Hey America, What's Your Retirement Plan?

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So I was reading an older article in the NYTimes about retirement and how Europeans are retiring earlier (see below link) and Americans are still burning the midnight oil (whether they want to or not). I don't know anyone in my age group (late 40's) who could retire within 10-15 years. American companies have eliminated pensions in favor of 401k's, and now even 401K's are being scaled back or eliminated. I recently joked about retirement and IRA savings with a thirty-two year old carpenter and he asked me "What's an IRA?". Not a good sign. My parents had me set up an IRA when I first got out of college, but I admit I didn't really pay attention to it until years later. Most of my friends did nothing until they were pushing 39- other than buy Dot Coms on speculation for their budding portfolios. Somehow we always think there is plenty of time.

So what's the plan for tail-end Baby boomers or younger? Is there a pension or fluffy 401K with your name on it that you feel confident about? Anyone still have an old fashioned golden pension like my father ( 2/3rds of his salary until death with health care, assuming his company keeps afloat)? Are you dreaming about lazy days reading on a beach in Maui or planning to move to a place like Mexico to make your social security go further? Are you socking away at least 10% of your income in a safe place or are you practicing how to greet people at Walmart? Will you be looking for a retirement community with good restaurants or wondering if you should move closer to the church food pantry? Will you be able to afford a Medi-gap insurance to take care of your health needs or rely on the kindness of strangers? Are you planning to work up until the day you die to pay for your funeral or will your bereaved heirs just write a check from their inheritance?

So my fellow Americans, where do you see yourself in your Golden Years? What will America look like when so many of us are pushing around walkers and gulping Ensure?

NYTimes article on retirement here and abroad:
http://www.nytimes.com/2009/09/03/business/03retire.html?scp=1&sq=europeans%20retire&st=cse

If I could find three women I liked I would follow this example:

http://www.reelfilm.com/images/tvgold.jpg

Littlek, Chai, Osso, Soz, Jespah, SheWolf- interested???

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Type: Discussion • Score: 13 • Views: 4,328 • Replies: 27

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@Green Witch,

Sure, but I can't afford it..

1 Reply

@Green Witch,

Though my wife and I are struggling with student loans,

We save 20% of our income every month right off of the bat and try and deposit another 10-20% into savings at the end of the month. I'm actually in a bit of a quandary right now as I have a pile of cash which I am unsure where to invest.

Cycloptichorn

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i'm hoping to implement the my generation plan

hope i die, before i get old

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@ossobuco,

Well, if four of us have $12,000 each in social security that's $48,000. Even if we put half of that into rent we still have $24,000 to feed and cloth ourselves. Better than the government poverty figure of $33,000 for a family of four.

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@Cycloptichorn,

Cyclo, I think your generation has far more student debt than my generation and I'm sure how much more of a drag it's going to be on this country. The majority of the people I went to college with were either able to pay as they went with part time jobs or had parents who could afford the bills.

You might want to look into I-Bonds for safe keeping at the moment, but I'm not an expert.

1 Reply

@Green Witch,

I'm hoping that Social Security still exists when I get to retirement. Even then I'm not so sure how I could afford retirement.

1 Reply

@Green Witch,

Green Witch wrote:

The majority of the people I went to college with were either able to pay as they went with part time jobs or had parents who could afford the bills.

I think course loads might be a bit heavier these days. Certainly, the relationship between tuition/book expenses and part time job income is in the cellar. I'm not at all sure a four year degree could be completed in anything like four years, anymore.

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@roger,

roger wrote:

Green Witch wrote:

The majority of the people I went to college with were either able to pay as they went with part time jobs or had parents who could afford the bills.

I think course loads might be a bit heavier these days. Certainly, the relationship between tuition/book expenses and part time job income is in the cellar. I'm not at all sure a four year degree could be completed in anything like four years, anymore.

Sure it can, if you are doing some summer class work. But, it's really difficult to do this and have a part-time job; everyone ends up saddled with debt.

The two of us probably have 130k in debt after Graduate school costs are taken into account. We'll pay it off no problem, but it's an economic drag for sure.

Cycloptichorn

1 Reply

@tsarstepan,

It will exist because older generations control much of the political decision making. My generation will insist the younger generation be taxed at a higher rate to keep social security solvent. However, living on such a small dollar as SS pays is not easy - you might have to move to Haiti.

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@roger,

I agree, Roger. I went to a private school and it has tripled it's tuition since I went there 20 years ago. Wages have not kept pace. I don't know how today's students are going to get out of such debt and still live normal lives.

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@Cycloptichorn,

I didn't mean to imply students should be paying as they go. I think that is now impossible with todays college costs and what Starbucks pays.
Your tuition debt is about what I paid for my house.

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elderly people here are entitled to a means tested age pension.
Government here recently increased pension age to 67.
superannuation is madatorily contributed on top of existing salary by employers. current rate of contribution is 9%.
i contribute a further 6 % of my salary to superannuation.
i should have close to 100k by retirement age.
That wont be enough because i did not start early enough.

1 Reply

@dadpad,

I can't see how anyone can live off the pension.

I had in super savings (on paper) something over 300k, but the downturn meant I lost about two thirds of that.

Not sure where it's at now, and I expected a massive
"correction" and all that, but at present, I expect to be able to go part-time (with luck) when I am seventy.

1 Reply

@dlowan,

It sounds like Aussies are in a similar boat as Americans. We get enough from social security (over version of a gov't pension) to buy some rice and beans, but if we want gravy with it we had better plan over a lifetime - and be very lucky in our financial choices. I don't know what our exchange rates are between the two countries, but in America is it estimated the average middle class person needs a million dollars in secure investments at the age of 62 to maintain a middle class lifestyle into their 80's.

1 Reply

@Green Witch,

Green Witch wrote:

It sounds like Aussies are in a similar boat as Americans. We get enough from social security (over version of a gov't pension) to buy some rice and beans, but if we want gravy with it we had better plan over a lifetime - and be very lucky in our financial choices. I don't know what our exchange rates are between the two countries, but in America is it estimated the average middle class person needs a million dollars in secure investments at the age of 62 to maintain a middle class lifestyle into their 80's.

Well, the exchange rate doesn't matter, really...it's the value of the currency where you live that counts...except when travelling.

But...a million would be a hell of a lot to have here.

My only hope of any kind of life after retirement really is for the market to be good when I cash in, and for me to invest whatever I have, and have it return enough to supplement the pension without cutting into it.

Or to die early.

Couples on a pension do a lot better...because it doesn't cost more to maintain a home for two than it does for one (well, a bit more food and electricity).

I am kind of hoping that my generation, who tended to spend ages in share houses whilst at university/early job life, will, if single, decide that sharing (in much classier circumstances!) is an option...because, even if I partner again, I really don't wanna live with said partner...and the mins tend to wear out earlier, anyway!

1 Reply

@Green Witch,

Ooh I'm in!

We're not so good on this front. We have a retirement savings account and it's not bad... took a hit but not as bad as many (diversified) and has now rebounded to where it was. Certainly have a ways to go.

I say "we" but it's E.G.'s which bothers me a bit. I was working on a retirement account at my old job but it went poof when I moved (wasn't there long enough). I saved a good chunk of money from when I was working, but that went into the house.

I have worked enough to get some social security but not that much.

I certainly don't plan on getting divorced but as a principle I would prefer to not just rely on my husband's retirement funds. I do plan to go back to full-time work at some point (when? that's the rub) and hope to build up some more then.

We have good life insurance policies and all that (knock on wood).

Our big glaring lack right now is a college account for sozlet. Since E.G.'s a professor we get discounts (to the place he's teaching anyway*, and who knows where she'll want to go), and she might be able to get some scholarships (she's a smartie now but who knows what will happen between now and then) but that's something we really need. We have some plain old regular savings and need to do something with that.

*The University of Chicago pays not only tuition for faculty's families there, but will pay the value of a University of Chicago tuition ANYWHERE. Since University of Chicago is expensive (quick google search yields $36,891), that's a mighty nice benefit. This is moot, he doesn't work there, but he almost got a job there and that was a very tempting element... sigh...

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My fiance and I are both 30 now, and we have a little over 100k in our 401k plans, and are now making enough money to put almost 20k in each year.

I'm anticipating an early retirement from corporate work, hopefully by the time I'm 50, and getting in to some non-profit 'feel-good' work.

We're learning to live very frugally (well, she is, I've always been a pauper), so I have little concern about retirement.

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@dlowan,

A million is the recommended number for my generation. It is possible if you start young enough and follow the experts advice, but even they cannot predict the investment markets over the long term. My first IRA investments earned 8% annually, that's now down to about 1.5%. You just don't know where to park any money. It's all a roller coaster.

I think more people will be forced to live together as they age. Co-housing is a trend that is on the rise in this country for the first time since the 1930's. We still have a lot singles living in 3,000 sq ft houses, but that's changing. I think many of the McMansions that were built here in the last 20 years are going to become co-housing for the aging population. These large homes are becoming unaffordable for a typical family, but four or five people on retirement benefits could make it work. It's why in my first post I referenced the Golden Girls - power in numbers. On some level it's a good thing. Structured assisted living accommodations are expensive (my father pays $3,200 per month for his apartment), but a self-created group home can be economical. I've lived with various souls over the years and found I can tolerate all kinds of things as long as I have a door to close when I want to be alone. If something ever happened to my husband, I think I would deliberately try and find a compatible female to share my house and expenses. I rather like people.

1 Reply

@Green Witch,

Yep.

I agree.

But NOBODY NOHOW is getting me into a goddam McMansion!!!

I might be getting older, but I still have my taste!!!

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Hey America, What's Your Retirement Plan?

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