Young Workers Not Saving Article

[cute fuzzy bunny]

Just before she ate the cameraman.

Last we saw of him, two little feet kicking...

 

[Mr._johngalt]

I am wondering how the author of that article expects those of us under 30 to have huge balances when we are just starting out.  We are making entry level salaries and have not had a lot of TVM yet.  Give us a break.  My company only lets me invest up to 15% of my salary, which will not bring me near the maximum dollar amount.

It's simple. You don't need a "huge balance". I didn't have much of anything
(and no real planning either). Worked out great anyway. BTW, don't blame your company for restricting you to 15%. There are a gazillion other ways
to save for retirement.

JG

 

[Sillysal]

I am not blaming anyone or making up an excuse not to save. But it is a little ridiculous to lump in everyone from 18 to 30 into one group and write an article on how small the balances in their 401ks are. The article didn't mention IRAs or any other savings vehicles, such as savings for that house most people get. Young people have to save for more than just retirement and on small salaries. I am just pointing out that the article was pretty crappy as a measurement of savings rates for young people. I currently save 10% of my income from retirement, with it set to icrease by 1% every enrollment period until it reaches the max. I am also saving another 15% of my income after tax for a house downpayment. Trust me, the actual dollar amounts aren't big - because my income isn't yet. So instead of focusing on dollar balances young people have in 401ks, I just think the savings rate would have been more useful to study.

 

[JPatrick]

I am not blaming anyone or making up an excuse not to save.  But it is a little ridiculous to lump in everyone from 18 to 30 into one group and write an article on how small the balances in their 401ks are.  The article didn't mention IRAs or any other savings vehicles, such as savings for that house most people get.  Young people have to save for more than just retirement and on small salaries.  I am just pointing out that the article was pretty crappy as a measurement of savings rates for young people.  I currently save 10% of my income from retirement, with it set to icrease by 1% every enrollment period until it reaches the max.  I am also saving another 15% of my income after tax for a house downpayment.  Trust me, the actual dollar amounts aren't big - because my income isn't yet.  So instead of focusing on dollar balances young people have in 401ks, I just think the savings rate would have been more useful to study. 

I'd say you are off to a decent start silly, but no lay out of a "young" person's financial prowess can be complete until you are able to step up to the mike and loudly proclaim- - - - "AND I AIN'T GOT NO STINKIN CREDIT CARD DEBT"
Can you do that silly?

 

[maddythebeagle]

probably, the study has bias as do most but investing as early as possible is the key to taking advantage of compounding. I think this is more important to anything else in your planning.

 

[saluki9]

WOW! $60,000 teachers? In KY, I live in the highest paid teacher county, but new teachers make $26,000 or $28,000 and get no educational benefits even though there is heavy pressure to get advanced degrees.

You should see it here in the burbs north of chicago. Avg teacher salary is about $75-85. They top out in the low $100s after 10 year on the job. Full tenure (this is for Jr HS and HS) get full healthcare for which they pay nothing. On top of all that, they get 80% lifetime pension at 30 years.

That of course may explain why the taxes on my little condo (1100 sq ft) are almost $6K per year.

 

[farmerEd]

>>That of course may explain why the taxes on my little condo (1100 sq ft) are almost $6K per year.

That also explains why govt workers can retire in their 40 and 50's and private sector employees counting on SS are going to have to work another 20-30 years more.

 

[Sillysal]

J Patrick - I paid off the CC debt I accumulated in college a few months ago. I am now putting all the extra money that was going toward it toward my auto loan so that I can get that paid off by the end of the year, which will be about 22 months earlier than the term of the loan. Then the only debt I will have is my student loan debt, fixed at 3.28%.

 

[JPatrick]

J Patrick - I paid off the CC debt I accumulated in college a few months ago.  I am now putting all the extra money that was going toward it toward my auto loan so that I can get that paid off by the end of the year, which will be about 22 months earlier than the term of the loan.  Then the only debt I will have is my student loan debt, fixed at 3.28%.

Wow!  You really are on the right track.
Just keep on keeping on, and maybe go a little easy on those $3 Starbucks

 

[vic]

The problem is our educational system. No one can do the math. In the average tax bracket it only takes 7 dollars take home pay to invest 10 dollars, it's a no brainer. If you ask these people if they would like to buy 10 dollars for 7 dollars they would understand, but make it slightly more complicated and you have lost them.

No, they still do not (want to) understand. I tried to convince my fellow engineer to start saving in his 401K to at least up to the company match. He is at leat 45 years old. He can do math and I even did it for him. Including the scenario that he would put in the 5% for a 100% company match and then take it out with a 10% withdrawal penalty. Still not convinced.... He understands that he could almost double his money that way but then he would have to wait maybe a few weeks/months. Wants to have and spend it right now. He also just cashed in his pension plan. Paid the pension plan extra to overnight the check to him. Nice guy but I don't feel sorry him if he has to get a greeter's job at Walmart in his golden years.

Vicky

 

[unclemick]

I know one of them (for 29 yrs and counting) - lived large in the 70's, 80's and 90's.

Walmart greeter jobs are hard to come by - he's still working his way up from bringing in the shopping carts. That and part time cab driver - health permitting.

 

[Cut-Throat]

I know one of them (for 29 yrs and counting) - lived large in the 70's, 80's and 90's.

Walmart greeter jobs are hard to come by - he's still working his way up from bringing in the shopping carts. That and part time cab driver - health permitting.

Actually, most of these folks take care of their health about as well as their finances. A lot of them will be dead in their 60's and never retire.

The guys I know that were making 6 figures and in heavy credit card debt in their 30's and 40's - Are now in their 50's with type 2 diabetes, 75 extra pounds, and the only exercise they get is flicking the remote control.

 

[Mr._johngalt]

Actually, most of these folks take care of their health about as well as their finances. A lot of them will be dead in their 60's and never retire.

The guys I know that were making 6 figures and in heavy credit card debt in their 30's and 40's - Are now in their 50's with type 2 diabetes, 75 extra pounds, and the only exercise they get is flicking the remote control.

Hey, not all of us! I don't get much exercise, but I also watch very little TV.
Also, low stress and no-debt (except CC flippin'). I could live another 40 years.
Okay with me as long as I'm havin' fun........................

JG

 

[mangodance]

You should see it here in the burbs north of chicago. Avg teacher salary is about $75-85. They top out in the low $100s after 10 year on the job. Full tenure (this is for Jr HS and HS) get full healthcare for which they pay nothing. On top of all that, they get 80% lifetime pension at 30 years.

WOW! I have a friend who teaches in Robinson, IL who gets nothing close to that...more similar to what they pay here.

 

[cute fuzzy bunny]

Also, low stress and no-debt (except CC flippin')

Amazing. Someone with 100k in credit card debt can dismiss it by calling it 'flippin'.

When you owe someone $100,000 and they expect you to pay it some day, thats called 'debt'.

 

[jimhcom]

Being a Wall-Mart greeter isn't the only option for non savers there are also excelent positions wearing paper hats and asking people "would you like fries with that". Its just not my idea of the good life. 8)

 

[preben]

He,he - Not Me; we all know that JG could pay it back tomorrow should he decide - had he written "only debt is a 100k credit card debt" you would have jumped at that!

Anyway we NEED these people to keep spending to keep the hamster wheels turning for the rest of us! It is however a thin line to balance on.... As the group (read: VOTERS) of disgruntled people grow, the governments will have to please them (to get re-elected) taking from the "rich"(us... ) and giving to the poor spendrifts...

Cheers!

Amazing.  Someone with 100k in credit card debt can dismiss it by calling it 'flippin'.

When you owe someone $100,000 and they expect you to pay it some day, thats called 'debt'.

 

[Marshac]

You should see it here in the burbs north of chicago.  Avg teacher salary is about $75-85.  They top out in the low $100s after 10 year on the job. 

I call BS. Can you show us an IL state link providing the teacher pay scale? It's strange that you claim one thing, yet the Heritage foundation claims an average salary of just a hair over $51k/year. Here are the numbers from Washington State. http://www.k12.wa.us/safs/PUB/PER/SalAllocTbl0103.pdf

As you can see, a masters with 16+ years of experience will only get you $52k/year.... I really don't wonder why some of my favorite science teachers left for the private sector.

 

[justin]

And send me an application for the $75k teacher job while you're at it.

 

[bosco]

60K for about 1000 hours of work a year is no chump change, especially when you factor in the benefits..

Spoken like someone who hasn't been around many teachers, or at least many good ones. I'm not a teacher, but my mom and a few good friends were/are. All of them put in more hours in their 10 months than most people I know working 40 hour/week jobs 50 weeks/year. They all got phone calls regularly at home, all attended PTA meetings in the evenings, and all spent their own money on supplies because the public valued education so little that they wouldn't fund it properly.

Good education (= good teachers) is a big part of the future of keeping earnings high and social security healthy.


Bosco

 

[Jay_Gatsby]

Just like private industry, there are many teachers that work extremely hard for their poor salaries, while there are also quite a few who just "phone it in" after being on the job for 10-20 years.

Rather than continue this thread along the lines of "teachers are under-appreciated", I would agree based on anecdotal evidence that younger workers aren't saving enough.  It seems like most of my friends/colleagues didn't start saving seriously until after they got married, turned 30 (a magic age for some reason), had kids, etc...  Perhaps such life milestones indicate the final transition point into adulthood, whereby frivolous spending is no longer an option if one ever wants to retire.  At the same time, the young person who begins saving from day one of his or her first post-undergraduate job can continue spending more freely than the average 30-year old.  The statistics indicate that an additional 10 years in the market can make a tremendous difference.

 

[youbet]

My wife recently retired after spending 35 years as a elementary school teacher, the last 20 or so as a Special Education teacher. I was in the private sector. You can imagine the interesting conversations we had regarding salaries, benefits, etc.

In the end, we came to the agreement that teaching is just like any other profession in that the participants will receive what the market will bear. If a school district has vacancies they can't fill, they aren't paying enough. If they have plentiful, qualified applicants available at all times, they're paying enough. It has nothing to do with the importance, ease or difficulty of the job.

Admittedly, government and unions will step in from time to time to muddy the free market waters.

 

[saluki9]

I call BS. Can you show us an IL state link providing the teacher pay scale? It's strange that you claim one thing, yet the Heritage foundation claims an average salary of just a hair over $51k/year. Here are the numbers from Washington State. http://www.k12.wa.us/safs/PUB/PER/SalAllocTbl0103.pdf

As you can see, a masters with 16+ years of experience will only get you $52k/year.... I really don't wonder why some of my favorite science teachers left for the private sector.

Ok, fine call BS. Here is a link to the list of average salaries by district in IL. My district is fifth down. http://www.thechampion.org/teach2004/avgteachersal.asp The AVG teachers salary is around $78K. This is lower than it will be because there are a lot of newer teachers that were recently hired.

 

[Marshac]

Ok, fine call BS.  Here is a link to the list of average salaries by district in IL.  My district is fifth down.     http://www.thechampion.org/teach2004/avgteachersal.asp  The AVG teachers salary is around $78K.  This is lower than it will be because there are a lot of newer teachers that were recently hired.

Is this total compensation, or perhaps an 'annualized' rate (ie: 'if they were working 12 months rather than 9, this is what they would get)? It doesn't say on the page where the numbers came from, so I can only guess... These numbers are just unbelievable.... and if are actually correct, well, then i'm movin to IL to become a teacher!

 

[saluki9]

No, those are for 9 month contracts. I know several teachers here, they get about $5K per class on top of that for summer school

As you can guess, the jobs are very hard to get. Most of them have masters degree or PhD's