illusion retirement budget

[offroad]

Am beginning to think that 80% of the public are really completely ignorant and have an illusion about having a retirement dollars to live on.

1) if you are 30 years old, and you take out a 30 year mortgage on a house. You will just barely pay off the house. You still have to pay for a replacement roof every twenty years, and replacement furnace every fifteen years. plus all those town tax increases. Plus the need to have disability access as you get older and need that.

2) You also need to save for a retirement. Work no longer pays pensions, no longer pays retirements. You save via a 401K or have nothing. if you get laid off (on the dole) you dip into that and have to reset the savings. $12,000 is the limit for that fund yearly (or something close to that). That might be just enough, assuming you do not loose it when the funds market takes a nose dive. Also assume that you or your family do not get sick, and loose your income. thats a suckers bet.

Fiscally the system is rigged for the rich rich (over $1million in assets) and not for us common folks.

Thus why Cheap RV living seems so smart.

 

[sl1966]

When the market bottomed out a few years ago I was lucky and didn't lose anything on my 401k. I'd made enough the years prior to cover the loss and still have plenty left over.&nbsp;Unfortunately I had to withdraw it all just to keep the bills paid while having to remain homeless.&nbsp;<br /><br />I did manage to hold onto 5 acres I own in CA. If push came to shove I would have a place where no one could throw me off of it. The only problem is I never want to live and contribute to that wreck of a state ever again.<br /><br />This is why I'm very very grateful for this site as well as ones like it.<br /><br />Thanks Bob!<br /><br />

 

[offroad]

also wonder why people think they are living much past 70 years old. If you dont smoke or never did. if you maintain a lighter than average body weight, and exercise, and eat terrific healthy foods. then only maybe.

Most of my relatives passed from 60 years old to 75. The lucky ones lived to 80. The extremely rare ones lived to 90.

Point is financially if you have not paid off debts, and retired by 60, you may not have much golden years to enjoy left. no matter what you want to think. And those years left, might be hard years with medical issues.


So live them while you have them.

 

[sl1966]

Then this is gonna totally suck for me then. Most everyone in my family is passing on well after their 90s, with my gramp's beating everyone out by passing at 104.<br /><br />

 

[Seraphim]

I have to agree with your intial statement, offroad.&nbsp; Somewhere along the line people began believing they could support themselves on only a social security pension, without a lifestyle change. That just won't happen on a %60 pay cut, which is the most a SS pensioner will receive ( as I understand the system).&nbsp;The average retiree can&nbsp;survive on it, but that's about it.

 

[offroad]

My mother only does well by keeping a subsidized elderly housing apartment in her town of residence. They will not force her to pay more than her SS income And they make sure she has enough for bills. But not car repairs.

 

[Seraphim]

Offroad

Women in my wife's family live from the early 90s to over a hundred consistently. Genetics plays a large part in longevity.

 

[yesican]

My mom is 80, smokes, has empysema and doesn't plan on kicking the bucket any time soon.&nbsp; She worked out of the home maybe 15 years of her life&nbsp;for low wages.&nbsp; She owns a small house in a small town in Wisconsin.&nbsp; Has everything she wants and needs and more frickin clothes than she can put in two big closets.&nbsp; <br />We can plan for the future and work towards that plan, but life has a way of working its own way out.&nbsp; Some like my mom put little money or effort into retirement and came out smelling pretty good.&nbsp; I know others who socked away every cent possible into retirement and lost almost all of it.&nbsp; <br />Me...I don't ever plan on retiring only reallocating those&nbsp;energies now used for making a wage into energies used to make life worth living.<br />Rae

 

[wandering mike]

When I was in India about 15 years ago a psychic read my palm and said I "would have <em>good health</em> until I was 82 years old". &nbsp;I thought it was nice of him to phrase it in a positive way. &nbsp;So, based on that, I am planning my affairs to check out of this world about then. &nbsp;

 

[josephusminimus]

also wonder why people think they are living much past 70 years old. If you dont smoke or never did. if you maintain a lighter than average body weight, and exercise, and eat terrific healthy foods. then only maybe. Most of my relatives passed from 60 years old to 75. The lucky ones lived to 80. The extremely rare ones lived to 90. Point is financially if you have not paid off debts, and retired by 60, you may not have much golden years to enjoy left. no matter what you want to think. And those years left, might be hard years with medical issues. So live them while you have them.

<br /><br /><br />

<em>My fiance's father was in amazing health, didn't smoke, biked everywhere. &nbsp;Died at 59</em><br /><em>My grandmother was overweight &amp; didn't exercise much. &nbsp;Died at 73</em><br /><em>My grandfather was VERY overweight, diabetic (&amp; didn't manage it), didn't exercise at all, horrible diet, died at 85</em><br /><em>My mother works at a nursing home where the oldest resident has been smoking a pack a day since they were in their 20s. &nbsp;This guy is 97 years old, &amp; relatively healthy.</em><br /><em>Sometimes it has nothing to do with how people live as to how long they'll live. &nbsp;A lot of it is genetic.</em>

<br /><br />The days between me and 70 are peeling off rapidly and diving into the grader ditch, and I'm inclined to think statistics about lifestyles probably don't have much to do with the duration of our lives in any meaningful sense.&nbsp; We live until we die and the health we enjoy or have to live with appears to be a shuffling and re-shuffling of the deck as we go along.<br /><br />I lived hard, took an unconscionable series of physical risks against the better advice of a lot of friends who are dead now and didn't take such risks.&nbsp; But the greatest physical risk I've taken was living to be 70.&nbsp; That's one doesn't need to be examined against Heisenberg's Uncertainty Principle.<br /><br />As for the savings, seems to me it's wise to try it, but believing it will be there's just another way of assuring more challenges when the time arrives to need it.&nbsp; It might be there, or it mightn't.&nbsp; Wise decisions, or lousy decisions.&nbsp; Too much is outside the hands-on of personal decision making and in the hands of folks making professions from other people losing theirs.<br /><br />

 

[IGBT]

It is not impossibly hard...you just have to LBYM for quite some time.<br /><br />The limit on 401K is much higher than $12,000 btw, it is $17,000 for this year if you are under 50, more than that if you are over 50.<br /><br />Lets say you start off at age 20 after finishing a 2 year training program at being a plumber, welder, electrician, etc.&nbsp; You make about $20/hr, or about $40,000 a year and manage to save $10,000 of that income.<br /><br />Even with the ups and downs of the market, if you choose 60% stocks and 40% bonds, and rebalance each year, you will earn a real rate of return of about 4% to 5% historically.<br /><br />Assuming you keep up that contribution for 35 years, you will have $965,000 at age 55, in addition to whatever SS will pay you at 62 or 67.<br /><br />This is all in todays dollars, so it is real money.&nbsp; Plenty of money to keep you able to spend $30,000 a year (the amount you actually spent each year) for the rest of your life.&nbsp; When SS kicks in, it will just be gravy.<br /><br />Note that this didn't require being a doctor, or engineer, or lawyer.&nbsp; high school plus 2 years at a trade that is in demand in almost any economic environment.<br /><br />Of course you could rack up $100,000 of debt&nbsp;going to a liberal arts school getting a degree in women's studies, find you can't get a job, work at a fast food joint for years, use credit card and payday loans to make ends meet, never save anything, then lament at age 55 that the whole system is rigged.<br /><br />We all have choices to make I guess.

 

[Simran]

It is not impossibly hard...you just have to LBYM for quite some time.<br /><br />The limit on 401K is much higher than $12,000 btw, it is $17,000 for this year if you are under 50, more than that if you are over 50.<br /><br />Lets say you start off at age 20 after finishing a 2 year training program at being a plumber, welder, electrician, etc.&nbsp; You make about $20/hr, or about $40,000 a year and manage to save $10,000 of that income.<br /><br />Even with the ups and downs of the market, if you choose 60% stocks and 40% bonds, and rebalance each year, you will earn a real rate of return of about 4% to 5% historically.<br /><br />Assuming you keep up that contribution for 35 years, you will have $965,000 at age 55, in addition to whatever SS will pay you at 62 or 67.<br /><br />This is all in todays dollars, so it is real money.&nbsp; Plenty of money to keep you able to spend $30,000 a year (the amount you actually spent each year) for the rest of your life.&nbsp; When SS kicks in, it will just be gravy.<br /><br />Note that this didn't require being a doctor, or engineer, or lawyer.&nbsp; high school plus 2 years at a trade that is in demand in almost any economic environment.<br /><br />Of course you could rack up $100,000 of debt&nbsp;going to a liberal arts school getting a degree in women's studies, find you can't get a job, work at a fast food joint for years, use credit card and payday loans to make ends meet, never save anything, then lament at age 55 that the whole system is rigged.<br /><br />We all have choices to make I guess.

<br /><br /><br />LOL <img src="/images/boards/smilies/rofl.gif" alt="" align="absmiddle" border="0" />

 

[IGBT]

The above outlined method to get near a $1,000,000 fairly comfortable retirement by age 55 was just the basics.&nbsp; A motivated individual could do better in high school, get a scholarship to a public engineering college, and end up&nbsp;similar because of the higher income, even though they start earning a bit later.<br /><br />Example:&nbsp; Start Georgia Institute of Technology at age 18.&nbsp; Study electrical, mechanical, aerospace&nbsp;or software engineering.&nbsp; Graduate at 22 with $40,000 in student loan debt @ 4%&nbsp;(partial scholarship offset some of tuition).&nbsp; <br /><br />Start job at $55,000 a year at age 22<br />Pay 15,000 toward student load each year.<br />After 4 years, student loan is paid off (age 26)<br /><br />Save $15,000 a year for the next&nbsp;30 years @ 5% real<br /><br />Result: $1,040,000 at age 55<br /><br />

 

[IGBT]

I assume the LOL was a reference to the liberal arts degree and not to the viability of what I outlined?<br /><br />We came from a poor family and have never inherited any money.&nbsp; Because both of us studied and made good grades in high school and college, we were able to graduate with decent engineering degrees and only $80,000 in student loan debt.&nbsp; (me electrical, wife software).&nbsp; It took us awhile to pay the debt down, but we paid it off by age 28.&nbsp; For the past 14 years we have managed to save over 50% of our gross income and will have $1,300,000 to $1,500,000 by age 45, at which point we are going to scale back to part time work and living in a box van or tent.<br /><br />There are so many opportunities but everyone just wants to complain and not work.&nbsp; The decisions you make when you are young are the consequences you must live with when you are older.

 

[SoulRaven]

Add the risk of losing everything to health issues and that is why I live in a van down by the river... Which has very nice view BTW... Good bye Rat Race, hello freedom...

 

[offroad]

all that money you saved does not take into account<br /><br />1)&nbsp; Children and their expenses for their future (rather not have some of those breeders out there though).<br /><br />2) Loved ones being despirate.&nbsp; happens too often.<br /><br /><br />

 

[IGBT]

all that money you saved does not take into account<br /><br />1)&nbsp; Children and their expenses for their future (rather not have some of those breeders out there though).<br /><br />2) Loved ones being despirate.&nbsp; happens too often.<br /><br /><br />

<br /><br />1)&nbsp; We chose not to have kids.&nbsp; This has reduced our impact on the environment more than anything a greenie could do.<br /><br />2)&nbsp; Yeah, that has been a little problem, but we have managed to give some to family and still keep up our saving rate.&nbsp; We just cut back more on our personal expenses.

 

[Terry]

I have a shack on 3/8 acre lot(s) in town (Pensacola) but not city limits. I was an iron worker most of my working life till injuries stopped that. Then, my son became very sick&nbsp; with a form of muscular dystrophy that came from my wife's family. He died from poor care and mistakes by the doctors and staff at Sacred Heart hospital.&nbsp; She has the disorder too and is in the last stages of it for the last three years needing me to be 24/7 caretaker. Since 1986, I have been unable to work due to injuries and family needing me to be available to care for them to one degree or another. My Social Security balance sheet says I'll get just over $300 a month if I wait till I'm 65. I have been found disabled by the SS Depts doctors but my doctor kept poor records and gave/gives poor treatment to people on medicaid so a review board changed that decision based on my doctors lack of treatment records and such. If the final decision goes against me, I'll have to sell the house and live on that and whatever pennies I can earn doing flea market type business till I'm 62. Then, I'll file for my SS and apply for a subsidized housing around Portland or Seattle. The only other retirement option I see is to walk into a bank with a hold-up note and wait till the police arrive and let them provide me with "three hots and a cot" along with primitive medical&nbsp; care. This is what happens to a lot of people and many are far worse off than me. A lot of people say I deserve whatever I got coming but i would have had a much better chance of making things work out with either a decent chance at an education or with public servants actually serving the public (me) rather than serving their own self interests. I also am fortunate that my only surviving son is doing OK for himself and has no children for me to worry about after my passing from this life.<br />&nbsp;I once upon a time was able to go where I wanted and do as I pleased as long as I did it in a reasonable manner. I worked hard at jobs that most people wouldn't want to do so I made good money. I just didn't last long enough to start thinking about retirement. I have no formal education and expected the "powers that be" to be honest with me and they weren't. Starting with the doctors through the insurance companies all the way up to and including lawyers and judges. <br />&nbsp;This is just a small look into the life expectations of someone that didn't believe that the world was looking out for those with power and money only. Sorry if its depressing.

 

[stude53]

Terry,<br />Depressing? No, but do I have empathy for your situation, Yes.<br /><br />I suggest you take positive steps toward getting your disability approved. Here's a website that has information you may need:<br /><br /><a href="http://disabilityblogger.blogspot.com/2006/05/if-you-are-turned-down-and-denied-for.html">http://disabilityblogger.blogspot.com/2006/05/if-you-are-turned-down-and-denied-for.html</a><br /><br /><br />Good luck,<br />Bob<br /><br />

 

[Seraphim]

Nothing is guaranteed as to retirement funds, but if we don't try to save the end result is guaranteed. Van dwellers have the correct idea - to love BENEATH our means and save as much as possible. I had an article about an elderly woman who made $9300 a year and managed to accrue $250,000. It takes discipline and a long term time horizon. Frugality is the basis for success.