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(CNBC)   More and more Americans are opting for an early retirement rather than hold out hope their 401Ks and pensions will be there in ten years   (cnbc.com) divider line 42
    More: Scary, public sector workers  
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5703 clicks; posted to Main » on 15 Oct 2013 at 5:36 AM (40 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-10-14 10:29:14 PM
4 votes:
...and now that they can get affordable health care without staying in a job they hate, they can spend their middle years doing something they may enjoy.

Terrible.
2013-10-15 08:33:01 AM
3 votes:

t3knomanser: PunGent: Generous pensions are nice in theory, but eventually the math stops working out.

I still have co-workers that are expecting a pension. It's a weird thought, because no job I have ever held has discussed a "pension". Us youngins get a "deferred contribution", which is basically the company saying, "look, instead of putting money into a pension fund, we'll just give you the money to invest how you see fit." I think I like that better.


I have mixed feelings on it.  On paper it seems like a smart idea in that it eliminates massive amounts of red ink from company balance sheets.  Theoretically this should free up tons of capital for investment but in practice it's just getting funneled to wealthy stockholders for short term gains.  In addition, the whole point of pension plans, including Social Security, and also things like weekly withholding taxes is that people in general are really lousy at planning for the future, even short term.  "Well, that's their own fault.  Screw 'em!" sounds fair but what do you think will happen if tens of millions of Americans suddenly find themselves at or near retirement with nothing to live on?  You really think they'll just sit back quietly, take all the blame themselves and accept their fate?

I've said it before and I'll say it again.  The reason we have welfare and social safety nets is to protect the assets of rich.  A poor person with no prospects for a better life is far more likely to resort to thievery, not because they are bad but just in order to survive.  When you have millions of poor people in a dire straights, you get France in 1789 or Russia in 1917.  All your philosophical arguments about natural rights, capitalism, socialism, property and whatnot mean nothing to a starving desperate man.
2013-10-15 05:48:31 AM
3 votes:

namatad: "More and more Americans are opting for an early retirement rather than hold out hope their 401Ks and pensions will be there in ten years"
So um ... isnt this a GOOD thing?
More retiring people = more job opening = lower unemployment rate = better economy = less chance that things are screwed up in 10 years.

WHY are we raising the retirement age and not lowering it???


Maybe because the government has to pay more money to retirees than it does to unemployed people.

It's a myth that governments want to lower unemployment, their financial benefactors (big business) like high unemployment because that is how companies can really screw workers. If they're grateful just to have a job, they will work for the little money and under awful conditions. What governments want is to have the voters think they want to lower unemployment, while not actually doing so at all.
2013-10-15 01:06:21 AM
3 votes:
"More and more Americans are opting for an early retirement rather than hold out hope their 401Ks and pensions will be there in ten years"
So um ... isnt this a GOOD thing?
More retiring people = more job opening = lower unemployment rate = better economy = less chance that things are screwed up in 10 years.

WHY are we raising the retirement age and not lowering it???
2013-10-15 10:14:07 AM
2 votes:

AngryDragon: Headso: baufan2005: AngryDragon: ThatGuyFromTheInternet: AngryDragon: Even if you save $200 a month starting at 25.

Aaaaaand that's how I know you haven't been 25 in quite  while.

My step-son is not even 23, goes to school, works two jobs, and saves at least that much.  It's not impossible.

My friend does to but he has never had a gf and lives at home with parents with all bills paid.

I know a guy who is 18 has 37 jobs goes to medical school full time is a classical musician who plays in the BSO and dates 4 super models depending on what city he happens to be in at the time. If he can do it anyone can.

I didn't say anyone could, I said it's not impossible.  It all comes down to you being confident in a pension/social security and having faith that the government is going to take care of you in 40 years.  If the cost of one night at the bar a weekend insures that you won't be living in a box when you're older, you may want to consider it.

Your choice.


When you're young in this day and age in America your money could be easily taken at any time if you suffer a medical problem, so you have to weigh that short term fun not just with your future as an old person but the decent chance you are just saving to pay a small portion of medical costs before you file for bankruptcy. Not even mentioning the people who really have no capacity to save even those that do have some calculations to make that we as young people never did, the idea of saving money for the future is not really as attractive as it once was.

Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year-making health care the No. 1 cause of such filings

...

Even outside of bankruptcy, about 56 million adults-more than 20 percent of the population between the ages of 19 and 64-will still struggle with health-care-related bills this year, according to NerdWallet Health.
2013-10-15 08:02:26 AM
2 votes:

AngryDragon: AirForceVet: As for the 401k, save more, invest wisely and max out employer contributions. Remember that the markets are never a sure thing, but history shows long-term investing pays off.

THIS THIS THIS.

Save early, save consistently.  If you are 25 making the median wage and save 15% of your incomeat the historical return average, you will have over $1.5M in the bank by 55.

Why aren't kids taught this?


Kids won't listen. They think they are all special and unique and exceptional and above average and and and. I know. I was a kid once. Movies and fiction made me think that hard work and luck would get me somewhere.

Hah!

The truth, of course, is that hard work and luck MAY get you somewhere... or it may not.

So, the first problem is that the kids have a couple of decades of programming that need to be overcome first before they could understand the problem at anything more than an abstract level.

Another issue is... what is the average age of the person making the median income? I suspect it's considerably older than 25. i was 35 before I ever got a real good job. (25 to 35 was spent as a ronin database programmer, it was feast or famine, and that is no way to live or plan for the future). I've seen helpful articles online that talk about how a young person can retire wealthy... and their starting conditions are always a ridiculously high paying job compared to reality.

When you run those scenarios with realistic McJobs, the outlook isn't nearly so rosy. :(
2013-10-15 07:52:24 AM
2 votes:

Kibbler: Also, what does that even mean?  And put it where?  Under a rock in Portugal?


I have a fair amount of money invested in international T-bills and international stocks. While that's not quite "moved out of the country" (I'm gonna pay taxes on that income eventually), it keeps my investments diverse.
2013-10-15 07:10:12 AM
2 votes:

MemeSlave: We also need old people to die, and not consume their accumulated assets in their last few years trying to stay young and healthy.   As a nation we're eating our seed corn, who leaves houses and property and assets to their kids anymore?   If every generation has to start from scratch now, how do we accumulate wealth?


The system is designed to extract end-of-life wealth by default.
If you have assets, they will be used up by the time you're at the end of your terminal illness, unless you go quick and unexpectedly and have arranged your legal instruments to prevent this theft.
2013-10-15 07:09:52 AM
2 votes:
3.bp.blogspot.com
time yet?
2013-10-15 06:25:26 AM
2 votes:
I'm going to retire at 51. I will have 30 years of service in my position.
It's time to enjoy life and let the young whippersnapper take over.
I fully intend to spoil my future grandchildren to the max.
2013-10-15 06:00:35 AM
2 votes:

Nidiot: If they're grateful just to have a job, they will work for the little money and under awful conditions.


which actually just farks over the companies. Henry Ford understood this very well, it's a big part of why he paid his employees so well. Well eventually he did, at first he paid like everyone else, had the same problems as everyone else and decided that was no way to run a company.
2013-10-15 12:10:36 AM
2 votes:

what_now: ...and now that they can get affordable health care without staying in a job they hate, they can spend their middle years doing something they may enjoy.

Terrible.


My best friend's in-laws (who I know quite well) did this.  They are a few years away from collecting SS.  Not too long ago, the mother in-law had a serious illness which she overcame.  Their insurance dropped them like a blue-hot nuclear potato.  Now they can get insurance again.  They're both rabid teabaggers.  I'm anxious to see how it plays out with them..
2013-10-15 11:19:35 AM
1 votes:

Ficoce: I think health care cost too much


Hmm, I wonder why.

"The CEO of Aetna Inc., Mark T. Bertolini, had a 2012 pay package that more than tripled - nearly quadrupled - his compensation the year before, according to documents filed Friday with the U.S. Securities and Exchange Commission.
Bertolini was compensated a total of $36.36 million last year, not including $11.1 million in stock awards which vest later and are based on the company's performance."
http://articles.courant.com/2013-04-08/business/hc-aetna-ceo-bertoli ni -pay-20130408_1_aetna-ceo-magellan-health-services-inc-aetna-inc

Or maybe I don't.
2013-10-15 10:44:00 AM
1 votes:

trappedspirit: PhDemented: AngryDragon: Even if you save $200 a month starting at 25. By 65 you will have amassed over $750,000. You don't have to be socking away thousands, you just have to start early and do it consistently. It's the miracle of compound interest.

Man, I wish I was making enough when I was 25 to have $200 to invest a month

Were you making below minimum wage or wasting too much?


Monthly Expenditures:

Filling up at the gas pump once a week - $50
Healthcare Insurance - $250
Car Insurance - $150
Car Payment - $200
Food - $300
Rent (Assuming Roommate) - $300

Just the bare minimums are covered with minimum wage. How exactly do you afford any sort of savings here? This doesn't take into account student loans, clothing, personal hygiene, etc. The only way kids can afford that out of college is to have a legitimate job, or multiple jobs, or with their parents helping pay for things like insurance (or the kids living at home).
2013-10-15 09:12:37 AM
1 votes:

ltdanman44: once the boomers die off, who will vote republican???


Poor, white folks south of the mason-dixon line?
2013-10-15 09:04:56 AM
1 votes:
There's also other calculous involved - far simpler too.

I remember back when my mother retired and they said something in the order of "You can retire now and get X a month as part of your pension (something they'd save money on the short run with). Or stay on another (I think it was 3-4 years) and Get X + whatever a month."

She did the math, considering and I think rightly so, that retirement was good at that point and that the money made from it for the gap was the issue. So she compared how many years it would take her to make that with the difference. In her words, while she'd love to live to 108 years old, she was dubious of the actual chance. So she just retired early.

For many though, they just don't see it that way. And in certain professions "pensions" and "retirement" are just not part of the culture. I know in legal circles you work until you die at work, or until you lose your faculties. Some lawyers I know have "retired" in the sense they became ALJs or something like that. Something, that for anyone else looking at that as a career goal would consider a job and not retirement. But there it is.

I'm just saying that... when discussing some of these really major economic things - for whatever reason, economics, political spin, or the yearning for genuine comprehension - it generally doesn't boil down to 1 or 2 simple axioms. It's not like older Americans are en mass in a mass fugue screaming "Ehermergerd, Erbamaz killin sercial sercurity!"

/except the general understanding that the population is getting older, so yes, more Americans will be retiring..... boomers, etc.
2013-10-15 09:00:28 AM
1 votes:

AngryDragon: Even if you save $200 a month starting at 25. By 65 you will have amassed over $750,000. You don't have to be socking away thousands, you just have to start early and do it consistently. It's the miracle of compound interest.


Man, I wish I was making enough when I was 25 to have $200 to invest a month
2013-10-15 09:00:05 AM
1 votes:
As long as we're sort of straying off the article topic, I like this guy's ideas a lot:
http://www.coffeehouseinvestor.com/">http://www.coffeehouseinvestor. com/

My investments aren't even as complicated as the coffeehouse portfolio, I now stick with mostly S&P ETF, equal weight S&P ETF, BND (and BOND since it came out last year), VTI and VEU.  And I think I'm only about 10% in VEU total, which is probably a little low, but maybe my tolerance for risk is not as great as it should be given that I'm still pretty young.

And my external rate of return is like 11% since I started investing in '05 (maybe high 10s).  And that's net rate, after expenses.

I don't keep much in cash.  I hate losing money to inflation, but I've got a CD ladder to cover about 6 months of living expenses.
2013-10-15 08:57:09 AM
1 votes:

AngryDragon: Investing should be core curriculum in high schools.


Let's start small, like personal budgeting and how not to fark up your life with credit cards.
2013-10-15 08:54:21 AM
1 votes:

KIA: AngryDragon: at the historical return average

Can *anyone* get a decent rate of return today on any relatively safe investments?


Index funds.  Low cost, decent return.  I have a straight index fund portfolio and do nothing but add money to it  For this year it's up 16%.  Brokers and bankers just like to make the process sound intimidating so you give them your money.

Investing should be core curriculum in high schools.
2013-10-15 08:47:57 AM
1 votes:
More workers retiring later - conservatives' fault because they can't afford to retire.
More workers retiring earlier - conservatives' fault because they are unsure of future returns on investments.

But no matter what, Obama is a complete boss on the economy.  Just fantastic.
2013-10-15 08:25:13 AM
1 votes:

sethen320: WhyteRaven74: PunGent: all those jobs are NOT coming back, and we need to figure out what to do with all the people who used to do them

Tell corporations to get off their asses and start doing R&D again to find new stuff to do.

Only corporations can come up with new and original ideas? Huh...


Certainly not.  But look at ferrofluids...invented in a US university, first commercial applications came out of...China.

Richest woman in China?  Self-made, no business degree, made her billion dollars shipping recycled American cardboard across the Pacific...in a field our own MBAs thought was "unprofitable" WITHOUT trans-Pac shipping costs.
2013-10-15 08:21:30 AM
1 votes:
www.upl.co
2013-10-15 08:19:43 AM
1 votes:

DrPainMD: PunGent: We're eventually moving into a world where one guy can harvest all of Nebraska, mine an entire mountain range, or produce 10,000 cars, just by pushing a couple of buttons.  This is a good thing, since surplus food and goods are what civilization is built on, all the way back to the Neolithic.

However, all those jobs are NOT coming back, and we need to figure out what to do with all the people who used to do them.  Starting now would be a good move, but we'll probably wait until it's a real crisis..probably take another global depression, or something.

We don't need to figure out anything. 200 years ago, 95% of American workers were involved in food production/distribution; today it's only 5% (at most). We don't have a 90% unemployment rate because food (in real terms) costs much less, giving people more money to spend on other things, which creates jobs.


Sure, things will settle out, one way or another.  By "figure out", I don't mean serious governmental social engineering...that usually ends in tears and tyranny.  I mean more like "adjust our expectations and perceptions."

The old "get a job at the plant, work there until I get my pension" days are LONG gone, but lots of folks don't seem to realize that yet.
2013-10-15 08:07:25 AM
1 votes:

Kibbler: robohobo: Kibbler: My concern is that all of the money I have carefully saved up over the years will disappear the next time the sharks move in, and I will be told, "Oops, nobody's fault, you knew those were investments, you knew there were risks, everybody suffered, pay no attention to that guy upgrading his 200-foot yacht to a 500-foot yacht.  It's all Jimmy Carter's fault."

Well...they are investments, and they are risks. If you've enough to invest, you have enough to move that money out of the country. I would suggest you do so.

What would be the outcome if every middle class savings account was moved "out of the country"?

Also, what does that even mean?  And put it where?  Under a rock in Portugal?


Bwahaha savings...what does that word mean?
2013-10-15 07:57:22 AM
1 votes:

WhyteRaven74: PunGent: all those jobs are NOT coming back, and we need to figure out what to do with all the people who used to do them

Tell corporations to get off their asses and start doing R&D again to find new stuff to do.


Problem is, we in the U.S. have trained a full generation of MBAs who can't look past the next quarterly statement.
They won't even fund NON-speculative stuff, like employee training, let alone anything "speculative" like R&D.

So, anyone who can look further than three months down the road will eventually eat our lunch, in any given industry.

Oh, well...we had a good run the last sixty years or so.  Fun while it lasted.
Sorry, but you younger Farkers are probably, well, farked.
2013-10-15 07:29:28 AM
1 votes:

PunGent: all those jobs are NOT coming back, and we need to figure out what to do with all the people who used to do them


Tell corporations to get off their asses and start doing R&D again to find new stuff to do.
2013-10-15 07:23:53 AM
1 votes:
Too bad their jobs are going with them. It used to be when the old man retired everybody moved up the ladder.
2013-10-15 06:53:02 AM
1 votes:

UberDave: My best friend's in-laws (who I know quite well) did this.  They are a few years away from collecting SS.  Not too long ago, the mother in-law had a serious illness which she overcame.  Their insurance dropped them like a blue-hot nuclear potato.  Now they can get insurance again.  They're both rabid teabaggers.  I'm anxious to see how it plays out with them..


You've just predicted what will happen yourself. They're teabaggers. They lack any ability to reason rationally, and can only spew talking points.

They will profit from the changes, and at the same time, will decry those very changes as the worst thing to happen to America, ever. And they will not be even slightly troubled by the paradox.

/You know I'm right.
2013-10-15 06:51:36 AM
1 votes:

DrPainMD: namatad: "More and more Americans are opting for an early retirement rather than hold out hope their 401Ks and pensions will be there in ten years"
So um ... isnt this a GOOD thing?
More retiring people = more job opening = lower unemployment rate = better economy = less chance that things are screwed up in 10 years.

WHY are we raising the retirement age and not lowering it???

Wow. I don't even know where to start with this post. The percentage of Americans who are producing the goods and services that we all consume is dropping, and is going to continue to drop over the next 15 years, and then stay pretty low for the next 20 years. That's not a better economy. A 1% unemployment rate in a country with 60% of the population not in the job market is worse than a 10% unemployment rate in a country with only 30% of the population not in the job market.


Liberals think of economics as a zero-sum game; they don't realize that a 30 y.o. can't support a dozen pensioners for the last two decades of life.

Also, the reason state employee retirement benefits are at risk is that they were overly generous packages negotiated by state employee unions promising votes, primarily to Democrats.

If you want those kinds of benefits when you retire, put money in a 401K.
2013-10-15 06:36:20 AM
1 votes:

AirForceVet: As for the 401k, save more, invest wisely and max out employer contributions. Remember that the markets are never a sure thing, but history shows long-term investing pays off.


THIS THIS THIS.

Save early, save consistently.  If you are 25 making the median wage and save 15% of your incomeat the historical return average, you will have over $1.5M in the bank by 55.

Why aren't kids taught this?
2013-10-15 06:35:26 AM
1 votes:

namatad: "More and more Americans are opting for an early retirement rather than hold out hope their 401Ks and pensions will be there in ten years"
So um ... isnt this a GOOD thing?
More retiring people = more job opening = lower unemployment rate = better economy = less chance that things are screwed up in 10 years.

WHY are we raising the retirement age and not lowering it???


Wow. I don't even know where to start with this post. The percentage of Americans who are producing the goods and services that we all consume is dropping, and is going to continue to drop over the next 15 years, and then stay pretty low for the next 20 years. That's not a better economy. A 1% unemployment rate in a country with 60% of the population not in the job market is worse than a 10% unemployment rate in a country with only 30% of the population not in the job market.
2013-10-15 06:23:07 AM
1 votes:
Scary?  This is actually a good thing.  More people who retire, the more jobs that open up.  Since most retiring people are at the top of career, that also means it is good jobs becoming available, and that the younger generations can finally move up into something that doesn't pay a good wage in 1978, which their old fogey bosses, who just retired, thought was perfectly reasonable.
2013-10-15 05:58:21 AM
1 votes:
Yeah they retire but instead of someone replacing them, their work will probably be divide up between a few people that wont get any extra money.

Dad just retired a few months ago and he is 70, but he still does odd jobs. If he ever retired he would die of boredom. He is pissed enough he has to take it easy because of his knee surgery
2013-10-15 05:51:49 AM
1 votes:
The wife and I plan to retire by 50, so that leaves us 15 years. I don't think she'll ever fully retire, because she's a surgeon, but she'll probably end up teaching when we're older.

But at 50, it's all about traveling and relaxation.
2013-10-15 05:42:02 AM
1 votes:
good good. at last the baby boomers can end their days in a medicated, gentrified state until they choose to go soylent green and open up career opportunities, the ones that never knock
2013-10-15 01:07:58 AM
1 votes:

AirForceVet: As for the 401k, save more, invest wisely and max out employer contributions. Remember that the markets are never a sure thing, but history shows long-term investing pays off.


Except that the markets have always done well over the long term.
Pretty much always.

long term of course
short term = gambling and should be taxed as such
2013-10-15 01:06:22 AM
1 votes:
I don't think subby read the article (that's a shocker, I know). It has nothing to do with 401ks.
2013-10-14 11:58:15 PM
1 votes:

NewportBarGuy: what_now: ...and now that they can get affordable health care without staying in a job they hate, they can spend their middle years doing something they may enjoy.

Terrible.

Yeah, that's not assured. They have f*cked up this roll-out royally.


TFA is about California.  California's exchange is apparently working quite well... so... there's that.
2013-10-14 10:45:52 PM
1 votes:

what_now: ...and now that they can get affordable health care without staying in a job they hate, they can spend their middle years doing something they may enjoy.

Terrible.


Yeah, that's not assured. They have f*cked up this roll-out royally.
2013-10-14 10:30:23 PM
1 votes:
Why are Americans opting for early retirement? Let's see. Oh, we're talking about California public employees.

Well, that pretty much covers the whole USA then.

As for the 401k, save more, invest wisely and max out employer contributions. Remember that the markets are never a sure thing, but history shows long-term investing pays off.
2013-10-14 09:56:41 PM
1 votes:
Americans are getting older. That's why more are retiring. We've already talked about this for 20 years. THIS is the strain on the system. We ready?
 
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