Article - 35% of Millionaires won't be able to retire

[Samsung4321]

earned SS of more than 50% of US retirees

The average (not median):
'Retired workers, Average monthly benefit (dollars) 1,677.52'; Couple = $40,260.48/ y?

https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/#table2

 

[thod]

I did not make as much as some of you, but I did regularly max out my social security contributions. It just happened later in the year.

It was interesting to watch the pattern. At first, I might max out in December, then the next year in November, then October, etc. Then suddenly one year it was back to December, then November, then October, etc. Then suddenly it was back to December, etc.

When the resets to December happened, that was when I learned of the government changing the contribution caps.

It would have been nice if I made enough to max out really early in the year.

 

[Crabbyjerry]

Northern Italy

To avoid hijacking the thread more than necessary, please see:

https://www.early-retirement.org/forums/f46/flight-snafu-at-ba-and-aa-114876-2.html#post2868287

Thank you so much. Will enjoy reading that post

 

[JJpop]

I live in a small town in Wisconsin. Paid off house, single, no kids or pets.

That is all well and good that you can live on 12,000 a year.

Unfortunately that does not help the 99.9 pct of the people on the forum who have a much different situation.

 

[Major Tom]

That is all well and good that you can live on 12,000 a year.

Unfortunately that does not help the 99.9 pct of the people on the forum who have a much different situation.

Perhaps not, but it's always interesting (to me, at least) to see the breadth of different living situations that our board members are in. I'm single, no kids, a renter, and living in a high COL area, though my cheap rent does a lot to balance things out.

Although the average member here tends to own a house, have kids, and enjoys a solidly middle-class income, there are many who are not in that situation. I like hearing from everyone.

 

[Fermion]

That is all well and good that you can live on 12,000 a year.

Unfortunately that does not help the 99.9 pct of the people on the forum who have a much different situation.

$24,000 for a married couple with a paid off house, no kids, no pets is actually not that hard if you dislike travel. Free healthcare with that level, free internet, no taxes. Its lean but quite easy to do in several parts of the country.

 

[Gumby]

Perhaps not, but it's always interesting (to me, at least) to see the breadth of different living situations that our board members are in. I'm single, no kids, a renter, and living in a high COL area, though my cheap rent does a lot to balance things out.

Although the average member here tends to own a house, have kids, and enjoys a solidly middle-class income, there are many who are not in that situation. I like hearing from everyone.

An excellent point. There is no single, correct way to do this retirement stuff.

 

[NW-Bound]

"It's possible to live well whether you are rich or poor. When you are poor, it just costs less" -- Andrew Tobias

 

[oiseux]

Ah, I LOVED those paychecks!

It's always fun to point out to the people who are under the delusion that their SS is all coming from a little bank account in DC with their contributions in it that any proposed solution that involves removing the wage cap without any commensurate increase in benefits to high earners just makes it more of a welfare system.

Not to mention the special tax treatment that SS gets, something not available on available on private pensions and 401K (though we do have Roths, of course).

 

[Time2]

Some people are ideologically opposed to SS.

So anything to strengthen it is probably a nonstarter.

I don't think that is the problem. Young people don't think they will get SS.
The things that will fix it; people that hit the cap don't want to pay more, they get no benefit, the people that are getting older don't want to push the age to collect farther out, the people collecting don't want a cut in either their benefit or cola's, the people paying in don't want the FICA percentage increased and neither does the employer.
But those of us collecting, want it fixed now

 

[daylatedollarshort]

$24,000 for a married couple with a paid off house, no kids, no pets is actually not that hard if you dislike travel. Free healthcare with that level, free internet, no taxes. Its lean but quite easy to do in several parts of the country.

College kids usually live on even less than that and as a group aren't known to be massively depressed. In fact, many people view college as the most fun years of their life.

Robert Shiller had this advice for his students, "Robert Shiller, the Nobel Prize-winning economist, offered some simple advice for people trying to get ahead...: Live like a student. My students are living alright,..I’ve suggested to them, why don’t you just continue to live at that level after you get a job? It would pile up into a lot of money.”- How to bank hundreds of dollars more each month (yahoo.com)

 

[Koolau]

Ah, I LOVED those paychecks!

It's always fun to point out to the people who are under the delusion that their SS is all coming from a little bank account in DC with their contributions in it that any proposed solution that involves removing the wage cap without any commensurate increase in benefits to high earners just makes it more of a welfare system.

You mean, the proverbial "lock box?" What a joke!

 

[Koolau]

Perhaps not, but it's always interesting (to me, at least) to see the breadth of different living situations that our board members are in. I'm single, no kids, a renter, and living in a high COL area, though my cheap rent does a lot to balance things out.

Although the average member here tends to own a house, have kids, and enjoys a solidly middle-class income, there are many who are not in that situation. I like hearing from everyone.

Hear, hear!

I always appreciate aaronc879's perspective. He helps set the parameters on possible very livable retirement scenarios. Folks "tuning in" for the first time who think one needs "millions" to retire will find aaronc879 (and others) a refreshing voice.

 

[MichaelB]

College kids usually live on even less than that and as a group aren't known to be massively depressed. In fact, many people view college as the most fun years of their life.

Robert Shiller had this advice for his students, "Robert Shiller, the Nobel Prize-winning economist, offered some simple advice for people trying to get ahead...: Live like a student. My students are living alright,..I’ve suggested to them, why don’t you just continue to live at that level after you get a job? It would pile up into a lot of money.”- How to bank hundreds of dollars more each month (yahoo.com)

Robert Shiller is very smart and everyone should live within their means and save, but I find this advice a bit objectionable. He teaches at an elite university, tuition is greater than the median yearly income in the US, and most students come from upper-middle income families. It’s easy to tell people that are already well off that they should save.

I went to university so I wouldn’t have to live like I did during those same years.

 

[athena53]

I went to university so I wouldn’t have to live like I did during those same years.

Yep. My parents paid for my college, God bless them, but I was anxious to get out into a real job so I could live better. It was OK at age 20 to live in the cold attic of an ancient house off-campus, sharing a bathroom with a few other people and carting my groceries to and from the store in a collapsible cart that hung off the side of the grocery cart while in the store, but I'm almost 70. I like luxuries like a car, dental implants, central heating and A/C and not having to share a house with people I didn't choose (ah, the stories I could tell you about waterbeds, and people dropping acid and having body-painting parties while I was upstairs trying to study ).

 

[NW-Bound]

Robert Shiller is very smart and everyone should live within their means and save, but I find this advice a bit objectionable. He teaches at an elite university, tuition is greater than the median yearly income in the US, and most students come from upper-middle income families. It’s easy to tell people that are already well off that they should save.

I went to university so I wouldn’t have to live like I did during those same years.

True. But if a college graduate wants to retire in comfort, she will need to save to have more retirement income in addition to SS. And then, if you want to ER, boy, that takes even more savings.

I recall the time when Shiller said that. I thought he was exaggerating to make a point, that was the market would not continue to rise at 20%/year. "Don't count on it" was the message I thought he was trying to convey. I recall that Shiller sounded a bearish at that time. And the market kept on rising, and his premonition turned out to be wrong.

And at the same time the late Bogle kept repeating himself: "Expect 6% return, and that is before accounting for inflation." P/E reversion, P/E reversion, Bogle kept saying. I am no Boglehead, but I respect Bogle for warning people of silly things they might do.

 

[Samsung4321]

The average (not median):
'Retired workers, Average monthly benefit (dollars) 1,677.52'; Couple = $40,260.48/ y?

https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/#table2

'Retired workers, Total monthly benefits (millions) 81,358'; = 976b / y.

How does USA Federal Government afford SS?

'In 2022 the federal government collected $4.90 trillion'
'In 2022, the federal government spent $6.27 trillion'
https://fiscaldata.treasury.gov/americas-finance-guide/

 

[daylatedollarshort]

Robert Shiller is very smart and everyone should live within their means and save, but I find this advice a bit objectionable. He teaches at an elite university, tuition is greater than the median yearly income in the US, and most students come from upper-middle income families. It’s easy to tell people that are already well off that they should save.

I went to university so I wouldn’t have to live like I did during those same years.

And you don't have to. But looking at the room and board costs for colleges does show what some people can live on and be happy. I had a light bulb moment helping to furnish a college apartment for one of the kids in a hipster area near the beach. I got most of the furnishings from thrift shops, hand me downs and Ikea and it looked really cute. College kids there didn't need cars, even though ours had one. There was no place to park one even if you owned one, so everybody walked, biked, skated or took the public transportation (free for college kids) or Uber. Lots of cheap entertainment through the university or on the beach. ACA for plan for health care. A small apartment in a mild climate meant not much in the way of utility bills. Living near the beach, taking classes and not having to work, able to be outside all year, surfing and beach parties - not exactly a destitute life even with a modest budget.

 

[Fermion]

'Retired workers, Total monthly benefits (millions) 81,358'; = 976b / y.

How does USA Federal Government afford SS?

'In 2022 the federal government collected $4.90 trillion'
'In 2022, the federal government spent $6.27 trillion'
https://fiscaldata.treasury.gov/americas-finance-guide/

They make money the old fashioned way...they print it.

 

[youbet]

But looking at the room and board costs for colleges does show what some people can live on and be happy.

I pick up the tab for my grand daughter to attend a Midwest public university. Room and board is $10,030. That gets you a dorm room shared with a roommate and access to the bathroom down the hall. Also a meal plan that looked adequate to me to be healthy. But, I'd guess most students who couldn't spend a bit on snacks, entertainment, transportation, personal items, etc., might be pressed to be "happy."

You'd still need to find a place to stay and food to eat for about three months a year.

 

[daylatedollarshort]

I pick up the tab for my grand daughter to attend a Midwest public university. Room and board is $10,030. That gets you a dorm room shared with a roommate and access to the bathroom down the hall. Also a meal plan that looked adequate to me to be healthy. But, I'd guess most students who couldn't spend a bit on snacks, entertainment, transportation, personal items, etc., might be pressed to be "happy."

You'd still need to find a place to stay and food to eat for about three months a year.

Right, the room and board costs are not 100% of expenses for an entire year. You have to add in the costs you mentioned plus other likes health care and extrapolate the room and board for 12 months. But most college lifestyles are still pretty low cost. Or a Golden Girl type lifestyle for seniors. I don't remember the Golden Girls show much but it seemed like they weren't considered to be living in poverty.

 

[explanade]

College kids usually live on even less than that and as a group aren't known to be massively depressed. In fact, many people view college as the most fun years of their life.

Robert Shiller had this advice for his students, "Robert Shiller, the Nobel Prize-winning economist, offered some simple advice for people trying to get ahead...: Live like a student. My students are living alright,..I’ve suggested to them, why don’t you just continue to live at that level after you get a job? It would pile up into a lot of money.”- How to bank hundreds of dollars more each month (yahoo.com)

I remember going back to the campus about 5-10 years after graduation.

The bookstore and the student center were full of brochures and applications for credit cards.

Never occurred to me to rack up some credit card debt, enjoy more restaurant meals, summer trips, etc.

I don't believe the banks were marketing that heavily to college students when I was in school. I'm sure some students took out credit cards on their own but it would have been a small minority.

 

[disneysteve]

I don't believe the banks were marketing that heavily to college students when I was in school.

I was in college 1982-86. There was often a table set up in the campus center promoting a credit card. My friends and I would always fill out applications because you got a gift for doing so. We did the same thing at numerous stores when we went to the mall. Why did we do that? Because we knew there was no way we'd get approved. We had no job and no income. We just did it to get the free gifts: an umbrella, a 2-liter bottle of Coke, a tote bag, whatever.


Fast forward a few years and the banks loosened their lending policies considerably and suddenly credit card debt among college students became a huge problem. That's what happens when you start giving credit to anyone with a pulse even though they have zero means to repay any debt. Student loans are one thing but at least those payments are deferred until after graduation and the rates are reasonable. Credit card debt will bury you way faster, especially at 19-29% interest.

 

[Gumby]

I didn't get a credit card until I after I got married (at 25). Looking back, that was a good thing.

 

[punkinhead]

Robert Shiller had this advice for his students, "Robert Shiller, the Nobel Prize-winning economist, offered some simple advice for people trying to get ahead...: Live like a student. My students are living alright,..I’ve suggested to them, why don’t you just continue to live at that level after you get a job? It would pile up into a lot of money.”

I appreciate the underlying "live below your means" message but I very much doubt Robert Shiller is following his own advice. Maybe Yale students have a higher standard living then we did at midwestern state universities. I lived in a house that should have been condemned - spongey floors, no insulation, threadbare carpet, vomit stained couches rescued from the curb, a rusted out unreliable car, and a diet of ramen noodles and mac & cheese. If your income is so low that you need to live like that to save for retirement then you wasted money on a worthless degree.