# Retirement = no money



## simpsontruckdriver (Jun 10, 2013)

Retirees are going broke.

As a side note, _[deleted to comply with TUG Posting Rules: "Individual users please note that messages promoting anything for which you may receive some personal gain are considered to be advertising, and are thus prohibited."]_

TS


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## lprstn (Jun 10, 2013)

At this rate I'll never be able to retire...


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## am1 (Jun 10, 2013)

No mention of net worth.  

Downsize and sell the family home.  
Invest savings in things that return more than inflation.
Spend less on kids college tuition.
Stop gambling.
Stop buying timeshares.  

Any number of other things can help.


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## geekette (Jun 10, 2013)

Start early and save save save.  I can't retire today, but wasn't planning on it, so will continue to save save save for the next 10-20 years and pinpoint a retirement date 'later'.

It's a big problem when people consider SS To Be THE retirement income.  I think this is going to get a lot worse in coming decades as the low-wage employees of today and tomorrow won't have 401ks and may not save into an IRA/Roth on their own.  

I feel fortunate to have been offered a 401k at every job since my mid-20s, but have also funded my own IRA and Roth.  I have a great fear of outliving my money, which I find to be a powerful motivator in saving.


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## vacationhopeful (Jun 10, 2013)

Yet when the older defined pension plans seem to end in late 1982 in corporate American, and profits went up for those same corporations in 1983, most Yuppies just looked at their paychecks and some pitence Bonus Checks as better than sliced bread. Idiots.

And now those same Yuppies are looking at retirement - a much poorer retirement than their parents - wondering why?

And for selling the family home to fund retirement - refinancing for luxury cars, vacations, paying off credit cards, private high schools - there is very limited equity in those homes. 

And who will be buying those (used and dated) McMansions? The college educated younger generation who have student loans balances of over $300-600K per couple?


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## Passepartout (Jun 10, 2013)

Of all the wisdom passed to me from my parents, the BEST was 'PAY YOURSELF FIRST', followed closely by, 'Live beneath your means'. In other words don't live in the most expensive house you can afford, be happy with a reliable 10 year old car, and a State school gives a fine education.

Unless I live far beyond 100 ( very unlikely) or the value of investments or currency tank, I see no way to run out.

I am concerned about the majority of the next generation, but have counselled mine as I was. I think it took. They will be fine.

Jim


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## vacationhopeful (Jun 10, 2013)

Passepartout said:


> Of all the wisdom passed to me from my parents, the BEST was 'PAY YOURSELF FIRST', followed closely by, 'Live beneath your means'. In other words don't live in the most expensive house you can afford, be happy with a reliable 10 year old car, and a State school gives a fine education.
> 
> Unless I live far beyond 100 ( very unlikely) or the value of investments or currency tank, I see no way to run out.
> 
> ...



Jim, 
I agree that there are some parents who have passed on Financial Skills to their children -- all you can do is HOPE it sticks and as my BIL once said when asked how he could retire at 65, "One wife and one set of kids".


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## geekette (Jun 10, 2013)

vacationhopeful said:


> Yet when the older defined pension plans seem to end in late 1982 in corporate American, and profits went up for those same corporations in 1983, most Yuppies just looked at their paychecks and some pitence Bonus Checks as better than sliced bread. Idiots.
> 
> And now those same Yuppies are looking at retirement - a much poorer retirement than their parents - wondering why?
> 
> ...



I think that running up 300-600 k in college loan debt is a bad idea to start with.  One can ruin their chances of a decent retirement by starting out this way unless they have a very lucrative career and live beneath their means.

I also think a parent has no obligation to spend hundreds of thousands on a kid's education in order to ruin their own retirement.


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## simpsontruckdriver (Jun 10, 2013)

My grandfather-in-law did everything right. He had investments and a pension, so he retired at 55 in the mid-80s. Up until he died in late 2011, money was not an issue. When my wife and I toured an assisted-living complex a couple weeks ago, a 90-ish (I don't remember her exact age) lady talked about retiring 30 years ago, and not having any issues with finances.

It's all about planning as early as possible, and budgeting for a 70% income cut at retirement. Another place people SHOULD NOT plan to get money is from home equity, as "Reverse Mortgages" can do more damage than good.

TS


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## vacationhopeful (Jun 10, 2013)

simpsontruckdriver said:


> My grandfather-in-law did everything right. He had investments and a pension, so he retired at 55 in the mid-80s. Up until he died in late 2011, money was not an issue. When my wife and I toured an assisted-living complex a couple weeks ago, a 90-ish (I don't remember her exact age) lady talked about retiring 30 years ago, and not having any issues with finances.
> 
> It's all about planning as early as possible, and budgeting for a 70% income cut at retirement. Another place people SHOULD NOT plan to get money is from home equity, as "Reverse Mortgages" can do more damage than good.
> 
> TS



Not totally true. *Both of your examples involved PENSIONS of the old type *- my father had 3 PENSIONs which did NOT reduce benefits plus his Social Security. VERY HARD to explain to my siblings that he was a CASH generating old person - PIA, but cash generating. He retired with his first pension in Nov 1982; retired with his second pension a little over 3 years later (using his last 3 years of FULLTIME employment with his 17 years of parttime municipal employment service) - his benefit was the HIGHEST 3 years of pay. Plus, he was a veteran with 20 years as a parttimer as an Army officier. Plus Social Security. I believe they even had COLA increases and medical benefits. He lived over 21 years after his first retirement.

He also took the MAX benefit without splitting it if his wife survived him - and he won on that too. My Mom predeceased him by 3+ years.

Family wealth is also removed from the next generation via dependant old age care. Unless your elderly relations have paid for Longterm Care Insurance, many upper middle class estates are drained dry (spent down to qualify for Medicaid). You can NOT have a working job and ever save enough to pay for 3+ years in a custorial care (nursing home) while allowing the functioning spouse keep the same standard of living for another 10+ years. To qualify for Medicaid (nursing home care), the assets have to be under $70K for both spouses.

And thing - inheritance taxes truly reduce family wealth MORE for the upper middle class than the wealthy. The wealthy have estate planning for multiple millions while a under multiple million dollar estates can not afford the fees to set up those trusts and manage them.

Getting old for us Baby Boomers is NOT GOING to be pretty. Most of us will be working into our 70s - fulltime.


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## theo (Jun 10, 2013)

*How so?*



simpsontruckdriver said:


> <snip> Another place people SHOULD NOT plan to get money is from home equity, as "Reverse Mortgages" can do more damage than good.



You may well be right; I don't claim to know much about (or plan to ever utilize) a "reverse mortgage". 

That much being clearly acknowledged, what exactly do you mean by the blanket statement that "reverse mortgages can do more harm than good"?


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## geekette (Jun 10, 2013)

vacationhopeful said:


> Not totally true. *Both of your examples involved PENSIONS of the old type *- my father had 3 PENSIONs which did NOT reduce benefits plus his Social Security. VERY HARD to explain to my siblings that he was a CASH generating old person - PIA, but cash generating. He retired with his first pension in Nov 1982; retired with his second pension a little over 3 years later (using his last 3 years of FULLTIME employment with his 17 years of parttime municipal employment service) - his benefit was the HIGHEST 3 years of pay. Plus, he was a veteran with 20 years as a parttimer as an Army officier. Plus Social Security. I believe they even had COLA increases and medical benefits. He lived over 21 years after his first retirement.
> 
> He also took the MAX benefit without splitting it if his wife survived him - and he won on that too. My Mom predeceased him by 3+ years.
> 
> ...



Are there actually people expecting inheritances?  I certainly don't know of any, but likely I simply do not run in those circles.  It would certainly be hard to complain about Mom and Dad's money taking care of them in their old age with nothing left for me.  That's crazy, the dough belongs to mom and dad, Not Me.

There will be no pension for me and any inheritance would more likely be a bill.  I thought there were more people like me:  sock it away your own self via 401k, IRA, and keep on working vs some kind of generational handout.


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## vacationhopeful (Jun 10, 2013)

geekette said:


> Are there actually people expecting inheritances?  I certainly don't know of any, but likely I simply do not run in those circles.  It would certainly be hard to complain about Mom and Dad's money taking care of them in their old age with nothing left for me.  That's crazy, the dough belongs to mom and dad, Not Me.
> 
> There will be no pension for me and any inheritance would more likely be a bill.  I thought there were more people like me:  sock it away your own self via 401k, IRA, and keep on working vs some kind of generational handout.



Geekette - there are WAY more people like you. With my Dad as the last parent standing, his situation was he lived decently in the home he built in 1951 until he needed to be supervised for his own safety. With his pensions and LTC policy, the 19 months he needed assisted living was covered. His assets allowed his home to be maintained - in case he was ever able to return home. Or if he lived 20 years in assisted living or nursing homes.

Generation wealth transfer - an inheritance - occurs in the very wealthy only NOW. But my materal grandfather working a UNION job building cars for American Motors and died in 1959, left his wife with enough security to leave an inheritance for their 3 daughter when she died in 1983. 

Your comments confirm that YOU, a professional employee, with a track record for saving for your retirement, expect to OWE money when you pass away. 

My comments are regarding my family, who expects to pay their bills, to be able to enjoy life in their Golden Years and to not worry about a roof over their heads or food on the table. That requires an income whether they are 70 yo or 93 yo - but dying earlier than 93 should have an inheritance going to someone. (I picked 93 as that is the oldest any of my grandparents lived).

And living ONLY on social security will most likely include trips to the food bank, government housing, medcaid, heating & cooling assistance, riding the senior buses to go anywheres, etc. Being poor is very hard work.


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## easyrider (Jun 10, 2013)

One reason why so many retire's are running out of money was they took such a big hit with their investments. Its not that these people didn't save for retirement but more that they lost income due to lower interest rates, housing crash and stock market declines while paying higher prices for every thing else.

For most of those retire's that lost half of their net worth there wasn't any time left to recoup as they were living off these investments.


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## geekette (Jun 10, 2013)

vacationhopeful said:


> Your comments confirm that YOU, a professional employee, with a track record for saving for your retirement, expect to OWE money when you pass away.


No, I expect my last living parent, my mother, to be significantly in debt (uncontrolled unnecessary spending without assets nor income to support it).  I joked about receiving a bill as an inheritance, the very opposite of what beneficiaries usually receive.

Not me, I'm going for debt-free as soon as house is paid.  I know it's all on me to look out for my golden years and I've had an eye towards that for most of my career.  Old and Poor scares me more than spiders or tornados.  young and poor sucked rocks - yes, it is hard work to be poor.

Easy, if someone lost that much value in the past few years, they were invested wrong for their assets, age and goals.  If one does not pay attention to the risk side of the risk vs reward equation, they can shoot themselves in the foot.  It's very difficult for me to blame the economy when in so many cases, the folks done it to themselves.  Inappropriate investments or timeline will do that.

HOWEVER, the widespread job losses were not individual faults (in most cases).  Plummeting home prices only matter if you want to sell, which I agree that some people simply HAD to do but most of us could stay right where we were, underwater or not.  No one called in my loan to be paid in full.  Plenty others did it out of fear or whatnot and really did not have to lock in at low prices.  

Same with people bailing out on the stock market - if you sell for less than you bought in at, that's a loss that you yourself locked in.  Had they held on they may have sold at much higher prices.  Fear and greed are two powerful forces that can motivate people to make bad decisions.  That is individual responsibility, not the duty of the economy to swing the right way to help boomers.

If one simply throws some money at an investment and neglects to keep tabs on what is going on in the world and their own steps towards retirement, it's hard for me to lay blame elsewhere.  The stock market doesn't go up forever, interest rates don't go down forever. Any adult old enough to be thinking about retirement is old enough to know these things to be true.  Failure to plan for CHANGE with diversification or other means is the fault of the investor.


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## easyrider (Jun 10, 2013)

Geekette, you are right about these people being invested improperly when speaking about mutual funds and hot housing markets, but that doesn't change the circumstances of this group. They were and are forced to live off what ever was left. The thought was, and still is with many investors that you just ride these drops out but with 3 bust cycles in a decade and no time left these people are running out of money.


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## geekette (Jun 10, 2013)

easyrider said:


> Geekette, you are right about these people being invested improperly when speaking about mutual funds and hot housing markets, but that doesn't change the circumstances of this group. They were and are forced to live off what ever was left. The thought was, and still is with many investors that you just ride these drops out but with 3 bust cycles in a decade and no time left these people are running out of money.



Absolutely, you can only invest or stretch what you have today.  Or go back to work.  Or decrease expenses further.  They are indeed forced to live off what they have squirrelled away and that SS and/or pension will provide.  Just like I will be.  Just like you will be, just like everyone else.  Nobody knows what the stock market will do in 2025.  We won't even know that when it IS 2025.

But note that Not Everyone took a bath on their stock investments the past decade, regardless of sensationalistic articles claiming that We All Lost.  How could this be, with all these retirees suddenly destitute?  Diversification, dividends, not buying and selling frequently in order to avoid excessive fees,  investing by research vs hearsay, avoiding sexy IPOs that nosedived  ...

After all, I never pulled out of the stock market (because I do indeed have the time) and even tho my account values went down, like everyone elses, I have more than made up those dips.  If half my money had been in the bank instead, my overall portfolio would not have dipped as much, but it also would not have climbed to where it is now.  Yes, riding it out takes time.  

Which is why maybe that money should not have been in the market when it was.  If I were planning to live on that money (as in, I Required It To Be There), it would not have been mostly in the stock market.  Greed would leave it in the market, which is likely what happened to a lot of these people (so, again, sadly, I find it hard to come up with sympathy).

It would be sad indeed if someone did not heed the first wakeup call and figured, oh, well,that's the last downer until I retire!   But if you are going to be an investor, then you need to educate yourself about the ups and downs instead of becoming a statistic from which following generations learn.  I'm sorry, they have only themselves to blame for not thinking about RISK.  

If there remains anyone thinking they get guaranteed safe passage in the last decade of their work life, they need to be visiting with reality more frequently.  Perhaps some of these retirees would have been better served by using the fear reflex to keep their money in a savings account vs expecting the stock market to provide gains only and never dips, or thinking that they would Just Know when to get out.  

Diversification could have saved these people from piling mistake on top of mistake.  Bucket method could have helped also.

But now?  Learn to live with the mistakes (and not repeat them yet again) and within means.  If they left themselves no safety net, I don't know why.


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## tschwa2 (Jun 10, 2013)

Passepartout said:


> Of all the wisdom passed to me from my parents, the BEST was 'PAY YOURSELF FIRST', followed closely by, 'Live beneath your means'. In other words don't live in the most expensive house you can afford, be happy with a reliable 10 year old car, and a State school gives a fine education.
> 
> Unless I live far beyond 100 ( very unlikely) or the value of investments or currency tank, I see no way to run out.
> 
> ...



The best advice I received was unsolicited from an old man with no teeth at a nursing home when I was visiting my great grandmother.  He said "take care of your teeth when you are young.  You will really regret it when your older if you do not."


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## am1 (Jun 10, 2013)

Even millionaires will suffer in retirement:

http://www.cnbc.com/id/100803102


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## momeason (Jun 10, 2013)

Passepartout said:


> Of all the wisdom passed to me from my parents, the BEST was 'PAY YOURSELF FIRST', followed closely by, 'Live beneath your means'. In other words don't live in the most expensive house you can afford, be happy with a reliable 10 year old car, and a State school gives a fine education.
> 
> Unless I live far beyond 100 ( very unlikely) or the value of investments or currency tank, I see no way to run out.
> 
> ...



We did all of that also and are doing okay now. We travel a lot but still watch our pennies. Great advice. 
We told our kids early on that we would pay for a state school college education. If they chose to go elsewhere they had to finance it. We also said, we would give them 1/2 of any savings they achieved from the costs of the state schools. They each received full tuition scholarships and we owed them some cash. Great deal for all of us.
It does not pay to hand over too much to your kids. Make them earn their way.


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## simpsontruckdriver (Jun 10, 2013)

The reason I said Reverse Mortgages are a bad idea: when the equity is gone, the house is no longer owned by the person. In addition, some places claiming to do it are really frauds.

TS


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## Talent312 (Jun 10, 2013)

I'm facing early retirement (62) with a state pension and SS benefit that will result in more net income than I take home now. Different than most, sure. But heck, so is 30 years with the same employer!  Added to that is a decent IRA portfolio.

My deepest fear is not living long enuff to use it all.
.


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## ciscogizmo1 (Jun 10, 2013)

As a parent researching colleges right now in California, State schools are not the easy solution they use to be.  For example, you need to make the decision between being out of school in 4 years or out in 8 years.  Did you know at CSU, State only 10% graduate in 4 years; 42% in 6 years?  However, at a private University like USF, 58% graduate in 4 years; then, 70.2% in 6 years.  Most of the State and Junior colleges in California are impacted and cannot offer all their students classes.  It is pretty depressing.   

Another factor is that more merit, financial aid is offer at the private school level.  The retail price of USF is definitely more at $58k per year while Sac State is at $24k per year.  But at the private school you'll probably cut that bill down to 1/3 to half off.  Where very little will be saved by going to State school.  You'll most likely pay the full retail rate.  So, then, if you figure it takes your kid 8 years to graduate you could be spending up $200k for their education.  But let's say your bill was $30K at USF and your are done in 4 years you only spent $120k.   

Every state is different but education isn't as cheap as it use to be.  I remember going to college 25 years ago and being able to work part-time and support myself full-time going to college.  My tuition was $600 a year now at the same school it is $16k.  I went to a State School too.   I made $8.50 per hour working at an accounting firm.   The minimum wage in CA is still only $8 per hour in 2013.   My rent was $150 per month as I split it with room mates.  I spent about $25 to 30 a week on groceries.  The world is definitely different these days.


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## bogey21 (Jun 10, 2013)

Back in my working days (pre 2000) I ran a large Bank.  I sat down with my key employees and we all agreed to accept less in current wages in exchange for a pretty lucrative Defined Benefit pension plan.  It was a very conscious decision.

I retired on a nice pension as did many of my co-workers.  After I left the new Management discontinued the Defined Benefit Plan almost immediately for all new hires.  To their credit they left it in place for existing employees.

George


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## bogey21 (Jun 10, 2013)

ciscogizmo1 said:


> As a parent researching colleges right now in California, State schools are not the easy solution they use to be.....Every state is different but education isn't as cheap as it use to be.  I remember going to college 25 years ago.......My tuition was $600 a year now at the same school it is $16k.  I went to a State School too.....The world is definitely different these days.



Same deal with me.  Tuition, fees and book rental were $750 per year at a State University *and I was an out of state student*!  My question is "Why have costs gotten so out of hand"?

George


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## MuranoJo (Jun 11, 2013)

geekette said:


> Absolutely, you can only invest or stretch what you have today.  Or go back to work.  Or decrease expenses further.  They are indeed forced to live off what they have squirrelled away and that SS and/or pension will provide.  Just like I will be.  Just like you will be, just like everyone else.  Nobody knows what the stock market will do in 2025.  We won't even know that when it IS 2025.
> 
> But note that Not Everyone took a bath on their stock investments the past decade, regardless of sensationalistic articles claiming that We All Lost.  How could this be, with all these retirees suddenly destitute?  Diversification, dividends, not buying and selling frequently in order to avoid excessive fees,  investing by research vs hearsay, avoiding sexy IPOs that nosedived  ...
> 
> ...



I agree with you, but there are situations where the elderly can be exploited by their own "trusted" investment brokers.  An elderly widowed aunt had a family broker who recommended she put a significant chunk of her late hubby's investments into a high-tech stock just before the dot.com bubble. (This was with the broker's full awareness that she got zip of late hubby's pension as he opted for non-spousal support, plus the fact that she was a SAHM through most of their marriage.)  That particular high-tech stock tanked and never really made a come-back, and she ended up living on $700/mo. for the remainder of her life.  She didn't consult with any of us until it was too late.


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## bogey21 (Jun 11, 2013)

muranojo said:


> I agree with you, but there are situations where the elderly can be exploited by their own "trusted" investment brokers.  An elderly widowed aunt had a family broker who recommended she put a significant chunk of her late hubby's investments into a high-tech stock just before the dot.com bubble. (This was with the broker's full awareness that she got zip of late hubby's pension as he opted for non-spousal support, plus the fact that she was a SAHM through most of their marriage.)  That particular high-tech stock tanked and never really made a come-back, and she ended up living on $700/mo. for the remainder of her life.  She didn't consult with any of us until it was too late.



I had the same thing happen to a friend of mine.  I suggested he file an arbitration claim against the broker and his firm.  In truth I had to badger him to file the claim.  He was awarded a little over $100,000.  Lawyer took a percentage on a contingency.  I think the key was a combination of his last 10 years of tax returns and his age.  His tax returns showed zero investment activity ever.  His age showed he should have been invested more conservatively.

George


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## geekette (Jun 11, 2013)

muranojo said:


> I agree with you, but there are situations where the elderly can be exploited by their own "trusted" investment brokers.  An elderly widowed aunt had a family broker who recommended she put a significant chunk of her late hubby's investments into a high-tech stock just before the dot.com bubble. (This was with the broker's full awareness that she got zip of late hubby's pension as he opted for non-spousal support, plus the fact that she was a SAHM through most of their marriage.)  That particular high-tech stock tanked and never really made a come-back, and she ended up living on $700/mo. for the remainder of her life.  She didn't consult with any of us until it was too late.



There is a special place in hell for those that take advantage of the elderly.  Sick though it is, I know this is not a unique situation.  My mother also has been taken advantage of by people she should not have trusted.  Not to this level, thankfully.

I hope it serves as a warning to those who leave money management to others.  Please educate yourself to at least a minimum level so that you will be better able to spot A Really Bad Idea suggested for your portfolio, like the very out of balance diversification above.


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## x3 skier (Jun 11, 2013)

No clue why it would take more than five years if one is diligent in selecting a course of study. When I went to Engineering college, I was issued a schedule of courses totaling at a minimum, 21 credit hours for the quarter until my last two quarters my Senior year when I could select two electives each Quarter. If Someone flunked a course, they were out for a year which was a pretty good motivator. It is still that way today at my Alma Mater. 

If one selects a major late or one that is oversubscribed, one pays the piper. Nobody in my time "pursued their dream" by taking 6,7 or more years taking a smorgasbord of courses. You took a course of study and if you didn't cut it, you were out the door. 

We along with our kids have set up 529's for the Grandkids at a State School that will cover four years (or five it that is the standard course of study) and that's it. 

End of soapbox speech. 

Cheers


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## smurfyblue (Jun 11, 2013)

muranojo said:


> I agree with you, but there are situations where the elderly can be exploited by their own "trusted" investment brokers.  An elderly widowed aunt had a family broker who recommended she put a significant chunk of her late hubby's investments into a high-tech stock just before the dot.com bubble. (This was with the broker's full awareness that she got zip of late hubby's pension as he opted for non-spousal support, plus the fact that she was a SAHM through most of their marriage.)  That particular high-tech stock tanked and never really made a come-back, and she ended up living on $700/mo. for the remainder of her life.  She didn't consult with any of us until it was too late.



That is just scary. I will share this with my parents, I don't like the level of trust they have with their broker. We always have to ask and be quite nosey about their finances before we find out they are about to make a lousy decision. So far so good but they are getting tight mouth about what they are doing with their money.


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## geekette (Jun 11, 2013)

x3 skier said:


> No clue why it would take more than five years if one is diligent in selecting a course of study. When I went to Engineering college, I was issued a schedule of courses totaling at a minimum, 21 credit hours for the quarter until my last two quarters my Senior year when I could select two electives each Quarter. If Someone flunked a course, they were out for a year which was a pretty good motivator. It is still that way today at my Alma Mater.
> 
> If one selects a major late or one that is oversubscribed, one pays the piper. Nobody in my time "pursued their dream" by taking 6,7 or more years taking a smorgasbord of courses. You took a course of study and if you didn't cut it, you were out the door.
> 
> ...



A little weird to me, also, but since I decided late what I wanted to do, I did 5 years in 4 years by staying on campus summers.

I wouldn't put a lot of stock in college stats as far as % graduating in X time.  Each kid is different.  I sure wouldn't go in planning to stretch a Bachelor's degree to 8 years!!

Well, maybe I would, if I were on the bank of Mom and Dad and not keen on entering Real Life where I have to pay for stuff myself.


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## easyrider (Jun 11, 2013)

http://www.marketwatch.com/story/do...stock-crash-by-year-end-2013-06-05?link=kiosk

87% chance of stock market crash by year end predicted


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## ciscogizmo1 (Jun 11, 2013)

x3 skier said:


> No clue why it would take more than five years if one is diligent in selecting a course of study. When I went to Engineering college, I was issued a schedule of courses totaling at a minimum, 21 credit hours for the quarter until my last two quarters my Senior year when I could select two electives each Quarter. If Someone flunked a course, they were out for a year which was a pretty good motivator. It is still that way today at my Alma Mater.
> 
> If one selects a major late or one that is oversubscribed, one pays the piper. Nobody in my time "pursued their dream" by taking 6,7 or more years taking a smorgasbord of courses. You took a course of study and if you didn't cut it, you were out the door.
> 
> ...



Actually, right now it has nothing to do with the kid it has to do with budget cuts especially in California.  A typical freshman at a junior college may get 2 classes their first semster of school.  At UC Santa Barbara as a freshman you are allowed to take only one class the first quarter.  At least it is only one quarter so, 9 weeks or so.  The schools have more students than they have available classes.   You can check on http://collegerealitycheck.com/ for how well a typical school does.   I'm just researching CA.  It may different in your state.  Also, here's a blog that talks about this issue in detail.

Trust me I've asked the very questions you are asking is the time to graduate related to major changes, poor grades, etc...  No, it all budget cuts.   Another way to look at it there are more applicants for Nursing school in California than there are spots.  Some students wait 1 to 2 years before they get placed in a program.


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## klpca (Jun 11, 2013)

ciscogizmo1 said:


> Actually, right now it has nothing to do with the kid it has to do with budget cuts especially in California.  A typical freshman at a junior college may get 2 classes their first semster of school.  At UC Santa Barbara as a freshman you are allowed to take only one class the first quarter.  At least it is only one quarter so, 9 weeks or so.  The schools have more students than they have available classes.   You can check on http://collegerealitycheck.com/ for how well a typical school does.   I'm just researching CA.  It may different in your state.  Also, here's a blog that talks about this issue in detail.
> 
> Trust me I've asked the very questions you are asking is the time to graduate related to major changes, poor grades, etc...  No, it all budget cuts.   Another way to look at it there are more applicants for Nursing school in California than there are spots.  Some students wait 1 to 2 years before they get placed in a program.



I agree with this - it's ridiculous. If anyone reading this has kids in high school my advice to you is do whatever you can to get them into some AP classes. My oldest didn't take any and it took 5 years to get her degree, but the university was upfront about science majors taking five years to finish, mostly due to course sequencing issues. My #2 and #3 kids each finished in 4 years, but their AP classes helped immensely. First of all they received "some" credit (some schools are stingier than others with AP credit), secondly they were registering as sophomores instead of freshmen so they were able to get into classes that filled up by the time the freshmen were registering. Not to mention how much money is in play here - $25,000+ in tuition/r&b for each year plus lost wages for the year that they are students instead of employees - maybe $40k+. That's a lot of reason to get those kids through school in four years.


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## momeason (Jun 11, 2013)

The state schools in NC are very good and I do not think they ration classes. They do not over enroll..very selective. My son, however, considered University of Florida in 2002 and he was told he would have to sit out one fall or spring because of over-enrollment. He went to Clemson U in SC instead.


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## Jennie (Jun 12, 2013)

simpsontruckdriver said:


> The reason I said Reverse Mortgages are a bad idea: when the equity is gone, the house is no longer owned by the person. In addition, some places claiming to do it are really frauds.
> 
> TS



Not necessarily true.  So long as the home owner pays all the real estate taxes each year, and keeps the home in a habitable condition, they can continue to live in it until they die. I have a relative who  has lived in her home for almost 15 years since she took a reverse mortgage. She invested the money wisely and now has assets worth far more than the current value of the house.


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## pgnewarkboy (Jun 12, 2013)

*Play by the Rules - Reap the Rewards- is Over*

The idea that if you work hard, save,are loyal to your company or boss; or go to college, get good grades,; or buy a house, pay down the mortgage, AND EVERYTHING WILL BE FINE  etc. etc. are long gone.  We are living in a an ever changing no mans land where the game changes constantly.


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## PigsDad (Jun 12, 2013)

pgnewarkboy said:


> The idea that if you work hard, save,are loyal to your company or boss; or go to college, get good grades,; or buy a house, pay down the mortgage, AND EVERYTHING WILL BE FINE  etc. etc. are long gone.  We are living in a an ever changing no mans land where the game changes constantly.


While some of the rules have changed, I don't think it is so doom-and-gloom as you seem to put it.  The main difference as I see it is that people are now more individually in charge.  

We need to directly manage our retirement accounts (401k, IRA, etc.) vs. relying on a company pension.  

We need to own our professional development (education, skills) vs. being loyal to "the company" and expect they will do what is best for our careers.  

We need to be smart with buying homes: the old "purchase the largest house you could possible afford, since real estate _always _goes up" doesn't work.

In general, you can't just be on auto-pilot to be successful.  You need to be smart, flexible, and adjust "the rules" to fit you.

When I started my professional career ~25 years ago, I had no expectation of Social Security or a company pension, even though it looks like I will probably get some of each.  I have invested from the start with the mindset that I was in charge.  I didn't buy the biggest house on the block.  I don't drive a car that costs half my annual salary (and I drive it for 10 years).  I never purchased something on a credit card that I could not pay off when the monthly bill came.  Etc., etc.

"Retirement = no money" will certainly NOT be a true statement for me, because *I will not let it be true*.

Kurt


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## geekette (Jun 12, 2013)

PigsDad said:


> While some of the rules have changed, I don't think it is so doom-and-gloom as you seem to put it.  The main difference as I see it is that people are now more individually in charge.
> 
> We need to directly manage our retirement accounts (401k, IRA, etc.) vs. relying on a company pension.
> 
> ...



Exactly.  "The Rules" my parents had fit their generation, not mine.  There is no standard way to ensure a financially solvent life, but if one does not live beneath their means and save save save for retirement, there may not be a happy ending, and that is directly attributable to the individual.  There is no other place to put the blame.

I remember dad wondering what was wrong with me, that I didn't just get A JOB and keep it for 10-40 years.  The world is not that way, has not been that way for a very long time.  It's even harder for the non-career workers as they may bounce around even more than I have and not get the bennies I did.  Are these folks without 401k/pension going to save into IRAs on their own?  I don't think so, not like they need to (and what is the deal with such low ceilings on IRA contributions, anyway???  If you don't get a 401k or pension, well, Good Luck, hope you started putting full $5k in starting at age 15 ...)

Kurt nailed it - the individual is in charge.  There is no Company Family to give a crap about you, your loyalty is a donation, not an upfront payment on a promise fulfilled in your golden years.

The problem is that not enough people recognize the issue until too late, until they have spent years of potential tax shelter savings on new cars, fancy trips, latest gadgets, instead of putting that dough away.  The idea that one can live on SS needs to get stomped out, not enough people understand that SS is NOT, was never intended to be, Your Full Retirement Income.

"Being good", playing by the rules, those were never guaranteed to see you through, but these days, it's not nearly enough to simply do the right thing.

I am determined to not be old and poor and was lucky enough to have that goal when I was young and poor.  "The Struggle" is best done young.  I will work until I can be reasonably confident that I will not outlive My Money, and plan to delay taking SS until age 70 to get as much monthly as possible, and not count on that seeing me through.


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## planzfortomorrow (Jun 12, 2013)

*So true!*



pgnewarkboy said:


> The idea that if you work hard, save,are loyal to your company or boss; or go to college, get good grades,; or buy a house, pay down the mortgage, AND EVERYTHING WILL BE FINE  etc. etc. are long gone.  We are living in a an ever changing no mans land where the game changes constantly.



Yeah, what worked for the older generation isn't what will work for the baby boomers, and what's going to work for them doesn't necessarily work for generation X.  My biggest fear is that because I've saved so well for my retirement, and have a decent job with good benefits (but less upfront pay) is that when I retire, my SS benefits will be cut.  I'm a gen X'er.  I love people who have 'made it', and say basically, it worked for me, it can work for you!  But it's all a 25 to 40 year plan, and you don't get a do-over.  

I also don't think I will encourage my young daughter to necessarily go to college.  Come on--someone here is talking about paying out $125K to get a college degree.  REALLY?  What kind of money is this student planning on making?  It would take SEVERAL years to make that money back.  Sometimes, I think people would be better doing trade work that they can start right after high school.


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## x3 skier (Jun 12, 2013)

Beck02 said:


> I also don't think I will encourage my young daughter to necessarily go to college.  Come on--someone here is talking about paying out $125K to get a college degree.  REALLY?  What kind of money is this student planning on making?  It would take SEVERAL years to make that money back.  Sometimes, I think people would be better doing trade work that they can start right after high school.



When I started college a thousand years ago, it was clear to me there were two kinds of experience. One was taking a course of study that led to a job in science, engineering, business, education, pharmacy, nursing, etc. Another was to get an education in some field that may or may not lead to a good paying job, like history, art, English or another Liberal Arts field.

It was true then and even more so today so it's pretty easy to me to see a $125000 or a $10000 or a $1000 expenditure in education as an investment in a a career. Students that get excellent training at a community college as a machinist, mechanic, pilot, or other field not needing a college degree can be as well off as any college grad. Apprenticing in a building trade field like plumbing, electrical work, HVAC or others is another choice. 

Of course, if somebody wants to spend the money to learn something just for the hell of it, it's their (or their parents, grandparents whoever) money. 

Not everybody needs or wants college to be happy and financially secure so it's best to figure which bin you belong in before laying anything out for any education. 

Cheers


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## pgnewarkboy (Jun 12, 2013)

Some individuals can exert control of their financial fate to varying degrees of success. All individuals, however, are subject to the actions and inactions of other individuals and institutions. The recent banking housing crash is just one example of many. How many people knew they would be harmed by derivatives scams -directly or indirectly? How many people who worked for the largest and best known companies in the world knew these companies would go bankrupt or move their jobs outside the country -causing them to lose their pensions?  Instability reigns  and there is a limit to how much any one individual can do to protect themselves. The younger you are the more daunting the task to ensure your financial present and future. Will my chosen career exist in 5 years or will my job be outsourced or done by a computer? What control does a person have over that?  Constantly going to school is not the answer for most people.


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## planzfortomorrow (Jun 12, 2013)

There's also environmental concerns.  There was this older couple who had farmed/ranched their entire lifes.  Money lean but land rich.  Except there had been an oil & gas spill nearby, and all their cattle died, they got cancer, etc.  Even if they had not been immediately affected, their home worth was next to zero (contaiminated ground water, oil/gas company wouldn't admit fault).  Hurricane Katrina--same thing--you might be OK, but the economy around you isn't, and it'll drag you down. 

The stock market can rapidly decline--in a matter of minutes, where the average investor in a 401(k) or Roth IRA or whatever just cannot get out of the market in time.  And if you want to act like it's your fault because you shouldn't have been in the market in the first place, remember no matter what your age, you'll have to have soemthing in the market for growth to comp for inflation. What took YEARS to grow can be wiped out in seconds.

The bottom line is, even with the best planning, sometimes things just don't work out because it's outside of your control.


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## bogey21 (Jun 12, 2013)

bogey21 said:


> I had the same thing happen to a friend of mine.  I suggested he file an arbitration claim against the broker and his firm.  In truth I had to badger him to file the claim.  He was awarded a little over $100,000.  Lawyer took a percentage on a contingency.  I think the key was a combination of his last 10 years of tax returns and his age.  His tax returns showed zero investment activity ever.  His age showed he should have been invested more conservatively.



I'm surprised that no one has commented on this.  What happened in my friend's case is that the first lawyer we went to declined to represent him on the basis that his claim was too small.  He did, however, recommend another lawyer just starting out in the field who was willing to take the case and was successful to the tune of $100,000.

George


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## geekette (Jun 12, 2013)

Beck02 said:


> There's also environmental concerns.  There was this older couple who had farmed/ranched their entire lifes.  Money lean but land rich.  Except there had been an oil & gas spill nearby, and all their cattle died, they got cancer, etc.  Even if they had not been immediately affected, their home worth was next to zero (contaiminated ground water, oil/gas company wouldn't admit fault).  Hurricane Katrina--same thing--you might be OK, but the economy around you isn't, and it'll drag you down.
> 
> The stock market can rapidly decline--in a matter of minutes, where the average investor in a 401(k) or Roth IRA or whatever just cannot get out of the market in time.  And if you want to act like it's your fault because you shouldn't have been in the market in the first place, remember no matter what your age, you'll have to have soemthing in the market for growth to comp for inflation. What took YEARS to grow can be wiped out in seconds.
> 
> The bottom line is, even with the best planning, sometimes things just don't work out because it's outside of your control.


Farmers, they have it rough, for sure, and losing everything is a possibility quite frequently.

However, I disagree on the possibility losing EVERYTHING in the market in a matter of seconds.  

Yes, the value of my holdings went down but it is not true that my 401k or any other account, ceased to exist (anyone, if your whole account went to 0 and never returned, please post details of your holdings).  

this has not happened in my lifetime.  In fact, none of the mutual funds available in my 401k vaporized, either.  Sure, price per share plummetted, but not to 0, or less, and they came back, so where is the wipeout?

If you invest all of your money in a company that goes kaput, ok, there is total loss.  For the rest of us, diversification hedges against this risk.

All the mutual funds and every company on all of the exchanges would have to go bankrupt, out of business, for there to be widespread cases of people Losing Everything.

I simply do not believe there is any chance that all equities can be reduced to nothing in a matter of seconds.  A nuke could do it, but I wouldn't be alive to know it or need the money.


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## x3 skier (Jun 12, 2013)

I worry not at all about a meteorite hitting me in the head just as I don't worry about anything else I cannot control like the stock market, hurricanes, plague, etc. Better for my health that way. 

If something unexpected happens, I have made reasonable preparations. If they were insufficient, I move on. Wringing of hands and whining or worrying about it does zero to change my situation. S*** happens and you can accept it and let it beat you down or deal with it.

Cheers


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## vacationhopeful (Jun 12, 2013)

This months AARP mailing has a story on adult women sharing houses as they age - refers to the many unmarried 50+, divoriced, or widowed women living together - sharing housing expenses and companionship. 

Adapting --- to aging with less resources but pluses include companionship and better neighborhoods to live in.


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## planzfortomorrow (Jun 12, 2013)

Your right--you don't lose all your money in seconds.  But you don't gain it back immediately either.  Say the market takes a 30% hit in one day.  Even if it comes back to a 30% gain, you're still not even.  And the stock market rarely makes rapid gains like that.  If you take out any money (such as for living expenses), then that's even less there to help gain you back to zero.  The last stock market plunge took me about 3 years, to maybe be back to where I was (and I'm not counting my additional contributions as part of getting me to "what it was").  My grandparents, who are very well invested, suffered with the last market hit.  They still live very comfortably, but I'm willing to admit that they may be in the minority.  

I find that in most personal interest stories, most readers try to find fault with the people involved, because otherwise they'd have to admit to themselves, that could be their sob story & not some stranger.  And that scares them.


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## PigsDad (Jun 12, 2013)

Beck02 said:


> There's also environmental concerns.  There was this older couple who had farmed/ranched their entire lifes.  Money lean but land rich.  Except there had been an oil & gas spill nearby, and all their cattle died, they got cancer, etc.  Even if they had not been immediately affected, their home worth was next to zero (contaiminated ground water, oil/gas company wouldn't admit fault).  Hurricane Katrina--same thing--you might be OK, but the economy around you isn't, and it'll drag you down.


I would chalk that up to a lack of diversification.  To have all or a significant amount of your assets in one thing is a poor investing strategy.  

Those Enron employees that lost everything had all of their 401k assets in Enron stock.  How smart was that?  If the company goes down, not only do you lose your job, but you also lose your retirement assets.  Defined benefit retirement plans have the risk of falling into that trap as well (but usually a lower risk, since they are often insured).  But what if that insurance company goes belly-up?

Diversify, diversify, diversify.  It can't be said enough.  If your whole retirement is in a single investment, be that land, a house, a limited number of stocks, a narrow set of bonds, etc., you are just looking for trouble.



Beck02 said:


> Your right--you don't lose all your money in seconds.  But you don't gain it back immediately either.  Say the market takes a 30% hit in one day.  Even if it comes back to a 30% gain, you're still not even.  And the stock market rarely makes rapid gains like that.


The stock market has never lost 30% in one day.  Take a look as some real data:

http://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average

The absolute worst was Black Monday in 1987.  There were only *two *other days in the history of the DJIA that the market had a double-digit percent decline.

But getting back to your comment about an "average investor in a 401(k) or Roth IRA or whatever just cannot get out of the market in time" -- my response is that an "average investor" shouldn't be trying to time the market in the first place.  

Over the long term, there are few, if any, investments that match the performance of the stock market with the same level of risk.  Of course the market goes up and down, but for a dollar-cost investor, the volatility actually adds to your gains as you buy more shares when the market is down, and less when it is up.  Trying to time the market just increases your risk and has proven time and time again to lead to disasters for the average investor, as the average investor tends to be emotional and will do exactly what they should not do: panic and sell after a big dip.  The only thing that does is lock in your losses.  Not very smart, IMO.

Kurt


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## SunSand (Jun 12, 2013)

Articles like this are designed to lure people like me, within a 5 to 7 year retirement age window, to pump even more money into the stock market.  Empty Nester's with good salaries are spending too much on vacations and dinner, so lets cause a fake crisis to get those cheap *B* to give us more money.  Bull, If I can't live on SS and my retirement fund, then I'm an absolute idiot and I deserve to starve. Just sayin.


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## easyrider (Jun 12, 2013)

Some other factors that could be somewhat bearish for retirees are underlying economic factors such as consumer confidence and inflation. Consumer spending accounts for alot of the economic activity in the USA. When spending declines because of higher cost of needed items such as gas, food and taxes people don't spend as much. This causes the economy to slow. A slow economy can lead to a recession. Soon in the USA we will be in a situation where everyone will be participating in health insurance. The people that didn't buy this before will be buying it in 2014, shrinking some of these peoples ability to spend. This is especially true for retirees on fixed incomes as their medicare plans change.


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## ondeadlin (Jun 12, 2013)

easyrider said:


> http://www.marketwatch.com/story/do...stock-crash-by-year-end-2013-06-05?link=kiosk
> 
> 87% chance of stock market crash by year end predicted



Hard to take a prediction like that seriously when the person doesn't give you any idea what it is based on.


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## pgnewarkboy (Jun 12, 2013)

SunSand said:


> Articles like this are designed to lure people like me, within a 5 to 7 year retirement age window, to pump even more money into the stock market.  Empty Nester's with good salaries are spending too much on vacations and dinner, so lets cause a fake crisis to get those cheap *B* to give us more money.  Bull, If I can't live on SS and my retirement fund, then I'm an absolute idiot and I deserve to starve. Just sayin.



I don't know your age or the amount of your retirement fund but the greatest threat to a reasonable retirement for most people is inflation. Hopefully you will live many years after retirement. Even low inflation takes its toll over time. Your fund should be able to keep up with inflation. Social Security does not keep up with inflation in large part because of the high cost of medical care -particularly for the elderly. Retirement planning should take that into account.


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## ciscogizmo1 (Jun 12, 2013)

Amazing... these are statistics for applying to Medical School in the US.  It tells you how many applicants and how many get in.   It is definitely WOW.   I can understand why it is so selective but I was shocked at the number of people who think they are going to Med School.

https://www.aamc.org/download/321442/data/2012factstable1.pdf


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## geekette (Jun 12, 2013)

SunSand said:


> Articles like this are designed to lure people like me, within a 5 to 7 year retirement age window, to pump even more money into the stock market.  Empty Nester's with good salaries are spending too much on vacations and dinner, so lets cause a fake crisis to get those cheap *B* to give us more money.  Bull, If I can't live on SS and my retirement fund, then I'm an absolute idiot and I deserve to starve. Just sayin.



I actually thought it was opposite,designed to inspire panic selling.  I do intend to live off my retirement and non-retirement accts with ss a bonus.


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## bogey21 (Jun 13, 2013)

pgnewarkboy said:


> I don't know your age or the amount of your retirement fund but the greatest threat to a reasonable retirement for most people is inflation.



I'm living on a nice annuity and social security.  My big fear is inflation and the solvency of the entity providing my annuity.  So far (12 years), so good, but I definitely think about it every day.

George


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## spirits (Jun 13, 2013)

*This is my retirement plan*

I am 62 years old and love driving my Acura TL to my teaching job.  Yup, I am 1/2 time on the paycheque but I teach high school English and spend just as much time marking and planning as I do in the classroom.....so technically I work full time  If my eyesight holds up I hope to be as sharp as this lady and still teaching students....as long as the kids, parents and principal think I am still effective I plan on being there....I spent 300 hours planning new curriculum this year and want to fine tune it by teaching the courses!!!! 


http://autos.aol.com/article/102-year-old-woman-still-drives-her-82-year-old-car/


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## MuranoJo (Jun 13, 2013)

bogey21 said:


> I'm surprised that no one has commented on this.  What happened in my friend's case is that the first lawyer we went to declined to represent him on the basis that his claim was too small.  He did, however, recommend another lawyer just starting out in the field who was willing to take the case and was successful to the tune of $100,000.
> 
> George



I was impressed that your friend actually was successful in this.  In my aunt's case, it was water under the bridge by the time we heard of what happened to her.  And her son was her POA and Executor and obviously had no interest in it while she was alive nor after she was gone.


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## MuranoJo (Jun 13, 2013)

PigsDad said:


> While some of the rules have changed, I don't think it is so doom-and-gloom as you seem to put it.  *The main difference as I see it is that people are now more individually in charge.*
> 
> We need to directly manage our retirement accounts (401k, IRA, etc.) vs. relying on a company pension.
> 
> ...




This is something that should have mandatory coverage in our school system, somehow--and starting at a very young age.

Stock market roller coasters will happen, Mother Nature will have her way, corporations will be corrupt, etc.  But all of this has happened for years and years.  Somehow, those who took accountability for their future in spite of all the doom & gloom are likely moving along quite nicely.

Anyone know someone who's almost SS age and has no retirement savings and no pension?
We do.


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## vacationhopeful (Jun 13, 2013)

muranojo said:


> This is something that should have mandatory coverage in our school system, somehow--and starting at a very young age.
> 
> ....



Except in my state, teachers and administrators have GOVERNMENT pensions and little interest in anything other than demanding more and more from the taxpayers (property owners). Why teach saving for retirement - it is NOT something they do (or need to do)?

My one good friend - an elementary school principal (early job was middle school teacher) for 40+ years - brags about his low paying career which came with very nice health coverage and a steady government pension. When he retired 10+ years ago, his ending salary was over $120K and his pension started at about $70K plus social security (at 65 when he started that). 

Suburban police officers start at over $90K (plus overtime) and after 20 years get full pensions (and they then retire). A local grassroots organization setup a website and planted around hundred white vinyl signs in frontyards pointing to the website disclosing the local government's pay scale for all the towns job classifications. First Fall election - XYZTruth.org signs - looked like the standard - support our candidate. Only the signs did not come down and for the next year, MORE signs keep appearing in more yards. Second Fall election, the current & entrenched for 35 years ruling party's candidates were voted OUT.  All the website showed was the payscales for all the town's classification of jobs and number of employees at each classification.


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## rapmarks (Jun 13, 2013)

vacationhopeful said:


> Except in my state, teachers and administrators have GOVERNMENT pensions and little interest in anything other than demanding more and more from the taxpayers (property owners). Why teach saving for retirement - it is NOT something they do (or need to do)?
> 
> My one good friend - an elementary school principal (early job was middle school teacher) for 40+ years - brags about his low paying career which came with very nice health coverage and a steady government pension. When he retired 10+ years ago, his ending salary was over $120K and his pension started at about $70K plus social security (at 65 when he started that).
> 
> Suburban police officers start at over $90K (plus overtime) and after 20 years get full pensions (and they then retire). A local grassroots organization setup a website and planted around hundred white vinyl signs in frontyards pointing to the website disclosing the local government's pay scale for all the towns job classifications. First Fall election - XYZTruth.org signs - looked like the standard - support our candidate. Only the signs did not come down and for the next year, MORE signs keep appearing in more yards. Second Fall election, the current & entrenched for 35 years ruling party's candidates were voted OUT.  All the website showed was the payscales for all the town's classification of jobs and number of employees at each classification.




In my state, they want to take away our pensions.   We put in over ten percent of our salary (betwen us worked for 65 years)  the state never matches, as they would have had to do if we paid social security.  they borrowed our money, now since they owe too much to ever pay if back, they want to change the system.   somehow, the teachers are the culprits.  and we are not getting social security , one of the states that won't allow both.     plus when we retired, we had to pay the retirement system and extra 30,000 and an extra 87,000 for not teaching 38 years each.  sorry, we spent that money on other things is what we are told.

I believe in New jersey the pension is paid by the teacher's salaries.  that principal probably had much more than a master's degree, made very low salary for years, and worked many more hours than you think, as do any teachers who are worth keeping.


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## geekette (Jun 13, 2013)

muranojo said:


> This is something that should have mandatory coverage in our school system, somehow--and starting at a very young age.
> 
> Stock market roller coasters will happen, Mother Nature will have her way, corporations will be corrupt, etc.  But all of this has happened for years and years.  Somehow, those who took accountability for their future in spite of all the doom & gloom are likely moving along quite nicely.
> 
> ...



I also know a few in that category.  Few options at this point for the 2 people I have in mind.

One has so very much done it to himself by being self-employed for a very long time and keeping it off the books.  he completely shot himself in the foot as far as SS.  Bigger problem would be someone ratting him out to IRS for non-file.   he sealed his fate a few decades ago when he cashed out his retirement plan around age 40 at a layoff.  Not the biggest shock to find he never saved a penny more towards retirement.  

The other lady, been off and on unemployed last few years, has health issues, often no insurance (she is a legal secretary).  She's past 60 so very close to being able to claim SS.  Has recently moved back in with her mother after another illness-related job loss.  Any savings she may have had has been used up in surviving the past few years.  I think there are MANY people in her kind of situation.  so much beyond her control.


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## singlemalt_18 (Jun 13, 2013)

PigsDad said:


> While some of the rules have changed, I don't think it is so doom-and-gloom as you seem to put it.  The main difference as I see it is that people are now more individually in charge.
> 
> We need to directly manage our retirement accounts (401k, IRA, etc.) vs. relying on a company pension.
> 
> ...



Excellent post.  (Hopefully Pigschildren listen to their Dad!)

Like it or not, research has shown that what we think and know about money we learn from our parents.  In some cases that example may teach us what NOT to do, but family “values” are a primary driver or our financial habits and attitudes.  In addition, *research also shows that the emotional and psychological aspects of money and investing are counter-intuitive, often resulting in false confidence and misinterpreting risk.*  The field of Behavioral Finance has become its own specialized area of study.

As a private practice financial planner I saw things up close.  The first client I ever fired was a guy who (at that time) made over $140k a year.  He was always coming to meetings saying the dog ate his homework, and he didn’t have two nickels to rub together because he was spending at least $150k a year.  One of my best clients was a guy who worked a blue collar job earning no more than $40k in his best years and he didn’t know much about investing, but he had over $500,000 in savings by age 52.  Only about a third of that was in traditional retirement type accounts.

There was a terrific book written almost 20 years ago by two researchers who attempted to understand the dynamics behind examples like the two people I just described.  *The Millionaire Next Door *is a great read even today and it should be required reading.  Stanley and Danko’s work is thought by many to have been the inception of modern Behavioral Finance studies.

The bottom line: you have two guys living on the same street.  One lives in the newer house with finished landscaping and lawn, has two European cars, goes to work in fashionable clothing, and has kids that think their Mom and Dad are rich.  The other lives at the other end of the street in the older house.  It may need a few repairs, the landscaping is of no particular fuss and some dandelions grow in the grass.  In the driveway is an older domestic car and an even older panel van with “Smith Plumbing” painted on the sides.  Which one is the likely millionaire?

Hint: the plumber's kids have no idea how much money their parents have.


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## vacationhopeful (Jun 13, 2013)

rapmarks said:


> ...I believe in New jersey the pension is paid by the teacher's salaries.  that principal probably had much more than a master's degree, made very low salary for years, and worked many more hours than you think, as do any teachers who are worth keeping.



Had a Master's Degree. Period. 

Yes, he worked many hours - but I as a salaried employee worked many extra hours and had out of town job assigments for several years. 

And I don't think that is totally correct as to who pays the pension. The NJEA is extremely political and very well financed. Every November, the NJ schools are shut down for a 2 day NJEA Convention - same week as elections close the schools. When WDW recognizes that week as NJ Week, you know it has a major effect on the education of the children. 

The NJEA biggest target for the past 2+ years is our current governor - a governor who has an almost 80% approval rating by the states' voters.


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## rapmarks (Jun 13, 2013)

yes, i heard the gov. christie is targeting the teachers, did away with the cola for retirees, but my friends who taught in nj said pension was funded by teachers, and it is based on base salaries, not coaching or any extracurricular. 
My new york  friends claim they never paid a penny toward retirement, get great pension, social security, and paid medical.
In fact I know NJ took out of teacher's salary because my friends said what are florida teachers crying about having to pay 3 percent for the first time toward retirement when she paid ten percent her whole teaching career.

anyhow, i fully expect my pension to be severely curtailed in Illinois, and I feel bad for those near retirement.  the money the teachers put in would keep it going for 18 years, but lots of money is gone .   blagovich had to pay lot of state bills before he went to prison to join other former govs.
If and when we lose our pension, no social security, and will live off savings, and will probably lose the retirement medical insurance we paid into while we were teaching, which would be like canceling medicare.


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## pgnewarkboy (Jun 13, 2013)

Mad at teachers? Why?  Yes, you PAY THEIR SALARIES.  Perhaps some pay and some pension provisions are not warranted but some of these posts are downright nasty. Teachers have a hard job. They are just like everyone else trying to make a living and looking to better themselves. Write your state legislature if you don't like it.

Does it make you mad to subsidize WalMart execs big salaries with your tax dollars? Here is how it works. As many as one third of WalMart employee's are paid so little that the workers , with families, need help to feed their children and get them medical care. You, the taxpayers, pay for that so WalMart execs can keep their fancy lifestyles and big incomes -far bigger then teachers. We should fix that too. Now, I won't belittle WalMart execs either . They are trying to maximize their earnings like everyone else. We should, however, fix this situation.


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## rapmarks (Jun 13, 2013)

singlemalt_18 said:


> Excellent post.  (Hopefully Pigschildren listen to their Dad!)
> 
> Like it or not, research has shown that what we think and know about money we learn from our parents.  In some cases that example may teach us what NOT to do, but family “values” are a primary driver or our financial habits and attitudes.  In addition, *research also shows that the emotional and psychological aspects of money and investing are counter-intuitive, often resulting in false confidence and misinterpreting risk.*  The field of Behavioral Finance has become its own specialized area of study.
> 
> ...



You are so right.   My family (the older generation) meets the second guy standard.   My aunt passed away at 90.  she worked for 44 years at the same place, low salary, $400 a month pension from them, and finally up to 1000 a month SS.  Lived in assisted living the last 8 years out of pocket, and still managed to leave behind almost a million dollars.  
then i have friends who have pensions over 250,000 and are deeply in debt and can't make ends meet.  Here is irony, nursing home insurance for 30 years, and got a check for $64 when i filed a claim a few months before she died (I did not leave off any zeroes)
If you think that $400 a month pension is bad, my father worked same place for 40 years and he only got 200 a month so my mother would get it after he died.  Despite this, my parents never got any assistance, even when my mother went into a nursing home.


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## Janette (Jun 13, 2013)

My hubby and I paid into teacher retirement in Georgia and paid social security. Yes, we draw both now, but we paid into them. We both have advanced degrees and enjoyed our years as educators. We see the results of our hard work in the lives of our former students. I assume all of you probably had a teacher who influenced your life. Thank them today and don't complain because they have income. I don't have any idea of how hard you worked and I only wish the best for you in your retirement.


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## momeason (Jun 13, 2013)

muranojo said:


> This is something that should have mandatory coverage in our school system, somehow--and starting at a very young age.
> 
> Stock market roller coasters will happen, Mother Nature will have her way, corporations will be corrupt, etc.  But all of this has happened for years and years.  Somehow, those who took accountability for their future in spite of all the doom & gloom are likely moving along quite nicely.
> 
> ...



Yes, my Brother in law. He had a matching 401K plan and has never contributed a cent. He is 64 yrs old. My sister kept trying to get him to save. He threw away the free matching.


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## MuranoJo (Jun 14, 2013)

geekette said:


> I also know a few in that category.  Few options at this point for the 2 people I have in mind.
> 
> One has so very much done it to himself by being self-employed for a very long time and keeping it off the books.  he completely shot himself in the foot as far as SS.  Bigger problem would be someone ratting him out to IRS for non-file.   he sealed his fate a few decades ago when he cashed out his retirement plan around age 40 at a layoff.  Not the biggest shock to find he never saved a penny more towards retirement.
> 
> The other lady, been off and on unemployed last few years, has health issues, often no insurance (she is a legal secretary).  She's past 60 so very close to being able to claim SS.  Has recently moved back in with her mother after another illness-related job loss.  Any savings she may have had has been used up in surviving the past few years.  I think there are MANY people in her kind of situation.  so much beyond her control.



Yes, there are certainly exceptions, like those who have legitimate reasons which prevent them from working or exhausting savings for health reasons.  But it's hard to understand those situations where someone who is gainfully employed for years and never saves a cent or (as momeason mentioned) leaves money on the table because they don't even take advantage of an employer-sponsored 401k.  

Similar to what others have posted, some of our neighbors and friends who were frugal and had blue-collar jobs are very well set for their retirement.  Others have waterfront vacation homes, kids going to the top schools, drive the best cars and live only in the best neighborhoods.  But they're broke.


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## geekette (Jun 14, 2013)

momeason said:


> Yes, my Brother in law. He had a matching 401K plan and has never contributed a cent. He is 64 yrs old. My sister kept trying to get him to save. He threw away the free matching.



Terrible!

The job I have now does matching quite differently, it's once a year profit-sharing, so will vary each year. 

One young lady in the benefits group I was in didn't want to contribute if she couldn't be sure what the match was.  After the meeting I took her aside and made sure she understood that the match is Gravy, that the Meat and Potatoes need to come from her.  

Free money is great, and it's hard to understand why some people won't take that little step THAT IS BENEFICIAL TO THEM to get it.


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## Passepartout (Jun 14, 2013)

I used to write a monthly article or our company newsletter. One month I entitled it something like, "Getting (the co's) Freebies". I went on about how it was their offer. Didn't cost the employee a cent they wouldn't get back. I added that inside each worker who wants to spend his or her entire paycheck is a person who wants to retire. What the worker does with his money depends on who wins the 'who's most important' argument.

Hard to know if the phones rung or there was a rush to Human Resources to enroll in the matching 401(k). And while I'm on my soapbox, 401(k)'s should be mandatory with 'opt out' instead of requiring the employee to opt in.

Soapbox mode: off.

Jim


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## geekette (Jun 14, 2013)

Passepartout said:


> ...And while I'm on my soapbox, 401(k)'s should be mandatory with 'opt out' instead of requiring the employee to opt in.


I agree.  I think the % should be 1 in that scenario, hardly noticeable.

I am glad that now there is a small amount of guidance that can be given to new enrollees.  It was always a bit of a problem for the non-financially-literate to suddenly be Investors with no clue at all as to what might fit them.  Easier to not deal with it at all.


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## bogey21 (Jun 14, 2013)

pgnewarkboy said:


> Mad at teachers? Why?  Yes, you PAY THEIR SALARIES.  Perhaps some pay and some pension provisions are not warranted but some of these posts are downright nasty.



In the old days teacher salaries weren't all that great which was somewhat compensated for with decent pension plans.  Problem is that often the public views teacher in the same light as other municipal employees whose pension plans are *sometimes* outrageous.

George


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## PigsDad (Jun 14, 2013)

Passepartout said:


> And while I'm on my soapbox, 401(k)'s should be mandatory with 'opt out' instead of requiring the employee to opt in.


That is changing.  The company I work for automatically enrolls new employees into the 401k at something like 2 or 4 percent, unless they opt out.  Not much, but better than nothing -- and they get matching $$.

Kurt


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