- 388
Social Security at my retirement age? How much are these worth?
Time To Raise Retirement Age
- Thread starter Robert Barney
- Start date
- 2,455
Yeah, tell a guy who is doing physical labor to keep doing it till he is 70 lol. Some of these guys are lucky to even make it to age 62.
- Thread starter
- #13
- 1,405
I have not problem with a disability function in Social Security, with enhanced consideration after age 65, but the bottom line is you cannot pay out 30 years of benefits from 30 to 40 years of contributions. The numbers do not work. The retirement age has to go up.
- 2,455
They could just get rid of it entirely and all that would happen is they would just find some other place to spend money. It's a joke!
- Thread starter
- #15
- 1,405
Here is a very simple example I used to use when doing seminars demonstrating a piece of software provided by Compulife in our quotation software.
The deal is this. We have a 30 year old who wants to save for retirement. We'll assume he currently make $50,000 per year and his retirement income goal is $25,000 per year (in today's dollars), indexed to inflation, to last until he is age 90.
The assumptions are 3% inflation, and a 6% rate of return.
How much does our 30 year old have to save each year to retire at 65 versus age 70? I have attached the two schedules as pdf files.
To retire at age 65, he needs to save and invest $7,395 per year.
To retire at age 70, he needs to save and invest $5,072 per year.
So, if our 30 year old is willing to wait 5 more years to retire, the annual cost savings, indexed, are over $2,300 per year.
Or, to retire at 65, the 30 year old will need to invest 45% more each year, versus retiring at 70.
As a percentage of income, the 30 year will have to invest about 10% of his income, and invest that for 40 years, in order to get about 50% of his income at age 70. That's 40 years of contributions and savings, to get 20 years of income.
By contrast, he will need to save about 15% of his income, and invest that for 35 years, to get about 50% of his income at age 65. That's 35 years of contributions and savings, to get 25 years of income.
Is this becoming clearer for you? The numbers are huge.
The deal is this. We have a 30 year old who wants to save for retirement. We'll assume he currently make $50,000 per year and his retirement income goal is $25,000 per year (in today's dollars), indexed to inflation, to last until he is age 90.
The assumptions are 3% inflation, and a 6% rate of return.
How much does our 30 year old have to save each year to retire at 65 versus age 70? I have attached the two schedules as pdf files.
To retire at age 65, he needs to save and invest $7,395 per year.
To retire at age 70, he needs to save and invest $5,072 per year.
So, if our 30 year old is willing to wait 5 more years to retire, the annual cost savings, indexed, are over $2,300 per year.
Or, to retire at 65, the 30 year old will need to invest 45% more each year, versus retiring at 70.
As a percentage of income, the 30 year will have to invest about 10% of his income, and invest that for 40 years, in order to get about 50% of his income at age 70. That's 40 years of contributions and savings, to get 20 years of income.
By contrast, he will need to save about 15% of his income, and invest that for 35 years, to get about 50% of his income at age 65. That's 35 years of contributions and savings, to get 25 years of income.
Is this becoming clearer for you? The numbers are huge.
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- 14,809
That illustrates just how screwed we're all gonna be. Anyone care to point out anyone earning 50k and saving 7k?
That's over 12% and not even accounting for taxes. National savings rate is around 2%?
That's over 12% and not even accounting for taxes. National savings rate is around 2%?
- 924
This country penalizes savings and rewards spending with our corrupt tax system. Want to save for retirement? Just try it. Watch as whatever hits you make in the market are taxed while losses have to be written off at the speed of a retreating glacier. Watch as tax rates go up so that any "investments" you have are boxed in and not worth the risk of selling. Watch how inflation creates "gains" that are not really gains at all, but are taxed as such when sold. Watch as the current gang in power makes sure that whatever meager profits you make in the market, or whatever meager income you have from investments, are taxed at higher rates than "earned" income. Watch as your earned income becomes subject to more and higher taxes to cover the entitlements that keep being created.
- 14,809
Totally agree. Unless you're earning big bucks and living well below your means, "saving for retirement" is a suckers game.
Plan on working....well into your 70's.
Plan on working....well into your 70's.
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- 924
And here's your niche as you work into your 70s:
Selling products to other duffers in their 70s who are getting screwed by the system and are working until they drop.
Mmmm.... that annuity with income rider is looking mighty good, yesiree.
And here's your commission picture (based on current commission trends): 2% with 1.5% going to income taxes and 3/4% going to health care. Net loss of only 1/4% per sale --not bad, not bad.
Selling products to other duffers in their 70s who are getting screwed by the system and are working until they drop.
Mmmm.... that annuity with income rider is looking mighty good, yesiree.
And here's your commission picture (based on current commission trends): 2% with 1.5% going to income taxes and 3/4% going to health care. Net loss of only 1/4% per sale --not bad, not bad.
- Thread starter
- #20
- 1,405
As I say to Compulife subscribers that I speak with, life agents are among the luckiest people in the country. They can keep working long after many people, in many field and occupations, have to quit or are forced to quit.
Even if I had $3,000,000 in an IRA, and I don't, I wouldn't trust it. I think that we are so in debt, and getting there faster and faster, that anything in paper currency is going to be risky.
Your greatest asset is your ability to do meaningful work, in exchange for meaningful compensation, and that is your best and safest retirement package.
This doesn't mean that I still don't aggressively save for retirement, I do. It's my disability package. If you can't work, because you are disabled, then you have the IRA to fall back on (after 65).
So as I keep telling my customers - don't quit your day job.
Even if I had $3,000,000 in an IRA, and I don't, I wouldn't trust it. I think that we are so in debt, and getting there faster and faster, that anything in paper currency is going to be risky.
Your greatest asset is your ability to do meaningful work, in exchange for meaningful compensation, and that is your best and safest retirement package.
This doesn't mean that I still don't aggressively save for retirement, I do. It's my disability package. If you can't work, because you are disabled, then you have the IRA to fall back on (after 65).
So as I keep telling my customers - don't quit your day job.
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