Posted on 08/14/2023 9:23:38 AM PDT by ChicagoConservative27
On Aug. 14, 1935, President Franklin D. Roosevelt signed Social Security into law. Eighty-eight years later, our Social Security system is among the most successful and popular government programs in history.
Nearly every worker pays premiums (Federal Insurance Contributions or FICA) for Social Security. In return, they receive insurance benefits when they retire, become disabled, or lose a family breadwinner.
Social Security is secure, efficient, and the most important source of retirement income for the vast majority of Americans. Social Security does have one major flaw, though: Its benefits are too low.
The average Social Security benefit is only $1,700 a month — considerably lower than in peer nations. That is not enough for working families to enjoy a secure retirement or make ends meet when tragedy strikes in the form of serious and permanent disabilities or death.
(Excerpt) Read more at thehill.com ...
Thanks for the complement. My suggestion is a portfolio that's about 75% equity mutual funds and 25% bond/treasury/money market mutual funds. I know the usual recommendation is 50%/50% or 60%/40% (or the old 100 - age strategy). But like you said, you have to account for inflation. Especially if you retire in your 50's.
So I suggest about 30 or so equity mutual funds in many different asset classes to give you a huge diversification (and the 25% safe funds in 10 bond/treasury/money market asset classes). Basically, even in the largest market downturns since the 1980's there's always something that is always up. So there's something you can pull your 4% withdrawal from. If I had been retired in 2020 I would have done my 4% withdrawal from my two tech funds and the health sciences fund (all of which are part of the 75% equities portion) and the long term treasury fund (part of the 25% "safe" portion). The only algorithm you need is when it's time to do the annual 4% withdrawal or monthly 0.33% withdrawal, withdraw from whatever's up at that time (sell high). Likewise since I'm still working some and still contributing to investments, I invest in whatever mutual fund has the lowest balance at the time (buy low).
they found a way to get at it spend it and add it to the deficit while leaving an IOU they dont intend on paying back.
“If someone is retiring with only ss, then that is either tremendously bad luck over decades or decades of poor decisions.”
And there’s a huge plurality of folks (40.2 % of retirees) who are in just that position-
Add in all the folks currently draining 401ks just to eat, and that number will keep growing into the future.
More than a decade ago I went to the local Social Security Office to file for my benefits. In a room full of people I was (except for the security guard) the only geezer in the room. Everyone else was there to collect disability.
“My best advice to all the nieces and nephews was that time shows that job stablity in a decent job (there are few perfect jobs) proves better than thinking the grass is always greener somewhere else.”
Disagree-
It works ONLY if you are UNION or Goobermint. The rest are at the whims of a Boss.
Younger folks change jobs every 2-3 years to move up the rungs, rather than sitting and waiting for Benevolence to fall from On High.
BoomerCons had it different and were the last of that breed.
New Advice? Screw the Corporate loyalty - They will fire you at the first chance. If they don’t? ask for more money. No Raise? Quit, roll your 401k, and get a better higher paying position.
You are in the “Me Inc.” world now.
“mine:
Sociable Insecurity was never intended or designed to be a retiree’s sole source of income. President Roosevelt sold it as a Supplement to your own preparations for your own retirement (savings, investments, any private pensions, etc.)”
Yes, but . . .
Back then, most people lived on their own small Farm. The houses even had birthing/dying rooms because folks came into the world and left the world from right in the same place. Hospitals were an expense many could not afford. Many were even buried in their own land.
Cash was hard to come by so SS would be a true “Supplement” in those cases.
Lots different today. Not many on Farms anymore. Will cost you ~15K to die. A house is 3 times what folks can afford. Only Goobermint has a true Pension. And the dollar has been devalued by 99.6%.
So, for many of our Fellow Citizens, life is gonna get much harder.
“It works ONLY if you are UNION or Goobermint. The rest are at the whims of a Boss.”
Not true. There are many companies, and not-for-profits, non-union shops, with good pension plans that are not 401k plans and not defined benefit plans.
Just a few years after Ponzi was deported for having committed fraud.
People need to understand that at best, Social Security will only replace about 40% of your income upon retirement. So it is on you to supply the rest.
I'm getting ready to retire and I spent the past 40 years putting 10% of my income (not including company match) into a 401k. Over the years, I changed the allocation of equity/fixed to reflect my age so that I have increased protection from stock market swings as I get closer to retirement but even in retirement, you will want a good portion still invested as you will want to grow your account in your retirement years.
People make the mistake of putting it all in fixed when they retire and when they do that, they can run out of money rather quickly.
People retiring today should look to have $1,000,000 or more in their 401k/IRAs. Even that is cutting it close because applying the 4% rule, you can safely withdraw $40,000 from your retirement fund each year to supplement your Social Security benefits. Assuming a $25,000 annual benefit, that comes to $65K even with a million dollars in the bank.
So even having a million saved up is not going to give you a really comfortable retirement these days, unless you have other income streams, such as property rental income, side jobs, etc.
Having $2 million or more saved up should be the new goal for younger people to reach when saving for a 401k. That requires at least a 10% contribution over decades.
That is not enough for working families to enjoy a secure retirement
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The original purpose was for it to be a supplement, not to be anyone’s only means of living.
“Younger folks change jobs every 2-3 years to move up the rungs, rather than sitting and waiting for Benevolence to fall from On High.”
That is always true but in every generation that settles down after a time/age, because after a time/age shifting jobs reaps fewer additional rewards (does not do better than periodic raises) - generally.
I know. Creeps! Every last one of them are disgusting.
I tell any young person who’ll listen, save as much money in your 20s as you can, I don’t care if it’s only $50 a month.
Compound Interest is The Eighth Wonder Of The World!
#8 Matthew Lesko this year....
https://s26552.pcdn.co/wp-content/uploads/2023/04/21226AB0-F6B0-4C0E-9D5E-77F4E4113A19.jpg
“I disagree. If your employer doesn’t have a 401K (or 403B or 457), then invest elsewhere. My step 2 for investing is a Roth IRA — which you get outside of work.”
1. If your employer has a regular pension plan, that you and your employer contribute to, then why also put money in an IRA?
2. Only 15% of current eployed folks do an IRA or Roth IRA and much of that reason is after all other financial obligations and savings there is not excess income with which to put into an IRA.
“...Social Security is secure, efficient, and the most important source of retirement income for the vast majority of Americans. Social Security does have one major flaw, though: Its benefits are too low......”
Wow. Anyone bother to read the latest Trust fund Report from Social Security on when it will run out of funds and need to dramatically cut back on benefits? I have. Obviously the author doesn’t believe the people in charge of managing the integrity of the program.
Now who also remembers all the BS about the Social Security “lock box” and how the funds will always be there?
By the way, where are the “fact checkers” on this nonsense?
“What really needs to be done is to logically phase out social security and replace it with a workable and self-funded, not robbable real pension plan “
PRIVATIZE IT
Or picking their parents poorly.
Why? Because I'm not comfortable with my employer's HR dept being in charge of mine and my wife's future. Or to use words from Tennessee Ernie Ford, I don't want to owe my soul to the company store.
2. Only 15% of current eployed folks do an IRA or Roth IRA and much of that reason is after all other financial obligations and savings there is not excess income with which to put into an IRA.
I'm sure that's the case for some people. But in my experience, most of the 85% that's not investing anything to their future (assuming your 15% is correct) are living above their means. Until we got an EV last year as part of our energy savings plan, my wife and I were happy with driving nothing but old used cars the entirety of our marriage --- while lots of folks in the neighborhood drove new car after new car all while complaining they can barely pay their bills. The same for eating out. The same for always having the latest dumb phones. The same for paying for cable TV for many years. My wife and I didn't participate in that mess. Instead we saved and invested. And my wife retired 3 years ago at age 55. I'll fully retire probably 3 or 4 years from now in my late 50's.
Yes, not 401k, because non-profits fall under 403b.
Are you a politician by any chance?
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