Posted on 01/08/2012 9:57:57 AM PST by Silentgypsy
high earners need to save extremely high percentages of their income -- as much as 77 percent for the 45-year-old just starting to save for retirement at age 62 -- to produce that 80 percent.
The concept underlying Munnell's paper, and a lot of other retirement planning advice, is that you can figure out how much you need to save once you have a number for that 80 percent replacement rate.
But there's reason to believe that oft-quoted 80 percent figure is wildly on the high side. That, in turn, makes the retirement calculations based upon it also wildly off. And that means if you're trying to save enough money to produce that 80 percent figure, you may be putting away too much, or skimping unnecessarily on the early years of retirement.
(Excerpt) Read more at finance.yahoo.com ...
No, fred, you must eat every twenty-four hours whether you want to or not.
“...there is No such thing as retirement planning.You just can’t plan on the destructive things their doing.” This is why we need to develop a plan to ensure unity in 2012 to get rid of noxious forces in our government. (Can’t believe I’m hijacking this thread.) It’ll be disastrous to divide the vote. I don’t personally know one single person who supports Romney, yet I see diametrically-opposed poll results frequently. We need to get it together, and soon.
Not broke, I Hope, I was divorced in Mass not a guy friendly State. One of the nice things is that she will lie when the truth would do and I have the best lawyer in Essex County who dislikes her as much as I.
This article feels like a plea for retiring Baby Boomers to blow wads of cash on facials, vacations and “hobbies” to boost the economy because they “likely won’t need all their savings”.
Spending all the retirement money now only makes since if there is NO risk of someone outliving it. And if you die with extra left over, you don’t care.
This article only makes sense if you trust the government not to send you home to die because they have no money for you.
I’m sorry—are you still stuck w/paying alimony? I paid to get rid of my ex at the time of divorce. Borrowed money to do it, never received a penny of child support, etc., but at least I didn’t have to send him $ on a regular basis.
Glad you have a good lawyer. People can bad-mouth them, but having a good one watching your back is so valuable.
Best of luck to you!
Munnell “I’m supposed to be smart and savvy because I work in this area and I know all the pitfalls, but I’ve done a very bad job.”
No, having had a Classical Education I learned how to read, after spending 40 years in the Engineering Trade I learned to reason, and normal retirement age is 62. A good, but expensive Lawyer pointed this out to the Court no alimony no mo. Always read the Divorce agreement to the letter.
actually I have been agreeing with this article for years. My parents scrimped and left us alot of money as do so many. I think the financial institutions want to keeo your boodle and overestimate how little you take out. the 4 to 5 percent a year is stingly when you first retire. and as you age, you spend less. I watched my elderly parents and inlaws spend so little in their 70 and 80’s.
those investment companies and advisors want to have your estate sitting there making money for them.
actually I have been agreeing with this article for years. My parents scrimped and left us alot of money as do so many. I think the financial institutions want to keeo your boodle and overestimate how little you take out. the 4 to 5 percent a year is stingly when you first retire. and as you age, you spend less. I watched my elderly parents and inlaws spend so little in their 70 and 80’s.
those investment companies and advisors want to have your estate sitting there making money for them.
actually I have been agreeing with this article for years. My parents scrimped and left us alot of money as do so many. I think the financial institutions want to keeo your boodle and overestimate how little you take out. the 4 to 5 percent a year is stingly when you first retire. and as you age, you spend less. I watched my elderly parents and inlaws spend so little in their 70 and 80’s.
those investment companies and advisors want to have your estate sitting there making money for them.
sorry for the triple post!
If it flys, floats, or f%#@s, lease it.
With a paid off, modest house in a moderate to low cost of living area with moderate to low property taxes, it’s still entirely possible to retire reasonably comfortably with the proceeds from Social Security alone, and even that being based upon lifetime earnings that were just as moderate as everything else.
My mom hasn’t touched the retirement accounts my dad scrimped and sacrificed to save, other than required distributions. She gives those to my sister and me. Those investments have taken a bit of a beating despite the both of us, my mother and I, attempting to beat the inevitable back in late 2007 and early 2008 by trying to set things up in other, more stable investments.
Obama’s gambit back in August, of using the fear of SS checks not being sent out backfired with her. She’s still Democrat, voted for him in fact, but that really rattled her. She can’t stand him now. Look at the approval ratings for back then, he really damaged himself with seniors by doing that.
All I know for myself personally at this point, though, is that “retirement” as it has been understood likely isn’t going to be in the cards for me or for the majority of people my age and younger. There is no certainty, incomes are falling, costs including taxation are rising. No end in sight, either. Looks like we’re heading back into scary times along the lines of 2008 again. The fundamental problems have not been addressed. Throwing money at it by the truckload just papered it over for the time being.
I was right on track for semi-retirement at 50 until 07-08. My formerly very successful small business was done in by bad debt, customer bankruptcies and mergers. Now, it’s looking like I’ll be fortunate to be able to merely go part time in my dotage. I’m trying to regain my footing by opening an e-commerce business in addition to having gone to work for one of the few former customers to thrive. If that succeeds, maybe my old age will be less of a grind. If it or some other effort doesn’t, I’ll be working in some capacity until I drop.
I’m far from alone in being in this predicament.
Can you still do that in Oregon? Most of my relatives sold out in the 50’s’s.
I’ve never understood the structural problems or whatever, that have so many in the northeast dependent upon oil heat. Diesel, kerosene and heating oil remain near historic highs. Natural gas is far more cost effective.
Why is that? During what little real estate boom there was here in inland NC, nearly all the older houses with buried tanks for heating oil were retrofitted for natural gas or a heat pump, and the tanks were removed, expensive if there was any evidence of leakage which required soil remediation. Very few houses remain with oil heat.
Have you read “Reckless Endangerment,” by Morgenstern and some other guy? (Sorry, brain fails me.) Also, which Munnell?
It sounds like you’ve planned as well as is humanly possible. Seems like monkey wrenches have been tossed into everyone’s plans to some degree. (People who work for a living, of course.)
Best of luck to you!
Ummm, you interrupted my video game for this????
I haven’t readed her and Joshua Rosner’s book.
The munnell I am referring to is the munnell the article is referring to who wrote the paper that I hope you are referring to.
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