This is just plain sad for retirement

[Chahta]

LINK. Age 70-79 the value is $171,400. No wonder the government panders to poor folks. I need to start thinking of myself as a very well-off 70 year old.

[mozart522]

These balances seem to only include 401Ks, not total household wealth.

[Chahta]

Aug 29, 2022 14:47:23 GMT mozart522 said:

These balances seem to only include 401Ks, not total household wealth.

What  I took from the article as well, since principle residences should not count. Most post retirement folks would have a rollover IRA in lieu of a 401k. In my mind I assumed that. At 70-79 if one had a 401K it should be larger since there is a contribution rate shown. All 401Ks should be larger.

[steelpony10]

Chahta ,

        Well I guess I was brought up differently. One of my mentors, the growth guy from an investment club, working it out with me came up with 75k + SS as my retirement goal. He also stated don’t screw around with future schooling, frame this graph and goal on the napkin which I did. I was 17.

         I have nixed feelings about government help. I’m ok with minimum healthcare for those under 18, adapting the same retirement program and benefits as government workers or maybe giving adults an option to opt out of SS for private retirement accounts like 401k’s offering a limited # of investment choices but no individual stocks. Of course this all has to be grandfathered in over time.

         But this will never done in the present environment, individuals will still steal for more money and like the much larger minimum wages now with higher valued retirement portfolios those still might be the poorest citizens as prices adjust upwards.

          Part of the problem I accept as fact is the poorest people in the U.S. are amongst the richest people in the world. The key may be to get out of Dodge and relocate somewhere else where your money goes further. In other words if you did indeed do this to yourself this is your option rather then wait for Uncle Sam to save you. SS was designed as a suppliment the rest was up to us. We all had 40+ years to address our future with varying degrees of success.

[retiredat48]

Couple quick thoughts:

--If a person saves 10% of their income for their working life, they will have saved for a comfortable retirement by their age sixties. Thus, the average 401.K annual savings of almost 14% (included co match), is encouraging.

--I considered the savings dollar amounts per age was in line with expectations.

--Consider that almost half of USA heading to retirement, have miniscule savings, other than their home equity and social security (if any). However, they eventually retire and get by. They manage; family aspects playing a big role for many. From their viewpoint, someone else having a retirement portfolio of $180,000 is worldly!

R48

[Mustang]

I know a lot of people who rely on social security for their retirement. A lot of the companies they worked for didn't have retirement plans or 401Ks. Some who job hopped relied on payouts to keep them going until they found another job. A lot of them could have saved in individual IRAs but saving is something that must be learned and today was always more important than tomorrow.

Even though social security is a giant pyramid scheme, today's retirees have paid into it their entire working lives. According to the contract they have with the federal government they are owed it. Unfortunately, the federal government cannot pay current retirees without taking from current workers. Opting out really isn't an option because social security is currently spending more than it takes in. The social security trust fund is expected to run out in 12 years. (Because of inflation increases it might be sooner.) After that it will be able to pay approximately 80% of promised benefits.

The only alternative is to take more from current workers. But that is unpopular and doesn't win elections. Our government will kick that can down the road and wait until the last moment to address the problem.

My brothers are relying on social security. One was is a truck driver. He delayed taking SS until he could work part-time and still get full benefits. He has worked hard to pay off all his loans so he and his wife should be OK between SS and part-time work.

A half-brother has degrees in information technology but somehow doesn't seem to be able to hold a job. His mother was left in pretty good shape by our father. He often lived with her and relied on her for "loans." She died penniless. He even had to "borrow" money from me to bury her. He has no savings and will soon be relying on SS to live. He is going to have problems.

Its nice to have goals for savings/investment but unforeseen circumstances can take that away fairly quickly. Working for a company that goes under may force someone to dip into their savings to survive. My wife and I should be OK but, as always, the future is unknown.

[mozart522]

There have been many threads over the years about how few Americans have enough for a comfortable retirement. For the bottom majority, they just don't make enough to be able to save anything, and in fact are often in debt. Showing the amount in 401Ks doesn't really mean much. the 70-79 age group pointed out are still working. Why? because they like it and have 1M stashed away in IRAs and such, or because they have to. We can't tell from this.

The median earnings for full-time wage or salary workers in 2021 were about $51500. Half ( I assume mainly the wage workers) is lower than that. Very difficult to save for many with those numbers.

[ECE Prof]

R48 "If a person saves 10% of their income for their working life.."

+1.

Remember David Chilton's "Wealthy Barber." That is the first book that I gave my son. A lot of people think the "visible hand" will take of itself and ignore the "invisible hand." The invisible hand is far more potent than the visible hand. Young people should learn it early, but they do not. That is the problem. I met a former colleague in the Walmart parking lot two days ago, and we are of the same age. Guess what he told me, "He is going to work until his death."

[liftlock]

I would guess those 401K balances don't reflect that fact the many seniors have saved nothing for retirement.  An estimated 40% of retirees have no income from savings.

www.nirsonline.org/2020/01/new-report-40-of-older-americans-rely-solely-on-social-security-for-retirement-income/#:~:text=A%20new%20report%20also%20finds%20that%20a%20large,Security%20replace%20approximately%2040%20percent%20of%20pre-retirement%20income.

The average Social Security retirement benefit is about $1500 per month which suggests that lots of folks are trying to survive on less than $18,000 per year.

[saratoga]

Liftlock: The average Social Security retirement benefit is about $1500 per month.

I am always frustrated by this `average'. To compute an average, you need to count the denominator.
Lets us say A, B are married and both are eligible for SS. B has an ex-spouse who is eligible and dependent on B for her SS. Case 1. A, B claim SS independently on their work records. In this case, presumably the units are 2 (A and BC)? Case 2. A claims spousal benefit. In this case, the unit is 1 (ABC)?

[liftlock]

Aug 30, 2022 0:38:42 GMT saratoga said:

Liftlock: The average Social Security retirement benefit is about $1500 per month.

I am always frustrated by this `average'. To compute an average, you need to count the denominator.
Lets us say A, B are married and both are eligible for SS. B has an ex-spouse who is eligible and dependent on B for her SS. Case 1. A, B claim SS independently on their work records. In this case, presumably the units are 2 (A and BC)? Case 2. A claims spousal benefit. In this case, the unit is 1 (ABC)?

I haven't studied how the averages are calculated by the Social Security Administration.  However, my guess is that it's a simple average of the monthly SS benefits per recipient, regardless of how the benefit might have been calculated or earned.   Regardless of how the average are calculated, it would appear that a significant % of retirees are attempting to live on $18,000 or less per year (or $36,000 or less for a married couple).

www.investopedia.com/ask/answers/102814/what-maximum-i-can-receive-my-social-security-retirement-benefit.asp

[retiredat48]

I occasionally single out a homeless person in Florida, and give them $5. However, there is a catch, and they usually comply. That is, I try to get them to open up and talk to me of their plight and situation...and background. If cooperative, I sometimes double the $5, and send them over to a Zaxby's for a fried chicken cobb salad--great if you have never had one!

Recently, sitting outside my pancake house, I struck a conversation a couple days running, with a 60.5 year old guy--everything he owned, in a shopping cart. Formerly was a NY city electrician, owned his own home in Port Saint Lucie...but eventually with a divorce, some health issues and bad luck, he had to sell his home to pay debts, and currently has no wealth whatsoever, or income.

It appeared to me upon probing, that he may have had some Social Security benefits coming from past work. I steered him to the local SS office, and the following week he saw me outside the P-house, and showed me his benefit: $1200 a month beginning age 62. He was elated, stating now he just has to survive to age 62! He also stated SS was very helpful and helped him fill out the paperwork for an immediate "disability status." I was unaware it could be non-medical...perhaps mental. His case is under review.

So depending on one's situation, $1200 a month SS can seem like manna.

R48

[saratoga]

R48, that is a great story.   I always wonder if some Asian immigrants are missing out on their spousal benefits, especially if they are divorced (Most countries in Asia do not or did not have spousal benefits, I think.)

[Chahta]

A 70-79 YO working and contributing 12%, per the article, seems to be hopeless. WTH is he saving for at 79? Just work and spend. I know a 75 YO lady in that boat.

Or if you think you have a $1m IRA then spend that paycheck converting to a Roth. LOL

[johntaylor]

Re shopping cart fellow, about 6 mos for application processing.   If denied, roughly 9 mos for ALJ hearing, more if pursued to Appeals Council (top admin step before fed ct).

[retiredat48]

Aug 30, 2022 13:47:11 GMT johntaylor said:

Re shopping cart fellow, about 6 mos for application processing.   If denied, roughly 9 mos for ALJ hearing, more if pursued to Appeals Council (top admin step before fed ct).

johntaylor,...yea...thanks...that's my understanding also.  Long, and difficult, to get that disability designation.

R48

[ECE Prof]

After the pandemic, a good number of people, especially older single men, went unstable and berserk. Unfortunately, they do not get enough mental evaluation and treatment. We simply do not have enough facilities also, especially, in rural areas (around me for example). They just roam around. Some were even arrested for homicides (elsewhere) in some parking lots of local businesses.

Guess what, our city enacted some rules last year to prevent people to hold signs on the street (especially at the intersection of our interstate and local roads) for begging or panhandling. There were also some objections to that rule, and I am not sure what happened to that rule now.

[retiredat48]

Aug 30, 2022 13:24:46 GMT Chahta said:

A 70-79 YO working and contributing 12%, per the article, seems to be hopeless. WTH is he saving for at 79? Just work and spend. I know a 75 YO lady in that boat.

Or if you think you have a $1m IRA then spend that paycheck converting to a Roth. LOL

Yes, why save?

The USA created the middle class...starting with auto workers in Michigan; it can easily take it away (likely doing so now).

Think Downton Abbey.  Upstairs in the mansion were the few wealthy people.  Everyone downstairs had no wealth.  They simply worked until they died.  Oh, they owned a suit and tie, and on Sundays spent time in their communities; but the idea of any savings or a portfolio was beyond them.  

Most of the world history is 2/98.  Meaning 2% of the people owned the wealth; 98% died even. 

Interestingly, in Europe they view wealth as: what kind of current "income" does a person have.  In the USA, it is what kind of assets/portfolio does one have.  Sounds like our constant forum debate on income versus total return...but also don't forget "risk-adjusted total return"!

R48