Retirement, Social Security, and Wages

[MNBobcat]

Maybe I can help someone by sharing my plan....

If you had a million dollars squirreled away for retirement, it would earn about $1,200.00 a month in interest. That is not enough to live on. At least...not live well.

So we're all told that during your working years you should put money in an IRA or 401K and save and save for retirement. I figure you need about 3 million in the bank when you retire. Then when you do retire, you're worried about not drawing down the account too fast.

There is a better option. Start a business. You can start a business on the side while still working a full time job. The key is to pick the right business. Selling real estate, for example, would be the wrong business. Its wrong because when you stop doing the work your income goes away. Instead, find a business where you can train people to manage it and do the work. Then when you want to retire, you can. Others will carry on (with your occasional oversight) the business. Yet as the owner you continue to be paid by the business every month. Investing in (your time in building) a business is a way better investment than sticking money in the stock market or a 401K and hoping it will appreciate...

 

[twarr1]

I have both a Defined Benefit and 401k. The 401k is essentially worthless for retirement purposes. I like the business idea.

Stock Market Asymmetry and its Implications

 

[scesnick]

The taxpayers are getting tired of picking up the tabs on those early and lucrative retirements by public sector workers. Cops used to be under paid. They aren't anymore. And their retirements are better than most private sector workers.

This is a VERY common misconception. The average Joe LEO is not breaking the bank when they retire that's for sure.
I work for the Federal Gov't and get Law Enforcement pay with retirement benefits and I can tell you that our retirement plan is not all that great and most state law enforcement plans are way worse than mine.
Well, to be honest I will get 30%. yep, that's it .... I can, and will retire after 20 yrs. service and 50 yrs old. which is a nice benefit. Other than being allowed to concealed carry in all 50 states there really isn't any other benefit.

The majority of my retirement comes from our TSP which is simular to a 401K.

BTW-- I think all cops are underpaid no matter how much they make.

 

[bp fick]

Maybe I can help someone by sharing my plan....

If you had a million dollars squirreled away for retirement, it would earn about $1,200.00 a month in interest. That is not enough to live on. At least...not live well.

So we're all told that during your working years you should put money in an IRA or 401K and save and save for retirement. I figure you need about 3 million in the bank when you retire. Then when you do retire, you're worried about not drawing down the account too fast.

If anyone can amass 3 mil, more power to them!! If one can amass a million, I'd say WOW!!!! Let's get real.

2/3 of retirees have Soc Sec and less than 100K. That is the reality for the vast majority or retirees, with 35% of folks retiring with Soc Sec alone!! Zip. Nothing in addition.

A million isn't enough? If one has a million dollars, it isn't likely that they are merely going to live off the $1200 a month in interest, but take that million in form of an annuity that pays them $3000-$4000 a month. Will the balance in their fund be decreasing? Yes, of course. So what? They cannot take it with them. Other than the benefit of leaving behind a large endowment, intelligently using up one's fund is the point of having it.

 

[Turbys_1700]

I have worked for the local community college here in Hickory for the past 16 years. I can retire with full benefits @ 60 as I will have 25 years in with the system. My retirement benefit will be around 45% of my highest 4 years of pay. I doubt if I will have enough to hang it up.

The biggest benefit is the health insurance. I may go ahead and hang in there until 62. With social security and my state retirement benefits my pay should be 75% to 80% of what I make now. Not too bad. The main thing is I love my job. It is low stress, great benefits and time off, and not physically demanding. I have certainly been blessed.

 

[keegs]

When I think about this...that's to say ..where the middle class is and where we've been over the past half century or more, it seems to me that my generation is/has been very willing to discount all the gains made by my father's generation.

Salaries, job security, healthcare, pensions, the need for two income households...we've lost allot of ground in the US.

 

[Reg]

Maybe I can help someone by sharing my plan....

If you had a million dollars squirreled away for retirement, it would earn about $1,200.00 a month in interest. That is not enough to live on. At least...not live well.

So we're all told that during your working years you should put money in an IRA or 401K and save and save for retirement. I figure you need about 3 million in the bank when you retire. Then when you do retire, you're worried about not drawing down the account too fast.

There is a better option. Start a business. You can start a business on the side while still working a full time job. The key is to pick the right business. Selling real estate, for example, would be the wrong business. Its wrong because when you stop doing the work your income goes away. Instead, find a business where you can train people to manage it and do the work. Then when you want to retire, you can. Others will carry on (with your occasional oversight) the business. Yet as the owner you continue to be paid by the business every month. Investing in (your time in building) a business is a way better investment than sticking money in the stock market or a 401K and hoping it will appreciate...

Yes, no and maybe.
It works for some, it can't work for all.
There is a MASSIVE number of folk at or close to retirement age right now, basically the baby boom bubble and there just are not enough self sustaining business opportunities to go around.
Sure, some new directions open up from time to time, but there will not be enough small business opportunities that can be grown to become self sustaining.

OK, that is some of the supply side of it, now the skills side.
In order to start a business and succeed you need more than to just throw your savings at an opportunity (an idea, a niche, etc.).
You need a good business sense of the market need (or "want" that you will develop into a need).

For the first few years you need to do it all, or most of it with help from one or two others.
Many/most folk in their sixties who have been wage earners for 40+ years just do NOT have the background needed to start up any sort of a business.
Knowing, or being passionate about a product, hobby or other interest, does NOT qualify someone to start up a business selling, repairing or producing a related product.
Despite the impression given by "How to start a home based business and make a million the first year" type books, it ain't easy and MOST small businesses do go under within a few years.

 

[jpm]

reg said it very well. if you think you can just pick a business you think will be easy to run,your wrong.think of that jerk coworker,it's your jerk worker you will make your life he** plus you may have more than one and you are the camp conseler/target of lawyers.then your partner uncle sam and that FICA + stuff that comes out of your pay,well you are lible for employes plus your half of every tax.then theres ins,accounts pay+receivables,plus more stuff you'll never think of.but owning your own business all you do is collect big bucks

 

[Uncle Doug]

I am 54 and facing a forced medical retirement. I have worked for a major oil/chemical company for 22 years. I have not been able to in work in over 6 months but still on company paid disability. I met with a retirement planner last week to go over the "what if's". My 401k is still down about 25% from a few years ago. The only bright spot is the lump sum pension is being driven up by the current low interest rates. I fell a little beter after meeting with the planner last week. If I am unable to return to work and can get on SS disablity then my current 401 and lump sum pension should provide me with a good income for 30+ years.

The hard part is short term needs while on half pay disibility which equates to about 1/4 pay after deductions. After the end of the next 6 month period things should improve and get some progress towards the final retirement outcome.

 

[tglass]

I have enough to retire at 62, but with the cost of prescription drugs I already have to take and without medical ins. without work I have no choice but to keep working till full retirement age.