How many of you are actually saving for retirement?

[LAM]

best not to invest too heavily into the overvalued US stock market as the events of 2008 will happen again. the years of 1982-2007 was nothing but one big "asset" bubble with it bursting in 2008.

The amount of money in the US economy (and no other) is not the number of actual, physical dollars (of which there are something around $900B, most of which does not circulate much). Nor is it reserves held by the Fed to back its lending facilities to member banks. Nor is it all the loans and mortgages those banks have issued, using those reserves at the Fed as collateral. Nor is it all that credit card and student loan debt floating around out there. The supply of money in our economy is all of those things and much, much more.

Anything that can be used as money (e.g. spent), or can be used to collateralize credit (which is the same thing as money when fractional reserve lending and maturity transformation are legal), IS money under the kind of system we have. and since the 80's almost the entire increase in US GDP and gains in the US stock indexes is built upon this fake wealth as are the fortunes of those in finance that had the laws and regulations made and passed to create this new US economy which started in the 80's and was built on "capital" investment and fueled by debt both public and private.

 

[Big Smoothy]

My better half is a 401K anaylist. She is an expert on retirement IRS regs so I get to hear an hour of IRS rules and regs on my drive home from work daily when we car pool. The 408 b2 disclosure reg was a big deal in her industry. Many providers implemented it 6 months before the law required. She advises plan administrators and does testing for huge corporations. Her department has thousands of employees so this is a major player in retirement services. Some of the disclosures are in formulas so the average guy with a low IQ might not be able to calculate the fees but the formulas are provided and have to be by law. If a plan is out of compliance a participant can call the DOL to investigate. If there was a non compliance issue the DOL contacts the IRS and an audit will force the issue.

What hidden fees are you posting about?

Thanks for the note and info, Heavy Iron.

If I stand to be corrected I want to be. I just hope that these shenanigans are being eradicated.

 

[LAM]

the problem with the future of many stocks tied to US large firms is that the company's don't have much equity. for years majority shareholders have been extracted dividends for themselves in cash and replacing it with debt, which means many years down the road regular shareholders are going to get screwed out of their investment monies they should have had coming to them.

it's why I don't fuck with US stocks anymore the whole financial system in the US is one big bag of bullshit.

 

[Gregzs]

Map: States With Parental Support Laws | Bankrate.com

 

[KelJu]

I don't save anything. If I am not healthy enough to work, then I am not healthy enough to live. My method works well for me, but only because I have almost no possessions or responsibilities. If I can't come up with $800 a month to fund my meager existence, then I have bigger problems to deal with.

 

[Big Smoothy]

I don't save anything. If I am not healthy enough to work, then I am not healthy enough to live. My method works well for me, but only because I have almost no possessions or responsibilities. If I can't come up with $800 a month to fund my meager existence, then I have bigger problems to deal with.

I feel the same way Kelju.

I have almost no possessions and intentionally try to keep it that way.

I am saving again however. I'm in my early 40s now, and in my mid and late 20s I saved. I saved a little in my early thirties and a little in my mid 30s: IRAs maxed out, Index funds, etc.

Then, I stopped saving for a while because worked slowed down and I was not concerned about it.

I probably have 25-35 years left on this planet. I plan to work until I am too old mentally or physically able to work - based on basic math, stats, and numbers. It will cost too much to every "retire" for most of us.

This does not mean I do not want to have anything in old age. When we are old, may usually need money. Some money.

A lot of my (and our future) depends on our health.

We can control this to a large degree, but as we know, as we age, medical things happen.

We do not know how much time we have left, and we don't know how we're going to check out. This is why I try to do the things I want to do sooner than later in life.

 

[LAM]

We do not know how much time we have left, and we don't know how we're going to check out. This is why I try to do the things I want to do sooner than later in life.

when I was younger I didn't give a rats ass about anything, I lived for the moment. then when I learned how things really worked I switched focus for a little to make sure I didn't get caught in the debt trap. now I'm trying to live more because there isn't always a tomorrow for everyone.

I'm actually in the process of closing my business here in Vegas and moving to St Croix. going to try to find a way to use this pilot's license and have some fun while doing it.

 

[Big Smoothy]

when I was younger I didn't give a rats ass about anything, I lived for the moment. then when I learned how things really worked I switched focus for a little to make sure I didn't get caught in the debt trap. now I'm trying to live more because there isn't always a tomorrow for everyone.

Good on you LAM on avoiding the "debt trap." It is....a trap.

I am almost debt free with about a $1,000 in total debt.

I'm actually in the process of closing my business here in Vegas and moving to St Croix. going to try to find a way to use this pilot's license and have some fun while doing it.

Good luck on this and keep us posted.

 

[KelJu]

I lost my entire 20s working for my future. When that future become the present, I was disappointed with the decisions I made. The things I bought with the money I was able to make was not worth the time I lost getting it. I am still in debt for my education, and most of the people I went to school with that skipped college and went right to work are doing much better financially than many of the ones who went to college.

More so, the ones who have a house, a truck, and a mortgage are always worried about their financial future, where as the ones who have very little seem to have no worries t all.

I have come to the conclusion that owning things and sacrificing for the future are the two most destructive forces in my life. So, I will make as much money as I can doing things I enjoy while buying as few things as possible. If I can do those two things, I will be free to live for today, not for a future that may never come. I really wish I would have figured it out sooner, but better late than never.

 

[pjliftsalot]

I have my own business and I invest via something called a SEP. Its a self Employed Plan.
I set it up right through my bank with some advice from my accountant.

 

[Big Smoothy]

I lost my entire 20s working for my future. When that future become the present, I was disappointed with the decisions I made. The things I bought with the money I was able to make was not worth the time I lost getting it. I am still in debt for my education, and most of the people I went to school with that skipped college and went right to work are doing much better financially than many of the ones who went to college.

More so, the ones who have a house, a truck, and a mortgage are always worried about their financial future, where as the ones who have very little seem to have no worries t all.

I have come to the conclusion that owning things and sacrificing for the future are the two most destructive forces in my life. So, I will make as much money as I can doing things I enjoy while buying as few things as possible. If I can do those two things, I will be free to live for today, not for a future that may never come. I really wish I would have figured it out sooner, but better late than never.

You make points I can identify with, Kelju.

I know a lot of people in the US that are "living for the future."

Many people's psychological identity is tied to the things they "have." And they do not need to "own" these things. They can borrow to "have" them.

Yes, definitely on people with mortgages being concerned about their financial security. One economic hiccup can send a person or family into irrevocable trouble. I know people that paid into expensive mortgages for years (most payments go to interest) and they ended up losing their houses. One family member committed suicide as he could not deal with it.

The 30-year mortgage was promoted by government in after the labor disputes of the 1920s. People are a lot easier to control and a lot more docile when they have borrowed an amount of money that takes thirty years to pay off.

Mortgage is a French word. The root of the word is "mor" --> mortuary, mortician, mortality, moribund. --> death

"gage" means 'pledge'

Mortgage = death pledge.

 

[LAM]

I have my own business and I invest via something called a SEP. Its a self Employed Plan.
I set it up right through my bank with some advice from my accountant.

since you manage your own retirement with your SEP make sure the firms you invest your monies in are not heavily involved in financials. eventually all of the firms that do are going to go bankrupt and your shares will be worthless. there are dozens of US large firms that have no equity because it has been extracted via cash dividends being paid out to executives and replaced with debt. it's exactly what the people at Hostess did and many others.

 

[KelJu]

Mortgage is a French word. The root of the word is "mor" --> mortuary, mortician, mortality, moribund. --> death

"gage" means 'pledge'

Mortgage = death pledge.

That is fucking awesome dude. I don't know if it is true, but I like it.

 

[Big Smoothy]

That is fucking awesome dude. I don't know if it is true, but I like it.

Kelju,

I forgot the original source, but I read it somewhere on the word "mortgage."

As for the control of people and instigating the 30 year mortgage in the US, I watched a presentation/seminar by a famous marketing & advertising guy (forgot his name) who discussed this.

I'll try to google later.

 

[LAM]

Kelju,

I forgot the original source, but I read it somewhere on the word "mortgage."

As for the control of people and instigating the 30 year mortgage in the US, I watched a presentation/seminar by a famous marketing & advertising guy (forgot his name) who discussed this.

I'll try to google later.

I can't think of another country in the world where you can get a 30 year mortgage. considering the instability of the US economy, housing in the US will never be the same. TRA97 changed the home from a long term investment into a short term commodity and ruined the market forever and the document below pretty much supports that along with the "changes" in the overall US economy these past decades.


REFORMING AMERICA?S
HOUSING FINANCE MARKET
A REPORT TO CONGRESS
February 2011
http://www.treasury.gov/initiatives/Documents/Reforming America's Housing Finance Market.pdf

 

[LAM]

another thing that many don't realize is that buying stocks, bonds, gold, etc. is not investing it's simply allocating future savings against future permanent losses and losses of purchasing power. nothing more than a hedge against potential loss of purchasing power in the future. savings being nothing more than future consumption. there are no true "investments" in secondary markets your savings it's really "earning" it's simply not losing purchasing power.

this is the mistake that many babyboomers made in regards to the housing crisis. they mistook equity which is nothing more than the present far market value as being equal to savings, which it certainly is not. during the years of the manufactured housing boom many people either "forget" basic market principles of equity based assets but most never knew them. pulling out equity to fuel consumption in the present is pretty much the opposite if spending savings, increasing future debt for consumption today.

 

[Gregzs]

Boost your Social Security payout by $100,000 - CBS News

(MoneyWatch) The most important decision you'll make regarding your Social Security income is when to start receiving benefits. Welcome back to the second week of posts on Social Security as part of my 16-week series on planning your retirement.
If you're married, then your spouse faces the same decision regarding their spousal benefit based on your earnings. But your situation becomes more complex if your spouse also worked most of his or her career and will be receiving a significant Social Security income based on his or her own earnings record.
To help you determine the best age for you and your spouse to start benefits, I'm going to borrow some words of wisdom from author Andy Landis, who offers an excellent description of the considerations you need to take into account in the latest edition of his book, Social Security: The Inside Story. According to Landis, here's what you have to do: "Remember two numbers: age 78 and age 82-1/2." Let's see why he says this.
We're going to look at three people born in 1951, all currently earning $75,000 per year and all earning similar amounts in prior years, adjusted for wage inflation. All three plan to stop working at age 62. Person A plans to start Social Security at age 66 (the Full Retirement Age, or FRA, for these three individuals). The initial monthly income for this age-66 starter will be $2,000 per month. Person B plans to start Social Security at age 62 and will receive $1,500 per month. Person C is going to wait until age 70 to start Social Security and will receive $2,640 per month.
Landis's yardstick for Social Security success is the total amount of income you'll receive over your lifetime. Using this yardstick, the age-62 starter will be "money ahead" of the age-66 starter during the early years of retirement because of the four years of payments the age-66 starter missed by waiting to start benefits until age 66. But, according to Landis, the age-66 starter will catch up to the age-62 starter by age 78 and will thereafter be money ahead. By age 85, the age-66 starter will be ahead by $42,000.

• What you need to know about Social Security
• Social Security spouse benefits -- the rules of the road
• How long will you live?
• 16 weeks to plan the rest of your life

You can start receiving Social Security income as early as age 62, but your income is increased significantly for each year that you delay starting benefits until age 70. There's no increase for starting benefits any time after your 70th birthday. Now let's compare the age-66 starter with the age-70 starter, using the same logic. The age-70 starter will catch up to the age-66 starter if he or she lives to age 82-1/2. By age 85, the age-70 starter will be money ahead of the age-66 starter by $19,200 and money ahead of the age-62 starter by $61,200. If the age-70 starter lives to age 90, he or she will be money ahead of the age-66 starter by $57,600 and money ahead of the age-62 starter by $129,600.
Do you think you'll live to your late 70s or early 80s? There's a very good chance you'll make it to these ages if you don't smoke or abuse alcohol, keep your weight at a healthy level, and eat a balanced, low-fat diet. So if you think you'll live until age 78, then waiting to start your benefits until age 66 is the best strategy. And if you think you'll make it to age 82-1/2, then waiting to start benefits until age 70 is the best strategy for you.
The difference in total benefits is one very important reason why estimating your life expectancy should be a critical part of your retirement planning. Two good websites that offer calculators to help you do this are www.livingto100.com and www.bluezones.com.
The "money ahead" amounts shown above are just for one person; a married couple can gain higher amounts by carefully selecting the start date for each spouse, which could easily add more than $100,000 in payouts over their joint lifetimes.
Of course, Landis's analysis doesn't reflect such factors as inflation, cost-of-living increases, possible benefit cuts, taxation of Social Security benefits, investment earnings, and wage earnings after age 62. But I've seen other analyses that do consider some of these factors (and significantly complicate the analysis), and they still result in nearly the same conclusions regarding "break-even" ages.
But don't let all the numbers you'll have to deal with intimidate you -- it's well worth your time to do the math and make informed choices about when to start your Social Security benefits. It could put many thousands of extra dollars into your retirement pockets. Stay tuned for my next post that discusses Social Security strategies for married couples.

 

[Big Smoothy]

To help you determine the best age for you and your spouse to start benefits, I'm going to borrow some words of wisdom from author Andy Landis, who offers an excellent description of the considerations you need to take into account in the latest edition of his book, Social Security: The Inside Story. According to Landis, here's what you have to do: "Remember two numbers: age 78 and age 82-1/2." Let's see why he says this.

We're going to look at three people born in 1951, all currently earning $75,000 per year and all earning similar amounts in prior years, adjusted for wage inflation. All three plan to stop working at age 62. Person A plans to start Social Security at age 66 (the Full Retirement Age, or FRA, for these three individuals). The initial monthly income for this age-66 starter will be $2,000 per month. Person B plans to start Social Security at age 62 and will receive $1,500 per month. Person C is going to wait until age 70 to start Social Security and will receive $2,640 per month.
Landis's yardstick for Social Security success is the total amount of income you'll receive over your lifetime. Using this yardstick, the age-62 starter will be "money ahead" of the age-66 starter during the early years of retirement because of the four years of payments the age-66 starter missed by waiting to start benefits until age 66. But, according to Landis, the age-66 starter will catch up to the age-62 starter by age 78 and will thereafter be money ahead. By age 85, the age-66 starter will be ahead by $42,000.

The numbers based on what age you elect to receive are well known. It's math. Basic mathematics.

But there is ONE major hole in this argument of waiting b/c you'll get significantly more in returns - see my bold texts above.

People do not usually know how long they're going to live. (Unless one has a diagnosis, for example).

Sure, healthy people live longer in general and their quality of life is better as they live longer.

But I knew a 'health nut' who ate healthy and workout consistently who got annual physicals - except for the colonascopy and was given a death sentence of 2 years with a diagnoses of colon cancer.

Many, many, Americans check out early for the common reasons: heart disease, heart attack, strokes, anyueurisms and the nasty "C" - Cancer.

Look how unhealthy people are (members on this forum in general may be an exception to the general American public).

If we knew when we were going to die, life and finances would be a lot easier to plan.

 

[FUZO]

My wife and I put money away every month so when we are old and retired we wont have to do shit and are daughter wilkl be taken care of

 

[Bowden]

another thing that many don't realize is that buying stocks, bonds, gold, etc. is not investing it's simply allocating future savings against future permanent losses and losses of purchasing power. nothing more than a hedge against potential loss of purchasing power in the future. savings being nothing more than future consumption. there are no true "investments" in secondary markets your savings it's really "earning" it's simply not losing purchasing power.

this is the mistake that many babyboomers made in regards to the housing crisis. they mistook equity which is nothing more than the present far market value as being equal to savings, which it certainly is not. during the years of the manufactured housing boom many people either "forget" basic market principles of equity based assets but most never knew them. pulling out equity to fuel consumption in the present is pretty much the opposite if spending savings, increasing future debt for consumption today.

Investing for retirement is not the same as saving for retirement.
Investing for retirement equals increased risk of loss of retirement capital in return for possible increase on retirement capital.
Saving for retirement equals no risk to retirement capital and return of all retirement capital .

I have no idea as to why the meaning of savings vs. investing is not made clear to the general public as to understanding retirement capital financial risk.
You see this issue constantly in mass market financial publications and on retail brokerage websites that never make clear that saving for retirement is not the same as investing for retirement.
They confuse the concepts of saving for retirement with investing for retirement and they confuse people by suggesting that people save for retirement via investing for retirement in the stock market.
The result is that people never understand the concepts of investment risk related to possible loss of retirement capital and are shocked when their retirement 401k capital balance drops by approx. 45% like it did following the recent great recession.

 

[Big Smoothy]

My wife and I put money away every month so when we are old and retired we wont have to do shit and are daughter wilkl be taken care of

It depends on how much your saving per month, how long you plan to save (years) and what % return you're getting.

Anyone with savings in a US bank account is losing money now.

 

[LAM]

I have no idea as to why the meaning of savings vs. investing is not made clear to the general public as to understanding retirement capital financial risk.
You see this issue constantly in mass market financial publications and on retail brokerage websites that never make clear that saving for retirement is not the same as investing for retirement.
They confuse the concepts of saving for retirement with investing for retirement and they confuse people by suggesting that people save for retirement via investing for retirement in the stock market.
The result is that people never understand the concepts of investment risk related to possible loss of retirement capital and are shocked when their retirement 401k capital balance drops by approx. 45% like it did following the recent great recession.

they do not want people to know how finance works. the less the general population knows the easier it is for them to be taken advantage of, via various methods of rent seeking, etc.

 

[Braveheart82]

I don't save anything. If I am not healthy enough to work, then I am not healthy enough to live. My method works well for me, but only because I have almost no possessions or responsibilities. If I can't come up with $800 a month to fund my meager existence, then I have bigger problems to deal with.

I agree with living minimally but you should still have some money socked away in case of emergencies. Stuff happens.

 

[Gregzs]

New tool helps estimate your retirement income - CBS News

New tool helps estimate your retirement income

(MoneyWatch) How much reliable, lifetime retirement income can you generate from your savings? That's a critical question for baby boomers approaching their retirement years without traditional pension benefits. These days, most people are on their own to use their IRAs and 401(k) balances to generate a retirement income that supplements Social Security benefits -- and they don't have a clue about how to estimate how much retirement income they can actually generate.

Fortunately, there's a new tool you can use as you approach retirement that can help you estimate what potential income you can expect. BlackRock recently introduced the CoRI Retirement Index, which provides a daily measure of how much annual income your current savings could generate beginning at age 65. According to BlackRock's website, the tool is designed to be used only by people age 55 to 64 because "the required calculations for each CoRI Retirement Index is based on precise information for this age group."

The basic application is fairly simple. After visiting the BlackRock site and clicking on the CoRI Retirement Index link, move the slider to your current age, and the index will tell you how much savings it would take to provide one dollar of annual retirement income. For example, the index recently produced a value of $15.81 for someone age 60. That means that if a 60-year-old wanted an annual retirement income of one dollar starting at age 65, it would take a current amount of savings of $15.81 to generate this income.


Then, if you plug in the value of your current savings, the system will show you how much annual retirement income you might expect to receive at age 65. In the above example, I hit the button "calculate retirement income" and it asked me for my current level of savings. I input $100,000 and received a value of $6,325. This means that if I had savings of $100,000 at age 60, my estimated retirement income at age 65 would be $6,325 per year.


The index is intended to estimate the retirement income you'd receive if you invested in a conservative bond portfolio from your current age until retirement at age 65, and then bought an inflation-adjusted immediate annuity to generate retirement income. The index is updated daily to reflect current bond rates and annuity purchase rates.


In the process of testing the tool, I compared the results from the CoRI Retirement Index and found it produced results that are similar to my most recent retirement income scorecard for immediate annuities.


If you decide to use the index, as with any tool, you'll want to understand how it's constructed and the proper applications. After all, you wouldn't use a Phillips head screwdriver with a flat-head screw.


First, because the index assumes you'll invest your savings conservatively until age 65 and then buy a competitively priced annuity, it's important to understand that if you use other investments and methods of generating retirement income, your retirement income could be much different.


For example, the CoRI Retirement Index produces significantly higher amounts of retirement income than the amounts you would receive if you invested in a portfolio of stocks and bonds, and then used systematic withdrawals with the "four percent rule" as your guide to generate your retirement income. The reason is, with systematic withdrawals, you're self-insuring your longevity risk and need to hold back your withdrawals in case you live a long time or experience poor investment returns.


With an immediate inflation-adjusted annuity, the insurance company guarantees your monthly payments no matter how long you live, and it also guarantees your retirement income regardless of returns in capital markets.


Even if you buy an immediate annuity with your retirement savings, your retirement income could be different from the index value for the following reasons:

The index is constructed to produce the same average values for men and women. If you buy an annuity on the open market, insurance companies require more savings from women than men, because women are expected to live longer than men on average.


The index assumes you're single. If you buy a joint and survivor annuity that pays income as long as either you or your beneficiary is alive, you'll receive a lower retirement income.


The index assumes you'll buy a simple, competitively priced annuity. If you buy an annuity with high transaction charges and/or expensive bells and whistles, you could receive a lower retirement income.


The index assumes you'll start your retirement income at age 65. Starting sooner will produce lower income amounts, and starting later will produce higher income amounts.


The index assumes your retirement income is indexed for inflation. If you buy an immediate annuity that is fixed in dollar amount, you'll receive a higher retirement income.


It's smart to compare amounts of retirement income you might actually receive and understand the reasons why there may be differences from the index values. That can help you make more informed decisions about your retirement income.


If you're working with a financial advisor who estimates amounts of retirement income for you that are different from the index, you should ask for an explanation and understand the reasons for the differences. Keep in mind that there can be reasonable explanations for these differences. Your job is to work with an advisor who understands the various methods of producing retirement income and has your best interests at heart.


BlackRock's online system contains links to additional help with planning a secure retirement income. Chip Castille, managing director at BlackRock, said the company is planning future enhancements of the index that will help you personalize your estimates of retirement income, such as using retirement ages other than 65 and selecting a joint and survivor annuity instead of a single life annuity.


BlackRock's CoRI Retirement Index can help you with a critical retirement planning task -- generating retirement income from your savings. The more you learn about this important topic, the better your retirement can be.

 

[LAM]

the only thing about those tools is that none of them adjust purchasing power of the USD for inflation, so they all understate how much a person really needs.

 

[SheriV]

we stopped investing and saving for retirement this year...not because we could but because we had to.

I agree with living simply and not being in debt...the monthly mortgage payoff amount horrifies me.

 

[Chiro Flex]

I put 15% in to my companies 401k that they match

 

[Swiper]

the only thing about those tools is that none of them adjust purchasing power of the USD for inflation, so they all understate how much a person really needs.

At the end of obamas rein of terror we'll have over and 20 Trillion in national debt. (Obama took office when it was 10 Trillion) when interest rates rise to say about 5%, that's a total of 1Trillion dollars we have to pay on just the interest of the debt per year. we currently pay about 300 billion with interest rates next to zero, we take in just over 2 trillion in revenue. my question is, what will happen then when we take in only 2 trillion and have pay to the interest on the debt 1 trillion?

 

[LAM]

At the end of obamas rein of terror we'll have over and 20 Trillion in national debt. (Obama took office when it was 10 Trillion) when interest rates rise to say about 5%, that's a total of 1Trillion dollars we have to pay on just the interest of the debt per year. we currently pay about 300 billion with interest rates next to zero, we take in just over 2 trillion in revenue. my question is, what will happen then when we take in only 2 trillion and have pay to the interest on the debt 1 trillion?

most of that debt is from the decline in revenue from 2008. I bet you can't name one major spending bill besides the 2009 ARRA that has directly increased the deficit.

Regardless the Feds discount window will remain open for years. As I have stated time and time again. The US is modeling the recovery of Japan's housing bubble burst which occurred in 1992. The central bank there is still lending at less than 1% and it's been over 2 decades now.

 

[Jeeper]

Most people are totally reliant on Social Security for their retirement, as few companies offer pensions. A pension is a main reason to work for the government. I talk to client and they believe they are completely set for retirement with 2-300K. That gets you nowhere unless you have paid off house, and live very simply.