Why are people obsessed with putting $$ in retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:A significant number of people are forced to retire early because of health problems. So just being willing to work until 70 is not a good plan; you or your spouse might well not be able to continue working.

And even if you're willing and able, you realize people get pushed out of career jobs all the time right? Surely I can't be the only person who knows engineer after engineer who got pushed out at 50 or 55 or 59, ever to land a full time, salaried engineering gig again after a lifetime of working. And lots of these folks were people who had said -- I'll pay off the mortgage; then I'll work on paying for the kids college; ah -- the kids are now done college, time for me to focus on my retirement savings. And boom a year later or 3 years later, unemployed -- when they had planned to work for 10 more years. The only saving grace for many I know was that they were planners who paid off their mortgages early and had some retirement savings, so they weren't totally upended.

This is exactly what happened to my dad, even in the same field (engineering), although thankfully he was older and was only 2 years away from his planned retirement (and was already almost 68--he just had planned to work until 70).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

The average person doesn't expect to eat a nice dinner out once a week and travel multiple times a year, either.


This really sums it up. There are things I want to do when I retire, many of which cost money. Some of them I do now (eat out, sometimes at nice places, sometimes at fast casual places, sometimes at really expensive places), travel, ski, drink good booze; some of them are waiting for retirement (month-long trips to Asia and/or Australia, perfecting the perfect smoked brisket, season tickets to the Nationals, subscription to several local theaters). If the sum total of your goals in retirement is to hike, grill burgers and chat, that's great for you (and I plan on doing those things too). But I want a little bit more out of life, especially in the early retirement years, and I'm willing to save up to do those things.

My parents are both retired and travel to Europe/Asia/Africa at least once a year, plus own a second home in Florida. They eat at nice places, go to plays, etc. They don't have 3 million saved - more like a million. They own both their first and second homes outright. I'd say you need more than 500K for the lifestyle you are seeking, but not 3 million.

This is NOW. People could also pay for college out of pocket at one time and now that is nearly impossible. Costs rise.

Yup. Back in the 1990s I paid for college out of my job waiting tables. Never took a loan and my parents only paid for 1 year which was 8,000. I had no problem paying for full time school with my part time job. Today? Impossible.

[Anonymous]

Yeah, we are the schmucks who will be able to retire in 10
Years.... WE are the stupid ones who won’t have to go to work every morning....

[Anonymous]

Anonymous wrote:Yeah, we are the schmucks who will be able to retire in 10
Years.... WE are the stupid ones who won’t have to go to work every morning....

What are you mumbling about??

[Anonymous]

I mean....do we really need to spell this out like you are 5 OP?
Because there will come a time when you cannot work but you still need to eat and have shelter and may possibly have increased healthcare costs. That's why. Now, do I save every single dime at the expense of not enjoying my life today? No. My mom unexpectedly died at 65 and luckily she had been retired for 10 years so she had some time to do some bucketlist items, but tomorrow isn't promised so I try to balance planning for retirement with getting as much as I can out of life now.

[Anonymous]

I have a coworker in his early 70s who is quite ill. He is still attempting to come to work every day. It's awful to see him, because he is too sick to be here. We don't know the details, but it's been made clear he can't afford to stop working.

It's heartbreaking.

So yes, I will save for retirement. I'd much rather have money leftover to pass to my kids than not have enough and be forced to work while elderly and infirm.

[Anonymous]

The conversation only remains interesting when people don't resort to extremes

[Anonymous]

There’s a balance. My in-laws have around $5 million in retirement and this is in addition to around $3 million in property. They are still working. They seem to think they need more money. They are in their 70s.

I do look forward to inheriting that IRA but I think they are foolish for not retiring and enjoy their remaining years. You can’t take it with you!

[Anonymous]

Anonymous wrote:OP is at least partly right. The Economist recently ran a cover story about a worldwide savings glut - never in the history of the world have people saved as much as now. And all these savings create a hunt for yield, which is part of what has bid up housing markets in the rich world - think Sydney, London, SFO, Toronto, etc. This is sort of why interest rates are so low. Too much supply of capital has bottomed out the demand (interest). This is the systemic side of things.

At a personal level you also require far less money than you think. And if you are willing to work until 70 you are golden.

omg what are you babbling about? The current savings rate in this country is 2.9%. That is one of the lowest rates ever recorded. People are extraordinarily overextended. We do not have a savings glut in this country!

https://tradingeconomics.com/united-states/personal-savings

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP is at least partly right. The Economist recently ran a cover story about a worldwide savings glut - never in the history of the world have people saved as much as now. And all these savings create a hunt for yield, which is part of what has bid up housing markets in the rich world - think Sydney, London, SFO, Toronto, etc. This is sort of why interest rates are so low. Too much supply of capital has bottomed out the demand (interest). This is the systemic side of things.

At a personal level you also require far less money than you think. And if you are willing to work until 70 you are golden.

omg what are you babbling about? The current savings rate in this country is 2.9%. That is one of the lowest rates ever recorded. People are extraordinarily overextended. We do not have a savings glut in this country!

https://tradingeconomics.com/united-states/personal-savings

Lol. Exactly. And just today there was an article on CNBC that savings rate is down to the lowest it's been in 10 years, again. Guess people are feeling flush again and 2008 is long forgotten. Savings gluts happen in Asia where savings rates can be 40%! I don't think Americans can imagine that. There have been times where Asian central banks have had to move interest rates to negative numbers -- i.e. you lose money by saving it -- to get people to take money out of their accounts and spend it! Americans have no problem going to Target 3x/wk and spending on all kinds of random junk.

[Anonymous]

Anonymous wrote:I have a coworker in his early 70s who is quite ill. He is still attempting to come to work every day. It's awful to see him, because he is too sick to be here. We don't know the details, but it's been made clear he can't afford to stop working.

It's heartbreaking.

So yes, I will save for retirement. I'd much rather have money leftover to pass to my kids than not have enough and be forced to work while elderly and infirm.

He can't go out on disability?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you start putting money away with every paycheck when you're young, you will be used to having that money taken out of your paycheck just like you are used to having money taken out for taxes. There is no obsessing about saving for a retirement you just do it. Over the years that money adds up. You also make your house payment every month - at first it seems that the balance barely even goes down. But over time those payments add up until you eventually pay your mortgage off and own your home free and clear.

You may not have 5 million in your bank account when it comes time to retire but you will be glad that you bothered to save something. 104K/160K is not a small chunk of change. The ones who will really be hurting are the ones who bothered to save nothing at all.

For retirement, $160k is extraordinarily small. Using the 4% rule (which, in today's low interest rate environment, likely is too aggressive), that yields $6400 per year, or less that $535 per month.

Average retired worker is getting a check for roughly $1368/month (Motley Crew) so if they are also getting $535/month in investment income, that adds up to $1,903/month. If they also have a pension and their home paid off, they aren't doing too badly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you start putting money away with every paycheck when you're young, you will be used to having that money taken out of your paycheck just like you are used to having money taken out for taxes. There is no obsessing about saving for a retirement you just do it. Over the years that money adds up. You also make your house payment every month - at first it seems that the balance barely even goes down. But over time those payments add up until you eventually pay your mortgage off and own your home free and clear.

You may not have 5 million in your bank account when it comes time to retire but you will be glad that you bothered to save something. 104K/160K is not a small chunk of change. The ones who will really be hurting are the ones who bothered to save nothing at all.

For retirement, $160k is extraordinarily small. Using the 4% rule (which, in today's low interest rate environment, likely is too aggressive), that yields $6400 per year, or less that $535 per month.

Average retired worker is getting a check for roughly $1368/month (Motley Crew) so if they are also getting $535/month in investment income, that adds up to $1,903/month. If they also have a pension and their home paid off, they aren't doing too badly.

Plus there's a reason people move to cheaper towns in FL -- where $2000/month isn't bad. Not everyone is staying in NY/NJ/Pa/Md./DC/NoVa

[Anonymous]

Retirement is great when it happens early in life. After 50 you should work because you want to not because you have to.

BTW staying with your parents for a few years when you first start working is a great way to start saving money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you start putting money away with every paycheck when you're young, you will be used to having that money taken out of your paycheck just like you are used to having money taken out for taxes. There is no obsessing about saving for a retirement you just do it. Over the years that money adds up. You also make your house payment every month - at first it seems that the balance barely even goes down. But over time those payments add up until you eventually pay your mortgage off and own your home free and clear.

You may not have 5 million in your bank account when it comes time to retire but you will be glad that you bothered to save something. 104K/160K is not a small chunk of change. The ones who will really be hurting are the ones who bothered to save nothing at all.

For retirement, $160k is extraordinarily small. Using the 4% rule (which, in today's low interest rate environment, likely is too aggressive), that yields $6400 per year, or less that $535 per month.

Average retired worker is getting a check for roughly $1368/month (Motley Crew) so if they are also getting $535/month in investment income, that adds up to $1,903/month. If they also have a pension and their home paid off, they aren't doing too badly.

SS and pensions are taxed. People still have to pay property taxes, the average nationwide is $2,100/yr. My mom pays $300/mo in supplemental insurance and still has pretty hefty co-pays and prescription costs. living on $2,000 a month IS most definitely doing pretty badly.