Posted on 12/17/2004 12:15:42 PM PST by Constitutionalist Conservative
Try this on for size. You’re seventy five years old. You live in the comfy home you’ve always lived in. You play golf in good weather. In bad weather, you travel to where it’s warm and sunny. When your grandchildren call, you take them out on the lake in your new boat. Your wife takes classes in the local college and paints. This is your life in retirement and it’s everything you always hoped and dreamed it would be.
Or, try this scenario: you are seventy-five years old. You live in a tiny apartment with the smell of boiled cabbage and noisy neighbors all around. You live in a scary neighborhood and you dare not go out after dark. Eating at restaurants is just a dream. Your apartment is too small to have your kids or grand kids visit. If you get sick and you have to spend time in nursing care, you don’t know how you’ll afford it. Your life is pure fear.
The fact is that if you are a baby boomer, one of the 77 million racing towards retirement, you have -- to a large extent--your choice of which of these retirement outcomes is yours. You get the good outcome or something like it if you start early, get a sensible, solid financial advisor, make a solid sensible plan for retirement savings, stick to it through thick and thin, accumulate diversified savings of stocks, mutual funds, bonds, real estate, variable annuities and foreign investments. You should accumulate an amount equal to roughly fifteen to twenty times what you need annually to live on–with allowances for pensions and social security. It’s a tall order, and it’s a bit scary to think about, but if you even come close to it, you get to have that great retirement life.
The point is, making sure you have a swell retirement is up to you. Not to Uncle Sam, usually not to your employer, not to your kids. You have to max out your IRA’s, your Keoghs, your 401K’s and do it sensibly, and then some. And you have to start with that all important plan.
Or, you can just be the happy go lucky grasshopper in your working years, not think about retirement, and then later, you get to live in terror. Which sounds better to you? I thought so. No matter how old you are, get started now and do the best you can.
Oh, you should know I am honorary spokesperson for National Retirement Planning Week. And, yes, I get paid for preaching to you. But your doctor also gets paid to tell you to stop smoking and eat green leafy vegetables. That doesn’t make us wrong.
Or, one could have had the foresight to have been born to a Presidential Cabinet member.
I had heard of that policy. However, my husband will likely be making a pretty fair income in the next year, and it will only increase (likely, anyway) over the coming years. I know they factor in a family's income for financial aid as well, so I am not certain what, if any, financial aid or student loans they would qualify for. This was, for me, the biggest thing for me to overcome when making the decision we did.
Saving for your retirement vs college education of kids is a far smarter thing to do. There are loans, grants, and other assistance to pay for college. Those don't exist for retirement living.
I'm in the opposite situation here. I am trying to convince my wife to retire. She says at 51 years old that she's too young to retire. I tease her a lot whenever she gets the inevitable AARP mailings.
Excuse my butting in ...
Years ago in N.J., should your child (ren) continue school DIRECTLY from high school (meaning no time off other than that summer) you, as a parent, were responsible for that schooling, as they were not emancipated.
You may want to both check it out for your state, or if it is not like that now, anticipate that it may be that way, for your future. ;)
My thinking, exactly.
what happens when you do all the right things and STILL end up losing ?.....spouse worked for a company for almost 27 yrs, moving up slowly....but now has ZERO company pension let alone any medical benefits for retirement....due to bankruptcy.....he does now get a much smaller Pension Gurarentee check once a month, but I foot the bill for the medical for the family,,,,and I am paying about $650/month no kidding.....
saving for retirement is swell, but let's remember that we are supposed to enjoy your younger years when your kids are small.....what good does it do to have a ton of money when you are 75 if all the kids remember is you not spending an extra dime for family vacations, etc.....you know, the memory maker types of things...
we never had enough to put away for the kids for college....
first one borrowed some, but we supplemented that with about $500 a month ........it worked out okay...
our youngest could have gone right to 4yr college, but her grades weren't great so she is in her 2nd yr of community college....doing much better...she hasn't borrowed anything yet and we have been able to pay for that as we go....
I would like to go and do more traveling....I also would like to be able to help my grown children out too.....other than that, we don't need too much.....
So what your saying is that if I lived in NJ and have a child graduate HS and go directly to college that the state, by law and at the barrell of a gun would force me to pay the tuition bill?
Years later, the second guy did run out of money, but chickened out on the gunshot. He ended up begging from the natives to stop from starving to death (a terrible thought for a Brit -- begging is bad enough, but begging from the natives....!)
Some people have decided that money is more important than people.
We have seven children, so far. When we decided not to limit our family, we also decided that we would do the best we could, as regards their higher education, but we're not going to agonize over it.
My parents have set up accounts for them all, and purchased some securities. We also make deposits, especially for the older ones, when we have extra. AND we're insisting that all the children save a portion of any money they earn or are given.
But in the end, it will be up to them and their own efforts whether they attend college, or where they go. Right now, our oldest is interested in military academies ... if she's prepared for that, even if not selected she'll have plenty of scholarship offers other places. Our second child wants to be a carpenter. Third one wants to be a priest. Fourth plans to marry a prince :-). God will provide.
As for retirement, I plan to go back to work at about the age other people are retiring ... IF we don't have more children, I'll be 58 when the youngest leaves home!
See #51!
I prefer the Villa as they have Palliotis down stairs for food and drink. So we can get all liquored up and just walk to our room. The Villa raised the rent on them big time and they were going to move to Surf City. Then the owner (Joe Pallioti) died several months ago and I am not sure the plans are. I need to find out soon though to make our accomidation plans as 20 of us go to Topsail every April for a week of all out drinking, debauchary, and golf.
Read it back in the day. Their money was basically worthless, because they couldn't buy anything with it. Anything decent was sold in hard currency that they couldn't get. Soviets kept plenty of cash on hand on the off hand luck that there was something worthwile available to buy.
As far as what would the economy look like if everyone saved enough for retirement? How about a federal budget of half what it is now and ALL citizens having larger paychecks both because of lower taxes and because of greater business activity.
Since it's dumb to save while you still have credit card bills, lets assume that everyone has first paid off the plastic and tears it up. What "greater business activity" would there be with everybody's money in the bank gathering dust, rather than coursing around the economy transporting economic energy?
I'm not saying it's a bad idea for *you* to save and invest. I'm just saying that if everybody did it, then it would cease to be a good thing because of the reduction in spending.
Economic life isn't built on people buying their necessities. That accounts for remakably little in the economy today. Our economy is built on trading things people want, not need.
Enjoy them and look forward to grand children. They're even greater!
I'm saying that in N.J. when, my children were in high school, I was responsible for them (ie: food, clothing, shelter, etc.) until they were emancipated.
I remember a court case where a girl sued her parents because they stopped providing her college tuition. The girl won.
But, hey, don't rely on me. Check out the law on it.
Wow. Congratulations. Keep up the good work raising little conservatives.....
No. Their money was worthless because it wasn't accepted anywhere else on the planet. Monopoly money had greater value than the Ruble.
Since it's dumb to save while you still have credit card bills,
Your assumption is false.
lets assume that everyone has first paid off the plastic and tears it up. What "greater business activity" would there be with everybody's money in the bank gathering dust, rather than coursing around the economy transporting economic energy?
You are assuming a 100% savings rate beyond basic necessities. That is impossible and no one has or would suggest such a thing.
You have also forgetton the part that if everyone was responsible in saving for retirement so they would be confortable there wouldnt be a need for SS, Medicare, and a whole host of other government programs and the budget could be slashed in half or more. Peoples take home pay would explode and their economic activity in the market (consumer, not capital) would also rise while their savings and investing would rise as well.
The biggest obstacle to saving and investing today is that for most people greater than 50% of their income is paid in taxes.
Dear exnavychick,
My brother works for a Fortune 500 company in a senior engineering position. Although not rich, he has a low six figure income. His wife works as an insurance underwriter, and makes mid-five figures. Between them, they have a lot of income.
Unfortunately, they're spendthrifts, and really don't have any savings outside of the value of their home, and his pension and their retirement accounts. He and his wife have managed to put something into his company 401(K) over the years, and her company's defined contribution plan, as well.
When Son No. 1 applied for college, even though my brother and wife had plenty of income, the son still nonetheless received some financial aid. Tuition, books, room and board, at the time, came to $26,000 per year. I think my nephew got financial aid of about $7,000 per year.
Son No. 2, similar deal.
My brother still had to take out six figures of student loans to help them through college, but the amount of financial aid was increased because my brother and his wife had virtually no assets outside of the equity in their house and their retirement accounts.
Now, here's the thing. Up until he sold it just recently, his wife and he owned a house in Connecticut that they bought in the late '70s. You can imagine the equity they had. And since even modest contributions to retirement plans snowball over the course of 20+ years (and his company's stock, which he gets some for free every year, has quadrupled in the past 10 years), he's got, I estimate, a couple hundred grand there, too.
Not too bad for a guy who spends just about every cent that walks in the door.
But the equity in the house (hundreds of thousands of dollars) and the retirement accounts (also six figures) didn't get calculated into the equation.
Because there were no general savings, or education savings, the only thing they considered was household income. Even folks who are well-to-do will be eligible for some financial aid at the more expensive schools, if assets are primarily in home equity and retirement accounts.
sitetest
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.