Boomer Retirements - Not a Surprise

[Winemaker]

Quote:

Originally Posted by GravitySucks Unreadable. I have given up on believing anything the Bezos Washington Post publishes.

+10

[North Texas Cajun]

Quote:

Originally Posted by DrRoy The current stock market (S&P500) is approximately double the high point prior to the great recession. If you remained invested this argument is false.

Not quite there yet, but close. The S&P 500 closed at 1565 one day in October, 2007 - Oct 10, I think.

Of course, if one includes dividends, the total nominal gain since that date exceeds 100%.

[target2019]

Quote:

Originally Posted by Cut-Throat It's actually much more positive for S.S. as the Inflation Amount on S.S. is on a 'Wage Index".... I found a calculator that shows this.... Calculator has only been updated to 2017 ..... https://www.halfhill.com/inflation_js.html First Figure is for CPI Inflation and the Second is For S.S. Wage Inflation... You actually gain with S.S. as far as the Dollar Figure... Certain Political Parties are trying to cut this Benefit Currently.

Thanks for posting that link. It tells me that "salary increases" for an average Joe like me are essentially keeping up with the Inflations.

[Rianne]

A couple of years ago, DH/me visited the Lincoln Library in Springfield, IL. The media was as bad or worse in 1861 than it is today. The news articles, the quotes by citizens, politicians, military etc. That was eye opening. We're naive to think today's news is much different than 100-300 years ago. Did Columbus discover America? Who discovered the earth was round? There are many misstated, misunderstood, inaccurate and false statements and beliefs in history.

[GravitySucks]

https://www.chicagotribune.com/busin...301-story.html

Chicago Tribune jumped in to.
One point I'd like to see addressed is the "No Qualified Employees" rant corporations make. When I was a pup companies trained people. Now they push that off on the public. For example: My community college has a certificate and degree program that includes working aloft of power lines. The local ( actually an international corp.) Power company hires the young folk that get that certificate and it cuts the corporations cost to train.
Kids starring out think this is how life always was, but it really is a recent change to the norm.
More corporate welfare.

[Chuckanut]

Quote:

Originally Posted by CardsFan But, on a related note, aren't the baby boomers (me included) about to dump a pile of taxes into the system as we get to RMD's? I have never seen a story on this topic, but it seems relevant.

+1

CardsFan, you make to much sense. If you continue along this path I may have to add you to the list of Dangerous Radicals who infest this site.

[Chuckanut]

Quote:

Social Security benefits have lost about a third of their purchasing power since 2000

In just 14 words the writer blows his credibility to Heck. It's sad since the article itself makes some good points.

My guess is the market will work this out, one way or the other.

[Cut-Throat]

Quote:

Originally Posted by Chuckanut In just 14 words the writer blows his credibility to Heck. It's sad since the article itself makes some good points. My guess is the market will work this out, one way or the other.

Here is the 'Study' which came up with this Malarkey. There is so many things wrong with this. See how many you can find. From the Article:


"The results showed that seniors' Social Security benefits have lost 30% of their buying power just since the year 2000. In other words, what $100 in Social Security income purchased in 2000 now buys about $70 worth of goods and services. " ---- Sure, but you get more Income Now - Right?


Their argument is that Seniors have a higher rate of inflation because they buy stuff that is increasing faster than the CPI..... Maybe for some, Maybe not for others.



https://www.fool.com/retirement/2017...mmeted-by.aspx

[gerntz]

The Phony Retirement Crisis

"...there is no retirement crisis among either today’s retirees or tomorrow’s. Eight in 10 retirees tell Gallup they have enough money to “live comfortably,” and 6 in 10 working-age households say the same. Seventy-five percent of retirees tell the Federal Reserve’s Survey of Consumer Finances they have “at least enough to maintain [their] standard of living,” up from 61% in 1992. Census Bureau research that uses Internal Revenue Service data to measure retirees’ incomes found that the over-65 poverty rate was only 6.7% in 2012, down from 9.7% in 1990 and lower than any other age group."

So retirees live better than workers & their lots are improving.

"More Americans are saving more than ever for retirement. Participation in traditional defined-benefit pensions peaked at 39% of employees in 1973. Today, the Social Security Administration says that 61% of workers, including 80% of married couples, participate in a plan. Nonsavers are mostly low-earners, who will receive high “replacement rates” from Social Security, or young employees who will save as their earnings rise.

Retirement-plan contributions are up as well, Labor Department data show. From 1975-84, total employer and employee contributions averaged 6% of employee wages; over the past decade the average has been 8.3%. Retirement savings in employer-sponsored plans and individual retirement accounts are at record levels, rising sixfold since the mid-1970s.

Retirement incomes have risen too. According to Fed data, the median retiree household’s income grew by 56% above inflation from 1989 through 2016, versus only 4% real growth for working-age households. Incomes grew faster at the poorest fifth percentile retirees than at the 95th percentile of the working-age population.

The Social Security Administration’s sophisticated computer models don’t project a retirement crisis. Incomes will continue to rise, old-age poverty will fall, and the share of retirees unable to maintain their standard of living will be similar to today."

https://www.wsj.com/articles/the-pho...is-11551398196

[Cut-Throat]

Quote:

Originally Posted by gerntz The Phony Retirement Crisis "...there is no retirement crisis among either today’s retirees or tomorrow’s.

And this article is probably more Bogus than the one we are discussing. It was written by an active GOP Congressman, whose party is actively trying to Cut S.S. Benefits... and it is on the "Opinion Page".



He glosses over the Problem here "Nonsavers are mostly low-earners, who will receive high “replacement rates” from Social Security, or young employees who will save as their earnings rise."


Bottom Line -- If you're doing well, you don't have a retirement crisis. However if you're not doing well, we're not going to talk about you.

[Andre1969]

I searched around, and found this site, which lists the COLAs by year...

https://www.ssa.gov/oact/cola/colaseries.html

For 2019, the increase was 2.8%.

So, doing the math, if you got a $1,000 SS check in 2000, you should be getting $1,492.96 in 2019. If I'm doing the math correctly

That Motley Fool article actually does indicate some erosion of purchasing power, though. Here's one thing they quoted, and this was as of 2017... "Topping the list were Medicare Part B monthly premiums, which are up 195% over that time frame; annual out-of-pocket prescription drug costs, up 184%; and homeowner's insurance, up 154%".

I don't know about prescription drugs or medicare Part-B because I'm not there yet. I just checked my homeowner's insurance, and it's around $1373/yr. Now, I didn't have this house in 2000, but a 154% increase would imply that insurance was only around $540 back then?!

[gerntz]

Quote:

Originally Posted by Cut-Throat And this article is probably more Bogus than the one we are discussing. It was written by an active GOP Congressman, whose party is actively trying to Cut S.S. Benefits... and it is on the "Opinion Page". He glosses over the Problem here "Nonsavers are mostly low-earners, who will receive high “replacement rates” from Social Security, or young employees who will save as their earnings rise." Bottom Line -- If you're doing well, you don't have a retirement crisis. However if you're not doing well, we're not going to talk about you.

He uses government data to support his conclusions, doesn't he?

[Cut-Throat]

Quote:

Originally Posted by gerntz He uses government data to support his conclusions, doesn't he?

He MAY use government data, but his conclusions he spins are too Rosy and ignores the folks in trouble.



""More Americans are saving more than ever for retirement. Participation in traditional defined-benefit pensions peaked at 39% of employees in 1973. Today, the Social Security Administration says that 61% of workers, including 80% of married couples, participate in a plan."


The Conclusion I reach... Is: Pensions are Gone, therefore More Americans HAVE to save more than ever for retirement.


61% of workers participate in a plan --- What about those 39% that don't - Those Poor Suckers!

[ncbill]

Quote:

Originally Posted by zippy2020 It would be interesting to see some stats on actual % of Boomers who ended up with poverty-level retirements.

I think the relative I just buried (born 1946) came the closest to running out of money of anyone I've known.

Laid off at age 60 & made some bad decisions:

1. refinanced their 15 year mortgage (5 years in) to a 30 year to save all of $400/month, because:

2. rather than take the lower-paying job they were offered they decided to return to school for a 4 year degree in a completely different field (they only had an associate's), borrowing ~$50,000 (half via HELOC, half via federal student loans) for school & living expenses. Oh, and they liquidated their cash-balance pension & other retirement as well.

Despite a ~$200,000 windfall in 2011 (inheritance) they were down to only~$75,000 by the time they got sick last fall when I took over their finances. Expenses incurred during their illness has taken half of that.

I'm still in the process of getting their home ready for sale, which remains heavily mortgaged...so high carrying cost until it sells.

[CardsFan]

Quote:

Originally Posted by Chuckanut +1 CardsFan, you make to much sense. If you continue along this path I may have to add you to the list of Dangerous Radicals who infest this site.

I'm pretty sure I post enough nonsensical things here to avoid your Dangerous Radicals list.

[beowulf]

More people may be in plans - 401K type - than ever before, but the real question is whether they are contributing anything? Just being in a plan doesn't mean you are making a meaningful contribution. Social security may replace more of a lower income person's earnings than that of a higher earning person, however, if they were barely getting by before, it will be even worse after they retire. 40% of US adults can't come up with enough money to cover a $400 expense. According to the SSA, 21% of married Social Security recipients and 43% of single recipients aged 65+ depend on Social Security for 90% or more of their income. That means they have little or no savings and are not continuing to work after starting SS. This is an early retirement board - I think our impressions of how others are doing is often colored by our own preparations for retirement.

[Cut-Throat]

Quote:

Originally Posted by beowulf More people may be in plans - 401K type - than ever before, but the real question is whether they are contributing anything? Just being in a plan doesn't mean you are making a meaningful contribution. Social security may replace more of a lower income person's earnings than that of a higher earning person, however, if they were barely getting by before, it will be even worse after they retire. 40% of US adults can't come up with enough money to cover a $400 expense. According to the SSA, 21% of married Social Security recipients and 43% of single recipients aged 65+ depend on Social Security for 90% or more of their income. That means they have little or no savings and are not continuing to work after starting SS. This is an early retirement board - I think our impressions of how others are doing is often colored by our own preparations for retirement.

+1