Dafuq: 35% of Gen Xers have < $10K in retirement savings, and 18% have $0???

[onlyTheObvious]

People should do a spreadsheet on collecting at 62 vs 65/67

I think I would need to live to be about 78 to make waiting worth it. By then how active will you be, assuming you are even alive.

Take it and enjoy it. If you don’t need it, take it and invest it.

 

[Tenacious E]

People should do a spreadsheet on collecting at 62 vs 65

I think I would need to live to be about 78 to make waiting worth it. By then how active will you be, assuming you are even alive.

Take it and enjoy it. If you don’t need it, take it and invest it.

I think another thing people need to account for in their spreadsheet is taxes. Figure out your actual dollars in the pocket you’ll have after all federal and state taxes. I’ve been keeping a retirement planning spreadsheet for decades and at first I didn’t account properly for taxes not only on SS, but also on dividends/interest.

 

[HawkeyeShawn]

What’s going to happen over the next 10-20 years is that there will be further separation from the haves and have nots. Those of us who saved for retirement consistently for 30+ years AND still make the SS cut. We will be considered rich. Then there’s everyone else who didn’t save. And there are millions of them, with no guarantee that SS will be there, no source of income. They will be Fvcked. Living off whatever govt program is available to them.

 

[onlyTheObvious]

What’s going to happen over the next 10-20 years is that there will be further separation from the haves and have nots. Those of us who saved for retirement consistently for 30+ years AND still make the SS cut. We will be considered rich. Then there’s everyone else who didn’t save. And there are millions of them, with no guarantee that SS will be there, no source of income. They will be Fvcked. Living off whatever govt program is available to them.

Plenty of jobs for those that need to work well into golden years.

I would be in favor of a law that automatically took 3% from everybody’s paycheck and it was invested in a targeted retirement date fund. You get that money at 59 or any time if you are diagnosed with a fatal disease/condition.

 

[Dirt Boy 2]

And Dirt…there are many many more folks who don’t have that chance. Income disparity is the world’s #1 economic problem.
It is hard to “pull yourself up by your bootstraps” if you can’t afford a pair of boots.

And those that do shouldn’t be demonized for it. Just like we should help those less fortunate around us. Works both ways.

 

[kc78]

I'm one that's not in a good place. Between losing a ton when we bought our first home and immediately losing half it's value when the market crashed, combined with my wife's myriad health problems, my cancer, and not the best healthcare plans and we're struggling just to stay out of debt.

My kids do have a funded college plan at least. But all in all, it's likely going to be a struggle when we get older if I can't find a better way forward soon.

 

[Tenacious E]

I'm one that's not in a good place. Between losing a ton when we bought our first home and immediately losing half it's value when the market crashed, combined with my wife's myriad health problems, my cancer, and not the best healthcare plans and we're struggling just to stay out of debt.

My kids do have a funded college plan at least. But all in all, it's likely going to be a struggle when we get older if I can't find a better way forward soon.

Sorry to hear that man. Let’s hope the market ignites and propels you to a good place.

 

[joelbc1]

And those that do shouldn’t be demonized for it. Just like we should help those less fortunate around us. Works both ways.

W ho is “demonizing” anyone? Paying a progressive tax on income is hardly “demonizing” anyone…..and todays tax rates are a pittance to what they were before Reagan/Cl;inton rates……..the tax cuts of Bush and trump were unnecessary and bad financial planning. Spending added to inflationary pressures….but so did the tax cuts by Bush and Trump.

 

[EasyHawk]

My no pic sister’s husband died of cancer at 45 when they had 3 minor children at home. She is a teacher and he was in a union, turned out he had an automatic $10k life insurance through work and had no other and he never participated in the 401k as he said they steal your money. Was rough times. My grandpa always said “Don’t ever be old and poor.” I’ve kept that in mind.

 

[joelbc1]

My no pic sister’s husband died of cancer at 45 when they had 3 minor children at home. She is a teacher and he was in a union, turned out he had an automatic $10k life insurance through work and had no other and he never participated in the 401k as he said they steal your money. Was rough times. My grandpa always said “Don’t ever be old and poor.” I’ve kept that in mind.

Your grandpa was a smart man, Easy.
There is a reason why programs like SS and MediCare/MedicAid have flourished. There is a reason why they are so damned popular, too.

 

[DooBi]

I'm squarely in the won't be comfortable camp. My 401k at 45 is low six figures. There's a couple reasons. First as mallard and global love to point out, I was a drug addict for several years so I started saving a lot later than I should. Thank God my son seems to be learning and is putting 10% in savings that he hasn't touched and has several thousand in the bank at 17. I only pray that he keeps that up his whole life.

The second problem for me is I go back and forth between wanting to save as much for retirement as I can and realizing that with my health I'm never going to make it to 80 or beyond. Ill be lucky to make it to 70. So, again I haven't saved as much as I should have. I told a planner once that I'm going to retire at 62. She said that's not possible and I told her I'm going to do it even if I have to live in the gutter.

Third problem is my wife no pics thinks she is going to retire the same time I do. She'll only be 59. That ain't happening.

 

[luvmyhawks]

I think another thing people need to account for in their spreadsheet is taxes. Figure out your actual dollars in the pocket you’ll have after all federal and state taxes. I’ve been keeping a retirement planning spreadsheet for decades and at first I didn’t account properly for taxes not only on SS, but also on dividends/interest.

Whoa. Good for you. Most people aren’t thinking like this as far in advance as you are. Nice work. Considering you are doing this while talking about when to take social security, make sure to factor in projected rmd’s and what that can do to your taxes when you are in your 70’s. I have seen this tax trap put people in the 22-24% tax bracket for the rest of their lives if they aren’t careful. Another benefit to waiting until later to draw social security is to convert as much of your tax deferred assets as possible before you take social security. Use standard deductions and the tax benefits of capital gains/dividends to your benefit while you can.

 

[Dirt Boy 2]

W ho is “demonizing” anyone? Paying a progressive tax on income is hardly “demonizing” anyone…..and todays tax rates are a pittance to what they were before Reagan/Cl;inton rates……..the tax cuts of Bush and trump were unnecessary and bad financial planning. Spending added to inflationary pressures….but so did the tax cuts by Bush and Trump.

Demonized was a poor word maybe minimalized is better but who said anything about taxes? Not a tax discussion. I just said the guy wasn’t lucky and was earning what he was putting away. Be glad for those that are responsible and plan for retirement instead of buying too much house or too much car. Just stuff.
I don’t look down on those that can’t put away much if any for retirement, I certainly don’t come close to maxing out. The people that piss me off are the ones that fail to plan and have the money to do so.. And as we are discussing, there are many.

 

[Dirt Boy 2]

I'm squarely in the won't be comfortable camp. My 401k at 45 is low six figures. There's a couple reasons. First as mallard and global love to point out, I was a drug addict for several years so I started saving a lot later than I should. Thank God my son seems to be learning and is putting 10% in savings that he hasn't touched and has several thousand in the bank at 17. I only pray that he keeps that up his whole life.

The second problem for me is I go back and forth between wanting to save as much for retirement as I can and realizing that with my health I'm never going to make it to 80 or beyond. Ill be lucky to make it to 70. So, again I haven't saved as much as I should have. I told a planner once that I'm going to retire at 62. She said that's not possible and I told her I'm going to do it even if I have to live in the gutter.

Third problem is my wife no pics thinks she is going to retire the same time I do. She'll only be 59. That ain't happening.

Is there a possibility of changing jobs? The federal government is hiring and having a hard time filling positions because pay right now is not competitive. Feds do have a pension and 15-20 years down the line that will be worth something. It is inflation adjusted at least somewhat.

 

[BustingNarratives]

Reading through this thread maybe we need to have some personal finance and even investment classes in high school and as a core requirement for those in college??? The younger you are when you start investing the easier it is to reach your long term financial goals.

 

[SSG T]

Based on income spreads among the general population, really should not be all that surprising...

Yeah, I don't think a lot of people have a clue what has happened to income vs costs over the last 40 years. It's not that there are tons of people who ignored retirement savings, it's that they used all of their money buying the same types of things their parents spent part of their money on.

 

[binsfeldcyhawk2]

Yeah, I don't think a lot of people have a clue what has happened to income vs costs over the last 40 years. It's not that there are tons of people who ignored retirement savings, it's that they used all of their money buying the same types of things their parents spent part of their money on.

I'm just glad TSP was so easy to contribute to....and pushed. I'm not sure if I would have been setting aside money like that if it hadn't been.

 

[cfbfan23]

What if you die at age 69 and never realized a dime?

If your health is decent and you don't absolutely need the money, it makes sense to wait as long as possible.

Roughly speaking, SS expects people to die around age 81 or 82. If you think you've got a good chance to beat that bogey, delaying SS should garner some serious consideration. I've known a number of people who started drawing early and later had major regrets.

Edit - My dad was one of those people.

It's awesome when those checks start coming in at age 62 (or some other age less than the normal age 65/66), and your friends and former co-workers are envious. Now it's 9 years later, your heart is in good condition and there are no signs of dementia. Those same friends and peers are drawing 40-50% more than you. You'll have some regrets until you die.

If you die before you ever start taking social security, you won't have any regrets (or thoughts at all) and it won't really matter. Plus, I think your spouse (if you're married more than 10 years) gets that increase benefit.

If SS is just play money for you or your health is iffy, go ahead and draw whenever.

 

[Nole Lou]

I'm an X'er and retiring at 50 next year and of course one of the 1% HROT's. I don't believe those stats. X'ers are independent latch key kids coming from 50% divorced parents. We had to do everything on our own. I walked home solo from school as early as 4th grade with no baby sitter until parents came home from work.

Man, I've been reading this same column for like 35 years now.

I think it's important to keep in mind that the survey and the column were both created by people who are wholly invested in getting people to sign up with retirement consultants and investment instruments. This isn't some shadowy sponsor, it's blatant marketing. This is very much the result they are looking for.

Most of this is a measure of anxiety, much of which is DRIVEN in large part by advertising and marketing by the same people commissioning this survey and writing this column.

A majority of people are not planning on the retirements depicted in the financial services commercials...living on a golf course, European tours, winters in the tropics, etc. Most people are going to retire and live in their paid off house and babysit their grandkids and maybe go on a 3-day Carnival Cruises to the Bahamas every few years. Most people will get by ok.

 

[tigerhawk2015]

Man, I've been reading this same column for like 35 years now.

I think it's important to keep in mind that the survey and the column were both created by people who are wholly invested in getting people to sign up with retirement consultants and investment instruments. This isn't some shadowy sponsor, it's blatant marketing. This is very much the result they are looking for.

Most of this is a measure of anxiety, much of which is DRIVEN in large part by advertising and marketing by the same people commissioning this survey and writing this column.

A majority of people are not planning on the retirements depicted in the financial services commercials...living on a golf course, European tours, winters in the tropics, etc. Most people are going to retire and live in their paid off house and babysit their grandkids and maybe go on a 3-day Carnival Cruises to the Bahamas every few years. Most people will get by ok.

I agree with this! We will only have about eight hundred thousand plus as when we retire and we are pretty much be told to plan on living under a bridge or working until we’re 75! We’re 60 now.

 

[binsfeldcyhawk2]

Man, I've been reading this same column for like 35 years now.

I think it's important to keep in mind that the survey and the column were both created by people who are wholly invested in getting people to sign up with retirement consultants and investment instruments. This isn't some shadowy sponsor, it's blatant marketing. This is very much the result they are looking for.

Most of this is a measure of anxiety, much of which is DRIVEN in large part by advertising and marketing by the same people commissioning this survey and writing this column.

A majority of people are not planning on the retirements depicted in the financial services commercials...living on a golf course, European tours, winters in the tropics, etc. Most people are going to retire and live in their paid off house and babysit their grandkids and maybe go on a 3-day Carnival Cruises to the Bahamas every few years. Most people will get by ok.

Solid post

 

[Joes Place]

Solid post

The other reality here, is that if the GOP destroys/bankrupts Social Security, all of those people are fooked.

There are some very basic fixes to SS, inclusive of raising the contribution limits/caps. A few percent higher for those in the top 10%/5%/1% would fully fund it.

 

[binsfeldcyhawk2]

The other reality here, is that if the GOP destroys/bankrupts Social Security, all of those people are fooked.

There are some very basic fixes to SS, inclusive of raising the contribution limits/caps. A few percent higher for those in the top 10%/5%/1% would fully fund it.

Stop scare mongering

I think the reality right now is no one really wants to address the looming SS and Medicare problems. It's political Kryptonite at the moment and really needs to be addressed.

 

[SSG T]

I'm just glad TSP was so easy to contribute to....and pushed. I'm not sure if I would have been setting aside money like that if it hadn't been.

I'll fully admit, I'm pretty much set even though I've never made a ton money. I have a great retirement from the Army, VA benefits and am currently working for DHS. Current salary isn't huge, but I rolled my TSP over and am maxing it now. While I'll take it, SS isn't a "need".

I also fully understand, I've been lucky to a point. I live in a $350+k house with nearly the same payment I had on our 1st house in 1995. That helped a LOT.

 

[MeetTheFerentzes]

If your health is decent and you don't absolutely need the money, it makes sense to wait as long as possible.

Roughly speaking, SS expects people to die around age 81 or 82. If you think you've got a good chance to beat that bogey, delaying SS should garner some serious consideration. I've known a number of people who started drawing early and later had major regrets.

Edit - My dad was one of those people.

It's awesome when those checks start coming in at age 62 (or some other age less than the normal age 65/66), and your friends and former co-workers are envious. Now it's 9 years later, your heart is in good condition and there are no signs of dementia. Those same friends and peers are drawing 40-50% more than you. You'll have some regrets until you die.

If you die before you ever start taking social security, you won't have any regrets (or thoughts at all) and it won't really matter. Plus, I think your spouse (if you're married more than 10 years) gets that increase benefit.

If SS is just play money for you or your health is iffy, go ahead and draw whenever.

If person A begins collecting $ in year 1 at age 62, and person B begins collecting 40% more $ in year 9 at age 71, person B would finally pass person A in total collections at age 94.

 

[binsfeldcyhawk2]

I'll fully admit, I'm pretty much set even though I've never made a ton money. I have a great retirement from the Army, VA benefits and am currently working for DHS. Current salary isn't huge, but I rolled my TSP over and am maxing it now. While I'll take it, SS isn't a "need".

I also fully understand, I've been lucky to a point. I live in a $350+k house with nearly the same payment I had on our 1st house in 1995. That helped a LOT.

pretty much in the same boat

 

[Joes Place]

If person A begins collecting $ in year 1 at age 62, and person B begins collecting 40% more $ in year 9 at age 71, person B would finally pass person A in total collections at age 94.

Covid's doin' its best to try and keep SS solvent....😉

 

[BustingNarratives]

Stop scare mongering

I think the reality right now is no one really wants to address the looming SS and Medicare problems. It's political Kryptonite at the moment and really needs to be addressed.

On SS they will end up just extending out the age for eligibility for those born after dd/mm/yyyy and possibly bump up the max income level again on the SS tax.

 

[onlyTheObvious]

Nobody wins any election but killing SS or Medicare. Too many people need it.

They will lift the earnings cap.

I worry about it 0%

 

[binsfeldcyhawk2]

On SS they will end up just extending out the age for eligibility for those born after dd/mm/yyyy and possibly bump up the max income level again on the SS tax.

I think this accurate.

Nobody gonna touch this seriously until after 2024 though....maybe after 2028. Unfortunate because the earlier they adress it the less drastic the measures would have to be.

 

[cfbfan23]

If person A begins collecting $ in year 1 at age 62, and person B begins collecting 40% more $ in year 9 at age 71, person B would finally pass person A in total collections at age 94.

My bad....my numbers were off. A 62 year-old would receive 77% higher benefit payments if they waited until age 70, instead of taking the reduced amount now.

Do you want $1,400/month now? Or can you delay the instant gratification, wait 8 years, and draw $2,480 for the rest of your life starting at age 70?

 

[HawkMachine]

Reading through this thread maybe we need to have some personal finance and even investment classes in high school and as a core requirement for those in college???

How To Live Within Your Means 101

 

[FranklinHawk]

On SS they will end up just extending out the age for eligibility for those born after dd/mm/yyyy and possibly bump up the max income level again on the SS tax.

Yeah, they have bumped up the max income cap every year since 2016 with a sizeable jump for 2023. I can't see that trend changing.

 

[MeetTheFerentzes]

My bad....my numbers were off. A 62 year-old would receive 77% higher benefit payments if they waited until age 70, instead of taking the reduced amount now.

Do you want $1,400/month now? Or can you delay the instant gratification, wait 8 years, and draw $2,480 for the rest of your life starting at age 70?

Those numbers make more sense, but my point still stands. Not gonna repeat the math, but even with new numbers it would probably take Person B a good 10 years (age 80) to catch up to person A’s total collection. Plus, Person A could have that ~$134k head-start invested and worth a heck of a lot more than that before Person B sees a dime.

Just trying to demonstrate that delaying SS as long as possible is not a no-brainer. There are some solid arguments for collecting ASAP. Not too many people live 100 years.

 

[PoopandBoogers]

My bad....my numbers were off. A 62 year-old would receive 77% higher benefit payments if they waited until age 70, instead of taking the reduced amount now.

Do you want $1,400/month now? Or can you delay the instant gratification, wait 8 years, and draw $2,480 for the rest of your life starting at age 70?

For those that want to retire at 62, an extra 1k a month to still keep working for 8 gottdamn years doesn't move the needle one bit and makes the decision easier.

 

[IowaPackFan]

I wonder how many have <$0 when factoring in unsecured debt.

 

[cfbfan23]

Those numbers make more sense, but my point still stands. Not gonna repeat the math, but even with new numbers it would probably take Person B a good 10 years (age 80) to catch up to person A’s total collection. Plus, Person A could have that ~$134k head-start invested and worth a heck of a lot more than that before Person B sees a dime.

Just trying to demonstrate that delaying SS as long as possible is not a no-brainer. There are some solid arguments for collecting ASAP. Not too many people live 100 years.

If you saw in my original post:

"If your health is decent and you don't absolutely need the money, it makes sense to wait as long as possible.

Roughly speaking, SS expects people to die around age 81 or 82. If you think you've got a good chance to beat that bogey, delaying SS should garner some serious consideration. I've known a number of people who started drawing early and later had major regrets."


I said that if you didn't need the money or you weren't in the greatest health, drawing at the normal age or earlier, might make sense. I clearly stated that the bogey was 81/82. Your point was exactly my point. Thank you for agreeing.

If you don't need the money and you think you've got a decent shot at making it to 81/82, then yes, it's pretty close to a no-brainer.

There's a ton of people out there with the diabetes.....I wouldn't recommend them to wait until 70. Also, Covid threw everybody for a curve. A lot of older people.....many in relatively good health, passed away. You can't anticipate stuff like that. If you have a fear of Covid, going forward, I wouldn't recommend drawing early. Same if you're at higher risk of cancer.

 

[Tenacious E]

For those that want to retire at 62, an extra 1k a month to still keep working for 8 gottdamn years doesn't move the needle one bit and makes the decision easier.

That's where I'm at, or at least, hope to be.

 

[Nole Lou]

For those that want to retire at 62, an extra 1k a month to still keep working for 8 gottdamn years doesn't move the needle one bit and makes the decision easier.

Yeah, I don't really get this. It's not like its working 8 more years in your 20s. Choosing to work or not for what will likely be 40%-50% of your remaining time on earth is a little bit more than "delaying gratification" LOL. It's literally deciding how you want to spend your remaining time on earth.

If you've got a job you like and isn't crushing you and you're happy to do it, then fine. But those people probably aren't contemplating pulling at 62 anyway. I'm all about prudent financial decision making, but this doesn't at all fit into the category of smart/dumb to me.

The way its being justified here by the bigger payouts later sounds a lot like encouraging people to do their tax planning for a big refund.

"What, minimize your witholding through the year so you end up close to even? How will you feel when your neighbors are getting a fat tax refund in the spring and you owe $500 instead?"

Fine. I'll feel just fine.

 

[An Iowa fan]

That's where I'm at, or at least, hope to be.

But during those last 8 years you are adding to your coffers. Why stop?