Dafuq: 35% of Gen Xers have < $10K in retirement savings, and 18% have $0???
- Thread starter Tenacious E
- Start date
They don't have to work an extra 8 years, they just need to not draw it for that amount of time. If they don't have the ability to be in retirement for 8 years without it, then it probably doesn't make sense to wait.
Don't overthink this.
1. Do you think you have a better than even chance of living until age 81?
2. Can you retire early without having to draw on SS?
If the answer to either of these questions is "no" then you should probably not wait until maximum age.
It probably shouldn't,.. Finding out that almost everybody sucks at golf doesn't make you a better golfer.
Gotcha. But what if you took that $ early and invested it and let's say you get an avg 5% return compounded over that time frame, what would the difference be? (I admit I'm too lazy to do the math right now).
As my dad said on his deathbed (literally as he was stuck bedridden in a facility for 6 months), "don't ever get this old." He was 89, but went through prostate cancer, then non-Hodgkins lymphoma kind of twice as chemo worked the first time but it then came back), and then dementia over his last couple years.
People better not count on anything from parents unless they have nursing home insurance. Assisted living and nursing home expenses are like crazy Monopoly money. It will make a well off person look poor in a year or two.
So much this... to the point you almost have to assume it's intentional. My kids are REQUIRED to take 4 years of a foreign language. 2 of the 3 have graduated now and neither are remotely literate in Spanish. Now just imagine if they took 4 years or hell even 2 of financial literacy instead.
Fortunately for them Dad (sorry, here comes the not so subtle brag) who will be able to retire at 50, has been able to teach them how to do the same.
Let's say 4% after taxes, as I assume you want it in a less volatile investment at that age......protection vs. growth, probably some type of "safe" bond fund. Or you could just put it into a tax-free muni and get 3%.
For 4% after taxes, If you didn't touch the money for 8 years, you'd have approximately $158K. This assumes your SS check is not taxed, which it will be unless you're very poor or are heavy into real estate (or some other investment that avoid/deter taxes). So the real number is less than $158K, the degree to which is determined by your marginal tax rate. It's going to be case by case.
Why say that? What does it accomplish?
Why are so many insults thrown around on this site?
So I ran actual numbers for me, per my SS information sheet we all get. Two major assumptions I have: (1) the math works for the same everyone; and (2) there will be no decrease in benefits down the road. I think the first assumption is true, but who knows with second assumption. Perhaps a bird in the hand is worth two in the bush, if we are concerned with viability of the system...
With that being said, without taking investment into consideration, the crossover point where taking SS at 62 versus 70 is during the 10th year, is at age 79. If you live to be 80, without taking investment into consideration, all other things being equal, you are money ahead waiting.
However, if don't need the SS and take those proceeds and dump them straight into the market, depending on what the rate of return is, you could very well run ahead by taking a lesser amount early. By my calculations:
- if you average a 7% return, you never break even by waiting until 70
- if you average a 6% return, you break even at age 89 by waiting until 70
- if you average a 5% return, you break even at age 86 by waiting until 70
- if you average a 4% return, you break even at age 84 by waiting until 70
- if you average a 3% return, you break even at age 82 by waiting until 70
- if you average a 2% return, you break even at age 81 by waiting until 70
One other consideration is that perhaps some people want the extra cashflow earlier, while they wait for Medicare to kick in.
Check my math above. The crossover/breakeven point if investing it all with a 5% return on the market is age 86.
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Yeah, I'm sure that's it. Both graduated with 4.0+ and both are getting large chunks of college paid for, but bc they didn't become fluent in a foreign language THEY NEVER FRICKING USED OUTSIDE OF CLASS, they're shitty students. Better than being a shitty human being I guess.
I ran the numbers with and without taxes, and if you apply taxes across the board to each revenue stream, it should not materially affect the crossover/breakeven point.
Bc he's a politics obsessed piece of human garbage. And yes I know I'm doing the same now, but it's getting old with a handful of posters who think taking shots at people's kids is okay.
No, I didn’t complete agree with your point, and it’s still not a no-brainer.
For people who live into their 90’s I’d say it’s definitely the right choice, but for those who die in their 80’s (vast majority of retirees) it’s pretty much a wash and depends on personal money management more than anything else.
You’ve got your opinion, and that’s fine. Just don’t assume that healthy people collecting ASAP are doing it wrong and will live with years of regret. I know a heck of a lot of healthy as heck 70 year olds who kicked the bucket before 80, yet my Dad made it to 83 despite being a ticking time bomb for 20+ years.
I don’t have a problem with your philosophy; just be open to alternate views.
My final analysis is that given most people's risk tolerance decreases in retirement, on average it is probably about a wash, which is probably by the design of the actuaries.
Personally I think it's silly to try to develop a plan that attempts to maximize total cash payout from Social Security, because the missing element in the equation will always be your death date,.. I think it makes more sense to base you plan on getting to a monthly Social Security benefit that best satisfies your needs in retirement and then just ride it from there... If you drop dead before taking a dime you're not going to miss it.
Pretty sure this is wrong. Retiring at 62 would reduce full benefit by 30%. Retiring at 70 would increase full benefit by roughly 47% as the 8% growth is compounded annually.
A person eligible for $2500/mo SS for retirement at 65 would get $1750/mo retiring at 62, whereas the person who retires at 70 would get $3673/mo. Breakeven around age 76. By 94, the person who takes benefits at 62 has earned $693k, the person who waited until they were 70 has earned $1.1 million.
It is what he posted.
His kids took "4 years" of foreign languages, and cannot speak them.
4 years of foreign language at any college gets you a "minor" in that field. Not sure how you cannot speak a language w/o a reasonable level of competence after 4 years of training.
Sure, Jan.
They had 4 years of classwork in a foreign language, and got "As" and can't speak it.
You're full of shit, buddy.
You're the one who posted that your kids were basically "dumb" when it comes to 4 years of coursework they cannot functionally utilize.
My guess is that because YOU do not value fluency in another language, THEY don't, either.
As you point out, risk tolerance is key. I view SS as insurance rather than an investment. I have plenty of other risky assets to manage/worry about. SS is as close to guaranteed as it gets, so I know what I'm going to be getting (given the info I have at this moment). Anyways, I'm 11 years away from having to consider this decision.......perhaps my mindset may change.
I figure that between my wife and myself, at least one of us will live to 90. So if I die early, she'll get my payment (to replace hers). It won't be crazy higher than what she'll have been receiving, but it won't be insignificant either. That's why I think I'll choose to delay SS payments until max age, if I don't need the money before then.
Solid discussion. Call us squarely in the middle - won't be sipping wine in Moracco but will be fishing with grandkids (hopefully) in the beater fishing boat I currently have.
That aside, always thought the tradeoff between what you give up in your younger years to accumulate wealth in your older years is fascinating thought process. It's so different for each person given variables at play (did you get a head start form mom and dad, are you getting inheritance, etc) and what each person considers comfortable is relative. Some folks don't have to give up much now to be comfortable later whereas some folks might have to forego something(s)z experiences, etc in their younger years to be comfortable in older years.
That aside, always thought the tradeoff between what you give up in your younger years to accumulate wealth in your older years is fascinating thought process. It's so different for each person given variables at play (did you get a head start form mom and dad, are you getting inheritance, etc) and what each person considers comfortable is relative. Some folks don't have to give up much now to be comfortable later whereas some folks might have to forego something(s)z experiences, etc in their younger years to be comfortable in older years.
Well it was in high school, not college, and despite you thinking you know everything, this is quite common. Talk to some other actual human beings who've raised kids and you'll hear this same thing.
My wife and I both finished school close to 30. I got sick and changed majors, she worked a few years before going back. We then had kids and she stopped working full-time.
We make good money now, but we had a late start for really saving and we'll have two kids in college this fall. I'm assuming that I'll be dead before retired. Our parents might leave us something but hers are moving into a care community this summer.
I was joking with the lady checking me out at lowe's the other night. She said something about a retirement plan and I told her mine was "hello, welcome to Walmart!"
She told me to apply to lowes instead as they pay better and have some benefits. She's holding out a few more years until she's 70.
We make good money now, but we had a late start for really saving and we'll have two kids in college this fall. I'm assuming that I'll be dead before retired. Our parents might leave us something but hers are moving into a care community this summer.
I was joking with the lady checking me out at lowe's the other night. She said something about a retirement plan and I told her mine was "hello, welcome to Walmart!"
She told me to apply to lowes instead as they pay better and have some benefits. She's holding out a few more years until she's 70.
So?
it's 4 years; 8 semesters; that's what you'd posted.
Or, did they just have to "re-take" the first semester 4 or 8 times to "get an A"?
Again, do us all a favor and talk to some other real life human beings who've had kids go thru foreign language required high school classes and see how much was retained. Until then gfy and quit hijacking a good thread.
I have neighbors who's kids have a couple years of foreign language, and they're pretty solid.
AGAIN: If YOU teach them it's not worth retaining, they'll follow YOUR lead on that.
#ShittyParenting:101
A big problem I saw in the last couple of years was when the stupid government allowed individuals to take distributions out of their retirement accounts penalty free due to covid.
You really didn't need to prove anything.
Many people took out $100k and spread the income over 3 years.
I can guarantee those people will be complaining come retirement.
I'd have to guess almost all of the people that did it were not in any type of financial trouble due to covid. They just wanted the money.
It was a good idea for those that NEEDED it. But like every other good government idea, it got abused.
Stupid.
You really didn't need to prove anything.
Many people took out $100k and spread the income over 3 years.
I can guarantee those people will be complaining come retirement.
I'd have to guess almost all of the people that did it were not in any type of financial trouble due to covid. They just wanted the money.
It was a good idea for those that NEEDED it. But like every other good government idea, it got abused.
Stupid.
Let me guess, you're a childless lonely old man? Yeah, thought so. I'm sure the childless old creepy guy is regularly quizzing the neighbor kids on their Spanish linguistics. Is there a topic you're not completely full of shit on?
Just ignore him. If there is one thing Joe is good at, it is hijacking a perfectly good non political thread.
Maybe get outside your bubble, and interact with parents who have kids that also learned languages in school, and they encouraged their kids to learn them (apparently, unlike you).
Being bi-lingual can almost always mean a bigger paycheck in most professions, because you can act as an interpreter, or handle translations within your workplace. And folks can make lots of money doing it.
We live in a global economy. Helping your kids with a tool that will better prepare them for it is basically giving them a gift, for life. Sad that you do not view things this way.
