Well apparently many middle class people are not planning on being able to retire. In this article at MSN, people are talking about not saving for retirement. The first couple in their 70s were lucky to inherit $400k from their parents. This helped them get into a retirement community.
However, experts are predicting people can no longer count on substantial inheritances to bail them out. They also cannot count on SS or a pension to replace their income.
People in general have no idea how much they have to save. They expect a miracle. This is the reason why I don't believe we can switch SS over to an individual account. People are depending on it too much. Are we really going to allow our parents/grandparents to eat dog food?
If you need $40k/year to retire you need about $1M saved to generate that income. This $40k is assuming you have a $12k SS and no pension. This will come to about $52k/year (close to the median salary of $48).
But will that really be enough? Can you live on $52k gross? That's the other question being raised, how will retirees manage the rising medical costs? Before it used to be picked up by employer provided insurance. With cuts to pensions and medical plans how will these retirees manage with medical bills? Will these bills replace the costs of raising their kids? I think so.
It's sad that so many people have nothing saved nor any idea how much to save. But it's better to start later than never. It's better to try to fix your situation than sitting there saving nothing.
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9 comments:
I have nothing saved, still have student loan debt, and understand that Social Security won't be enough to live on, therefore retirement will not be an option for me. I also understand that I probably will not be able to work until I die, and therefore I can expect to become destitute when I can no longer work.
I expect that people will be dying in the streets within your lifetime.
p.s. I live on minimum wage, why shouldn't someone be able to live on $52K gross?
Because they are health problems? Medications not covered 100%?
Maybe they were also assuming that the house is paid off etc, they have kids to lean on?
*Shrug*
I just know when I have kids, I'm paying 50% of their education but I also have to make sure I have enough in my retirement not to be a burden on them...
Medical attention and loss of the use of some body parts would be my greatest fear... and not being able to take care of myself :(
In reply to minimum wage: I'm sorry if this raises a touchy point with you, but have you considered getting a second job? If I was in your position, I'd get 2 jobs and/or try to work my way up to a better position within that company....
I'm blessed not to have to do this, and I know it might seem like I'm preaching off my high horse, but it's just a thought
I do not have a car, so I am limited to jobs within walking distance or accessible by transit. This eliminates a large number of swing shift jobs, like the great janitor jobs I recently found at Intel. The problem was that these were swing shift and got out too late to take a bus home at night.
Also I spend three mornings a week (as a patient) in a medical clinic, which interferes with a lot of day jobs.
Given the transportation and medical constraints, getting a second job with a workable schedule is really hard.
On the other hand, if I could find some sort of work I could do at home, that would be ideal. I wouldn't have to travel and could work my own hours, i.e. work around the other things.
Min wage: Ohhhhh I see.
I feel your pain. I also don't have a car...
I'm really sorry to hear about your situation. You're really caught in a tough place.
*trying to think of things people do at home*
How about telemarketing? I know that sometimes they let you work at home and use your phone for people to call in for customer service or tech support?
Medical Transcription? I hear people make great money from home.
Actually, I have a plan, sort of.
This guy had a store and got old and died and I bought a chunk of his inventory in an estate liquidation.
(I had some money saved up during a temporary disability and got a very good deal on the liquidation.)
So I have something to sell 0 several thousand dollars of stuff.
Problem is, I have a very small apt and my landlord made me rent a storage unit (5 x 10) to stash it.
If I had enough space, I could keep the stuff at home and start selling it, plus with more money coming in, I'd be able to buy more stuff to resell at a profit.
Well why don't you start taking some of it back home and selling it off piece by piece? Or using the storage location when you have to go to get the things to send/ship to people?
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