This topic contains 13 replies, has 5 voices, and was last updated by 
-
Posts
-
-
Too true. The majority of households are simply not saving.
The article mentioned an average $300,000 retirement account while in actuality the median is $125,000. The numbers are skewed by the retirement accounts of the top 20%.
Pensions are also being phased out. The city state and federal governments are the only entities still offering pensions to new workers.
The onus is now on the workers to save and they are simply not doing. The majority today do not want to defer instant gratitude. The majority must post on how wonderful they are doing — look at my wonderful new car, my big house, my awesome vacation. What they aren’t posting is how much debt they are in and how little retirement savings they have.
At some point, the bill will come due. Reality will need to be faced. Most Americans are planning on trying to survive on simply social security. With the current average American debt structure, the average American will not be able to survive on social security with their debt load. Most will have to continue working into their 70s. Many will declare bankruptcy, default on loans, face foreclosures, etc.
The true question is what effect the retirement crisis will have and how large scale the retirement crisis will be.
-
Well said Loving Life.
Too many Americans think SS is their retirement. SS was supposed to be a supplemental to savings.
And you are right about their debt load.
Unfortunately I can also see this becoming a election issue in the future. People with not enough savings or the SS is not anywhere near their lifestyle/debt load and then complaining why is the government not doing something?
-
-
Yeah and they will “help manage ” those who did save and use that pool of moneY to pay those who did not save stealing your saved retirement. Buy don’t worry by 2021 people will be more worried about food as cash they are getting wont come close to covering that cost like in wiermar Germany. … can you guess what happens next?
-
Crow Bar, I agree. I definitely see the looming retirement crisis becoming a political issue and election issue.
As an example, look how the student loan issue is now a “crisis” and the government must step in to save those borrowers, many whom are simply irresponsible.
To help pay for college, I joined the National Guard that paid the majority of in state tuition in my state. Recently, I told a friend about that NG program. Even though she didn’t have any savings or such, she stated that her son didn’t need to do something like that! Little Junior also had to attend a private pricey school and is on track to graduate with over $125,000 of student loans for a career that pays initial $35,000 salary.
I agree that similarly we will see a “retirement crisis” being a political issue.
The average social security benefit in 2019 is $1461 per month. For a couple that means approximately $2900 per month. With little or no debt plus retirement savings and pensions, this SS amount can be part of a retirement plan. The problem is the lack of other retirement income and debt load.
I don’t see this retirement issue being a political issue in the coming presidential election. I see the retirement crisis becoming an issue in about 4-8 years.
Sadly, personal responsibility is not fashionable.
-
Other countries have nationalized individual retirement savings to pay for pensions they can no longer support. I can see that happening in the US. I suspect the savers will end up bailing out the non-savers (similar to the Affordable Care Act–earners pay for non-earners).
-
Josefina, I so agree. I too can see the savers bailing out the nonsavers.
In the near future, I also see a further means/income test coming to SS. If you have a certain amount in your IRA and/or pension income, then your SS will be decreased. Right now, SS does that in a back door manner with additional taxation on your SS if your income is above a certain threshold.
-
Lot of good comments and observations.
I have seen/read articles about some baby boomers with not enough in savings or still have too high of debt.
It is the follow on generations that I see being the larger issue, as Loving Life notes in another 4-8years. Then it will start creeping into the MSM.
Yeah, and any of us who dare to complain about bailing out those who did not save, we will be the bad ones!
-
just have learned to shuffle things before then for yourself and children and grand children use the same ntricks as rich do using companies and tax treaties.
It’s not that hard. Lots of places that sell info. DO IT YOURSELF OR RISK GETTING SCAMED. It’s takes about 2 years to set up a full bolt hole with Id and finances.
-
With early health issues limiting income before retirement, we’ve got some real challenges. Yet we maintain life ins. and may/may not have inheritance. If so, we’ll breathe easier. But we know how to be satisfied with ‘enough’. Most define ‘enough’ far more gloriously than we do.
Medical costs can kill us. Our other bills are low. We don’t have new toys, devices, vehicles, or vacations. None. But we’re spending too large a percentage paying medical costs…meds or medical appointments. Paying off hospital and ER bills from this past year…and that will continue for 2 yrs. This year, will have surgery costs [hopefully covered…but some wiggle room for the insurer to duck out]. That also means time off P.T. work for that. I’ve got better coverage now. We’ll see how long the “insurance” will cover as they stated they would cover. Things change and not to our benefit. Hmph!
OldMtWoman ….when the majority of the folks start realizing and screaming….duck!
-
OldMtWoman added in the variable that will break many a retirement plan — health issues! “Medical costs can kill us.”
Most Americans are underestimating their retirement health costs. Between insurance costs, out of pockets, and co-pays; the costs are high. CNBC says a “healthy” 65 year old couple will need close to $390,000 to cover health care costs (Medicare part B, D, dental, etc).
Additionally, many Americans”plan” on working into their 70s. Health issues can easily derail this plan. I had an accident and had to take an early unplanned retirement. Fortunately, I was a saver with little debt (small mortgage).
I listen to friends and relatives describe awesome vacations, new cars, toys etc. I then ask if they have cleared debt, accumulated retirement savings, obtained long term care policies, etc. I get the response -. ” NO, but I have plenty of time and I plan on working until my 70s!”
The looming retirement crisis is coming.
What can we do?
I look at this as another crisis to prep for. From our posts, I gather that most of the people on the forum are 40s-60s.
If you are still working, I would take a long realistic look at my retirement accounts and plans. I might also consider moving or putting retirement funds in a ROTH (nontaxable) as I think as the retirement crisis gets worse, the government will look at your taxable income and tax/phase out SS. I would also look at paying off as much debt as you can. I would also consider making plans to be more self-reliant (gardening, etc) and taking steps to stay healthy (stop smoking, exercise, etc).
I just looked out and it is snowing A LOT! I must run.
I look forward to reading others thoughts on this subject and steps we can take.
-
@Loving Life,
Great post!
From the various finance articles I have read, one of the biggest goals people should have is to be debt free and clear by their retirement (sooner is better).
We put about 18% of our pay into various retirement accounts.
We have a financial advisor (a free perk from our credit union. IF you have a credit union check and see if they offer this service! You cannot beat free!). When we first started seeing him, we told him to plot out our retirement with the assumption that SS would NOT be there! At first, he thought we were nuts. As more and more news came out about SS going bust in 2033, baby boomers retiring, etc. he then saw the light and is on board with our thinking.
Health care costs are the real black swan for many people.
Not sure what the average age of people is on this forum. I do get the impression it is generally older 40/50/60ish.
-
-
@crowbar I so agree with your retirement plan, especially factoring in no SS.
I have done the same thing. Planning for the worst with no SS, any SS I do collect will go for savings and extras.
Financial planners are good, but I am always careful as some try to get you to purchase certain products. If anyone tried to get you to purchase whole life or annuities, get skeptical very quickly! I also use a financial planner to review my retirement plan and current progress. I have an annual meeting with my planner. We discuss the financial markets, government regulations, etc. We both agree that it is better to not factor in SS. At first, my planner was amazed at my moving to a more rural area with a slant toward self-sufficiency (solar, well, gardening, etc), but my planner has been asking more questions as more of his clients have been making similar moves.
Putting 18% of your wages is great. Putting it into diversified investments is even better as so many people try to just chase the stock market and putting all their investments in equities. I classify certain of my prep supplies (solar, well, extra food bought on sale, wood stove, food dehydrator, canning supplies) as part of my retirement planning and investments. In my retirement plan and budget, I have a separate area for self-sufficiency.
Self-sufficiency is the key to many of my concerns on a potential crisis (financial, retirement, inflation, etc). I am trying to make myself less financially dependant as I see SS and other government programs being decreased with increasing retirement age, more adjustments for income and wealth, etc. I also see the out of pocket costs for Medicare increasing, Medicare deductibles increasing, less Medicare coverage, etc.
-
While I have investments the working till you die is a real thing. I changed focus from me working as labor to m managing…. that is way easier more productive and while sharing with friends and family I can avoid market slumps and still prep. At end being a corperate on avoids taxes at death. It avoids personal liability during life and if done correct a hedge against losing it all in legal dispute.
There are 3 layers of companies with each cross weaved with others debt and profit can be moved to anyplace you choose and jurisdiction that has best tax policy. You will never own anything …. who cares sl long as you can use it when ever you want?
Re patriating money is easy as you just pile up loans from your own companies to each other using a bank holding that can be bought for the funding and access to swift and now the Chinese russian version. Banks use a form of crypto currency atleast smaller ones do to make transfers its called a “stellar lumen” crypto currency. Initially bought at .25 cents a lumen I think recently was near $24 each. Invest in stuff you understand if it’s too complex not for you.
You must be logged in to reply to this topic.