Smart, Responsible Retirement Planning

the lottery !?

I know you say that in jest, but the scary part is some people think of it in those terms. I can only imagine how much money my father-in-law would have saved if he invested the money he spent religiously on lotteries in West Virginia, Virginia, D.C. and Maryland over the years since their inception. Every week, week after week, year after year, driving to the various locales to buy his tickets. He's been doing this for thirty or forty years. (His biggest prize, a measly $5k, split four ways with co-workers in 1986)

It has to be some sort of irrational thought process and cognitive dissonance. The odds are clearly stated. Yes, "someone" eventually wins, but "everybody" loses. I guess that why some religious denominations forbid gambling because it must play on some vulnerable part of the psyche and hence a "social evil".

I won't retire at the same standard of living (if annual income/spending is the yardstick) as I am right now, but I don't have any doubts that I will be comfortable at any rate. I'm afraid a lot of retirement planners seem to think we "need" a lot more money in retirement than we really do.

For most people (at least the well-prepared ones) there won't be a mortgage. That's huge. And cat food is surprisingly affordable.

You, me and how many million others have the same 'plan' [win the lottery]?

Lyn, along with winning the lottery, you also left out lawsuits and inheriting the money/assets.

The best thing to do is err on the side of having more rather than having less and we can't depend on anyone or especially some government to provide for us. I look at Social [In]Security as simply a little extra to travel with and not part of what will be needed to live well.

The reason, besides inept governments who ruin economies and therefore investment opportunities, most people (about 90+%) retire taking in less than $30K/yr. is because we Americans are all screwed up in our thinking about "stuff". We think we have to have the latest and greatest and keep up with the Jone'ses whether we can afford to pay cash for it or not. We borrow for depreciating goods and start to have leveraging working against us.

It was also mentioned that without a mortgage it doesn't take much to live. That is true except that many people have borrowed against the one asset they have and they haven't finished paying off their house. When they go through life this way, they end up paying $1200 for a $450 item. It's nuts what people think they have to have, without deserving it (earning the right to buy it).

Well said, but there are other aspects to this problem as well. Being a working man raising a family, I started saving for my retirement at age 40. 20 years too late I think. Regardless of that, what was saved over years was wiped out to the tune of 30% a year when the economy went into recession. A recession that was caused by the greed of the oil companies and the inept performance of the moneylender elite, a problem that is sure to repeat itself since they are back to business as usual.

Now when I arrive at age 65 I firmly believe that our government will dole out less of the pension I've paid into for 40 years, to those who have saved, and more to those who haven't saved. What have I gained? With health care dropping and investments tanking it seems that the governments plan of retirement 85 is working well.

Retirement was for the generation past. I don't think it's for ours.

Elroy

Elroy, I appreciate your taking taking responsibility for a lax in proper thinking and acknowledging that you started 20 years too late. Me too. I am helping my kids to not make the same mistake and to start develop assets that will beat inflation, so it certainly isn't a saving accounts.

There are lots of reasons why we went into and are still in a recession; the primary one being that a bunch of beauracrats who practice that same fiscal irresponsibility that many Americans do. They spend money that they don't have. And it is easier when it is a third-party purchase (someone else's money) and you're typically not as frugal and concerned about price and value as if it was your own money.

That says nothing of the fact that the Federal government is meddling and involved in many things (banking, housing, auto mfgr., etc.) that they are not given allowance to do in the Constitution. The government does very little well, and then especially when you have an Administration who has never been in business and doesn't have a clue about what free enterprise and capitalism is all about and who has a philosophical standpoint contrary to what we are founded upon as a nation. You then have a recipe for moral and economic disaster. That is the main cause for the recession and the subsequent downfall of the investments which affects a lot of the "greastest generations" retirements.

You're exactly correct about the Ponzi scheme called Social Security. No one will get out what they have put in. To top that, we have liberal beauracrats who want to grab/raid any remaining funds that people have garnered on their own and confiscate that; because some have too much, and make it more "fair" (read, income redistribution), and use that to try and salvage an already defunct program. The only reason the government keeps raising the retirement age is so they don't have to pay out the non-existent money. There is no SS Trust Fund, as it was intended to be, it has been raided by beauracrats from both parties who want to create a bunch of dependent citizens through social/welfare programs, thereby insuring their votes. "If you (a politician) rob Peter to pay Paul, you will always have the undivided support of Paul". Congressman Bob Mc Ewen

Just a comment; retirement has nothing to do with age, it has to do with the amount of money/assets a person has developed on their own. I know young families who are "retired" at 30 years old (not inherited money) because they didn't follow conventional thinking ("get a good education, get a good job and you'll be set for life") about how income is made. Read Robert Kiyosaki's Business of the 21st Century, Cashflow Quadrant, for more information.

"Retirement was for the generation past. I don't think it's for ours." Maybe we're working hard at the wrong thing. The vehicle we use to produce income and proper thinking is key.

I can appreciate the depreciation of a number of investments. That being said, I did very little during the crash except keep investing in the mix of investments I owned. Most of my money is back now. I think the people who locked in their losses by selling are licking their wounds and lamenting their "seller's remorse".

I hope you continued to save/invest during the recession when stocks were cheap, now that your original stocks have regained their value, the cheap ones should have put you ahead of the game.

I upped my contribution rates to the retirement savings from 12% to 14% when the markets crashed. I found that small changes to withholdings like that are absorbed with negligible effects at home. It was a wild roller coaster ride, and it was dis-heartening to say the least when looking at quarterly statements and seeing a smaller balance at the end of a quarter after dumping in a boatload of cash.

However, patience and perseverance have paid off nicely. "Steady as she goes Captain . . . "