Boomers Not Ready For Retirement

The ledger (Lakeland, Florida) ^ | Monday, November 27, 2006 | MARINA BLOMBERG

[seacapn]

GAINESVILLE - From all appearances, America's baby boomers are a nation of procrastinators wearing rose-tinted glasses.

They think just because they worked all their lives - many starting as early as 16 - they deserve a retirement with the same income as at the peaks of their careers.

Oh sure, there will be some health benefits they'll have to pay for, and heaven knows what gasoline will cost in 10 years. But they'll still be in their homes, drive two cars and take cruises whenever they like.

But recent surveys show that probably isn't going to happen.

The 16th annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute found that a large majority of Americans expect to enjoy a comfortable retirement, but many have not taken the actions needed to turn their aspirations into reality and face the prospect of having to work far longer than they expect.

Their expectations are termed "Swiss cheese" - full of holes.

Twenty-four percent of respondents said they are "very confident" they will have enough money to live comfortably in retirement, and another 44 percent said they are "somewhat confident."

But 22 percent of the respondents aren't setting aside anything for retirement. Another 40 percent have saved up less than $50,000.

[tatsinfla]

IMAGINE THAT, BOOMERS THINK THEY SHOULD RETIRE MAKING WHAT THEY EARNED AT THE PEAK OF THIER CAREERS. WHY SHOULDN'T THEY IF OUR POLITICIANS CAN RETIRE MAKING WHAT THEY EARN WHILE IN OFFICE?

[tatsinfla]

IMAGINE THAT, BOOMERS THINK THEY SHOULD RETIRE MAKING WHAT THEY EARNED AT THE PEAK OF THIER CAREERS. WHY SHOULDN'T THEY IF OUR POLITICIANS CAN RETIRE MAKING WHAT THEY EARN WHILE IN OFFICE?

[FtrPilot]

You are exactly right about SS and Roth IRAs being taxed.. Anyone who thinks that Roth IRAs will be "Tax Free" is crazy. Congress will change Roth IRAs some time in the next 10 years.

[Kenton]

If you're like me and actually keep an excel spreadsheet (all those pretty colors....), look at the last two or three years and you'll feel a lot better! :)

I don't do that, but I have all my investments listed on my Excite home page. The 401K part of my portfolio alone is up 230% what it was in March 2003 (3.5 years) And all I had to do was watch it grow.

Anybody can save, it's a matter of one's chosen lifestyle. We've chosen the right lifestyle, apparently.

[litehaus]

Hitlary and the dems have ALREADY espoused that 'raid plan.'

[Hydroshock]

I have a friend who was getting ready to retier early next year at 62. He has little in savings, he did not think he needed it because he had a great defined pension and with it his and his wife SS they were going to get over $5K a month to retire on. The have their debts paid off. Last June his company declared bankruptcy adn dumped the pension plan. To make a long story short he will be luck to get 20 cents on the dollar of what he thought he was going to get. He now says he will be lucky to retire at 70.

[Ace of Spades]

I'm at peace with the fact that I'll be working at least part-time for the rest of my life. What am I gonna do with the last 20 (hopefully) years of my life anyway, watch the grass grow?

[Ace of Spades]

I'll be happy to sell you my house in Jersey when I escape to PA.

[Joe 6-pack]

Once the islamic jihad and mexican reconquista crowds start slugging it out for control of the United States, I would anticipate the life expectancy of the average American to plummet precipitously so all this should not be a problem. Ironically, much of the legislation, policies and social attitudes fostered by the boomers will be that which brings us to that point....

[staytrue]

ultimately when you see a nice elderly couple who can't afford health care, food, and shelter and there is a camera crew at your door will you say "they should have been better prepared" or will you say "go ahead, raid my retirement fund"

[Gandalf_The_Gray]

We're living somewhat hand-to-mouth now while I'm putting 15% of my salary into 401k so we'll be OK for retirement in 10-15 years.

You've got the right idea, you may want to bump up to 20% if you can though. Don't rely on your 401K alone, if your wife works outside the home, check and see if her employer has 401K or 403B programs. Sign up for the maximum contribution and shop around for employers who match at least part of your contribution. Max out on an IRA contribution every year. One more thing, pay off any revolving credit balance. Credit cards are OK as long as you pay them in full every month. Double up on your mortgage if that is allowed in your contract. The first payment is mostly interest while anything extra goes straight to reducing the principle owed. The ideal is to enter retirement without a huge debit load.

My wife and I are "DINK"s (double income, no kids) and we were both professionals with decent salary and benefit packages. We didn't start systematic savings until we were in our forties. In retrospect that was almost too late. The truth is start as early as possible and keep to the plan.

Regards,
GtG

[GOP_1900AD]

Here's a possible archetype (constructed from several actual individuals I have worked with):
1972 - Smoked two pounds of weed down at the University
1975 - BSEE degree, hired by up and coming Silicon Valley firm
1976 - Blew $10000 on coke
1978 - Met dingbat stoner wench at fern bar, engaged following week, married one month later. Bought West San Jose rancher using creative financing.
1980 - Bought Beemer and new bong, baby arrives.
1981 - First espresso machine, Mexican Riveria vacation, second Beemer
1982 - Upgrade to buy a pro-McMansion in Almaden Valley, baby number two.
1983 - Caught drunken and stoned wife cheating, the big D, probate sale of proto McMansion
1984 - Met dingbat golddigger yuppie in power bar, see 1978 for further details.
1985 - Baby number 3, invest in junk bonds and S&Ls, vacation in Vegas.
1986 - Upgrade to McMansion in Pleasanton
1987 - Take out 2nd to buy ski cabin and boat.
1988 - The two school aged kids now going to private school. Ex sues for increased payments.
1989 - Baby number 4, busted by cops for DUI and possession of pot and coke.
1990 - High tech co goes chapter 11, ex gets restraining order, current wife talks you into swinging.
1991 - 1999 - A blur of kid activities, house upgrades, expensive vacations, high tech gadgets, high end clothes, tax liens, financial misteps, refinancing, and treadmill runnin.
2000 - The strain of supporting 4 kids, two of them at expensive private Universities, the latest and greatest cars, boats, clothes, in places, and coolness, grows. Stock market crash to boot ....
2001 - present - Even more of the same, and now, with a 40 year debt consolidation mortgage and no retirement savings, the final bubble looms .....

;)

[Gandalf_The_Gray]

I used to get freaked out by a bad day on the stock market, but now I just try to shrug it off. The good days almost always outweigh the bad days if you're patient.

Right you are. If you do a running average for any tan year period since 1900, the rate of return for the DOW is in the 10% to 12% range. The extreme fluctuations during any given day may be +/- 40% or more. It's enough to give anyone the vapors!

The best advise is do not try to time the market 'cuz you will inevitably end up buying high and selling low. Also, do not put all your eggs in one basket, you'll want to diversify. I do not have enough to consider investing in individual stocks, I pick conservatively managed mutual funds and let the managers do the picking. Sticking with no load funds keeps your costs down.

Regards,
GtG

[linda_22003]

That's all an excellent, excellent plan up until 1980, when it begins to fall apart.

[Gaffer]

....I'm putting 15% of my salary into 401k so we'll be OK for retirement in 10-15 years....

It won't be boomers that take it from you; it will be Democrats. Bill Clinton's minions already thought of that back in 1993, but didn't get to implement it because they lost the House in 1994. Now that they have both houses and will have the presidency in 08, you'd better think about converting it out somehow and saving it. It's part of the largest single source of cold, hard cash in this country.....

[Hydroshock]

That about sums up a lot of them.

[Proud2BeRight]

This boomer sure loves being retired for the past six years.

[mysterio]

Young people better learn to vote, and fast.

Ok, I'm ready to vote. Which superparty is going to solve the problem? Because from where I'm standing, they seem to be working together to make the problem worse.

[Jimmy Valentine]

"self terminate" via medical neglect, or outright euthanasia"

Ahhhhh, we have a winner!

Please recall that the Terry Schiavo decision made it perfectly acceptable to do away with the merely inconvenient.

My fellow Boomers of the Liberal persuasion willbe horrified when their children turn on them like wolves, taking over their estates so that they can get their new BMW's without having to wait for Mom and Dad (they just would not want to live this way) to either step off the planet or to pull the plug.

[lilylangtree]

You stated what I was thinking as I was posting earlier. Thanks. I sure feel sorry for your friend. Unfortunately, there are more people like him in a similar situation.