Author Topic: How I did it - Retirement savings - but appallingly low savings numbers!  (Read 6821 times)

SpendyMcSpend

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On XO Jane, even saving $3500 for retirement at age 29 is considered worthy of respect.

http://www.xojane.com/issues/how-i-did-it-real-women-real-retirement-savings


SpendyMcSpend

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"Ding ding! For some people, it's not at all feasible to have a retirement fund.

I'm really lucky that at 27 I can manage to put 5% of my paycheck into a retirement fund...but any more than that and I wouldn't be able to get by NOW. Being secure in my old age or enjoying my youth...don't know where to draw the line with a compromise.
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arebelspy

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Wow, that was ridiculous.

The woman at 54 with only 190k?  Yikes.  (Yes, she has a pension as well, but still...)

Thanks for the amusement.

It goes to show what a state we are in when these are held up as exemplars.
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oldtoyota

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"Ding ding! For some people, it's not at all feasible to have a retirement fund.

I'm really lucky that at 27 I can manage to put 5% of my paycheck into a retirement fund...but any more than that and I wouldn't be able to get by NOW. Being secure in my old age or enjoying my youth...don't know where to draw the line with a compromise.
Likes 22  •Reply•Share ›"

Your comment is interesting. You said you would not "be able to get by now." Later you mention "enjoying my youth."

Do you need the money to get by or to enjoy your youth? Or both?


Dee18

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Arebelspy--I agree with you completely, but many people on the MMM forum appear to be setting up finances so the woman in a couple will have far less than a 2,000/mo pension plus $190,000 in her own name.  If the woman in the example stays married, they couple has a combined 5,500/mo pension (though whether or not that adjusts for inflation is not stated).  On many threads of this forum there is a lot of encouragement for women to stay home with children---I just hope they each have a plan for retirement.

oldtoyota

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On XO Jane, even saving $3500 for retirement at age 29 is considered worthy of respect.

http://www.xojane.com/issues/how-i-did-it-real-women-real-retirement-savings

This seems like an article about savings and retirement failures. I find it so sad that one woman is living off of her children. That must be really stressful.

SpendyMcSpend

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"Ding ding! For some people, it's not at all feasible to have a retirement fund.

I'm really lucky that at 27 I can manage to put 5% of my paycheck into a retirement fund...but any more than that and I wouldn't be able to get by NOW. Being secure in my old age or enjoying my youth...don't know where to draw the line with a compromise.
Likes 22  •Reply•Share ›"

Your comment is interesting. You said you would not "be able to get by now." Later you mention "enjoying my youth."

Do you need the money to get by or to enjoy your youth? Or both?

I was quoting one of the ridiculous comments.

oldtoyota

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Ah, I see. =-)

cats

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Wow, that was ridiculous.

The woman at 54 with only 190k?  Yikes.  (Yes, she has a pension as well, but still...)

Thanks for the amusement.

It goes to show what a state we are in when these are held up as exemplars.

Honestly, if she's planning on retiring at 60-65, I think she's okay by "average retirement" standards, given the pension.  With 40+ years service, she is likely going to get ~two-thirds of her last year's salary from that.  Assuming her mortgage will be paid off in the next few years, pension + social security + no mortgage means she probably won't see a huge drop in available income when she retires.  She is kind of a terrible example though, as that kind of pension is not available to most people.

And the other examples are seriously seriously depressing....

arebelspy

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Wow, that was ridiculous.

The woman at 54 with only 190k?  Yikes.  (Yes, she has a pension as well, but still...)

Thanks for the amusement.

It goes to show what a state we are in when these are held up as exemplars.

Honestly, if she's planning on retiring at 60-65, I think she's okay by "average retirement" standards, given the pension.  With 40+ years service, she is likely going to get ~two-thirds of her last year's salary from that.  Assuming her mortgage will be paid off in the next few years, pension + social security + no mortgage means she probably won't see a huge drop in available income when she retires.  She is kind of a terrible example though, as that kind of pension is not available to most people.

And the other examples are seriously seriously depressing....

My point wasn't that she wouldn't be okay, it was that it was ridiculous that he's being held up as a savings example when she only has 190k at 54.  Yes, the pension means she should be fine, but her actual example of saving for retirement is pretty poor.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

oldtoyota

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Wow, that was ridiculous.

The woman at 54 with only 190k?  Yikes.  (Yes, she has a pension as well, but still...)

Thanks for the amusement.

It goes to show what a state we are in when these are held up as exemplars.

Honestly, if she's planning on retiring at 60-65, I think she's okay by "average retirement" standards, given the pension.  With 40+ years service, she is likely going to get ~two-thirds of her last year's salary from that.  Assuming her mortgage will be paid off in the next few years, pension + social security + no mortgage means she probably won't see a huge drop in available income when she retires.  She is kind of a terrible example though, as that kind of pension is not available to most people.

And the other examples are seriously seriously depressing....

My point wasn't that she wouldn't be okay, it was that it was ridiculous that he's being held up as a savings example when she only has 190k at 54.  Yes, the pension means she should be fine, but her actual example of saving for retirement is pretty poor.

An additional point is that people who do not know better may see the $190K number (not realizing they won't get a pension) and think that is "enough." Or, they may not notice the mention of the pension at all and think $190K is enough. People only scan articles online so it's easy to overlook the full picture.


mpbaker22

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Arebelspy--I agree with you completely, but many people on the MMM forum appear to be setting up finances so the woman in a couple will have far less than a 2,000/mo pension plus $190,000 in her own name.  If the woman in the example stays married, they couple has a combined 5,500/mo pension (though whether or not that adjusts for inflation is not stated).  On many threads of this forum there is a lot of encouragement for women to stay home with children---I just hope they each have a plan for retirement.

I'd venture a guess that most people encouraging a stay at home mother are also planning on the whole family planning for retirement, not one spouse or the other.  I think that makes most sense, and I do think it's a little silly to claim one is retired if one's spouse is still working.  I know that is Jacob's current, but by that standard every stay at home mom in the world is retired.  I know there's some difference in that Jacob could have retired had he stayed single, but still ...

jrhampt

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Arebelspy--I agree with you completely, but many people on the MMM forum appear to be setting up finances so the woman in a couple will have far less than a 2,000/mo pension plus $190,000 in her own name.  If the woman in the example stays married, they couple has a combined 5,500/mo pension (though whether or not that adjusts for inflation is not stated).  On many threads of this forum there is a lot of encouragement for women to stay home with children---I just hope they each have a plan for retirement.

Agreed.  I think that stay at home parenting is a risky choice unless the spouse in question already has sufficient assets in his/her own name to retire.

oldtoyota

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Arebelspy--I agree with you completely, but many people on the MMM forum appear to be setting up finances so the woman in a couple will have far less than a 2,000/mo pension plus $190,000 in her own name.  If the woman in the example stays married, they couple has a combined 5,500/mo pension (though whether or not that adjusts for inflation is not stated).  On many threads of this forum there is a lot of encouragement for women to stay home with children---I just hope they each have a plan for retirement.

Agreed.  I think that stay at home parenting is a risky choice unless the spouse in question already has sufficient assets in his/her own name to retire.

I agree. And it makes the stay-at-home parent rather dependent upon their spouse.


MrsPete

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While these numbers appear low to this board, they are probably better than average for the average American.   

A couple thoughts: 

Like one of the women in the article, I have a pension.  It is a double edged sword.  On the one hand, I have live-forever genes and like the idea of not being able to outlive my money.  On the other hand, I am very aware that pensions have "gone under" in the past.  If mine were to disappear, it would impact my retirement, but it would not mean I'd be lost.  With only $190,000, this woman cannot say the same thing.  Another negative:  my husband and I are both tied to this state because of my pension.  If I could go back in time and have the pension or the equivalent in a 401K, I'm not sure what I'd do. 

I agree with an above poster that it must be stressful for the last woman to live off her daughter and son-in-law, but don't miss the detail that -- when things were better-- she sent money to her parents and her children.  While inter-generational financial support (of adults) is not an expectation in my family, it sounds like it may be the norm for her family and/or culture. 

The worst-prepared woman is the third one.  She's 40ish, so she does not have the best asset of all: time for compound interest to work its magic, yet she has only $89,000 saved for retirement . . . But the real kicker is that she is spending the equivalent of 1/3 her life savings every year for her two children to attend private school!  I fully believe in helping your kids through college, but she cannot afford to spend this much.  It would've made sense to make less expensive choices.   

cats

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Wow, that was ridiculous.

The woman at 54 with only 190k?  Yikes.  (Yes, she has a pension as well, but still...)

Thanks for the amusement.

It goes to show what a state we are in when these are held up as exemplars.

Honestly, if she's planning on retiring at 60-65, I think she's okay by "average retirement" standards, given the pension.  With 40+ years service, she is likely going to get ~two-thirds of her last year's salary from that.  Assuming her mortgage will be paid off in the next few years, pension + social security + no mortgage means she probably won't see a huge drop in available income when she retires.  She is kind of a terrible example though, as that kind of pension is not available to most people.

And the other examples are seriously seriously depressing....

My point wasn't that she wouldn't be okay, it was that it was ridiculous that he's being held up as a savings example when she only has 190k at 54.  Yes, the pension means she should be fine, but her actual example of saving for retirement is pretty poor.

An additional point is that people who do not know better may see the $190K number (not realizing they won't get a pension) and think that is "enough." Or, they may not notice the mention of the pension at all and think $190K is enough. People only scan articles online so it's easy to overlook the full picture.

Maybe it's just me, but I did not get the impression that this article was intended to just show "good" examples, I think it was to show a range of people and how they are saving for retirement (even if they aren't doing a very good job).  I mean, the last woman is forced to live with & depend on her daughter, no way can anyone say that's something to aspire to!  If the goal was to get a representative cross-section of women living in the US, I think the goal was achieved.  Also, as far as whether or not the 54yo w/ a pension and 190k was a suitable example b/c of the pension, isn't that kind of like the people who say MMM is not really a good example of ER because (insert any or all of the following): he worked in a high earning field, he lives in a cheap part of the country, he only has one kid, etc.  This woman may not be the exact model for everyone but she does actually sound like she'll be okay, assuming she works to a "standard" retirement age.  Some of the other examples are definitely more worrying!

c

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Ha, I'm addicted to XOJane. I wish I had the confidence in my early 20s that those women seem to have.

At 30 I had $0 in my retirement fund. I only started paying in to my 401k at 31 and the first two years were pretty pathetic. I've been fairly aggressive over the last few years so it's looking up, but I was definitely a late bloomer financially.
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strider3700

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Deborah, 40
 "Our parents chip in $37,000 a year,"

Holy crap a little over 3 grand a month from mommy and daddy when you're 40 years old and she still has less then 90k in retirement funds?

Apocalyptica602

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Deborah, 40
 "Our parents chip in $37,000 a year,"

Holy crap a little over 3 grand a month from mommy and daddy when you're 40 years old and she still has less then 90k in retirement funds?

+1, also holy crap on using the term "chip in" when referring to 37k/year.

Wow.

foobar

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First off I don't think this article is talking about net worth. It looks to me like they are only talking about retirement savings (i.e. 401ks and the like).

The 190k lady at 54 is fine.  Look at what she will be getting in retirement
Hubby has a 3.5k pension
She has a 2k+ pension
SS is another 2k+
They have a house they bought 30 years about outside of SF. If they haven't raided it for cash that is probably worth 600k+ with property taxes fixed at ~2k+2%year increase.

They are going to have 7k+ month to live on without touching the retirement savings or the house. Over 15 years inflation will eat into that a bit but they should be fine. If hubbies pension doesn't cover her, she can use the 401(k) money to replace it.  Figure another 5-10 years of  401k savings and compounding before retirment and I think she will be fine.

Wow, that was ridiculous.

The woman at 54 with only 190k?  Yikes.  (Yes, she has a pension as well, but still...)

Thanks for the amusement.

It goes to show what a state we are in when these are held up as exemplars.

Honestly, if she's planning on retiring at 60-65, I think she's okay by "average retirement" standards, given the pension.  With 40+ years service, she is likely going to get ~two-thirds of her last year's salary from that.  Assuming her mortgage will be paid off in the next few years, pension + social security + no mortgage means she probably won't see a huge drop in available income when she retires.  She is kind of a terrible example though, as that kind of pension is not available to most people.

And the other examples are seriously seriously depressing....

arebelspy

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We all agree they'll be fine, due to the pension.  No one has disagreed with that, as far as I know.

The point is that for an article titled Retirement Savings, holding up someone who has only saved 190k, despite the pension, isn't an example of someone to copy for retirement savings.  Nor are any of those other people, frankly.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."