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Old 10-10-2014, 01:35 PM   #21
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They foolishly think that you can simply start saving when you're in your 50s, after the house is paid off, kids schooling expenses are done, etc., and be in no worse shape than if they started in their 20s/30s.
They also plan to stop smoking, drinking and start losing weight at the same time.

To the OP: what should they do? They should start LBYM right now and pay down those debts and try to save what they can. Now is not the time to buy a car every 2 years. You have to start somewhere. Having something besides just SS helps. Maybe that extra will allow you to keep a house and pay for gas.

But what if they don't pay down debts and have no savings? Well, that's what SS is for. I've seen plenty of people live only on SS. It is pretty spartan, but doable. Don't plan on travel or luxuries. You may not be able to live in your house because you can't maintain it. But there is subsidized senior housing available.

Then you have one of my BILs. He has intentionally avoided taxes of all kinds. Always doing jobs for cash. Now he begs and will have to try to live on SSI. (Something I learned on this board... even if you totally blew it and don't even have SS, you can get SSI.) I suspect he'll be bugging us for cash too.

I hate to be a downer, but I suspect some Congress in the next 20 years or so will institute some wealth tax (asset tax) to "help" these folks.
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Old 10-10-2014, 02:36 PM   #22
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I hate to be a downer, but I suspect some Congress in the next 20 years or so will institute some wealth tax (asset tax) to "help" these folks.

either that or they'll start taxing Roth withdrawals

Seriously though, I'm amazed at these people in their late 50s and on up with great jobs....maybe I've always worked in cut throat industries, but people over 50 were hard to find - the organizations found a way to weed them out.
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Old 10-10-2014, 02:45 PM   #23
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I hate to be a downer, but I suspect some Congress in the next 20 years or so will institute some wealth tax (asset tax) to "help" these folks.
No, cause this would happen:

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Old 10-10-2014, 03:13 PM   #24
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Seriously though, I'm amazed at these people in their late 50s and on up with great jobs....maybe I've always worked in cut throat industries, but people over 50 were hard to find - the organizations found a way to weed them out.
I resemble this remark. I was flushed from a position where I thought I was important. They showed me how important I was at age 52. It took about 2 years but finally ended up in a much better place.
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Old 10-10-2014, 03:24 PM   #25
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No, cause this would happen:

REWahoo, while I almost always agree with your humor and sage wisdom, I sternly disagree with your thoughts above.

If the gov't was able to pass an income tax on up to 30% of your SS payments being DOUBLE TAXED (in the 90s), then they can do anything.

If the senior citizens didn't revolt then (and that tax affected MANY senior citizens), then surely the minority (or small majority) population of senior citizens that have ROTHs won't be able to muster up enough force at the ballot box to threaten the politicians.

Even though the $ involved could be higher than the double taxation on SS benefits, the AVERAGE ROTH IRA balance won't be high enough to institute political revolt. I don't have figures at hand, but surely just maybe 10% of senior citizens have a hefty ROTH balance to where a ROTH/asset tax would add up to a substantial sum. If a vastly higher % of SS didn't effect change with 30% of SS being double taxed in the 90s, I doubt a small minority of high ROTH balance senior citizens will matter.

Besides, they will be drowned out by the grasshoppers, who will be eagerly awaiting their share of the pie, since they have nothing.
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Old 10-10-2014, 03:27 PM   #26
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Do you ever hear comments like these? Whenever I do, I mostly keep my thoughts to myself, thinking "that ship has sailed" - without time on their side, how will these folks ever hope to retire?
And the answer to your question is, they may not be able to retire. I see folks a lot older than myself working at Home Depot every day. I would not guess that they are doing this for a great fulfilling life.

This is like anything else in Life. Have you ever seen people saying they were trying to lose weight, while snacking on high calorie snacks?

Those of us that have retired and planned for it, would not want to live without the 3 month winter vacation in the Bahamas, a new car every few years and expensive hobbies and so we have worked this into our budgets. Mostly to be able to do this in the Firecalc 'worst Case' conditions. (Which probably won't happen, but we could still live large, even if it did happen).

And if you have ever traveled the world and seen what truly poor people live like, I am talking Africa and areas of Central America, you may look at your friends as having a truly cushy retirement.

So, it's all relative.
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Old 10-10-2014, 03:35 PM   #27
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I have no idea how my friends are doing with money except for a few who shared their finance with me - Some are doing good, some are not.

It's a miracle I have as much money as I have, considering I didn't get into the saving mode until my mid-40's. I am not a big spender to start with, so money just kind of accumulated even before then, plus I was maxing out my 401K pretty much for the get-go for one reason or another.

It could have been a whole lot worse.
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Old 10-10-2014, 03:37 PM   #28
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... I sternly disagree with your thoughts above.
OK, but I'll be rioting. Consider this your formal invitation to join me.
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Old 10-10-2014, 03:38 PM   #29
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I resemble this remark. I was flushed from a position where I thought I was important. They showed me how important I was at age 52. It took about 2 years but finally ended up in a much better place.
Lot of people retire because of layoff or health problems and they may do it before they are 62.

It is best to be fully prepared once you pass 50.......
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Old 10-10-2014, 03:49 PM   #30
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I know several people who say they are planning to work "forever"--I don't know why as some seem to be very well off (high level executive) or do not seem to overindulge in conspicuous consumption. They won't retire early and they will have fewer years to finance, perhaps at a decreased standard of living, when they do. Maybe they will need to move to a low cost of living area. It will work out one way or another.
Bill Gross has an estimated (by Forbes) net worth of over two billion dollars. So why didn't he just retire?
According to him, it's because it's vital for him to get up a 5:30 every morning and try to beat his peers at other companies. It's his life, and it's what gives his life meaning.

My take is that he's simply not tough enough to hang out with the likes of this group!
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Old 10-10-2014, 03:51 PM   #31
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OK, but I'll be rioting. Consider this your formal invitation to join me.
By the time this happens it'll be a riot in the old folks home!
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Old 10-10-2014, 03:59 PM   #32
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By the time this happens it'll be a riot in the old folks home! re
+1

I'm getting a walker with a torch-holder attachment!
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Old 10-10-2014, 04:13 PM   #33
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OK, but I'll be rioting. Consider this your formal invitation to join me.
I'll join the group. Pass the torches.
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Old 10-10-2014, 04:44 PM   #34
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I may as well exist in another universe from pretty much all my friends and former co-workers. I don't know a single person who targeted ER in their early 30's and actually managed to do it. Pretty much everyone spends what they make and they don't hesitate in relating their financial challenges openly.

Hanging around this site I think causes me to drastically overestimate how many people have successfully built their finances up to a point where they can consider NOT working until 65.

I think we are a rare breed.
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Old 10-10-2014, 04:58 PM   #35
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To the OP's original question, at some point I think the ship has sailed and there is not a real ability to catch up. Unless the person has a high income and lives in near poverty to be able to save a huge percentage of their income, time just does not allow basic value of compounding to be effective.

As to the question of finances with friends and acquaintances, all I can say is most of the non-retirement savers are living paycheck to paycheck and just trying to keep their head above water. Both LBYM and pay yourself first seem to be foreign concepts to them. Those that do save, we do not talk more than general stuff and no specifics.

As to what the non-retirement savers will do? They all are basically assuming they will work long into 60's or even 70's.
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Old 10-10-2014, 05:06 PM   #36
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They will work till 65 and then live on SS ( which will not cover decent living ).
I know number of people who worked untill 62 and then live on smaller SS. Somehow, they make it work. For those people, they don't need a ship to sail. A (life)boat would do fine for them.
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Old 10-10-2014, 05:25 PM   #37
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REWahoo, while I almost always agree with your humor and sage wisdom, I sternly disagree with your thoughts above.

If the gov't was able to pass an income tax on up to 30% of your SS payments being DOUBLE TAXED (in the 90s), then they can do anything.

If the senior citizens didn't revolt then (and that tax affected MANY senior citizens), then surely the minority (or small majority) population of senior citizens that have ROTHs won't be able to muster up enough force at the ballot box to threaten the politicians.

Even though the $ involved could be higher than the double taxation on SS benefits, the AVERAGE ROTH IRA balance won't be high enough to institute political revolt. I don't have figures at hand, but surely just maybe 10% of senior citizens have a hefty ROTH balance to where a ROTH/asset tax would add up to a substantial sum. If a vastly higher % of SS didn't effect change with 30% of SS being double taxed in the 90s, I doubt a small minority of high ROTH balance senior citizens will matter.

Besides, they will be drowned out by the grasshoppers, who will be eagerly awaiting their share of the pie, since they have nothing.
If you believe this, you better hope that Social Security is not Cut anymore via chained CPI, the Minimum wage is raised and Medicare and Medicaid is protected. The huge tax cuts for Billionaires should be repealed and large penalties for off-shoring jobs from the U.S. should be enacted.

Without these safety nets and reforms you as a middle class taxpayer most certainly will be on the 'Hook'.

When we all do better, We All do Better!
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Old 10-10-2014, 06:24 PM   #38
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I hate to be a downer, but I suspect some Congress in the next 20 years or so will institute some wealth tax (asset tax) to "help" these folks.

either that or they'll start taxing Roth withdrawals

Seriously though, I'm amazed at these people in their late 50s and on up with great jobs....maybe I've always worked in cut throat industries, but people over 50 were hard to find - the organizations found a way to weed them out.
“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”
John Steinbeck
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Old 10-10-2014, 06:32 PM   #39
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I know of a number of people who live solely on SS and make it work. They often live in the lower cost of living areas, share housing and don't enjoy much beyond treating the selves to a weekly mocha at Starbucks.

Over 50 and out of work? This is a sad situation. I have known of people who worked low paying jobs and drained their already meager retirement funds to survive until they hit SS. Then they join the group above.
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Old 10-10-2014, 07:02 PM   #40
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I hate to be a downer, but I suspect some Congress in the next 20 years or so will institute some wealth tax (asset tax) to "help" these folks.

I'm looking forward to the rewriting of Aesop's Fable

The Ant and the Grasshopper

I figure the Ant still works all Spring, Summer and Fall while the Grasshopper goofs off, but the ending is changed: The Ant is vilified for planning ahead, having accumulated enough to survive Winter. As punishment for this crime, the Ant stripped of the fruit of his labor and it's distributed to all the needy Grasshoppers innocent of anything deserving their stern plight.

-Jon
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