Posted on 03/12/2010 2:18:46 PM PST by Pontiac
Is it too late to save your retirement?
For many, the answer is surely yes. News out this week shows that 29% of those who have already retired have saved nothing at all to support themselves, while only a third have saved at least $50,000.
To put this in context: A retirement account of $50,000 will provide a 65-year-old man with an annuity of just $4,000 a year.
Yet according to the latest annual retirement survey from the Employee Benefit Research Institute, a nonprofit think tank in Washington, two-thirds of those in retirement don't even have that much set aside.
It's true that many will still be okay. That's because they will have a good benefit pension, or a lot of equity in their home, or both. Neither is counted in the survey, and both can be very important.
But neither pensions nor home values are what they once were. And many won't even have them.
Overall, this is a pitiful state of affairs at the tail end of the biggest financial boom in history. Today's retirees lived through the incredible bull market that began in 1982. Bonds as well as shares skyrocketed. Most of them should be rolling in money.
Instead they were relying on ... what? Santa Claus?
The picture is no better for those still working, eitherincluding millions of baby boomers nearing retirement. According to EBRI, just a third of workers have saved $50,000 or more, and nearly a third haven't saved a dime. The numbers got worse, not better, in the last year. Forty percent of workers aren't saving at the moment.
(Excerpt) Read more at online.wsj.com ...
I have neither big screen, nor cable, but we saved well for our retirement. Now 0bozo has his eyes on it. Our thrift just will give him more to hand out once he redefines “wealth” and “taxable income”, and caps what we can leave to our children. We might as well have bought the big screen and cable.
Dont worry youll get it!
And with that check you will be able to buy a loaf of bread (if your lucky).
Which is why a few years ago they started sending out statements detailing your contributions and your projected payments upon retirement.
A lot of people don't have home equity, and the home equity market over the last decade has been a bigger gambling pit for most Americans than the stock market.
No money down, 30-year mortgages only build equity if housing is undergoing artificial inflation. Prior to the changes to the Community Reinvestment Act in the late 1990s, housing appreciated at a rate lower than inflation. Sure, equity is wealth, but the historical rate of return is on par with certificates of deposit. And how many people with artificially inflated equity traded it for bad debt with cash out refinancing? That is not like the 80's stock market, that is like borrowing from your bookie.
As for the stock market, one dollar invested in the S&P 500 Index in January of 1980 would be worth about ten dollars today, 20 years later. That equates to about an 11.5% annual rate of return. That includes the 1987 crash, the dot-com bust, the 9/11 aftermath, and the current financial collapse.
BTTT
sometimes a simpler, humbler life might be better than the comfy thoughts we plan..
My contemporaries are in their 70s and 80s and damn few fell into the equity pit. My investments were in real-estate in the 1960s/1970s and my rental income is beyond my wildest childhood fantasies...
Live like no one else so that you can LIVE like no one else!
Thanks Diana for the ping-a-ling.
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I see this in my wife's family. Her father is one of those guys that can save without thinking about it, and their retirement plan is "He's going to die and leave us plenty of money."
And it's only one out of three in my family that has the finances to make plans beyond working.
It is our duty!
But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security
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