For those of us who do not have SS and a pension -- and who either will not or have reason to question what they are supposed to receive years from now -- this seems a little Pollyannaish.
It's awfully easy to feel smug and secure when you do have COLA'd retirement income that meets your needs and doesn't require being invested with your own money -- or that your own retirement savings don't need to be as high because so much of your income needs are met elsewhere. Feel glad that you were born at the right time.
I don't want this to sound like sour grapes but the bottom line is that right now I think it's hard for people with secure retirement income from pensions and SS -- especially when the pension is COLA'd -- to really relate to the anxiety out there, and that their situation is not the norm for an increasing percentage of people, especially those who are younger.
When my grandparents retired, they had two sources of retirement income - pension and SS.
When my parents retired, they had two sources of retirement income - pension and SS.
When I retired last year (age 59), I neither had a pension or SS. This is the same situation for my DW who will be retiring sometime in the next year (might be tomorrow, if she feels like it
).
Anyway, I'm one of the folks (like you) that does not have a pension (COLA'ed or otherwise) and while SS is probably going to happen for us, it is not assured (BTW, I won't be taking it till age 70, due to survivor benefits for my DW). Actually, SS for both of us is more of a "dessert" rather than the "main course".
We both started our respective Traditional IRA's in 1982, and our respective 401k's several years later, as they became available through our respective employers. In all IRA's, we each contributed the maximum allowed and for most years, I contributed the maximum to my 401k and in later years, I contributed beyond the federal limit, which was post tax and moved to a taxable MM when I retired (my DW remained at 15% of salary).
Since my DW decided to delay retirement (she was to go with me last year, but is not yet "emotionally ready), I was able to continue to fund my Roth IRA ($6k due to my age).
What I'm trying to say that I'm in the "bleeding edge" of the boomers under this "new system" of retirement (e.g. elimination of pensions and questionable SS). However, the "advantage" of knowing this (our respective pension programs were phased out in our early 30's, and our first retirement contributions started at age 33). However, even at that "late age" we've had 25+ years to make our own "pension program".
From what I see on this forum, there are a lot of folks that are starting to contribute at a much earlier age (even some in their teens - good for them).
Over the years, my DW/me have seen much "flux" in the market (and the value of our respective holdings), from the '87 "blip" along with the post 2K "meltdown". The result of these down periods was our good fortune. We paid much less and the value of those "cheap buys" enhanced the value of our portfolio (yes, even with the downturn of the past year).
Don't lose faith. As long as you make a plan which outlines what you will require in retirement, execute the plan faithfully (regardless of "market imperfections"), you will do OK.
Did I think this way 25+ years ago (when we started our plan)? Of course not. Did I think/plan on retiring before FRA for SS? Of course not. Was I "that smart". Of course not. However, I'm certainly glad that I made up a preliminary plan and stuck to it all these years.
- Ron
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