The main reason so many people don't save for retirement (friends, years)
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Be a little more creative - this trope has been done to death. No, and "All the kids have iphones" isn't any better. FWIW, and for those who don't know - not all smart phones are iphones and there are many better Android phones out there for far less than an iphone...jus' sayin'.
This drives me crazy as well. Even my 92 year old demented father understands that smart phones are not necessarily expensive.
I was reading the Farm Bill (the one that was voted down today) and found it interesting that the bill requires that all states provide for the use of "mobile technology" in processing SNAP (food stamp) purchases. I had visions of customers standing in line clutching their chest when they see a shopper whip out his smart phone to access his "food stamps".
Of course people should save as much as is reasonably possible but if you have a modest income, you also have to ask yourself if you are going to deprive yourself of many things you enjoy such as a cell phone and eating out maybe a couple of times a month so you can live better in your old age than you did for the last 40 to 50 years.
No one is guaranteed a long and healthy retirement. You may only be retired a couple of years before you kick the bucket and if you live into your 80s, chances are, you are not going to worry about buying that big new expensive car, remodeling your kitchen or buying new trendy clothes. As people age into their late 70s and 80s, they spend much less. They eat less, don't have the energy to go out as much or take that vacation to South America.
You aren't the same person in your 70s as you were in your 40s for sure when you could enjoy life much more.
Last edited by marino760; 05-18-2018 at 10:13 PM..
Two steps that would make it easier:
1. Open up the 401k system to all workers, regardless of company size.
2. Automatic enrollment 3% of pay.
There is less cause to say you cant afford it.
Anyone can set up their direct deposit to send 3% of their pay to a mutual fund. This would simulate a Roth 401k.
You can be a middle income earner, play by the rules, and still be wiped out financially. My brother and SIL were both working when she got colon cancer. They had insurance, but the copays were huge. She had surgery, chemo, and radiation. The treatment saved her life, but she has had serious digestive problems ever since and never could go back to work. She eventually applied for and received SS disability.
Then the same brother got prostate cancer, which again involved surgery with big copays.
Then they got divorced.
My brother just got laid off and has less than $5,000 in cash saved. He's 60 and eligible to retire with a state pension, but his ex will get a chunk of that and what is left isn't enough to live on.
Yes, they have made some poor financial choices along the way but they have also had some really terrible luck. Most people are one serious illness, accident, divorce, or natural disaster away from financial ruin.
This. It can happen to anyone. It happened to me. I became disabled after a long period of struggling, and failing, to overcome what I thought must just be burnout and instead turned out to be increasingly disruptive cognitive deficits. I was a software engineer. Now I'm a little old lady living on SSDI.
I make about a third of what someone else here posted, and my house payment is higher. I don't have money for dental work and I'm afraid to go back to the "cheap" dentists because a lot of what's wrong in my mouth is because of the LAST time I went to a "low-income" dental clinic. I could not afford to live here if my son hadn't ponied up enough for the down payment to keep my house payment under $800 a month. And BTW, the percentage of my income going to housing (including utilities) is about 60%.
Medical expenses ate up ALL of my 401k long before I ever got this far.
Medical expenses are the single most common disaster that sends people into bankruptcy and homelessness. You get sick, you lose your job, you lose your health insurance, and you never get better even if you could have had you been able to get medical treatment in time. It is a national shame.
Reality: some people will always earn (and have) more than others and all people inevitably age to the point where a full-time job is no longer feasible.
Meanwhile, advertisers promote the notion that everyone, regardless of income, should have the exactly the same lifestyle and things
Politicians of many increasingly socialist countries, attempt to level the playing field with an ever-growing litany of give-away's ... paid for by those who earn more. But, even they eventually run-out of "other people's money."
The media wrings their hands and bemoans the 'unfairness' of it all, while endlessly stoking the fires of daily outrage.
Ultimately, whether "fair" or not, every individual is responsible for dealing with the obstacles in their own life and planning for their own future.
The 'poor' who realize that blaming others and living life on the 'dole' is not the solution, do what is necessary to protect their families and provide for themselves ... in spite of the obstacles and limitations.
It's called life.
Yup. And life ain't fair.
A new world, built upon brains, not brawn, machines built by brains which replace brawn, a media where we see who has what and who has not, where the few (charismatic, brainy, talented, athletic, lucky, well-born, and beautiful) beat out the many (boring, stupid, ordinary, klutsy, luckless, low-born, and ugly).
And where the rewards to 'excellence' are no longer linear, but exponential, and your peer group is not your village but the whole phµcKing world. So, yes.. most people will have less than the rest, and MUCH less than the few.
Yeah, life ain't fair.
Last edited by PamelaIamela; 05-18-2018 at 11:14 PM..
Einstein and compound interest. Whether he called it the Eighth Wonder of the World or not, the point is, the sooner you save a dollar, the better off you will be down the road. I won't say there's no excuse for not saving, I think it's harder to do today than any previous time in my life. But that just makes it all the more important to do, IMO.
Twenty years into retirement our income is roughly half of what we earned in our peak earning years, which fortunately began in our late 20s and continued to retirement. Not everyone is so blessed. More reason to save something from every darned dollar you get your hands on.
I don't pretend to know everything, or even a lot, about money - I once heard a Treasury Secretary say he knew of only one person in D.C. who understood money and that was a mid level employee in his Department - but I do know we spend a lot of time and energy trying to get some of it. So when you do, for gosh sake, keep some of it.
Read about how to invest and sort out the real helpful stuff from the sales pitches. You can begin by opening an IRA with, say, Vanguard for very little money. If young, buy equity funds. If old, it's tougher as bonds are little better than bank savings accounts, which return near zero.
The more you involve yourself, the more you'll learn and the better you'll do if you follow conservative advice.
This. In spades....
Too many walk throught life unconsciously. And then they are caught lacking.
We were "late" savers but when we did shovel - we kept shoveling. This on basically one and a half salaries. I was the full salary and started 18 years ago making $30K. I'm now at $59K and my spouse stopped working years ago. It has not been easy to save - but there's never been an alternative.
We paid ourselves FIRST. No $5 cups of coffee. No frills.
And we'll retire after almost 20 years of active saving with almost a million.
Very true on making my own coffee...one cup a day. When all these coffee shops took off, I would go to them, starbucks not my fav, but would buy a simple cup of coffee for back then about $1.00 or so and now that same cup I hear is about $2 or more I think...
Data point...... McDonalds makes a great cup of coffee. $1. Any size you want.
I remember reading an article some years ago that said the #1 way to be financially secure is to get married and then stay married to the same person for the duration. I think that’s a very accurate assessment. It means the costs of life are contained under one roof and the savings from life don’t get splintered off.
Quote:
Originally Posted by marino760
Of course, married people have the potential of earning twice as much as a single person while having virtually almost the same amount of bills as a single person considering you only pay one mortgage or rent, utilities are virtually the same, food isn't all that much more for two people and so on. Then when you retire you still have the same benefits with two social security incomes coming into one house. It makes a lot of sense that being married and staying married helps a great deal.
As a lifelong single, I can attest that this is true. I make good money but my savings would be doubled if I had someone paying half the bills.
I would advise young people to get married even if just for the financial benefits.
I remember reading an article some years ago that said the #1 way to be financially secure is to get married and then stay married to the same person for the duration. I think that’s a very accurate assessment. It means the costs of life are contained under one roof and the savings from life don’t get splintered off.
Well sure, but most of the benefit from staying married is not that two people are sharing expenses, but that married people make more money. The main reason is that they're more stable and reliable and make better employees, but it's also because they are more motivated. (There are exceptions but this is true on average.)
Bad decisions is not the reason for the largest group of people who don't save for retirement. The study and other sources of data back up my opinion; it's not based on just anecdotal information.
couldn't care less why others don't save , not my problem as i say over and over . there is nothing me dwelling on why they can't save that will change a thing .
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