http://finance.yahoo.com/retirement/art ... ter_retire
Carefully read this article. There is something very wrong about it as far as I can see. I think it's a government plot to make you think you will make out if you work until you drop over. They don't want anyone to retire.
Social Security..... if we live that long.
The average man only lives 1 1/2 years after retiring at age 65.
I retire at age 62 and start collecting SS.
Let's use round figures of $1000 being 100% payment per month.
I would get 74% that equals $740 a month or $8880 a year.
$72,000 free money in 8 years or to age 70.
At 75 that's $115,440.
At 80 it's $159,840.
At 84 it's $195,360.
Starting at 70 you get $1000 plus 32% more or $1320 a month or $15,840 a year.
At 75 you have $79,200.
At 84 you have $190,080.
I'm going to bet on dying before I get to be 84. At age 70 I have collected all the money I ever paid to them and some.
I retire at age 62 and start collecting SS.
Let's use round figures of $1000 being 100% payment per month.
I would get 74% that equals $740 a month or $8880 a year.
$72,000 free money in 8 years or to age 70.
At 75 that's $115,440.
At 80 it's $159,840.
At 84 it's $195,360.
Starting at 70 you get $1000 plus 32% more or $1320 a month or $15,840 a year.
At 75 you have $79,200.
At 84 you have $190,080.
I'm going to bet on dying before I get to be 84. At age 70 I have collected all the money I ever paid to them and some.
I multiplied wrong.
The figure for the 84 year old retiring at 70 is $221,760. I did 12 years instead of 14. And I got out of bed to fix the error.
$26,400 difference by waiting 8 years to collect.
If you wait til 66 years old because that's when I can collect full money (Ex $1000 a month) $216,000 at 84. Not much difference between 65 and 70. Except you worked 5 years longer. I can remember guys I worked with saying they were getting SS while they were still working after 65. I don't know if that's still possible now.
I take after my dad's side of the family. My grandmother lived to 84. All her kids died early. The oldest boy at 80, the middle boy 53, the youngest boy (my dad) at 69. The girls were mixed inbetween them. I figure I'm dead somewhere between 65 & 75 more like before 70. I want to make sure I at least get back what I paid in.
Besides I want to screw the government as soon as possible.
According to the social security administration, your benefits are not affected once you reach full retirement age.Bigdog wrote:... I can remember guys I worked with saying they were getting SS while they were still working after 65. I don't know if that's still possible now...
http://www.socialsecurity.gov/retire2/whileworking.htm
66 is my full retirement age as well. So I have 10 more years to go.
However, while I make too much to collect early retirement benefits, I won't put off collecting at the earliest full-benefit time. I’ll still continue to work and use the benefit payment to pay extra on my house. These days the bird in the hand... well..., let’s just say it may outweigh the additional income at age 70.
Unfortunately, before we get there I'm sure they will raise the age limit higher. Reagan wanted to raise it to 70. They blocked it. I'm not so sure it will get blocked again.jr2423 wrote:According to the social security administration, your benefits are not affected once you reach full retirement age.Bigdog wrote:... I can remember guys I worked with saying they were getting SS while they were still working after 65. I don't know if that's still possible now...
http://www.socialsecurity.gov/retire2/whileworking.htm
66 is my full retirement age as well. So I have 10 more years to go.
However, while I make too much to collect early retirement benefits, I won't put off collecting at the earliest full-benefit time. I’ll still continue to work and use the benefit payment to pay extra on my house. These days the bird in the hand... well..., let’s just say it may outweigh the additional income at age 70.
I just want to try and get the money I personally paid in, back. If I can't I'll have lost about 2 years gross pay. Meaning I would have worked 2 entire years of my life for NOTHING.
FREE labor for 2 years. Think about that. You and millions more will have done the same. 2 entire years of of your life turning over every penny you made into a bottomless pit. Forever lost in government limbo.
The health care and Stimu-less & Stimu-later costs will do the same for your kids and grand kids and their kids.
Their wages gone forever never to be seen again.
Most Americans still unprepared for retirement - survey
Buzz up! 217 Print..Chavon Sutton, staff reporter, On Tuesday March 9, 2010, 8:21 am EST
The percentage of American workers with virtually no retirement savings grew for the third straight year, according to a survey released Tuesday.
The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009, according to the Employee Benefit Research Institute's annual Retirement Confidence Survey. That excludes the value of primary homes and defined-benefit pension plans.
Workers who said they had less than $1,000 jumped to 27%, from 20% in 2009.
Confidence in ability to save enough for a comfortable retirement hovered at 16% of respondents, the second lowest point in the 20-year history of the survey.
A drop in the bucket
"Americans' attitudes toward retirement have clearly tracked the economy the last couple of years, and that seems to be the case in 2010," said Jack VanDerhei, EBRI's research director and co-author of the survey, in a statement.
The percentage of workers who said they have saved for retirement fell to 69%, from 75% in 2009.
While VanDerhei attributed the decline in current savings rates to job losses, mortgage problems and the suspension of corporate 401(k) matches in 2009, he said the economy isn't entirely to blame.
"In previous years, there were a whole lot of people who had nothing to begin with," said VanDerhei.
The gap between what Americans have saved and what they'd need for retirement is forcing workers to prolong their working years.
According to the survey, 24% of workers said they have postponed their planned retirement age in the past year, up from 14% in 2008.
But even as fears over health care costs and job prospects mount, the survey found that only 46% of workers have tried to calculate what they need for a comfortable standard of living in their golden years.
"People just don't want to think about this," said VanDerhei. "Everybody thinks they're too young to think about it, until suddenly they're too old to do anything about it."
In general, financial planners say that retirement savings, including Social Security benefits and pension, should be large enough to provide about 80% of pre-retirement income.
To reach that target, "most Americans need to be saving within the healthy range of 6% - 10% (of their salary)," said Beth McHugh, vice president of workplace investing for Fidelity Investments.
But the survey found that 54% of the workers with some form of savings said that they have less than $25,000 stowed away.
Delaying retirement, though not ideal, is a good sign that people are finally facing reality.
"People have figured out that they don't have enough money," VanDerhei said. "Still, I'd rather they bite the bullet today, rather than take the chance that they'd have a job when they are 65."
The EBRI surveyed 1,153 U.S. workers and retirees, age 25 and older, in January.
This doesn't include all the money people will lose that do have 401K plans that have steadily lost money. Most people will be lucky to retire with just the money they paid into the account, let alone making interest money on it.
Nobody will be a millionaire as they promised.
Buzz up! 217 Print..Chavon Sutton, staff reporter, On Tuesday March 9, 2010, 8:21 am EST
The percentage of American workers with virtually no retirement savings grew for the third straight year, according to a survey released Tuesday.
The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009, according to the Employee Benefit Research Institute's annual Retirement Confidence Survey. That excludes the value of primary homes and defined-benefit pension plans.
Workers who said they had less than $1,000 jumped to 27%, from 20% in 2009.
Confidence in ability to save enough for a comfortable retirement hovered at 16% of respondents, the second lowest point in the 20-year history of the survey.
A drop in the bucket
"Americans' attitudes toward retirement have clearly tracked the economy the last couple of years, and that seems to be the case in 2010," said Jack VanDerhei, EBRI's research director and co-author of the survey, in a statement.
The percentage of workers who said they have saved for retirement fell to 69%, from 75% in 2009.
While VanDerhei attributed the decline in current savings rates to job losses, mortgage problems and the suspension of corporate 401(k) matches in 2009, he said the economy isn't entirely to blame.
"In previous years, there were a whole lot of people who had nothing to begin with," said VanDerhei.
The gap between what Americans have saved and what they'd need for retirement is forcing workers to prolong their working years.
According to the survey, 24% of workers said they have postponed their planned retirement age in the past year, up from 14% in 2008.
But even as fears over health care costs and job prospects mount, the survey found that only 46% of workers have tried to calculate what they need for a comfortable standard of living in their golden years.
"People just don't want to think about this," said VanDerhei. "Everybody thinks they're too young to think about it, until suddenly they're too old to do anything about it."
In general, financial planners say that retirement savings, including Social Security benefits and pension, should be large enough to provide about 80% of pre-retirement income.
To reach that target, "most Americans need to be saving within the healthy range of 6% - 10% (of their salary)," said Beth McHugh, vice president of workplace investing for Fidelity Investments.
But the survey found that 54% of the workers with some form of savings said that they have less than $25,000 stowed away.
Delaying retirement, though not ideal, is a good sign that people are finally facing reality.
"People have figured out that they don't have enough money," VanDerhei said. "Still, I'd rather they bite the bullet today, rather than take the chance that they'd have a job when they are 65."
The EBRI surveyed 1,153 U.S. workers and retirees, age 25 and older, in January.
This doesn't include all the money people will lose that do have 401K plans that have steadily lost money. Most people will be lucky to retire with just the money they paid into the account, let alone making interest money on it.
Nobody will be a millionaire as they promised.
Social Security to start cashing Uncle Sam's IOUs
By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer – Mon Mar 15, 12:00 am ET
PARKERSBURG, W.Va. – The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.
It's time to start cashing them in.
For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.
Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.
Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.
Social Security's shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program's finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits.
"This is not just a wake-up call, this is it. We're here," said Mary Johnson, a policy analyst with The Senior Citizens League, an advocacy group. "We are not going to be able to put it off any more."
For more than two decades, regardless of which political party was in power, Congress has been accused of raiding the Social Security trust funds to pay for other programs, masking the size of the budget deficit.
Remember Al Gore's "lockbox," the one he was going to use to protect Social Security? The former vice president talked about it so much during the 2000 presidential campaign that he was parodied on "Saturday Night Live."
Gore lost the election and never got his lockbox. But to illustrate the government's commitment to repaying Social Security, the Treasury Department has been issuing special bonds that earn interest for the retirement program. The bonds are unique because they are actually printed on paper, while other government bonds exist only in electronic form.
They are stored in a three-ring binder, locked in the bottom drawer of a white metal filing cabinet in the Parkersburg offices of Bureau of Public Debt. The agency, which is part of the Treasury Department, opened offices in Parkersburg in the 1950s as part of a plan to locate important government functions away from Washington, D.C., in case of an attack during the Cold War.
One bond is worth a little more than $15.1 billion and another is valued at just under $10.7 billion. In all, the agency has about $2.5 trillion in bonds, all backed by the full faith and credit of the U.S. government. But don't bother trying to steal them; they're nonnegotiable, which means they are worthless on the open market.
More than 52 million people receive old age or disability benefits from Social Security. The average benefit for retirees is a little under $1,200 a month. Disabled workers get an average of $1,100 a month.
Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800. Retirees can start getting early, reduced benefits at age 62. They get full benefits if they wait until they turn 66. Those born after 1960 will have to wait until they turn 67.
Social Security's financial problems have been looming for years as the nation's 78 million baby boomers approached retirement age. The oldest are already there. As that huge group of people starts collecting benefits — and stops paying payroll taxes — Social Security's trust funds will shrink, running out of money by 2037, according to the latest projection from the trustees who oversee the program.
The recession is making things worse, at least in the short term. Tax receipts are down from the loss of more than 8 million jobs, and applications for early retirement benefits have spiked from older workers who were laid off and forced to retire.
Stephen C. Goss, chief actuary for the Social Security Administration, says the crisis has been years in the making. "If this helps get people to look more seriously at that in the nearer term, that's probably a good thing. But it's only really a punctuation mark on the fact that we have longer-term financial issues that need to be addressed."
In the short term, the nonpartisan Congressional Budget Office projects that Social Security will continue to pay out more in benefits than it collects in taxes for the next three years. It is projected to post small surpluses of $6 billion each in 2014 and 2015, before returning to indefinite deficits in 2016.
For the budget year that ends in September, Social Security is projected to collect $677 million in taxes and spend $706 million on benefits and expenses.
Social Security will also collect about $120 billion in interest on the trust funds, according to the CBO projections, meaning its overall balance sheet will continue to grow. The interest, however, is paid by the government, adding even more to the budget deficit.
While Congress must shore up the program, action is unlikely this year, said Rep. Earl Pomeroy, D-N.D., who just took over last week as chairman of the House subcommittee that oversees Social Security.
"The issues required to address the long-term solvency needs of Social Security can be done in a careful, thoughtful and orderly way and they don't need to be done in the next few months," Pomeroy said.
The national debt — the amount of money the government owes its creditors — is about $12.5 trillion, or nearly $42,000 for every man, woman and child in the country. About $8 trillion has been borrowed in public debt markets, much of it from foreign creditors. The rest came from various government trust funds, including retirement funds for civil servants and the military. About $2.5 trillion is owed to Social Security.
Good luck to the politician who reneges on that debt, said Barbara Kennelly, a former Democratic congresswoman from Connecticut who is now president of the National Committee to Preserve Social Security and Medicare.
"Those bonds are protected by the full faith and credit of the United States of America," Kennelly said. "They're as solid as what we owe China and Japan."
And we need more debt with government health care?????
By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer – Mon Mar 15, 12:00 am ET
PARKERSBURG, W.Va. – The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.
It's time to start cashing them in.
For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.
Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.
Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.
Social Security's shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program's finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits.
"This is not just a wake-up call, this is it. We're here," said Mary Johnson, a policy analyst with The Senior Citizens League, an advocacy group. "We are not going to be able to put it off any more."
For more than two decades, regardless of which political party was in power, Congress has been accused of raiding the Social Security trust funds to pay for other programs, masking the size of the budget deficit.
Remember Al Gore's "lockbox," the one he was going to use to protect Social Security? The former vice president talked about it so much during the 2000 presidential campaign that he was parodied on "Saturday Night Live."
Gore lost the election and never got his lockbox. But to illustrate the government's commitment to repaying Social Security, the Treasury Department has been issuing special bonds that earn interest for the retirement program. The bonds are unique because they are actually printed on paper, while other government bonds exist only in electronic form.
They are stored in a three-ring binder, locked in the bottom drawer of a white metal filing cabinet in the Parkersburg offices of Bureau of Public Debt. The agency, which is part of the Treasury Department, opened offices in Parkersburg in the 1950s as part of a plan to locate important government functions away from Washington, D.C., in case of an attack during the Cold War.
One bond is worth a little more than $15.1 billion and another is valued at just under $10.7 billion. In all, the agency has about $2.5 trillion in bonds, all backed by the full faith and credit of the U.S. government. But don't bother trying to steal them; they're nonnegotiable, which means they are worthless on the open market.
More than 52 million people receive old age or disability benefits from Social Security. The average benefit for retirees is a little under $1,200 a month. Disabled workers get an average of $1,100 a month.
Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800. Retirees can start getting early, reduced benefits at age 62. They get full benefits if they wait until they turn 66. Those born after 1960 will have to wait until they turn 67.
Social Security's financial problems have been looming for years as the nation's 78 million baby boomers approached retirement age. The oldest are already there. As that huge group of people starts collecting benefits — and stops paying payroll taxes — Social Security's trust funds will shrink, running out of money by 2037, according to the latest projection from the trustees who oversee the program.
The recession is making things worse, at least in the short term. Tax receipts are down from the loss of more than 8 million jobs, and applications for early retirement benefits have spiked from older workers who were laid off and forced to retire.
Stephen C. Goss, chief actuary for the Social Security Administration, says the crisis has been years in the making. "If this helps get people to look more seriously at that in the nearer term, that's probably a good thing. But it's only really a punctuation mark on the fact that we have longer-term financial issues that need to be addressed."
In the short term, the nonpartisan Congressional Budget Office projects that Social Security will continue to pay out more in benefits than it collects in taxes for the next three years. It is projected to post small surpluses of $6 billion each in 2014 and 2015, before returning to indefinite deficits in 2016.
For the budget year that ends in September, Social Security is projected to collect $677 million in taxes and spend $706 million on benefits and expenses.
Social Security will also collect about $120 billion in interest on the trust funds, according to the CBO projections, meaning its overall balance sheet will continue to grow. The interest, however, is paid by the government, adding even more to the budget deficit.
While Congress must shore up the program, action is unlikely this year, said Rep. Earl Pomeroy, D-N.D., who just took over last week as chairman of the House subcommittee that oversees Social Security.
"The issues required to address the long-term solvency needs of Social Security can be done in a careful, thoughtful and orderly way and they don't need to be done in the next few months," Pomeroy said.
The national debt — the amount of money the government owes its creditors — is about $12.5 trillion, or nearly $42,000 for every man, woman and child in the country. About $8 trillion has been borrowed in public debt markets, much of it from foreign creditors. The rest came from various government trust funds, including retirement funds for civil servants and the military. About $2.5 trillion is owed to Social Security.
Good luck to the politician who reneges on that debt, said Barbara Kennelly, a former Democratic congresswoman from Connecticut who is now president of the National Committee to Preserve Social Security and Medicare.
"Those bonds are protected by the full faith and credit of the United States of America," Kennelly said. "They're as solid as what we owe China and Japan."
And we need more debt with government health care?????
After everyone that retired loses their health insurance (this includes the cadillac plans and the ordinary ones) to the government plan...next they will lose their pension plans.
We will lose our employer insurance plans because it will be cheaper for the corporations to pay a fine than keep everyone insured. Nothing personal..it all comes down to corporate greed. We drop your coverage ...we make more money... 
I just saw some guy on TV in an interview say that the legacy promises (retirement plans) will have to be broken. This is right up big business corportate greeds alley. We drop your pension plan and ...we make more money...
Let's see.....Social Security will be gone....everyone will be paying big fees and much higher taxes for government health care (that will be worse than any nightmare HMO plan you could ever imagine) nobody will have a pension or money in a 401 K. (they keep manipulating the stock market every few years to deplete your gains and then some)....big business will have bigger bottom lines and we will be working until we drop over dead. But...the good news is ....Only if you want to eat....
That sounds like the American Dream....nighty night everyone sleep nice...
Come on, everybody sing along...
I'm proud to be an American,
where at least I know I'm free...
to work my life from cradle to grave
to pay an eternity...
And I'd gladly drop dead... when I'm done
and can't go on no more..
There ain't no doubt they need my dough..
God Bless the USA....
Welcome to our Nightmare...
We will lose our employer insurance plans because it will be cheaper for the corporations to pay a fine than keep everyone insured.
Nothing personal..it all comes down to corporate greed. We drop your coverage ...we make more money... I just saw some guy on TV in an interview say that the legacy promises (retirement plans) will have to be broken. This is right up big business corportate greeds alley. We drop your pension plan and ...we make more money...
Let's see.....Social Security will be gone....everyone will be paying big fees and much higher taxes for government health care (that will be worse than any nightmare HMO plan you could ever imagine) nobody will have a pension or money in a 401 K. (they keep manipulating the stock market every few years to deplete your gains and then some)....big business will have bigger bottom lines and we will be working until we drop over dead. But...the good news is ....Only if you want to eat....
That sounds like the American Dream....nighty night everyone sleep nice...
Come on, everybody sing along...
I'm proud to be an American,
where at least I know I'm free...
to work my life from cradle to grave
to pay an eternity...
And I'd gladly drop dead... when I'm done
and can't go on no more..
There ain't no doubt they need my dough..
God Bless the USA....
Welcome to our Nightmare...
$1 Million Doesn't Cut It for Retirement
by Joe Mont
Sunday, March 21, 2010
provided by
Conventional wisdom says you need to save $1 million for retirement.
That target may be easy to remember, but it falls short of the true cost of what's required for post-career comfort. Longer life spans, the threat of inflation and the uncertain future of Social Security benefits make this long-touted savings advice inadequate for most, advisers say.
Scottrade recently polled 226 registered investment advisers on the topic and found that 71% don't believe $1 million is enough for the average American family. Most said families need to save double, or more than triple, the amount.
"Younger generations, especially, need to set their retirement goals higher than other generations and start saving as early as possible," says Craig Hogan, Scottrade's director of customer-relationship management and reporting.
The survey solicited opinions about the current investment habits of Americans. Questions were broken down by generations to determine advisers' opinions on average investment goals in today's dollars for various groups.
Generation Y (ages 18 to 26) needs to save at least $2 million, according to 77% of advisers. Forty percent put the figure at $3 million.
Nearly half of advisers (46%) said Generation X (ages 27 to 42) should at least double the $1 million goal. Twenty-two percent suggested more than $3 million.
For Boomers (ages 43 to 64), 35% recommended $2 million to $3 million. Thirty percent suggested $1.5 million to $2 million.
According to Scottrade's analysis, seniors are the only generation that may come close to needing only $1 million. Forty-four percent of advisers said $500,000 to $1.5 million is sufficient for average families in that age bracket.
Bill Smith, president of Ohio-based Great Lakes Retirement Group, is among the advisers who took part in the survey. As he sees it, too many people rely on online retirement calculators. Much of that guidance uses a target based on making do with 70% to 80% of pre-retirement income.
"I've never been a big fan of planning to earn less in retirement than you are making now," he says. "I'd like to see an individual continue making the same amount of retirement as when he was working. Who wants to set themselves up in retirement to make less?"
While most people will spend less when they retire, inflation or the onset of a long-term illness could wipe out savings without proper protection or planning.
That said, there's no secret to meeting a retirement goal: maximize your contribution rate, have a greater tolerance for risk when you're younger and downshift to bonds as you grow older. Successful preparation, however, begins with setting a realistic goal and understanding your true financial picture.
Debt needs to be carefully considered as well as leaving money for the kids.
"There are two extremes," Smith says. "There are individuals who say, 'We don't care if we have anything left the day we die -- we are OK with that last check bouncing when we are gone.' Then there are the individuals who don't do anything in retirement because all of their decisions are made around, 'I've got to leave it for the kids.' "
-- Reported by Joe Mont in Boston.
Copyrighted, TheStreet.Com. All rights reserved
How much money will you have to save to have anywhere near the amount you are going to need to live on?
Higher taxes from a new health care bill won't help. Working until you die is starting to sound really good.
Any kind of higher taxes like Cap & Trade, higher Medicare or Medicaid, Social Security, income, property, higher utilities food prices, gasoline,
etc...and you will need to decide if you want to eat ever again or retire.
The biggest problem is the majority of the population won't be able to earn a million dollars over a lifetime let alone have any left to save.
The current and future generations don't stand a chance. How can you save more than it takes to live on now?
Bigger government isn't the answer.
by Joe Mont
Sunday, March 21, 2010
provided by
Conventional wisdom says you need to save $1 million for retirement.
That target may be easy to remember, but it falls short of the true cost of what's required for post-career comfort. Longer life spans, the threat of inflation and the uncertain future of Social Security benefits make this long-touted savings advice inadequate for most, advisers say.
Scottrade recently polled 226 registered investment advisers on the topic and found that 71% don't believe $1 million is enough for the average American family. Most said families need to save double, or more than triple, the amount.
"Younger generations, especially, need to set their retirement goals higher than other generations and start saving as early as possible," says Craig Hogan, Scottrade's director of customer-relationship management and reporting.
The survey solicited opinions about the current investment habits of Americans. Questions were broken down by generations to determine advisers' opinions on average investment goals in today's dollars for various groups.
Generation Y (ages 18 to 26) needs to save at least $2 million, according to 77% of advisers. Forty percent put the figure at $3 million.
Nearly half of advisers (46%) said Generation X (ages 27 to 42) should at least double the $1 million goal. Twenty-two percent suggested more than $3 million.
For Boomers (ages 43 to 64), 35% recommended $2 million to $3 million. Thirty percent suggested $1.5 million to $2 million.
According to Scottrade's analysis, seniors are the only generation that may come close to needing only $1 million. Forty-four percent of advisers said $500,000 to $1.5 million is sufficient for average families in that age bracket.
Bill Smith, president of Ohio-based Great Lakes Retirement Group, is among the advisers who took part in the survey. As he sees it, too many people rely on online retirement calculators. Much of that guidance uses a target based on making do with 70% to 80% of pre-retirement income.
"I've never been a big fan of planning to earn less in retirement than you are making now," he says. "I'd like to see an individual continue making the same amount of retirement as when he was working. Who wants to set themselves up in retirement to make less?"
While most people will spend less when they retire, inflation or the onset of a long-term illness could wipe out savings without proper protection or planning.
That said, there's no secret to meeting a retirement goal: maximize your contribution rate, have a greater tolerance for risk when you're younger and downshift to bonds as you grow older. Successful preparation, however, begins with setting a realistic goal and understanding your true financial picture.
Debt needs to be carefully considered as well as leaving money for the kids.
"There are two extremes," Smith says. "There are individuals who say, 'We don't care if we have anything left the day we die -- we are OK with that last check bouncing when we are gone.' Then there are the individuals who don't do anything in retirement because all of their decisions are made around, 'I've got to leave it for the kids.' "
-- Reported by Joe Mont in Boston.
Copyrighted, TheStreet.Com. All rights reserved
How much money will you have to save to have anywhere near the amount you are going to need to live on?
Higher taxes from a new health care bill won't help. Working until you die is starting to sound really good.
Any kind of higher taxes like Cap & Trade, higher Medicare or Medicaid, Social Security, income, property, higher utilities food prices, gasoline,
etc...and you will need to decide if you want to eat ever again or retire.
The biggest problem is the majority of the population won't be able to earn a million dollars over a lifetime let alone have any left to save.
The current and future generations don't stand a chance. How can you save more than it takes to live on now?
Bigger government isn't the answer.
