Watch AARP’s New Celebrity Video Series with Don Rickles, ‘Dinner with Don,’ on Our YouTube Channel

Reply
Treasured Social Butterfly
Posts: 19,390
Registered: ‎12-25-2011

RE: How much do you need for a comfortable retirement?

Message 91 of 141 (1,617 Views)

In Response to RE: How much do you need for a comfortable retirement? by kom2010

My grandparents bought their home in 1928, moving their family of 6 children into it. Guess what happened the very next year .. the crash .. and they didn't have enough to make full payment on their mortgage. They went to the bank & explained that they'd pay as much as they possibly could, and with the Depression the bank probably wouldn't find anyone else with the money to buy the house, if it was foreclosed. The bank agreed with them, and let them keep it.

Whether or not that would work today, my grandparents & mom's generations believed that you always had more security in being a homeowner. Even if you had financial trouble, you could still buy more time, than if you were a renter & stopped paying the rent.

I've you're doing what's best for your MIL, and she accepts your guidance, it's probably best to let her keep her memories & fantasies about her old home .. as long as she doesn't complain too much. I think some people reach an age or mental state, where being totally realistic is too frightening for them. As long as they let trusted relatives help them do the right thing, it might be better not trying to force them to see reality.


Registered on Online Community since 2007!
Regular Social Butterfly
Posts: 370
Registered: ‎03-29-2010

RE: How much do you need for a comfortable retirement?

Message 92 of 141 (3,237 Views)

I think that to make sweeping generalities about the Boomers, a large and very socio-economically fractured generation, is not going to be completely valid.

One thing about living in CA is that we are your future. No, you may not like that, but try to get over it. What happens here very often predicts what is going to happen elsewhere. We are usually 10-15 yrs ahead of 'the curve'.

Times are bad for some; unnerving for many (but who are still coping just fine); and many aren't affected much, if at all. I know quite a number of younger Boomers who made far more $$$ than they expected to, and either went into business for themselves or retired young. Many other high-income Boomers are still working, either because they enjoy it or because they still have kids to put through college. 

Of the middle-class Boomers, most are shaken but the majority are still able to find work. It may not be the best-paying of their career, but they remain employed. They are paying their bills, making their mortgage payments (some do have paid-off homes, like my sister and I), and soldiering on. They may have to delay or wait until their full retirement age, instead of the Boomer dream of taking early retirement. That's not the end of the world, and they know it. They still can take a vacation or meet a friend for drinks.

I have personally never understood the clinging to house/home that most people have. I see it, but the idea leaves DH and I indifferent. We enjoy our home, and I love gardening, but I don't want to be dealing with all this upkeep twenty years from now. It's four walls and a roof, not the essence of my being or our reason for living.

We listen to MIL's wistful yearnings for her former home of 38 yrs and roll out eyes. Why surround yourself with the ghosts of past happiness when you can create a new happiness now?

We can't help her, only ourselves. If people don't see that their senior years are a series of phases dependent upon one's (and spouse's, if there is one) physical health, then those people are doomed to repeat the same mistakes many of the WWII generation made and are making.

In our past DH and I have run up a lot of debt when young, made some wrong financial decisions, but worked out of it. We realized we needed a plan, and were able to benefit from good professional advice when we needed it. Now we see that good financial planning isn't just the typical "save your money, pay cash, etc. etc.". There is far more to it nowadays.

Financial planning involves more than an amount. If you don't have enough money to choose from attractive alternatives as you age, THEN YOU DID NOT PLAN WELL. No matter how much money you saved in the bank! Did you think you were going to be in good health forever? That you would never suffer a degenerative or crippling disease? That bad things never happen to good people who count pennies? Wow, there's my MIL, folks.

MIL sighs over her house, while we shudder over contemplating what it would have been like as she aged. She didn't have enough cash, despite a pension, retiree health benefits, and SocSec. Her home was a nightmare for accessibility, and you just don't want to mess with building permits in San Francisco unless you've got lots of extra time and money. MIL was getting by for a while, but one roof replacement and any need for home healthcare would have sunk her into debt. Now she's got sufficient funds for any kind of care she needs.

People not as fortunate will do what they have to do - choose the least painful or most affordable scenario. This may involve some going overseas. Others will adjust their expectations and look for better solutions. The impetus for co-housing is growing, although that is not a cure-all for the entire senior/elder care issue.

Studies have shown that some of the poorest elderly are the happiest....possibly because they have come to realize that small pleasures are just as important as large ones. Why should anyone assume that Boomers or Millennials are not going to learn those same lessons, in the end?

It is the WWII generation, after all, that had some of the very biggest dreams of all - that winning a war meant world peace, that the enemy to be feared could be defeated by a tank, that Big Business knew best, that incomes would always rise and prosperity/material possessions were proof the American Way was the best way for everyone.

Treasured Social Butterfly
Posts: 19,390
Registered: ‎12-25-2011

RE: How much do you need for a comfortable retirement?

Message 93 of 141 (3,213 Views)

In Response to RE: How much do you need for a comfortable retirement? by sandpiper99

Years ago, someone close was complaining about the high cost of a senior residence for a parent, implying that the parent's money would run out, and they wouldn't be able to remain in their nice facility. But when $ help offered within the family, it came out that the concern was that the $$ would be used up by the parent for their needs, so nothing would be left for their children. I'm sure they were sorry they hadn't thought of shifting money before the look-back period kicked in.

That incident is what bothers me about attitudes. While it's wonderful for people to have assets to pass on to family members, that's not an "entitlement" to be gained by moving/hiding funds .. so that taxpayers pick up the tab for facilities via Medicaid.


Registered on Online Community since 2007!
Silver Conversationalist
Posts: 37
Registered: ‎01-30-2010

RE: How much do you need for a comfortable retirement?

Message 94 of 141 (3,211 Views)

In Response to RE: How much do you need for a comfortable retirement? by ASTRAEA

If you can pay your own way in an assisted living or nursing home, that enables you to keep any and all assets. If you cannot and need to be on Medicade to stay, THEN you have to strip yourself of assets, including turning over your monthly Social Security check. You are allowed  to keep a minimal amount (under $25, used to be) and about $1500 in a bank. Amounts may have changed; it was years ago now when I investigated for my mom. I decided to keep her at home where I KNEW she would be well-cared for. (Another topic for discussion, at least where I live.)

Treasured Social Butterfly
Posts: 19,390
Registered: ‎12-25-2011

RE: How much do you need for a comfortable retirement?

Message 95 of 141 (3,211 Views)

In Response to RE: How much do you need for a comfortable retirement? by SLEEPERCELL

Can you explain your statement:

"What I find particularly disturbing is for seniors that must go into an assisted living or nursing home environment is that they must strip themselves of their wealth and lifetime assets that they have accumulated. It's an ugly game being played."

My aunt went into a nursing home after hip replacement, to regain her strength with additional PT. She was there for almost 6 months, until she died of a heart problem. She just had to pay 2 months deposit to start, then was billed monthly.


Registered on Online Community since 2007!
Silver Conversationalist
Posts: 2,581
Registered: ‎12-06-2010

RE: How much do you need for a comfortable retirement?

Message 96 of 141 (3,216 Views)

In Response to RE: How much do you need for a comfortable retirement? by krlklar

Karl I agree with you 100%. I'm not giving up my garden, space, privacy and lifetime work of making home what it is.

Boomers were/are a reckless generation (IMHO) and my past arguments still stand in what and how I think any senior should be treated. One thing many boomers never learned was how to PRESERVE WEALTH.  I think I have learned and exercised my options in this regard.

Still, it's (Preserving Wealth) akin to having one foot in the fire and the other in the frying pan. What I find particularly disturbing is for seniors that must go into an assisted living or nursing home environment is that they must strip themselves of their wealth and lifetime assets that they have accumulated. It's an ugly game being played.

I wonder and worry about my daughter in what she is going to face in this new world of economic instability with a government gone wild on spending and many Americans clueless about the potential bang ahead of us.

And BTW yes, you've pegged me in that class but I grew up with depression survivors both sets of Grandparents, Parents, Aunts - Uncles having made it through the Great Depression with words of warning and advice all my life: There are only two kinds of sensible debt: a mortgage that you can afford and a loan for a car to get to work if necessary. The other warnings were simple: don't borrow money to buy what you can't pay for and SAVE YOUR MONEY. I have told my daughter this most of her life with my added warning: NEVER BORROW MONEY FOR A BUSINESS AGAINST YOUR HOME. (Another Boomer Peril)

It's worked well for me.

Treasured Social Butterfly
Posts: 19,390
Registered: ‎12-25-2011

RE: How much do you need for a comfortable retirement?

Message 97 of 141 (3,216 Views)

In Response to RE: How much do you need for a comfortable retirement? by krlklar

In New Jersey, a newer townhouse or condo can often cost more than a person/couple will get by selling their older home, especially if they've already downsized into a smaller house. I have a few friends who'd like to move into a condo or townhouse, but they can't afford either the purchase price or HOA fees!


Registered on Online Community since 2007!
Valued Social Butterfly
Posts: 10,667
Registered: ‎01-24-2008

RE: How much do you need for a comfortable retirement?

Message 98 of 141 (3,216 Views)

In Response to RE: How much do you need for a comfortable retirement? by SLEEPERCELL

I'm afraid the Boomer's have high expectations based on things I see like the big cars .TV sets etc. Easy money and borrowing on real estate expected price rises made for a rude awakening!

Many of us are staying put for many reasons. The cost of moving into a senior facility and paying monthly charges is daunting. Don't have the will to get rid of 50 or more years of accumulated things. Don't want to leave gardens and space that have been big investments of time and history or no longer have them to care for.

Karl

Regular Social Butterfly
Posts: 370
Registered: ‎03-29-2010

RE: How much do you need for a comfortable retirement?

Message 99 of 141 (3,216 Views)

No one is supposed to get enough from Social Security to live on. It was never designed nor intended to be the sole source of income for the elderly. It is supposed to be 1/3 of the retirement stream. 1/3 was supposed to be from the retiree's own savings; 1/3 would be a pension or annuity.

Although many pension plans have been canceled, larger companies still buy annuity insurance policies for their retirees once an employee is fully vested, in addition to the 401k accounts. Three companies I worked for sent me letters when I turned 55, saying I would receive $xxx when I turned 65. Individually they're modest amounts, but they total almost as much as my SocSec check will be.

We should also remember that when people are in a couples relationship and are asked how much money they will need, they often do not think in terms of 'per person' - they are thinking in terms of 'per household' which may be an entirely different beast.

It has been shown that Boomers are more comfortable - maybe too much so - carrying debt into retirement. Fewer of them will reach retirement age with a paid-off mortgage, for example. Their credit card debt is higher.

And what if they are instead debt-free, but want to travel? Is everyone to enjoy camping in a tent or RV'ing at KOA? DH and I would rather stay home than travel that way. When we travel, we go someplace we're interested in, and want to be comfortable and have a good time doing the things we most enjoy.

It has nothing to do with 'keeping up with the Joneses' or 'clipping coupons with the Smiths'. Snobbery and reverse snobbery are merely two sides of the very same coin.

So a couple might very well need $100K/yr to live in an expensive area, such as NYC or the San Francisco Bay Area. Not everyone enjoys 'counting pennies'. Could we spend less? Sure. Most people can. But we don't have to, and see no reason to.

We keep within our budget and do whatever we like within those parameters. We spend very little on clothes or theatre, and wouldn't be caught dead drinking Starbucks, for example - but what we spend on dining out annually could take others on the QE2 to Europe. It's my hobby and DH enjoys it too. We have other hobbies, but this is our major discretionary expenditure. In an emergency, we can easily cut it back. But we have a comfortable six-figure portfolio that we never need to draw upon. As Harlan (Colonel) Sanders said, "There's no point in being the richest man in the graveyard."

So again it goes back to, a comfortable retirement is one where you feel in control, knowing that you are able to enjoy your hobbies; indulge yourself a little or a lot, depending on your personality; and that emergencies, ill health, and death will not adversely affect your or your spouse's chosen lifestyle.

The exact number isn't important, and to focus on what other people think they may need is perhaps missing the point. If they are a working couple and are thinking, "Well, this is what I make now and we're just managing okay, not great, then if I need 80% of income to retire on, we'll have to have XXX dollars to manage," we can tell they have not done a lot of retirement planning. They are just guessing, and it may be accurate or it may not be.

Very few people, if pressed for an immediate answer, could tell you EXACTLY what they need in retirement income. We couldn't have done so, and even one year or six months away from retirement, it was still a 'best guess' after running multiple scenarios. Our planning was good, and things have worked out just fine, but we've all heard enough horror stories that make it clear many people thought they had enough to retire on, but didn't. So aiming higher, rather than lower, is not a bad thing - especially if it's properly focused where it should be....which is, how big does your retirement savings portfolio need to be, to ensure you have the income stream you need?

Valued Social Butterfly
Posts: 18,611
Registered: ‎02-14-2008

RE: How much do you need for a comfortable retirement?

Message 100 of 141 (3,216 Views)

In Response to RE: How much do you need for a comfortable retirement? by sandpiper99

 

Interesting post and all to true of many that retire. I hope you enjoy life. You do not have to travel and keep up to the Jones to enjoy like. 

 

I was luck to start IRA's for my self and wife. We do not get enough from SS to live on. 

 

I started this thread because I could not believe that 48% think they need 50k to100k a year for a comfortable retirement.