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401k not enough for baby boomers?

Shit son, I plan to die at the copy machine or whatever new fangled device our evil overlords assign me to work. I have no intention of ever retiring. :laughing :cry :cry I wish I was kidding. :|
 
Cyclesuzy said:
Shit son, I plan to die at the copy machine or whatever new fangled device our evil overlords assign me to work. I have no intention of ever retiring. :laughing :cry :cry I wish I was kidding. :|
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That one quote is eye-opening though, people reach age 65 or so, then: "The discussion turns out to be: What kind of part-time work do you want to do after you retire?"

I always thought of retirement as "sitting on the couch Tuesday morning at 10 a.m. in your underwear, watching The Price is Right." :laughing
 
Zerox said:
http://online.wsj.com/article/SB10001424052748703959604576152792748707356.html

The baby boomers saved a lot with their 401k's, but it's not enough? Working into their 70's?
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Anyone who was 60 years old when the economy folded shouldn't have had that much money in stocks. Likewise the majority of losses have been replaced.

The real problem is that people bought a house when they were 55 or 60 years old with a 300k to 700k mortgage. A 60 year old should not have any mortgage at all.

It is too bad that we don't teach young people about money, interest, savings and the like.

The example, Mr. Rutschmann, made two dumb decisions: 1. having a large mortgage at retirement time, 2. he probably panicked and put all of his 401k in safe investments after the market dumped 50% of it.

The other example did the same stupid thing:

"Gloria Moss has been contributing to a 401(k) since 1985, when she went back to work after having children. Especially after divorcing, she wasn't able to contribute as much as she wished and when her children finished college, she focused on repaying college loans. She says she lost more than half her savings in the recent financial crisis, then shifted heavily to bonds and missed the stock rebound."

The John Mastej character, also has a mortgage. He is 59, what has he been doing the last 30 years?

The Websters, heavily invested in stocks at around age 60 and where building a new house, with a mortgage.

:|

Good God.
 
Meter Man said:
It is too bad that we don't teach young people about money, interest, savings and the like.
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Back in the day one of my high school teachers invited some financial guy to speak to our class about how if we started saving then, by the time we were 60 we would have some serious cashola in the bank. Did I put his advice to good use? NO. :laughing
 
The whole article is premised around people needing 85% of their pre-retirement income to retire at current living standards, and makes it sound like it's totally hopeless.

How about instead we look at the real answer; that maybe these people aren't going to retire at 85%, and will simply have to deal with lower quality of life and diminished expectations. Make bad decisions and that's what happens.
 
a 401k is invested in stocks, mutual funds and bonds.

investing in equities and bonds is hard.
the large majority of people i talk to don't have any investing discipline so it's not surprising they are doing poorly.

also a lot of people take on way too much risk - they are too greedy for their skill level and age.
 
It's always amazed me to see people who raise a family in a 1200 square foot house, then once the kids are all gone and retirement looms, they go out and get a huge second mortgage so they can double or triple the size of the house. Even sillier are the ones who use their home as equity to go out and buy a bunch of expensive toys...

Personally, we worked hard to pay off our house and now, after being laid off/retired since Nov 2008 we have not had to touch our 401(k) yet - we've still got enough liquid assets to last us another 2 years. Meanwhile the 401(k) (actually now a rollover IRA) has been making about 28% per year so when our saving accounts get low we will be able to easily live on what it's making without touching the principal.
 
Meter Man said:
Anyone who was 60 years old when the economy folded shouldn't have had that much money in stocks. Likewise the majority of losses have been replaced.

The real problem is that people bought a house when they were 55 or 60 years old with a 300k to 700k mortgage. A 60 year old should not have any mortgage at all.

It is too bad that we don't teach young people about money, interest, savings and the like.

The example, Mr. Rutschmann, made two dumb decisions: 1. having a large mortgage at retirement time, 2. he probably panicked and put all of his 401k in safe investments after the market dumped 50% of it.

The other example did the same stupid thing:

"Gloria Moss has been contributing to a 401(k) since 1985, when she went back to work after having children. Especially after divorcing, she wasn't able to contribute as much as she wished and when her children finished college, she focused on repaying college loans. She says she lost more than half her savings in the recent financial crisis, then shifted heavily to bonds and missed the stock rebound."

The John Mastej character, also has a mortgage. He is 59, what has he been doing the last 30 years?

The Websters, heavily invested in stocks at around age 60 and where building a new house, with a mortgage.

:|

Good God.
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My wife and I put 19% in our 401k for 10 years or so that it was available to us, that's after starting contributing the maximum to our IRA's starting at age 21, (we're now 54), even though at that time we lived paycheck to paycheck.

Though there were big dips over the years, we hung in there and even were lucky enough to go to cash just before the recent recession...so a little luck helps.

Even though we can't touch that money for several more years we were able to retire at 52 and can live on our non retirement investments that earn us well south of $100k simply because we've generally lived very frugally over the years and never followed the advice of friends to "get a bigger house because you deserve it."

Most people while working hate to live frugally, but that's a big part of the equation right there, and, as you say, we had our house paid off at retirement time.

It takes discipline, some knowledge of investing, living within your means and some luck along the way, but it can certainly be done, even in the Bay Area.

I'd say we're able to live just fine with 50% of our average income from over the years.

Oh, and only having one kid was a big help!
 
GAJ said:
My wife and I put 19% in our 401k for 10 years or so that it was available to us, that's after starting contributing the maximum to our IRA's starting at age 21, (we're now 54), even though at that time we lived paycheck to paycheck.

Though there were big dips over the years, we hung in there and even were lucky enough to go to cash just before the recent recession...so a little luck helps.

Even though we can't touch that money for several more years we were able to retire at 52 and can live on our non retirement investments that earn us well south of $100k simply because we've generally lived very frugally over the years and never followed the advice of friends to "get a bigger house because you deserve it."

Most people while working hate to live frugally, but that's a big part of the equation right there, and, as you say, we had our house paid off at retirement time.

It takes discipline, some knowledge of investing, living within your means and some luck along the way, but it can certainly be done, even in the Bay Area.

I'd say we're able to live just fine with 50% of our average income from over the years.

Oh, and only having one kid was a big help!
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Living frugally is how i get by on well now 30k a year (gross) income after tax its much less.
 
Oceansides said:
Living frugally is how i get by on well now 30k a year (gross) income after tax its much less.
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I read the other day that owning a home is becoming less of a "must do" for the younger generations...and, as the Feds are mulling over cutting back or eliminating the interest deduction on owning a home that may become even more of a trend.

I think many in my generation bought into the whole "show house" idea and WAY overbought for some overly large and expensive homes, and I'm not even talking about people in foreclosure.

I truly believe that staying in the same 1800 sq/ft house we bought when we moved here almost 30 years ago was a big part in our relative success versus some of my friends.

I love visiting their fancy houses, but I don't envy their costs! :laughing

Frugality should serve you well. :thumbup
 
Zerox said:
That one quote is eye-opening though, people reach age 65 or so, then: "The discussion turns out to be: What kind of part-time work do you want to do after you retire?"

I always thought of retirement as "sitting on the couch Tuesday morning at 10 a.m. in your underwear, watching The Price is Right." :laughing
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No that's unemployment, son! :twofinger
 
If you want to have a long retirement with near the same income you had when you are working, you damn well better save most of your money and invest wisely. If you are more reasonable and can accept the fact that you will have to learn to live on less when you retire, everyone should be able to save that money with a little planning and discipline.

You can absolutely live on a moderate savings in retirement if you just do a little planning and don't have ridiculous expectations. Like retiring in a high cost of living, high tax state.

These articles are pure sensationalism and they typically chronicle people who didn't save or pissed away their savings on stupid investments.
 
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