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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 07:47 AM   #21
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by 2B
I'll use your comment to hijack the thread a bit. The biggest problem I see on this forum is the tendency to save and defer gratification at the expense of the here and now. As the "spenders" will someday regret their lack of saving will we "savers" also regret our way. I wonder how many of us worked or are still working (like me) to amass a stash far more than we really need for a life of leisure.

I have heard from many people how they are living in full early retirement on far less than my future SS check that I intend to be a small part of my retirement budget.

Let me confess my sins.....

I felt obligated to pay my children's college cost. No one paid mine so why did I think they would need me to do it?

My house is too big for me and DW. Total housing costs are fully half of our expenses. We could cut it in half and still have more room than we really need.

I have lusted just yesterday for a 61" 1080p DLP. I watch too much TV now and this would only make it more tempting plus it needs a big room in my too big house to view it properly.

I could go on but what's the point.....
Hopefully a large number of people delaying gratification will not die of a heart attack or suffer a major illness that will prevent them from enjoying the big stash they've accumulated while pinching pennies.

I also paid 90% of my kids' tuition bills not because I had too but because I wanted to. I too live in a too big of a house. We take of couple of expensive vacations a year.

We did save 15% of our incomes when the kids were in school and now we increased our savings to 25%-30%. We should be able to retire with a decent nest egg but not as large as if we had saved 50% as some people on this board.

Bottom line is we are enjoying some luxuries while hoping to fund a decent retirement if we live long enough to enjoy it.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 07:49 AM   #22
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Re: I hate to say this but most will not save enough.

A simple comment -

You will always have those that spend "too much" (under save).
You will always have those that save "too much" (under spend).

Neither condition is "perfect", but neither is life. What's perfect for me will not be right for you.

BTW, (on another, but related subject) I'm annuitizing 20% of my retirement holdings, so I'm "splitting the difference". I invest in the same manner I play roulette (split the bet), and I've won more than lost with that strategy over the long term ...

- Ron
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 07:51 AM   #23
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Re: I hate to say this but most will not save enough.

Lots of people I know will probably fit the following retirement profile: his and hers SS (about 40K total), a non-cola pension fragment or two (maybe 15K more, total), 200K-300K home equity, and whatever savings.

They will have an income from these assets of at least 60K per year, depending on how they work things. So, they will not be poor. Far from it. Around here (NC), you can live pretty well at this level.

OTOH, they will need to give up most of the following: the luxury house, the yard service, the county club, the German cars, the expensive clothes, and the exotic vacations. Unfortunately, they don't seem to recognize that they will probably need to give up these things . . . there's the rub.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 08:03 AM   #24
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by Corporateburnout
I also paid 90% of my kids' tuition bills not because I had too but because I wanted to.
Make sure that you are not paying the brand-name schools with costs of about $50K per year. You can always send them to a local community college then to a local state university. This is a big saving for the same education (but not name recognition). Actually your kids may receive a better education since these schools are focused on teaching as opposed to research by brand-name schools in search for fundings (or profits). A significant number of classes are taught by teaching assistants. Relationship between professors and students does not exist.

Obviously, if a brand-name school offers financial aid in significant amount, it might worth considering.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 08:24 AM   #25
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by jeff2006
OTOH, they will need to give up most of the following: the luxury house, the yard service, the county club, the German cars, the expensive clothes, and the exotic vacations. Unfortunately, they don't seem to recognize that they will probably need to give up these things . . . there's the rub.
Here you nail my in-laws. At 85 they were still paying club dues for a club they hadn't used in close to a decade but "they were a member." They are of the "successful people drive Cadillacs" generation so that's what they had. They didn't do vacations. They couldn't afford to.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 09:37 AM   #26
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by Spanky
Make sure that you are not paying the brand-name schools with costs of about $50K per year. You can always send them to a local community college then to a local state university. This is a big saving for the same education (but not name recognition). Actually your kids may receive a better education since these schools are focused on teaching as opposed to research by brand-name schools in search for fundings (or profits). A significant number of classes are taught by teaching assistants. Relationship between professors and students does not exist.

Obviously, if a brand-name school offers financial aid in significant amount, it might worth considering.
Actually they both attended brand name private schools. They were offered some merit based scholarships which reduced the cost of attendance to about 25K to 30K per year.

I was very impressed with the education they both received. My youngest attended a liberal arts school with an average class size of 25 ( her senior year classes had 12 students). All classes were taught by professor with terminal degrees. Her professors were always accessible to her via e-mail when she studied abroad for a year. I felt their education prepared them for life rather than just a profession.

A couple of my kids friends attended state universities with class sizes of 200 or more taught by assistants and had no educational assistance from any professors outside the classroom.

But I can only talk about my kids' experience and I am sure others may have had a good education in the public sector.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 10:20 AM   #27
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Re: I hate to say this but most will not save enough.

Some time ago I talked with the board about helping a friend figure out a retirement savings plan and what she would need to maintain her standard of living presuming retirement at full retirement age. She was in her 40s, very little savings, and a job that doesn't pay much. Odds are she would end up having to take out a reverse mortgage for part of her retirement income. At the time the idea of either using an annuity or otherwise spending savings to delay SS until 70 did not come up. But this does make a lot of sense. The increase in the SS by waiting until 70 is huge. It seems to me that she is much better off by spending more of her assets early and delay the SS. I guess I just had Cut Throat's ah ha moment on delaying social security, but a few months later.

Now I will have to remember that 20 plus years from now! Wonder what the world will look like then.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 10:42 AM   #28
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Re: I hate to say this but most will not save enough.

I think that how you live/save/plan has so much to do with the mate you choose. My 2 college friends I discussed yesterday in the "have you been near the bottom?" thread make huge dough. One is a loan broker that made great contacts over the years and often makes over $500,000 year - the other owns a successful business. They both married high matainence wives. I enjoy spending time w/ their wives at our get togethers but am shocked by their attitudes and needs. One spends over $1000. per month at Nortstroms, My buddy showed me her closet - loads of tags on clothes not even worn/enough shoes to build a bonfire! The wives guilt them into trips, expensive entertaining and vacations. A good example - I was best man at both of these guys weddings - It cost a bundle just to be best man - one was at the Hotel DelCoranado in SD the other at the Plaza in NY. Now the guys are not living small - new SUVs - one has a Sirus plane($400,000) and all the trappings of house/ highend furnishings etc.
I got lucky and married a woman that had dreams of being free early in life - w/o needs of keeping up w/ the Jones etc. She is the one that found YMOYL book amd brought it home in 1992 - that focused our plans.
I remember being around 18 when my father asked me what was the most important investment you will ever make? You know the answer.
Who you pick as your partner makes all the difference in the world.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 10:59 AM   #29
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by 2B
I'll use your comment to hijack the thread a bit. The biggest problem I see on this forum is the tendency to save and defer gratification at the expense of the here and now. As the "spenders" will someday regret their lack of saving will we "savers" also regret our way. I wonder how many of us worked or are still working (like me) to amass a stash far more than we really need for a life of leisure.

I have heard from many people how they are living in full early retirement on far less than my future SS check that I intend to be a small part of my retirement budget.

Let me confess my sins.....

I felt obligated to pay my children's college cost. No one paid mine so why did I think they would need me to do it?

My house is too big for me and DW. Total housing costs are fully half of our expenses. We could cut it in half and still have more room than we really need.

I have lusted just yesterday for a 61" 1080p DLP. I watch too much TV now and this would only make it more tempting plus it needs a big room in my too big house to view it properly.

I could go on but what's the point.....
2B,
Balance is the key! I believe strongly that success hinges on starting early. If starting early, you can invest smaller amounts and do a better job of enjoying life along the way. I'm in a similar situation as you: larger house than needed, 3 cars, 1 motorcycle etc... and enjoying life - and making adjustements along the way as needed.

I think that it takes some vision at a young age - that not everyone has - and tough to teach. Don't mind adding that a little luck doesn't hurt - and I have been blessed in many ways.

It is a shame that most do not even think hard about the future until fear becomes the driving force - then typically it is too late. Oh well!
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:16 AM   #30
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by Donzo
I think that how you live/save/plan has so much to do with the mate you choose. My 2 college friends I discussed yesterday in the "have you been near the bottom?" thread make huge dough. One is a loan broker that made great contacts over the years and often makes over $500,000 year - the other owns a successful business. They both married high matainence wives. I enjoy spending time w/ their wives at our get togethers but am shocked by their attitudes and needs. One spends over $1000. per month at Nortstroms, My buddy showed me her closet - loads of tags on clothes not even worn/enough shoes to build a bonfire! The wives guilt them into trips, expensive entertaining and vacations. A good example - I was best man at both of these guys weddings - It cost a bundle just to be best man - one was at the Hotel DelCoranado in SD the other at the Plaza in NY. Now the guys are not living small - new SUVs - one has a Sirus plane($400,000) and all the trappings of house/ highend furnishings etc.
I got lucky and married a woman that had dreams of being free early in life - w/o needs of keeping up w/ the Jones etc. She is the one that found YMOYL book amd brought it home in 1992 - that focused our plans.
I remember being around 18 when my father asked me what was the most important investment you will ever make? You know the answer.
Who you pick as your partner makes all the difference in the world.
I know this wealthy doctor whose wife drove him bankrupt for going on shopping sprees where she'd spent 15k to 20K per trip on clothes for her and the kids that they never wear. She claimed that he worked all the time and she felt lonely and needed to fill her time..............He is now rebuilding his life after the divorce.

I am fortunate to have my DW.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:17 AM   #31
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Re: I hate to say this but most will not save enough.

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Originally Posted by newguy888
As one guy said over a beer last week I am doomed to work forever.
Two dozen responses later I'm still hung up on this statement.

The guy can either educate himself to find a way to retire, or let an insurance company educate him to take New Thinking's approach, or he can continue to work forever.

The first will bring him to this board where he can get a free tutorial on how to retire.

The second will be his tuition at the school of financial knowledge, but for all its expenses & drawbacks he'll still be able to retire.

The third will ensure that Social Security & Medicare will be funded for the rest of my life.

So I'm not sure that I see the problem!
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:22 AM   #32
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by Donzo
Who you pick as your partner makes all the difference in the world.
Just remember, you "pick" each other

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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:24 AM   #33
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Re: I hate to say this but most will not save enough.

Quote:
Unless you've been living under a rock, have minimal intelligence, or are just so stubborn its hard to imagine or believe some of the stories you read or hear about of individuals in their 50's and sometimes 60's who haven't saved.
I've thought about this, and I think I've figured it out: We're very different from other people. Most people don't watch the news, don't read things on the Internet. They are totally focused on their present lives and what they're going to do on the weekend. If they watch TV, it's sports or reality shows that are quite apart from reality. If something related to saving does happen to intrude on them (e.g. on the TV at the airport), they push it aside because they don't like to face their shortcomings, and they can't do math or understand the concepts of investing. It's very scary to them.

So for us, we can't understand how they can ignore all the warnings about not saving enough. But these people aren't exposed to most of these warnings, and do all they can to push them aside.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:30 AM   #34
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Re: I hate to say this but most will not save enough.

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I think that it takes some vision at a young age
seeing beyond the end of one's nose would be a good start ... i know a guy who spends every penny on travel, and every year is absolutely surprised and amazed that he gets a realestate tax bill in the mail ... that he didn't save the money to pay. i'm pretty sure you can guess at the balance in his retirement funds.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:31 AM   #35
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by TromboneAl
I've thought about this, and I think I've figured it out: We're very different from other people. Most people don't watch the news, don't read things on the Internet. They are totally focused on their present lives and what they're going to do on the weekend. If they watch TV, it's sports or reality shows that are quite apart from reality. If something related to saving does happen to intrude on them (e.g. on the TV at the airport), they push it aside because they don't like to face their shortcomings, and they can't do math or understand the concepts of investing. It's very scary to them.

So for us, we can't understand how they can ignore all the warnings about not saving enough. But these people aren't exposed to most of these warnings, and do all they can to push them aside.
I think that about explains it - very well put Al.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:53 AM   #36
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Re: I hate to say this but most will not save enough.

Quote:
Originally Posted by Martha
The increase in the SS by waiting until 70 is huge. It seems to me that she is much better off by spending more of her assets early and delay the SS. I guess I just had Cut Throat's ah ha moment on delaying social security, but a few months later.
True but -- and I had the same reaction when CT was all atwitter -- what if SS reform reduces that delay-reward (it's ripe for the pickin' and far enough out that ERs could easily be caught by the phase-in)? You have eroded your nest egg, the SS deferral raise is lower than you were counting on and your assets are lower than they would have been.

I realize this is speculative, and the delay strategy is probably a darn good risk to take for those of us with a little cushion. But for someone "close to the line" to accelerate their SWR as a tradeoff against a higher SS payment may backfire in that scenario.

Just thought I'd throw a little paranoia into the mix .
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 11:59 AM   #37
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Re: I hate to say this but most will not save enough.

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Just thought I'd throw a little paranoia into the mix
even for our congress, it would be a bit much to have them penalize those who delay taking benefits.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 12:10 PM   #38
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Re: I hate to say this but most will not save enough.

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even for our congress, it would be a bit much to have them penalize those who delay taking benefits.
It'd be a "bit" harder to get re-elected, too.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 12:50 PM   #39
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Re: I hate to say this but most will not save enough.

guess some have saved a bit too much
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MONTREAL (AFP) - The world's oldest ice hockey stick, a hickory shaft carved in the 1850s, sold for 1.9 million dollars US (2.2 million Canadian) here and will be displayed at the Hockey Hall of Fame.
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Re: I hate to say this but most will not save enough.
Old 12-24-2006, 01:02 PM   #40
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Re: I hate to say this but most will not save enough.

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Originally Posted by d
guess some have saved a bit too much
Quote:
MONTREAL (AFP) - The world's oldest ice hockey stick, a hickory shaft carved in the 1850s, sold for 1.9 million dollars US (2.2 million Canadian) here and will be displayed at the Hockey Hall of Fame.
Sounds like they overpaid-- I doubt even Gretzky or Lemiuex could have kept up their scoring with that sucker...
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