Forbes: $1 million may not be enough for retirement

[sinkingfeeling]

http://www.msnbc.msn.com/id/44138332/ns/health-forbes_com/

To be clear, here’s what we mean by $1 million: We’re including what you have in any savings and retirement accounts, including tax-deferred plans like 401(k) and IRAs. You’ll still have to pay taxes when you withdraw money from those. We’re also including the present value of any pension accounts and Social Security payouts.

A famous financial planner’s rule of thumb is that you can spend 4 percent of your initial savings per yeark (sic), adjusted for inflation, and it will last for 30 years. If you have $500,000 saved, 4 percent of that is $20,000 per year. Can you live on $20,000 per year, plus whatever you’re going to get from Social Security and a pension (the $20,000 and — for now — Social Security)? If you can’t, then you’d better start saving more or thinking about when and how you plan to retire.

The bad news is that people are spending more in retirement on health care, utility bills, and particularly on mortgages. “The real reason why $1 million is not enough, sadly, is because a lot of people still have mortgages coming into retirement these days,” says Eileen Freiburger, a fee-only planner in Manhattan Beach, Calif. “I would never let a person retire if they haven’t learned to live within a certain dollar amount,” she says.

[n2doc]

1. The fact is that few can save anything, let alone 1 mil

Given the myth that you can invest long term in the stock market and make millions has been popped (the new economy means that the stock market is stagnant as well) and declining wages+increasing food, gas, health care costs, very few outside of the top 10% will be able to save these amounts.

That's why protecting SS is so critical. It is all many americans will likely have between them and a life of poverty and minimum wage labor in their 'golden years'

[femrap]

2. Yes, it is difficult to

save when the jobs being created are paying only $8 to $10/hour. WASF.

[spinbaby]

3. My guess is that any boomers who HAVE saved that much...

...will be the next looting opportunity for the predatory class.

[Karenina]

5. Grammar Governess: have already been. n/t

[Juche]

15. +1000

If anyone thinks all these upper class professionals will be allowed to enjoy their trillions unmolested, they are wrong. The predatory capital class will find a way to fuck them somehow ,they aren't going to let trillions in potential capital go unused in an age of socialism for the rich where the risks are given to the public sector and profits are privatized. If you gamble their money properly, you make billions. If you lose it, you get bailed out and get to try again after getting a few sternly worded letters. If you aren't in the top 1% (or arguably top 0.1%) you probably aren't going to be guarded by this plutocratic republic.

[Earth_First]

4. I'm fu*ked.

They may as well dig the hole right where I'm employed...

[LiberalFighter]

6. I would have to disagree with that analysis

I will have my mortgage paid off by the end of the year due to increased payments. With my pension and supplement. The supplement will be replaced with SS when I reach that age. Once I pay off the mortgage I will have about an additional $900 monthly in my savings. As it currently stands I am doing fine in paying expenses with still some left over. My annual income is just under $40k. I have a 401k which at this time I expect will be for extras when I start drawing from it. I doubt it will be much but I'm sure it will help make some things happen.

[sammytko]

11. No way would I take on a mortgage at retirement age - mine will be paid off next year

Oh, but I retired at 45.

[LiberalFighter]

13. I agree for most people. If they don't consider their finances they are stupid.

I could had kept working but was unhappy with the way the company was managing their business at the local level. I had the opportunity of taking early retirement and only consider it because the income I was taking in was about what my retirement was going to be. So my living standard had already been established and was doing fine. After considering that I was also going to save 30 gallons of gas a month plus other work related expenses I consider it acceptable. I took retirement officially at 52. I will have nearly 11,000 of additional income each year after the mortgage is paid off that can be kept in my savings account or used for special purposes.

[Yo_Mama_Been_Loggin]

7. Don't disagree

As one who's looking to retire in ten years I have about half that and it doesn't look like enough.

And Ryan wants to cut medicare.

[CoffeeCat]

8. What's crazy, is that this is TRUE...

You really do need at least a million dollars, but the powers that be have done EVERYTHING possible
to work against us and to ensure that most people never get there.

They conned us into running up debt--by offering loads of credit-cards to anyone with a pulse.

They made it so easy to mortgage away our futures with creative financing on huge homes.

They decreased Pell Grant eligibility and shoved student loan papers in front of our faces--further drowning us in debt.

They flat-lined our wages.

They allowed speculators to drive up the cost of gasoline.

They inflated the price of groceries by at least 25 percent.

They made new cars completely un-affordable. Now, it's nothing to pay $35k for a car and finance it for seven years. More debt.

They allow companies to screw people out of pensions, healthcare benefits and other perks, which is a pay decrease.

They allow a profit-centric healthcare model to rule--and if we have health insurance, we might still go broke if we have health issues.

...and now they're coming for your Social Security, Medicare and Medicaid, so please don't factor those into your million-dollar retirement.

Never, has the need for that million dollars been so great. You're screwed without it. But, they've rigged the game--making it
nearly impossible for the overwhelming majority to attain that million-dollar mark.

[MilesColtrane]

9. Just ran my numbers...

In order for me to have an annual salary of 30K from the age of 67 to 88, I'd have to sock away $1.25 million by retirement.

That ain't gonna happen.

(calculator here: http://apps.finra.org/Investor_Information/Calculators/1/RetirementCalc.aspx )

[Shagbark Hickory]

10. If I have to be a millionaire to retire in this country, I guess I'll have to find some other place

to retire to.

[Octafish]

12. Why should retirees pay taxes when GE, EXXON and da banksters don't?

If anyone should be off the hook, it's the seniors.

[Juche]

14. Move overseas

That is the most likely step most people will need to take, mostly due to health care in the US. Supposedly you can live a fairly decent life for $1000-1500/month in Latin America as a single retiree. Then again you can do that in the US if you have reliable health care and live in the sticks.

[Lyric]

16. rofl. A million for retirement?

I'll be lucky to save a jar of change.

[BiggJawn]

17. If I had managed to sock away a megabuck by now...

I would have had to try and make it on $1200 a year. BEFORE taxes.
How come you never see retirement advise for REAL people who get their hands dirty working REAL jobs instead of these 7-figure a year trust fund babies?

[DotGone]

18. Is this $1M in present dollars or future?

If this is $1M in present dollars, hell yeah. $20K/yr + SS? I'm almost 40 and I've only made $20K, barely, twice in my lifetime. When you've always been poor, you know how to live poor.

[Fearless]

19. So lets slash social security and give out payroll tax cuts!!!11!!

:eyes:

[sfpcjock]

20. I think they're selling annuities like most of the financial firms.

They claim you can play golf in Hawaii or rent Jerry Spences's place in Wyoming if you just sign up. Then they age you out with demographic tables.