^ Reading your post (and a few others’ posts) makes me feel we are really poor. (Is there any other poor CCer who feels the same?) Even in our “peak earning” years, our annual household income was never that high. Congratulations to you for a “retirement preparation” job well done.
My family also dreams of retiring in Texas. (Somehow this issue of money magazine does not select any city or town in Texas as a top retirement destination.)
There seems to be very few “financially-challenged” families on this thread!
@mcat2, my guess is that the financially well off have intimidated the others. That is profoundly unfortunate. I have a feeling that many lurkers are out there but are reluctant to post; props to you.
@HRSMom , that sounds like Financial Engine’s output. IMO, they have an optimistic Monte Carlo engine, even more optimistic than most (which assume that the future will be similar to the past). I personally apply a pretty harsh haircut to their forecasts.
Mcat, you are not poor, you are rich in spirit. My poor sister who rarely earned much and never put in any more than 4% of her small income and she cumulated nearly 3/4 of a million all by herself. Plus 2 small houses, not very financial savvy person either but she invested 100% in stock. It can be done. Don’t feel intimated either.
mcat2 - I make 53K a year. This is info available to the public so I don’t feel bad sharing it here. I am blessed in so many, many ways, but there are many people on CC who pay their housekeepers or nannies as much as I make. I am not complaining!!! We own our own house in a nice neighborhood, have no debt, both kids are out of college, and we are frugal types. We are better off than billions and billions of people in this world, but on CC it is easy to feel poor! CC does not represent most people’s experience in the USA, and there are so many scratching out a living working parttime at Whataburger and busing tables.
When I read folks on here who plan to “make do” with 170K a year in retirement, I worry about our little pensions and our little savings, but the truth is that many have fulfilled and comfortable lives with a lot, lot less. I plan to be one of those!!!
"@busdriver11 That is an excellent pension. You are correct about government pensions in NJ we contribute between 7.5-10% depending which pension you are in. "
I agree, @tom1944, much because both of us get a pension.
I never quite understood about having to contribute to a government pension. You have to contribute up to 10% of your salary towards your pension benefits? So what if you die before you get to collect, does that mean your beneficiaries get none of your pension, after you’ve paid in all that money? And also, what if you die soon after you retire, your beneficiaries only get a portion of it, that is, if you selected a reduced amount?
I just put in an investment calculator these assumptions. You work for 30 years, at 100K/yr (I realize that’s unrealistic to have a stable salary). You contribute 10% of your salary, with the investment growing at 6%/year. That’s almost a million dollars. Seems to me, there’d better be some guaranteed payback if you have to contribute that much towards your pension.
Thanks (I guess this is a nice word but I am not sure – my English skill sometimes still fails me. What is the meaing of the word “prop” in this context?)
Hey, even though I may not be that well-to-do compared to many CCers here, considering the fact that I was once a full pay parent (for only 2 years though, the kiddo’s college showed me some “mercy” after that), I have not been doing too shabbily. After all, I started from almost zero asset after I had completed my schooling several decades ago.
anxiousmom, no debt is a wonderful thing. I’d gather that there are plenty of people who make more than you, who are burdened by far too much debt. And as far as numbers go, if you’re paying all of your big salary to pay off your big debt and taxes, you might not have a whole lot left!
@mcat2 i’m so sorry. i not mean to make you feel bad. I grew up “poor”, I had to go to the only free college bc momdad had no $, and FA was not generous back then. Then I took on a lot of debt for law school and spent 12 years paying it off! I am looking forward to letting go of the big house payment, big prop taxes, etc…and the stress that goes with it…
Hmm…I must have done something wrong here because a million is beyond my reach unless I could work till 65. I actually contributed more in many years (especially in the past 2 years - I plugged in 40% to my 401k but without any company’s matching, and I had to stop contribution in the middle of the year because it has reached the maximum.)
My problem has been my investment phobia as some others pointed our before. (Proof: How many of you did not lose any money in the previous downturn, and lose very little in the downturn prior to the previous one?!)
@dstark , Thanks! I will repeat to myself several times everyday: I am not poor.
mcat2, I think investment return is everything. I could have picked a lower percentage return. But my point is that after someone gets all that money deducted from their paycheck to fund their pension, if they had invested that same money at a decent return, that’s a lot of $$. And do the government employees just lose it all when they die? That seems crazy wrong to have to fund your own pension, and then have no guarantees.
Everybody doesn’t have to retire… Especially at a young age. I guess it depends on the job. A friend of mine’s uncle was a lawyer. He worked until he was 98. He died.
Working an extra year or two or three can help financially… If you are stressed…
I walked by this grocery store today. There was a huge sign, “Help Wanted”.
I thought briefly, “Maybe, I should apply here. I would get health benefits”.
Although my commute would be good, I don’t want to work that hard.
This is essentially what SS is, if you like to think about it in that way. Except we pay in 12.4%, and will get 1/2 to 1/3 of what that contribution leads to in the equivalent state pension.
dstark, BTW, I like reading your post a lot. Not only money-wise wise, but also wise in how to live and enjoy a good life.
@HRSmom, Thanks for the kind word. I actually believe that whoever has been doing well must have done something right - like having more ambitions and/or dare to take on more risks and/or work harder than most others. I actually do not believe in a “dumb luck”. The luck only finds its way to those who have well prepared for it. I also do not consider myself as a hard worker in my life (I could not due to some health issues which I was born with. I am actually thankful that I have done so well today in my standard.)
