Talking Retirement

Talking Retirement Comes to an End

Well, folks, this is it. Talking Retirement has been up and running for over 2 years but we’re moving on to other things. Bruce and I want to thank you for coming by to check on the site as we’ve been working on this project. We’ve both learned a lot about the retirement conundrum and I hope you’ve found out some useful information along the way with us. Best of luck!

We’ll leave the site up for a while, probably for at least for another month so check out previous posts now if you’re interested in them. 

Why You Should Spend Everything You Earn and Not Save a Dime.

If I said to you, “You can have $10,000 to spend now—or $9,500 to spend in 10 years,” which would you choose? Probably the $10,000 now. And in doing so, you would be making the same choice many Americans make when deciding whether to save or spend their hard-earned cash.

The problem is how we tax investment gains.

If you’ve been reading TR for a while, you know I would still encourage you to save for retirement, but I found the article interesting. The article does say that long-term investing in stocks does avoid some of the problem, as he sees it, but it’s not for everyone.

Unless you’re in your 20s or 30s and saving for retirement, stocks are too risky to represent your entire portfolio. So, given current tax policy, it’s no wonder we’re not saving anything.

Mr. Bloget does offer some suggestions for fixing the tax code to encourage more savings, but I’ll let you read them in the full article.

Retirement Myths

Sorry it’s been so spotty lately. Work has been a little overwhelming. I’m back today though with an article debunking some popular retirement assumptions, Retirement Myths Revealed. The first one is the one I think it’s hardest for young people to overcome, “‘I’m too young to worry about retirement.” Read the rest of the myths here.

Retirement Just Doesn’t Suit Some People

Whether you like Larry King or not, you’ve got to hand it to the guy. The New York Times has a profile of him today called Who’s Talking About Retirement? in which Larry King comes off as one person who certain doesn’t want to retire, even given his numerous health issues.

“What would it take to go?” he said, paraphrasing a visitor’s halting question as succinctly as he might on his own talk show. “If, God forbid, I had an onset of dementia or Alzheimer’s. That would be it. And what I would wish is that if I get that, no joke intended, that it happens on the air. Just to see how they handle it.”

Read the article here.

Solid Numbers For Savings Goals

The analysis suggests you need a surprisingly large amount of money to keep up your standard of living. A couple that has gone through life with two children and with an income of $136,000 needs to have $850,000 in the bank, and a paid-off house, if they expect to maintain their living standard.

Skinner lists a number of markers along the way that can let you know whether you’re on track. At 40, this couple should have $167,000 in the bank, and at 50 they should have $399,000.

That same couple with an income of $272,000 needs to save a lot more, of course. They should try to have $1.53 million when they retire, and would need to have $316,000 at age 40, and $590,000 at age 50. Skinner also lays out a wide array of other incomes and scenarios.

It’s a large amount of money to save, but at least it’s something to mark your progress against. The rest of the article is worth your time too. Be sure to read the story here.

People Still Aren’t Saving

Instead of me saying the saying the same thing, I’ll let the opening paragraph of Yes, Retirement Still Seems an Impossible Dream do it for me.

It’s time for another retirement study to make you feel anxious and afraid. These studies always come to one conclusion: No matter how much you are saving for retirement, it isn’t enough, and you should save much, much more. So you’d better stop spending money on anything related to your present life.

Read the article.

Busy week. No updates until the weekend.

Thanks for checking in here. It’s a busy week and there won’t be any updates until the weekend. Talk to you then.

Test Out Retirement and See How You Save

I just read an article that has an interesting suggestion in it called Test retirement: Cut expenses. I appreciate the thought of giving your spending habits a test drive by seeing how much money you’re able to not spend throughout a month. It sounds like a really good exercise.

A change in lifestyle can have a big effect on expenses - bigger than we realize. And this shows how difficult it is to plan for retirement.

The author, Jeff Brown, is using this test to see if he might be saving too much money for retirement, an idea I doubt is a big problem for most people. What happens if you end up with too much money for your retirement? You might want to celebrate—splurge a little. What do you do if you find out you haven’t saved enough? Splurging isn’t going to be an auction. Read the article here.

Another Study Finds Fear of Not Having Enough for Retirement

I feel like a broken record posting this but yet another study has found Americans are finding properly funding a comfortable retirement a pipe dream.

Nearly half of America’s middle-income earners – the backbone of the working nation – simply do not believe it is possible to bring up a family, pay the bills, live a little and save for retirement all at the same time.

Read the full article.

Many Don’t Take Advantage of “Saver’s Credit” When Doing Their Taxes

A recent survey found that many people aren’t aware of a “tax credit designed to help low- to middle-income Americans build their retirement nest eggs” typically called the Saver’s Credit. Officially, it’s name is the Retirement Savings Contributions Credit. One important way to know if you’re not taking advantage of it is if you’re using the Form 1040EZ to file your taxes. Form 1040EZ doesn’t allow you to take advantage of it because it can “only be claimed using the Form 1040, Form 1040A or Form 1040NR (along with the accompanying Form 8880).” Even if you’re already contributing to your company’s 401(k) play, the Saver’s Credit may still be able to be claimed.

Read the article on the survey here and check out the U.S. Government’s site about the Saver’s Credit here.