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Old 04-10-2010, 11:41 AM   #21
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One way to insure your future housing/food/clothes? (and don't forget the free medical...)
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Old 04-11-2010, 07:13 AM   #22
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I think most people spend most of their lives in a consumerist haze generated by billions of dollars of advertising and hundreds of crappy but popular TV shows. By the time people wake up, it's too late to make much financial progress, since financial obligations have probably been run up to, or past, the level of earnings.

I'm usually one to hold people responsible for their lot, but in this case there are huge cultural forces working to keep people under-satisfied and over-spent.
I'm not so forgiving. A BIL and his wife - who clearly (and incompetently) runs the family finances just obtained a credit card consolidation loan. She's the one with the attitude of entitlement - "we need to take a trip" - and can barely go a day without shopping. Her solution to every "I wanna..." is charge it or take out a loan. Three brand-new cars in the last four years. These people are in their mid 50's and are still living paycheck to paycheck, driving to the bank on the day her cc payment is due and all that foolishness.

When her income dropped because of the recession her response was "He has to work more overtime". Heaven forbid she might reduce spending!

If the day ever comes they ask us for a loan the reply will be a resounding NO!
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Old 04-11-2010, 07:50 AM   #23
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But ERD50, you are old enough to know that we never know what life will bring. For example it was not due to my virtuous scrimping and saving that my house was not destroyed by Hurricane Katrina, while many of my friends' homes and about one third of my co-workers' homes were destroyed. Many are still battling with their insurance companies in court. Others settled for pennies on the dollar compared with their losses and what they thought they would have received. My former supervisor lost her home, couldn't find a rental (a real problem for many after the storm), and so bought a second home to live in while getting her first home rebuilt. Now she has TWO homes sucking up her money and losing value in this market, not to mention two kids in college and construction loans to pay off. Ewww. I wonder what I would have done had that been me. Sleep in my car, and shower at the gym, I suppose. But she had a husband and two teenagers to house. And both of us were lucky that we still had a job.

There are also many who lost nearly everything in the market crash. That could have been me, had I not come across the M* Diehards board from where I first heard of this group of jokers message board and from which the Bogleheads' board arose. I was lucky to have come across the Bogleheads and to have listened to their investment approach in formulating my own. Look at the investment book section at B&N the next time you are there. There are some really scary books advocating investment strategies that would give a Boglehead nightmares.

Others face the financial ruin and nightmare that we call "divorce". Been there, done that, and lost everything (but thank goodness I was only 50 so I had a decade to recover financially). Some marriages just crater and often there is nothing one can do to predict that or to save them.

Some have kids that are disabled and I understand that can be expensive as well.

You never know what life will bring. There but for the grace of G** go I.
I think that there certainly people who are genuinely worthy of sympathy and that most people would agree some financial support or help is appropriate.

I would not however lump people who "lost nearly everything in the market crash" in this category. First, I think this is a gross exaggeration of most people's ciurcumstances (even if you were 100% invested in the S&P 500, you would not have lost "nearly everything", and second, if you waited things out, you would have recovered a significant amount). Second, if you did lose nearly everything, that may just as much reflect greed in seeking ever higher returns as much as being an ignorant investor. (Just like the people who lost their shirts flipping houses--all your eggs in one basket so to speak.)

I think the vast, vast majority of people who are unable to fund their retirement have (or had) a life style problem--they spend (or spent) more than they should have when they were working. Most people who are (or will be) working beyond "normal retirment age" are not in that position because they had things that happened to them that were beyond their control. They did it because they bought 50" flat screen plasma tv's, granite counter tops, hihg end, stainless steel appliances, I-Phones with $100+ per month data/communication charges, and leased new cars every 3 years.

I am sorry these people are in the situation they are in, but for the most part, this was a choice they made.
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Old 04-17-2010, 12:23 AM   #24
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We may start seeing more people "semi-retire" to part time work at (say) age 55 or 60 and then fully retire at 70 or so. That could be the changing face of retirement. Assuming the age discrimination factor doesn't prevent it from happening, anyway.
But what will these part time jobs be? Sure, anybody can do something stupid like being greeter at the Wal-Mart - but at $7/hr, would it be worth it? As a displaced software engineer, I am in a similar situation - I can't get the good work making $50/hr anymore (or even $30/hr), and that as a lower middle aged person, I can get only a stupid job at $7/hr at Best Buy. I would rather live a more spartan lifestyle (and abroad) than only have an extra $10K/yr and go back to the dark days of waking up everyday to punch the clock.
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Old 04-17-2010, 08:30 AM   #25
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But what will these part time jobs be? Sure, anybody can do something stupid like being greeter at the Wal-Mart - but at $7/hr, would it be worth it? As a displaced software engineer, I am in a similar situation - I can't get the good work making $50/hr anymore (or even $30/hr), and that as a lower middle aged person, I can get only a stupid job at $7/hr at Best Buy. I would rather live a more spartan lifestyle (and abroad) than only have an extra $10K/yr and go back to the dark days of waking up everyday to punch the clock.
There is nothing wrong with your choice, many will agree. But some people get satisfaction from working at a job they enjoy, and their choice is fine too. Some even do it consciously and voluntarily at $0/hr. There is no right answer.

The two jobs I liked the most, were jobs I had before I graduated from college. Most people would consider them beneath my current status (at my age, that's irrelevant to me), but I may well go back to something similar because I actually enjoyed the work, and I don't have to work or care about how much it pays anymore. Just one of many benefits/options to FI.
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Old 04-17-2010, 09:21 AM   #26
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There may be more people over 65 working today but it is all relative. It is, in any event, not a good back-up plan solution in the "If things go bad, I will go back to work" vein for those who misjudged things. As I mentioned before:

Recession-proof cities for Retirees: Forbes
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Old 04-17-2010, 09:43 AM   #27
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Or maybe they saw their parents (who may have had good pensions and retiree health insurance) retire comfortably without much savings and just figured they could do the same. But the rules are changing...
I think this part is undoubtedly true. Granted that pensions are a way of the past, unless something sets the economies of the world on fire again. I think that friendly aliens landing would do that.

But while I didn't choose to save for retirement more than the 9.5% that was taken out of my take home pay, many of my associates who were on double incomes did. I only wish that I'd taken the 5000 disbursement that I got from TIA-CREF on my leaving that job and put it into a 401K or whatever 33 years ago. During the volatile 16% bank interest 80's even that small amount could have risen considerably. My aunt bough 30 year cd's at 15% interest in 1986. If she were still alive they would still be paying her 15% when everyone else is getting 1 %. To tell you that the bank was happy that she died was an understatement.

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Old 04-17-2010, 09:49 AM   #28
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The two jobs I liked the most, were jobs I had before I graduated from college. Most people would consider them beneath my current status (at my age, that's irrelevant to me), but I may well go back to something similar because I actually enjoyed the work, and I don't have to work or care about how much it pays anymore. Just one of many benefits/options to FI.
Agreed. There's a point when FI is reached that you really don't need to *care* what the job pays. You either enjoy it or you don't. And if you don't, you don't do have to it. That's the beauty of FI.

I suspect more of these senior "Wal-Mart greeters" at $8/hr don't *have* to work than many people assume.
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Old 04-17-2010, 11:06 AM   #29
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I doubt that many of them gave you a thought at all while you (and I) scrimped and saved, and spent time studying books on investments, diversification, efficient portfolios, and tax optimization, while they were on a beach sipping an umbrella drink.

OK, that's a gross generalization, but seriously - what is the difference between you and some of your co-workers who are unable to RE? You probably had similar incomes and benefits, the difference is you put your mind to it. I can't feel sorry for someone if they chose a different path. It was their choice. There is something to be said for beaches and umbrella drinks, too.

-ERD50
How many of these over 65 workers made some/all of the following bad choices:

-Married the wrong person
-Did not get a good education but rather "partied" in their early life
-Did not live within/below their means
-Got caught up in the R/E mania
-Did not take advantage of work retirement matching plans

I have zero sympathy for these people - these are the same ones who criticize as to why I save so much and don't "live it up"
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Old 04-17-2010, 11:12 AM   #30
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Married the wrong person
this is an alarming number!!!!
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Old 04-17-2010, 11:53 AM   #31
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this is an alarming number!!!!
My daughter is getting ready to do this right now...

She claimed on her facebook account that she wishes someone had told her ten years ago that she couldn't make any money in work world with the idiotic major she had in college.

I guess I was not "someone" or even "anyone", since i repeatedly asked her how she could possibly earn a living wasting my money on a college major that gave her absolutely ZERO skills. And she told me that she knew better.

I'm now persona non grata to her so she won't even talk to me. So I can't tell her how the husband in a week is really not the marrying kind. Geez, I'm a guy. I can recognize who has a stable life and who is only good for a romantic relationship. He's a fun guy for romance. He's unlikely to be appropriate for marriage and children. I have dreams of her showing up on my doorstep with bedraggled child in hand looking for a place of refuge to live.

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Old 04-17-2010, 12:38 PM   #32
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The last thing I want to do is have another job after I quit at 62 (in July).

I keep telling my younger IT co-workers (who are making more money than I am, a lot of dual income people) to max out the 401k - and they look at me like "how can we afford that"? Well, you don't buy as many clothes and you don't eat lunch out and you do Netflix instead of going to the movies... and Costco is your food store for a lot of stuff...

I haven't had to give up anything I thought was essential, to save money for the past 10 - 15 years. I max out a 401k and a Roth IRA every year - including this year. The 401k will be maxed out in early June.

We don't buy a lot of furniture, We don't redecorate unnecessarily (we can paint the walls). But anything we want, we do get. We just keep "wants" down to a reasonable level. We bought a 50" TV in 2005 or so - and Netflix - and stopped going out to the movies. But I bought a new Volvo wagon in 2003 - for cash - and plan to keep it until it dies - hopefully in 2020 or so. It has low mileage. I feel safe commuting. Decent gas mileage.

SO it's not like we're living poor, we're just not shoppers or spenders for the joy of it - because it isn't joy for me.

I buy good cooking pans - and we redid the kitchen counters and got new appliances - but we didn't rip out the kitchen.

Anyhow the point is that some people never will learn. And they will be working until they are 75 or whatever. Better them than me!
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Old 04-17-2010, 01:34 PM   #33
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But what will these part time jobs be? Sure, anybody can do something stupid like being greeter at the Wal-Mart - but at $7/hr, would it be worth it? As a displaced software engineer, I am in a similar situation - I can't get the good work making $50/hr anymore (or even $30/hr), and that as a lower middle aged person, I can get only a stupid job at $7/hr at Best Buy. I would rather live a more spartan lifestyle (and abroad) than only have an extra $10K/yr and go back to the dark days of waking up everyday to punch the clock.
People need to plan for part-time work before leaving the workforce. I know a few people who do part time work as consultants in the same company that they worked for. Networking is important. Planning for this isn't any different from planning for ER - so the same kind of people will do well, and the rest will suffer. C'est la vie.
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Old 04-17-2010, 03:10 PM   #34
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I know quite a few people who in their fifties were downsized by their companies. They never found comparable employment and now in their sixties are working at low paying jobs or contract employment with no benefits. They have to buy individual health insurance with large deductibles. There is nothing extra in their budgets for funding retirement; they are going to be totally dependent on SS and Medicare.

Some of these people were women who found themselves divorced in their mid-fifties. Certainly, these women COULD have planned for the worst and expected their marriages to fail; but who has an infallible crystal ball? And who among the married right now are doing financial planning in case your marriage fails? Probably none.

It's a very sad situation to see elderly people working in the kitchen at some Orlando resort or standing for hours as a cashier at Target, both situations I have witnessed. These menial jobs are physically very hard on the body. I would expect that the lifespan will diminish as a result. Is this the society we want? In many third world countries, the culture is such that younger people expect to take care of their elders when they are too old to work. I don't think many have that expectation here. I read comments by young people that they resent the fact of paying for social security because they don't expect to recieve it themselves.

I think we have a very difficult situation developing in our country.Social security is not going to be adequate for many elderly and they will not be able to get jobs that they can do that will support them. There will not be relatives to take care of them either. And, younger people will resent paying ever higher taxes.
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Old 04-17-2010, 03:25 PM   #35
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Oldbabe, that was a great post. I couldn't agree with you more. Retirement seems to be pretty iffy for many of those in the early baby boomer generation. People think that they can work forever. I remember when I thought that, too. Now that I am 61, I am beginning to understand that many do lose the physical capacity needed to perform many jobs as they age. Young people think they will never grow old, no matter how many years pass.

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Some of these people were women who found themselves divorced in their mid-fifties. Certainly, these women COULD have planned for the worst and expected their marriages to fail; but who has an infallible crystal ball? And who among the married right now are doing financial planning in case your marriage fails? Probably none.
This is so true. When you think about the divorce rate, and the strains on marriages that can occur during a couple's 50's and 60's, it's just plain scary.
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Old 04-17-2010, 03:47 PM   #36
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Oldbabe, that was a great post.
+1
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Old 04-17-2010, 07:29 PM   #37
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Oldbabe, that was a great post. I couldn't agree with you more.
+2

Ha
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Old 04-17-2010, 08:07 PM   #38
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Oldbabe, you raise an interesting question:

Quote:
And who among the married right now are doing financial planning in case your marriage fails? Probably none.
As a single gal, I've taken matters into my own hands. I don't think being married absolves a woman from that responsibility.
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Old 04-17-2010, 10:34 PM   #39
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Oldbabe, that was a great post. I couldn't agree with you more. Retirement seems to be pretty iffy for many of those in the early baby boomer generation. People think that they can work forever. I remember when I thought that, too. Now that I am 61, I am beginning to understand that many do lose the physical capacity needed to perform many jobs as they age. Young people think they will never grow old, no matter how many years pass.

This is so true. When you think about the divorce rate, and the strains on marriages that can occur during a couple's 50's and 60's, it's just plain scary.
I no longer believe I can work past 62 at my current job. I'm about to turn 62. I can't take the stress, and I'll never find a job that pays as well - if I have to work I want to get paid well.

Physically I look very young but I'm developing unwelcome aches and pains of aging -

Add me to the list of applauders of oldbabe's post.

I'm not married, happily living with a man. I've taken care of my own finances for a long time. And I learned long ago that I might not live forever so I'd better figure out how to get out of the rat race with money saved.

I think women especially who always depended on a man (for money and for decisions) are going to be in terrible shape. Sometimes it's financial, sometimes it's emotional bondage. But when the husband dies, they truly can't figure out how to go on. It's tragic, and I'm not being sarcastic. I have seen what they write about it.
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Old 04-18-2010, 06:04 AM   #40
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I know quite a few people who in their fifties were downsized by their companies. They never found comparable employment and now in their sixties are working at low paying jobs or contract employment with no benefits. They have to buy individual health insurance with large deductibles. There is nothing extra in their budgets for funding retirement; they are going to be totally dependent on SS and Medicare.

Some of these people were women who found themselves divorced in their mid-fifties. Certainly, these women COULD have planned for the worst and expected their marriages to fail; but who has an infallible crystal ball? And who among the married right now are doing financial planning in case your marriage fails? Probably none.

It's a very sad situation to see elderly people working in the kitchen at some Orlando resort or standing for hours as a cashier at Target, both situations I have witnessed. These menial jobs are physically very hard on the body. I would expect that the lifespan will diminish as a result. Is this the society we want? In many third world countries, the culture is such that younger people expect to take care of their elders when they are too old to work. I don't think many have that expectation here. I read comments by young people that they resent the fact of paying for social security because they don't expect to recieve it themselves.

I think we have a very difficult situation developing in our country.Social security is not going to be adequate for many elderly and they will not be able to get jobs that they can do that will support them. There will not be relatives to take care of them either. And, younger people will resent paying ever higher taxes.
Do you really think that this situation describes why many elderly folks are not financially prepared to retire? I understand 50% of marriages end in divorce, so 50% of the population don't end up desitute because of divorce. Of the 50% that do divorce, I suspect a good number of those husbands and wives are both employed in a capacity that would allow them to financially survive independently, and of those that divorce, a good number liley get remarried, thus possibly recreating a two wage earner home. I do think people can get themselves into financial situations that are genuinely beyond their control that can put people in situations they don't deserve. But I don't think that describes why most people in this country are not (will not be) ready/able to retire at what was a traditional retirment age.
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