you're so right! I worry everyday, and we just paid off our mortgage, but it doesn't stop the insurance and taxes!

dh wanted to take part of the monies for 401k we already have but I sure don't know, as his paycheck is already less than it was due to medical ins..we both have had medical issues (me more) so now am stressing over that!

One important thing people need to do before retiring is pay off any loans or credit card debt they have.
When my husband retired our monthly income was about the same as we would spend when he was working. I paid the bills but never save a portion of his income because some of it was deposited into a 401K and some into a "sacred" savings account that we didn't dip into.
We were fortunate to have bought our house 40 years ago and paid it off with a 15 year mortgage. We were old fashioned and would save up the money to buy things so no debt.
Now that he has passed away I get his social security and his pension from the company he worked for.
I think we were a little unusual in this day and age.

Of course you can never have enough, and yes, most people aren't saving enough but good grief....the retirement fund companies and their online calculators I think are exagerrating what you will need, especially if you move to a retiree-friendly state.

We've done pretty well with savings and 401k's, but the calculators say we are $700,000-1.2 mil short....and we only have 3-4 years to make it up since we are 62. One calculator said (even though annual salary was plugged in) we should be putting $18,000 a month in our retirmenet fund....yeah right!

It reminds me of when my kids were in grade school in the 90's and college calculators said, according to our kids' ages, we should be putting $3,000 a month in a college fund. Ha! I was a SAHM and we were lucky to have $300 at the end of the month back then. Yet, we got 3 kids through college. When #2 hit college I went from part time to full time. We had 4 years of two in college. Two took out student loans of about $15,000--- and when they graduated we matched the payment and the loans were paid off in a few years.

If you listened to the retirement fund companies and their calculators, 98% of us will be working until we drop dead (literally) to try to even come close to what they tell you you will need.

The figures on credit card debt are pretty staggering too. When you combine that with a lack of retirement savings....yikes!

Also, from observing some of my friends, I'd say retirees sometimes live a more expensive lifestyle than they did before they retired. We have a lot of "snowbirds" here--people owning a house in the south or west in addition to the one they maintain in the northeast. Others are doing a lot of traveling.

Unfortunately there is a large segment of the population who just don't seem to care about saving - perhaps they think their expenses will be lower or that Social Security will enable them to retire.

DH was part owner of a business that offered their employees a matching 401K. He was amazed that only 8 of the 30 opted to enroll in the plan and he was concerned that so many were missing out on the 'free' money. Their accountant come into the office to explain how the plan worked and that each employee could decide how to invest their money - whether they wanted a conservative profile or a more aggressive one.

I think it's really a matter of priorities. When DH and I were first married we tried to save money from each paycheck. That was important for us. We knew we wanted children and we wanted to be able to help with college expenses. We didn't take vacations, we seldom went out for expensive dinners, we shared one car for several years,....in other words, we lived within our means and continued to do so even as our incomes increased.

It's interesting that most of his employees said that they didn't feel they could afford to invest, they needed their income for every day living expenses. Yet for the most part these same employees went out to lunch nearly every day, took an annual vacation, had regular manicures, Smart phones, nice cars and had large weddings for their children. They weren't willing to sacrifice now to provide for a more secure future.

We've tried to instill the importance of regular savings on our children. When they were young and received money from relatives for birthdays or Christmas we offered to match any money they put into the bank. When they started working part time in high school we had them open Roth IRA's. They're all off on their own now and I can only hope they're still putting money away.

If you've got it, enjoy, If you don't, adjust. I have no intention of leaving a wad for any family member. When the time comes, that balance should be as close to zero as possible. Hope that $30,000 kitchen remodel you "had to have" permits you to learn the art of cooking. I'd be happy with some of the retirement numbers mentioned here. Enjoy your Golden years.

"Posted by maire_cate (My Page) on Wed, Sep 24, 14 at 18:14
Unfortunately there is a large segment of the population who just don't seem to care about saving - perhaps they think their expenses will be lower or that Social Security will enable them to retire."

And since the age of the people in chisue's article is 55-64, I'd suspect that some are helping their children pay for college, particularly since parents are older when the first child is born..

Chisue, what do you think of Durbin's campaign commercials allowing refinancing of student loan debt? Wouldn't surprise me if you are against the idea.

I met a woman who says she "lost it all" and is starting over. She's 62. I asked what her DH does for a living........drum roll ......... a financial planner!

She says people stopped using financial planners. They thought it was a trend that would end and when it didn't they could no longer make the house payment.....

I asked what her DH was NOW doing for a living....a financial planner.

SAY WHAT?

If you've got it, enjoy, If you don't, adjust. I have no intention of leaving a wad for any family member. When the time comes, that balance should be as close to zero as possible.

OldFixer, the problem with that is no one knows when that zero point should be. You could end up broke, or end up leaving a chunk of money to your relatives after all. ;-)

we dropped cc (aside from dh's business one and I pay off EVERY month)...dh has forgotten about retiring until age 70 now...he has so wanted to but it would have meant going back to work anyway...one of his friends wants him asap, but NO medical ins...so told him sorry.. with a kidney specialist, oncologist and gp that I see, we need every dime...thanks be I'm ok but still...at 68?

The article did mention the perils of depleting your retirement savings to pay for your children's college education. OTOH, college-educated children should be better able to help out their aged parents...if they will!

This isn't about leaving an inheritance. It's about having enough to get to that death/zero savings point without becoming a street person. If you and your spouse need $67K to live on now, don't think you'll be happy with only $32K. I suppose you could try it now. No?

Jim -- I'll try to listen for the facts on that refinance idea. I did recently see that a person who has not repaid his student loans to the government will get a reduced Social Security benefit. I'm pleased to see that the government is no longer blithely approving every student loan to one of those fake 'colleges'. What a dirty scam on those poor kids and on the taxpayer.

Nicole -- It's like anything. There are competent people and incompetent ones, including financial planners -- wide range of credentialing in that broad term. Since incomes have become stagnant for all but a few Americans, fewer have any savings to 'plan' for. Hence my subject title about needing higher income jobs. You can't save what you can't earn. (Jim and I are planning to rob either convenience stores or banks; it's not decided yet.)

Joanie -- You don't need any special calculator to see if $700K savings will be enough to get you to 90, along with whatever other income you may have, like pensions or social security.

General advice is to withdraw four percent a year from savings. $700K @ 4% is about $28K. If each of you gets the average social security benefit of $1190/mo., that's another $28K. Do you live on $56K/year now? Fine! You're good to go!

(This doesn't figure in compounding of returns on savings or inflation. I think that's why we hear the four percent per year withdrawal.)

Where is our Snidely to help with this?

Hi chisue,

Best way to rob a bank ... don't go in the front door with a gun: possibility of getting caught is rather high, and subsequent consequences are rather drastic.

Go in the back door with a relevant degree to become an exec. ... possibility of getting caught somewhat reduced ... and consequences in most cases less drastic.

After those New York bankers more or less sold their country down the river ... how many have you heard of who went to jail?

Didn't need to - hadn't broken any laws ... or too costly to prosecute, with rather low probability of getting a conviction!

ole joyful

joyful, you're a Canadian. Is that why you find it necessary to slam things American so regularly? Please try to be more polite. Maybe you should find a forum with a Canadian orientation where such comments might be more welcome.

You may want to believe differently, but Toronto bankers are no different than New York bankers.

Chisue....I plugged all of our information into 3 different online retirement calculators (Fidelity, etc)....and I just cracked up at the results. Fortunately, DH has always maxed out his 401K and purchased company stock along with other investments...let's just say we are way ahead of the average family in your post, yet these calculators said we are still around $1 million short....ridiculous! And we are supposed to make up this "shortfall" in the next 3-4 years.....aint gonna happen! But I guess we WOULD need another $1 million if we wanted to live like jet-set movie stars.

The bottom line is.....if you had the forsight to figure out what kind of lifestyle you wanted in retirement in your 20's or 30's and saved for it, you will be OK. If you didn't (like most people) you will either have to work longer or adjust your lifestyle to your retirement income, perhaps moving to a state with a lower cost of living, taxes, etc.

My brother did not retire with much, but he moved to a lower cost area and has quite a comfortable, yet modest life. He does some traveling and occasionally helps his kids out financially as well. It can be done!

It's not about having a specific amount of $, it's deciding how you want to live in retirement---if you want to eat out at fancy restaurants all the time and travel the world you're obviously going to need more than homebodies. Most of us won't have saved for a lavish lifestyle and will have to adjust to the $ we do have and live accordingly.

chisue, my view is that there are and have always been too many people who act irresponsibly. No more or less with personal finances as with anything else. Squirrels who don't stash food for the winter will get very hungry and may not survive until springtime, that's how it is,

There are plenty of canards that circulate - credit cards are bad, mortgages must be paid off, you must save X % of your income, lada lada lada. None are really true or helpful alone or as goals in themselves. What's needed like anything else is planning, goal setting, and sticking to it.

It's hard to save when current income (even with prudent management) barely keeps heads above water. The answer to that in my mind is the need to improve one's earnings potential, not always easy. The problem with mandating wage increases (whether by law or union action) is that it works contrary to the wishes of the public for lower prices. That's what happened to the US auto industry and why so many plants moved to the non-union South.

Questions are always simpler than answers. Social security was meant to be a safety net of last resort for those who spent their working years with jobs. For too many, it's all they have. That's how it is too, just as with the squirrels.

Thanks for posting here, Snidely. an imbalance when one percent of us are becoming exceedingly rich while the wages of others stagnate and even decline -- while they pay a larger percentage of their wages in taxes. Unions are not inherently bad. Seems to me we need worker-bees more than hedge fund managers. (See: Lampert and Sears.)

One thing we could do is provide more meaningful education at public expense -- a respectedl HS diploma -- and junior college for those who can test into it. More apprenticeships would also be useful.

All the talk about the "one percenters" has become a cliche. Think about it - whether everyone is rich, or everyone is poor, or everyone is exactly the same in the middle, there's always a top 1%. A bottom 10 percent too, and every percentile strata in-between. It's meaningless. But while where here, nothing that the most wealthy do or don't do is going to influence anyone's life. Unless you're talking about Bill Gates-type people who try to do good with what they have. But as with him and the others, you can really ignore them, most people have more important and interesting things to think about.

To your comment, neither are unions inherently good. As a segment of society, probably none other has been more corrupt and law-breaking nor had more self-focused leaders in the past century. If you want to give that segment a big hug, go ahead.

Hedge and private equity funds have put a lot of wealth in the pockets of little guys. Think about it, when they do a buyout, all selling shareholders benefit. People who have their own investments, or who have an interest in pension funds, are the ones who bank the profits. Yes, along with institutions too. So what, always plenty to go around. Those investment funds that your bad guys run are investing funds that come from university endowments, pension funds, and lots of other monies of nonprofit entities. They don't always hit home runs with their investments, far from it. Sears is a good example, it is a business from yesteryear that will die in the modern world. Wrong business, wrong place, wrong time. Not the investors' vault. They made a bet and picked the wrong horse, that's how it works.

I agree with your last paragraph. The US has never had a robust system for trade education, and there's less now in most places than before. A good model to follow is Germany, with well defined (and funded) programs for those having other than an academic bent. The rules require businesses to hire a certain quota of interns and apprentices depending on their size. The larger the company, the more they need to hire and train. It works.

People NOT in the top percentage are paying a much larger share of their earnings in taxes. We are losing a vital-to-America Middle Class. It's becoming "The Poor". Why else does Mr. Middle Class have nothing but his Social Security benefits in retirement?

Has a whole nation become Grasshoppers since the end of WWII? I do remember middle management in my DH's company 'betting on the come' in buying more house than they could afford at the time.

The Middle Class people I know aren't some kind of dull 'slackers', but they will never achieve the Upper Class wealth that replenishes itself -- sometimes despite the real slackers who inherit it.

Federal tax rates are at a low point in the years since WW 2.

The importance of the middle class and what constitutes membership in it are both undefined. For some reason these are notions that many people hold on tightly to. Not me.

Here is a link that might be useful: Fed tax rates

It's not the rates, Snidely. It's the larger proportion of Middle Class earnings that goes to pay taxes.

I would raise tax rates on the upper brackets. We had boom years WITH high taxes on high earnings; no valid argument there about rates crushing the economy.

No other nation has such a huge disparity between the wages of CEO's and Average Joes. It exists in other first world nations, but ours is three times greater than the 'next worst'. The ratio is over 300 to 1 here.

"Middle Class" isn't closely defined, but in a way it's like pornography (LOL). You know it when you see it. Right now you see its' members pretty stretched.

The Wealthy should start caring about this before it's only Wealthy and Poor.

We can disagree. I think you're trying to reduce what are very nuanced and complicated situations into a series of superficial soundbites. That doesn't work.

I will offer a few soundbites of my own - there are over 300 million people in the US. The wealth, taxes and income levels or actions of the top few thousand are wholly irrelevant, they affect no one but themselves.

Those who think they're slipping down from the middle class because of "the current situation" probably weren't in the middle class to begin with.

Yup. We disagree.

How about doing something about wealth that descends undertaxed? Unless you work at losing it, if you are at least a third generation inheriting great wealth, your kids will be wealthy too.

Estate tax is a poor choice to use for social engineering. The rate is high enough now but its contribution to the federal budget is miniscule. Makes for good press, though, "We need to protect America's family farms".