than there are today.

Good point and I agree with what you are saying about conditions and many jobs today. My point is that those in their fifties today are not from this same era but one more like the era many of us came through. I'm not condemning all just making a point that some who had the opportunity to save and invest just never took advantage because they wanted it all today and never thought longer term.
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Old 09-10-2015, 08:55 PM   #30
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When I was a Section 8 landlord, my tenants were all retired by around age 20. When my older tenants had kids, they got their voucher at 18 as well. It was like a proud family tradition. That is unless the kid went to prison.

It doesn't take much to not work, some people would consider that retired. It certainly doesn't take 15 years of working. It takes more to have financial freedom.
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Old 09-10-2015, 09:54 PM   #31
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A friend from high school recently confided in me that he will probably never be able to retire, just have to keep working forever and collect what he can from SS.

Now this really floored me because he is highly educated and intelligent and ran a successful business. I just naturally always assumed he must be doing well. He said that his divorce and subsequent problems sucked him dry.

Another college friend is in the same situation. His family net worth was far greater than mine, he is very creative and intelligent, but also told me he will have to work forever, expected inheritances never materialized.

The father of another friend, who owned their own successful company, a man with many patents and well respected in his field, made a lot of money in his life, flew his own plane, etc. Eventually he and his wife had to live off only what they got from SS and a reverse mortgage on their home.

All these people made a lot of money in their working life. In some ways maybe they thought the good times would keep rolling, and they could always make and save money later.

One does not have to be ignorant or uneducated to "forget" to save enough for that seemingly far off retirement.

Makes me sad.
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Old 09-10-2015, 11:25 PM   #32
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A friend from high school recently confided in me that he will probably never be able to retire, just have to keep working forever and collect what he can from SS.

Now this really floored me because he is highly educated and intelligent and ran a successful business. I just naturally always assumed he must be doing well. He said that his divorce and subsequent problems sucked him dry.
If I ever had any plans of getting married, the financial disaster stories I've seen or read about due to nasty divorces will probably cure me of that ailment really quick.
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Old 09-11-2015, 07:45 AM   #33
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A friend from high school recently confided in me that he will probably never be able to retire, just have to keep working forever and collect what he can from SS.

Now this really floored me because he is highly educated and intelligent and ran a successful business. I just naturally always assumed he must be doing well. He said that his divorce and subsequent problems sucked him dry.

I have seen that with a few of my friends, too. They will never retire as we know it. Some people go through two or more divorces. Somehow they survive. I guess inheritances, being rich enough already, or a new partner can help with the financial burden.
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Old 09-11-2015, 09:11 AM   #34
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Most people ARE from outer space and do not have a clue about retirement savings, IRA accounts, 401's, etc. I simply do not understand how people, (some highly educated), are so ignorant about saving, the idea of compounding interest, and what it takes to really retire. I understand with the older annuity plans that are going away very quickly, you don't need to know anything, really.

According to the article below from the Motley Fool, most people have around $100K. That's peanuts! It will be a rude awakening for the ones that realize they can't retire and there is no Retirement Fairy out there. I planned for more than two decades to retire and put away around 30 percent of my salary to do it. We lived below our means...and still do, but have loosened up some. It's a lifestyle, you know.

I have several doctor friends making big money, in their 60s and cannot even think of retiring. Money to them is like crack. They cannot fathom how an average guy can do it. We are human beings and supposed to be above the animals living in just the present. But, with most people that is not the case.

The Typical American Has This Much in Retirement Savings. How Do You Compare?

Sorry for the rant. I just smile when I see everybody slaving away and I no longer have to.
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Old 09-11-2015, 09:30 AM   #35
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If I ever had any plans of getting married, the financial disaster stories I've seen or read about due to nasty divorces will probably cure me of that ailment really quick.
My first husband was a financial disaster; fortunately I got out with no responsibilities towards him and he agreed to "let" me keep all the invested assets in my name (purchased with whatever of my earnings were left after paying most of the bills) in return for not paying him child support. Second husband has been a win-win: a good partner, a spectacular stepfather, and when he retired at age 65 after we married, we pretty much banked his SS, as well as the equity in his house after he sold it since I worked for another 12 years. So, the right marriage can be a financial benefit.

But, to get back to the OT: Yes, I see it on FB all the time. One friend, a retired nurse, once referred to the "meager" savings she and her husband had, but posts with questions about her iPad and iPhone and invites people to swim in their above-ground pool. When one of our classmates turned 62 she asked him if he was going to file for SS. Totally different example: our local paper used to have a financial writer who wrote about retirement. One person wrote and asked him if, instead of talking about people who retired with $500K in assets, he could give advice to those who would consider themselves "blessed" to have $50K or $100K saved. His advice: "Keep working".
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Old 09-11-2015, 09:37 AM   #36
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I'm sure you're relating that incident accurately, but it's still hard for me to wrap my mind around it.



My parents had a completely different mindset. Dad had only four years of primary education in a rural one-room schoolhouse. Mom had a high school education, but in an overcrowded, rundown school system. Yet they were both anxious to improve their lot, both for themselves and their kids. As soon as they were able, they started to dip their toes into the stock market. They got burned in the beginning by believing the "tips" they got, but quickly learned to do their own research and invest in safer vehicles. By the time my Mom died, she had enough left after several years of very expensive assisted living and memory care facilities to leave me over 200K.



What went wrong?

How did our society manage to give the current youthful generations the idea that saving and LBYM is not still right?



The last thing I want to do is turn this into a political argument, but I honestly wonder. I don't understand it.

I believe the reasons below have contributed greatly to the problem.
1) More sophisticated marketing which creates "needs" 2) Increased ease of consumer credit 3) Need for instant gratification


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Old 09-11-2015, 10:47 AM   #37
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I believe the reasons below have contributed greatly to the problem.
1) More sophisticated marketing which creates "needs" 2) Increased ease of consumer credit 3) Need for instant gratification
Those are dangerous combinations. Billions of dollars go into advertising to get us to buy a lot of stuff we do not need. And it keeps many on a work-spend-work treadmill they cannot break free from.

I picked up a book awhile back that was a reproduction of a Sears catalog from years ago. It was kind of interesting to flip through as it really had many of the basic things people would need to live a sustainable lifestyle, even today, compared to all of the zillions of products on Amazon alone.
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Old 09-11-2015, 11:39 AM   #38
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My eldest son once looked at the possibility of saving $100k by age 30, then never needing to save again since it would grow at 10% per year compounded until 65 when he could retire on his current salary. I pointed out that he may have unexpected costs over the next 40+ years and the market does not grow at 10% per year every year! He since has figured out that a more reasonable plan is to continue to save aggressively and possibly retire early or at least be in a position to retire early or eve take a sabbatical at some point in hi career. His friends are planning on living on their SSI and meager 401k when they turn 65. How sad is their retirement going to be!
Similar story - I had a co-worker who was convinced that he only had to save $1M by his early 30's and then could retire on the interest. He did, but guess what - that was in the early 1980's with sky-high interest rates. 5 years later, back to work.
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Old 09-11-2015, 11:39 AM   #39
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I have a different perspective on this. Like the iPhone someone mentioned, if you live out in the country, a landline can cost up to $35/month because of the monopoly they are allowed to have vs. you can go down and get a $35/month plan with a "free" iPhone from the cellphone company, so its a no brainer where you spend that $35.

Just because you spent $600 on a coach purse doesn't mean the one I carry cost me $600 vs. the $30 I paid for one on a facebook rummage sale.

I'm just saying the other issue is that some people are really good at pretending to have wealth that don't. If you go to discount clothes stores and rummage sales and spend the time you can live a "good life" on relatively little money.

So maybe the person at the counter doesn't have a lot of money, but maybe she doesn't need it. Maybe she only worked 15 years because she was busy raising a family before that and maybe got a divorce.. who knows.. maybe she is retiring now to take care of her elder parents and they will merge their money to live a comfortable lifestyle.

I think part of the issue in "BOTH" directions is people have a perception of what things cost and what a "standard" lifestyle looks like and they are so drastically different. The person who makes $100k/yr can't afford a home because they can't find one that has a decent kitchen with stainless steal and granite and the person who makes $40k/yr is bragging they just bought a home with newer cabinets and laminate floors and the person making $20k is just happy they bought their fixer upper for $50k and almost has it paid off and dream of the great life will be when they don't have that $350/month mortgage payment...just think what they could buy with $350 extra each month.

Its all perception and where you fit on the scale. I retired early because I don't have huge expectations, I don't want to live in a huge house, or spend money on toys. I just want to be able to hike all day which is pretty cheap. Most people would look at how much I saved and say "that's not enough".
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Old 09-11-2015, 12:34 PM   #40
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Some research on line indicates employer offers a 6% match up to $18,000, which is almost 75% of a high end clerks salary, and a 'retiree discount of 10%' on purchases. The clerk indicated her husband was retired with a 'very small amount' each month.

My gut feeling is they will be OK, but will draw heavily on state and federal benefits for based on their income bracket.
that match is on the maximum deferral, not the pay - didn't she say she couldn't afford to defer 15% of pay?
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