AND - pay off your mortage B4 U retire....

I think we see a whole new class of Older people that are truly needy in the next 20 years. I know so many people in their 50's and even 60's living one paycheck from being broke, no savings and a big home loan.

I feel so blessed that my wife and I each have a very good traditional retirement plan, 2 IRA's and SS in the future. My medical costs nothing, hers $359 a month. I give thanks every day......

i just turned 30 last week, and i've been maxing out my 401k for years. i will retire at age 53 (have to be retired by 56 by law). my retirement system is a 3 part system, with my annuity, 401k and SS. i'm not counting on anything, but on paper, i should be around 4 mil when i decide to quit. in addition to maxing out the 401k, i still only live on 40% of my net paycheck. 60% of my net pay is diverted into a separate account that i don't touch. it's extreme, but i'm still able to live comfortably on the 40%. i'm very lucky.

So was I. Then I got divorced, lost half of my 401,lost my job, my house and still have to pay outrageous child support for a few more years, and then will have 2 kids in college.

I will be working until the day I die.

My house is my retirement... don't have kids, so if the house is payed off at 60, i can use that to suppliment my own pension.
Banks already have special kinds of loans where you get funding based on the notion they will to settle the debt with the house sale after you are gone. basically a reverse mortage of sorts.

Nostatic nailed it. A lot of people who did/do put money into various investment vehicles have lost bigtime (or will) because of the shennanigans that have gone on and are still going on in the markets.

I'm an example of this phenomenon - in 2008 I was 38 and had a few tens of thousands spread across 401k and stock accounts. By early 2009 the values had dropped to a little over $10k. I ended up having to cash out what little I had left (and take the penalty) to pay the rent and other expenses after being laid off. I funded my cross-country relocation to get the job I have now with a mix of the last of those funds plus some credit cards. I'm now 40 and have been able to get a retirement fund going again as well as some small investments and finally buying a house, but total net worth is still around half of what it was. And I've been lucky. A market shellacking and a year out of work will do that - and plenty of people have been (and still are) out of work for much longer periods. Having folks working into their 70s and 80s won't help the job markets either (low/no attrition).


Many others had to do all the bad things I had to (like see their nest eggs get destroyed, have to burn off savings and retirement/investment funds, run up debts, sell assets at huge losses, etc) WITHOUT finding meaningful work that allows them to rebuild at all. It's a way ****tier situation out there than a lot of folks realize and a lot of it falls directly back on our own culture of debt, easy money (e.g. "flip houses instead of working", "invent new financial products that are really just skimming off of O.P.M.", "why work for money when you can get money to work for you?") and corruption (a government that only responds to big-money lobbyists).

There are going to be a LOT of people seriously screwed in their so-called "golden years" - the ripple effects from the housing bubble and Wall Street sleaze culminating in the 2008 crash will be felt for many years to come.

One thing is certain however - that most of the idjuts who bought all them McMansions and lived large from 2003-2007 - will NEVER accept responsibility. They'll blame Bush, Obama, Congress, God, their dog and everyone else before they'll ever look in the mirror, much less admit fault. That's now a distinctly American trait as well.

I didn't know I had to put away only $350,000 (that means $700k for husband & wife?).
I could have quit years ago. But I enjoy the pawnshop too much, I'll probably still be there when I'm in my 70's.
Jim

The problem I have read is that many are relying on the sale of their family home in order to finance, or partially finance their retirements. So what happens to the resale market for homes once it's glutted with the baby-boomers selling en mass? You might find that your house has de-valued considerably thanks to supply and demand... too much supply from a generation that could afford to buy a home, and no demand from the successive generation who is no financial position to purchase.

As for me, I'm just hoping that the Canadian government is still sitting on some cash to fund the federal public service pension that I've been earning over the years when it comes time for my golden handshake.

Dang...missed it by 32 years :).

ps: Make no mistake, I'll always "work"...just don't have the desire or need to base what I do everyday on $.

I think masraum put it best. The members of this board (OT and the 911 board) are probably not your typical people. The majority of workers right now are just getting by, so forget about saving for retirement. And let's not forget that the norm used to be that if you worked for a large company you got a retirement. Unless you employed in state, fed or local government, those days are long gone. A person didn't have to save the way they do today. If you worked for a company that had a retirement program, got your house paid for in 30 years and were eligible for Social Security, you could have a comfortable retirement. Not any more.

And sadly, you can't save as much today as you were once able to thanks to rapidly increasing prices on homes, groceries, gas, utilities, etc happening at the same time as wage freezes, "voluntary" salary and benefit decreases and hugh unemployment.

Remember the days when a man working at the local hardware store (working, not owning) could afford to buy a house and a car and support his wife and family on just his income? Now, it takes two large incomes to support this lifestyle and even this is unsustainable with the ever-increasing costs of living. Maybe the Sister Wives guy has the right answer... well, having multiple partners out working, not having them staying at home making dozens of dependents like he's doing.

Something has to give. Companies cannot expect to plump up their bottoms lines forever at the expense of their workers. Once there are no workers, there will be no one to purchase their products, or take advantage of their services.

the critical point for that has already come and gone, where do you think the credit explosion came from?

I would contend, that if you look at the size of the houses people built back then, the build quality of the cars back then, etc, that you could still sustain a similar lifestyle with a similar job. The quality of living has gone up, and the cost of living has gone up with it. If you cut a lot of the modern crap that you don't really need, its not as bad. Go look at the bare metal interior in a 1950's car, then go look at the lush interior of a modern Honda. Even our "cheap" cars are extremely luxurious. Throw in "Cable TV", Cigarettes, Big House payment, etc, and the cost has gone up because the amount of things we have has increased.

We've become too obsessed with appearance, try planting a food garden in your yard and see what the neighbors think, but raising some of your own food used to be common practice...

I was raised in a 2 bedroom house, with three siblings, it doesn't take a huge house to raise a family. Not much income did my parents have either, but they were resourceful.

Good point. You can still buy a MB in Germany with crank windows I believe. Not over here, everything has to have all the bells and whistles. That is just stupid.

Even Henry Ford understood this concept way back in the 19-oughts.

Part of the problem now is people don't care whether their customer base really can afford the product - they know it'll just be bought on credit anyway. *clang* kick that can down the road and let the kids/grandkids sort out the mess as long as you "get yours".

I'm starting to look at this whole game of life as "all I have to do is survive until I'm old enough to (hopefully) educate my kids about how to do the same and then it's not my problem anymore..." It's tragic to look at it that way but it's become so soul-crushing and spirit-numbing that one almost can't help it.

My father retired at 72. Sort of. He then worked part time at his old job, with no direct reports, 1/2 pay, no incentive pay, etc. He finally really retired this year, at 83 years old...He wants to work!

I'm no depending on a house sale for any income - I'm outta that and rent. As long as I can keep a job and the market doesn't completely collapse I'll be able to throttle down in a decade or two (like others, I don't see myself "retiring"). But while some people complain about the value of their house dropping (which for many was not real money), others of us see actual cash money that we put into the market vaporizing. Those are two different things.

i doubt that very much.
It's not cost effective to still keep non electric windows in the production line..
it would actually cost more to get a crank window car then an electric one, simply through economy of scale.


I actually have been gearing up to grow my own food, cause i think it's gonna get worse in the coming years, when oil runs out or at the very least becomes more expensive.

I'm not getting much volume yet, i'm mostly trying to figure out what works and what doesn't... but i have bought the house intentionally with a big back garden .. for that purpose. I'll have chickens and rabbits soon...And not just for eggs and cuteness.

Average retirement savings for the population as a whole are completely meaningless to me. You need to take into account wages and age. As has been said, $25k savings at 25 years old earning $25k a year and you'd be golden, $25k savings at 60 while earning $75k and your beyond screwed.

Is there a rule of thumb that says to retire at X (say 65), assuming SS stays the same you should have $Y savings by 30, 40, 50 etc? I've seen various online calculators and those provided by my 401K company, e-Trade, TD Ameritrade etc and every time I run them I seem to come up with wildly different answers that takes me from hide my head in the sand panic to wild ecstasy. Add in the volatility of the last few years and my savings have varied by +25% to - 35% of their current value, that alone makes it difficult to predict the future.

I think another thing a lot of Gen X and Y people do is assume they'll inherit a substantial amount from their parents, even if it's 'only' the house that can then be sold to top up their savings. I think that's an increasingly bad assumption as I see more and more people who will need to live of their houses to cover retirement medical bills etc

I think that the you folks need to be reminded that if they do the deductions for a 401k and based on the tax free mark there is an optimum point where they can actually take home the same amount of pay but also be socking some away. I don't think alot of wage earners know that.

I have been retired for 7 years and was very anxious when I first retired as to whether I could maintain a lifestyle that I was accustomed to, it was stressful the first few years particularly going through the financial roller coaster of the markets.

Sometime long before I retired I had heard that to maintain a lifestyle you needed to have access to income equal to 80% of your working income. From my experience that is a pretty accurate figure.

The other guide is to not expend more than 4% of your net worth in any given year. I also find that to be a pretty accurate figure.

I think most investment calculators are inflated because they represent organizations that want to manage your money and obviously having too little is to their advantage so their programing inflates the figure.

After a certain number of years of working and getting raises, I always banked or invested any raise that I got, always maxed my 401K and also funded a deductible IRA as long as I could. We didn't go out and spend the new found income, it went into investments. We lived in the same house for 35 years with minimal improvements other than necessary.

I have no doubt that a high percent of the population is not prepared to retire and live at the lifestyle they are accustomed, that scares me. I had many neighbors who always had new expensive cars and other stuff, I never knew how they did it.