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How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire?

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Replies to: How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire?

  • VeryHappyVeryHappy 18409 replies324 postsRegistered User Senior Member
    If someone has accrued a pension benefit, it cannot be taken away. However, a pension plan can be frozen, so no one gets any additional benefit going forward. That's the hardship -- that in your later years, you're not earning any more pension benefit, so you need to save in your 401(k).
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  • mom2collegekidsmom2collegekids 83958 replies1009 postsForum Champion Financial Aid, Forum Champion Alabama Forum Champion
    >>>
    However, a pension plan can be frozen,
    <<<<


    do you mean no more payouts? or what?

    if no more payouts...would that be because the money is gone? misused? what?
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  • mom2collegekidsmom2collegekids 83958 replies1009 postsForum Champion Financial Aid, Forum Champion Alabama Forum Champion
    can you contribute to an IRA after retirement?
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  • DrGoogleDrGoogle 11023 replies24 postsRegistered User Senior Member
    No, I don't think so, you can convert your IRA to Roth IRA but not contribution.
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  • cptofthehousecptofthehouse 28759 replies56 postsRegistered User Senior Member
    Momofthee, yes, I am afraid too, because so much no longer under our control I can't count on just taking up the slack and finding work as I get older.

    My DH's family has a very bad history in terms of old age living. Many lived hand to mouth and when hit with one disaster, it was over. While younger, they could always take a second job, borrow from mom, take money out of some niche or other and get by. Move in with someone temporarily while recovering from a financial hit, while looking for cheap digs. One isn't ask quick on one's feet at older ages, and options for bail out and bunking with friends start disappearing.

    My one son and I worked the soup kitchen and food pantry around here for a few years, and I was surprised to find a lot of people going there for food as they did not have any extra money at all, and many were just waiting to lose their homes because they could not pay rent or mortgage. One elderly woman, upon seeing a book in my hand, gave me her address to sell me books. She lived in a house, that was once nice, but now tumbledown with overgrown yard and boxes of books and junk in the garage which I found out were a perpetual garage sale. She picks up free and low cost books and then solicits people to come buy for a couple of bucks. She figures she sells a dozen a week to get twenty bucks clear. She's underwater in her home as she borrowed against it to live and is just waiting for foreclosure sale. I don't know what happens to people like this.

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  • MassmommMassmomm 3859 replies79 postsRegistered User Senior Member
    One very wise, but sobering, thing our financial planner told us was that most people find they don't spend as much as they think on expendable things. This makes it hard to cut back, because what you buy is very often what you believe you need, whether you live like a pauper, or just a middle class person.The way you live before retirement is about the same way you should plan to live afterwards. And this takes a lot more money than most of us think.

    It's very easy to say, "Well, you could cut out going out to dinner once a week," but in practice, if this is something that helps your quality of life, it's very hard to give up. We don't become different, more ascetic people when we retire, so whenever possible, we need to recognize this and plan accordingly.
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  • VeryHappyVeryHappy 18409 replies324 postsRegistered User Senior Member
    edited May 2014
    mom2collegekids:

    Freezing a pension means no one earns more benefits. People get what they earned up until the freeze. They can't take away what you have already earned, but they can take away what you'll earn in the future.
    edited May 2014
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  • thumper1thumper1 73734 replies3213 postsRegistered User Senior Member
    I think the important thing is to have options. I retired three years ago. I have been able to do some part time work. I started collecting my pension at age 60. At 62, I added my very small social security check ($150...teachers don't contribute in CT, and any benefit is reduced by 2/3). At age 65 or 66, I might tap into a small TSA that I have. But I might wait in that as well. At age 70, I will be required to take the minimum draw on that TSA, as well as a second one I also have.

    The reality is, we were contributing the maximum to our retirement accounts for years...plus all the other deductions related to work (union dues, TSA contributions, required pension contributions, health insurance, etc). My actual take home pay is higher than my last years of work.

    My husband is in a similar situation. Maximum contributions to his 401K. And he also has split up some of his retirement investments. His SS will be the max. I never can collect off of his earnings.

    Not having a mortgage saves us about $16,000 a year...which is not chump change.
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  • SweetbeetSweetbeet 565 replies30 postsRegistered User Member
    A lot.

    Never.
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  • mom2collegekidsmom2collegekids 83958 replies1009 postsForum Champion Financial Aid, Forum Champion Alabama Forum Champion
    <<<
    It's very easy to say, "Well, you could cut out going out to dinner once a week," but in practice, if this is something that helps your quality of life, it's very hard to give up. We don't become different, more ascetic people when we retire, so whenever possible, we need to recognize this and plan accordingly.
    <<<


    My mom, who was very thrifty, found that it really wasnt that expensive to eat out more when it is just two people...as long as it is done carefully....she'd use 2for1 coupons, earlybird meals, meals that would have a doggy bag for a later meal, etc. she found that she had less food waste. she also found that as they aged, dad and she only ate 2 meals a day....and maybe a snack in between.

    she would still cook big family meals when she had guests (and enjoy the leftovers later), or cook up a big bowl of spaghetti and freeze for later meals.

    I agree that you dont get more ascetic as you retire.

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  • mom2collegekidsmom2collegekids 83958 replies1009 postsForum Champion Financial Aid, Forum Champion Alabama Forum Champion
    @VeryHappy‌
    "Freezing a pension means no one earns more benefits. People get what they earned up until the freeze. They can't take away what you have already earned, but they can take away what you'll earn in the future."


    that is what I thought. so, I am guessing that there are laws in place NOW that prevents what happened to my BIL.
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  • shellfellshellfell 3270 replies11 postsRegistered User Senior Member
    We have a decent amount saved in retirement accounts, but other than SS that's what we're counting on. Our mortgage is paid off, but we plan to use the proceeds from our house to buy something else wherever we retire to. The big question is how much will healthcare cost in retirement, and both of us had parents who lived to 90 and beyond, not necessarily in good health.

    At this point, we just don't know when to actually retire. DH is worried about not having his job, and once he retires there's no going back, especially if we move.
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  • mom2collegekidsmom2collegekids 83958 replies1009 postsForum Champion Financial Aid, Forum Champion Alabama Forum Champion
    There are states that are more retirement-friendly....low taxes, low property taxes, don't tax pensions, etc.

    http://www.kiplinger.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/
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  • zeebamomzeebamom 1360 replies3 postsRegistered User Senior Member
    We've been talking about this lately. I don't know how much we will need, but with pension, 401k, and SS, we should do ok. We work for the same company and have put money aside since we started. Unfortunately, a couple of months ago they informed us that non-union employees will switch from a defined benefit to defined contribution plan in 2016. My husband is in a professional union that, for the time being, is still in the better plan. We both will get retiree medical which will cover us until Medicare kicks in. My fear is that they will take that away. The ACA will be of benefit if that happens.

    We will stay in the same area, maybe downsizing if we feel like it. It is not worth it to move away.

    I do know people who haven't put anything aside for retirement and will have to work until they die. Very much a live now attitude that will haunt them when repetitive stress injuries make them stop work with nothing put by to keep them with a roof over their head.
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  • busdriver11busdriver11 15187 replies28 postsRegistered User Senior Member
    ""Freezing a pension means no one earns more benefits. People get what they earned up until the freeze. They can't take away what you have already earned, but they can take away what you'll earn in the future."

    that is what I thought. so, I am guessing that there are laws in place NOW that prevents what happened to my BIL"

    So in theory, if I earn the max pension that I can receive and retire at age 60, if I live to 100, they have to continue to pay me that earned pension for 40 years, even if it's frozen? I wish I could count on that. But what if the company goes bankrupt and ditches their pension plan? That has happened to many in my industry, and then the PBGC takes over (if they aren't overwhelmed by that point) and gives you a small fraction of what you were expecting. Mismanagement, theft, laws that change, massive stock market fluctuations....anything can happen, and I really don't feel that a pension is firm.

    Then again, I know I'm on the paranoid side. I don't trust that social security will be available for everyone, and I don't trust the govt not raid our 401K's and Roths, which is why we're diversifying as much as possible.
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  • Singersmom07Singersmom07 4111 replies80 postsRegistered User Senior Member
    The pension is only as good as the company. If the company files for bankruptcy then the pension is turned over to the Pension Benefit Guarantee. BiL only got pennies on the dollar of pension value and it significantly affected their retirement planning and college payment planning.
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  • mom2collegekidsmom2collegekids 83958 replies1009 postsForum Champion Financial Aid, Forum Champion Alabama Forum Champion
    >>>
    The pension is only as good as the company. If the company files for bankruptcy then the pension is turned over to the Pension Benefit Guarantee. BiL only got pennies on the dollar of pension value and it significantly affected their retirement planning and college payment planning.
    ,<<<


    Yes, that is what happened to our BIL.....but I thought that companies now have to keep retirement dollars separate so that the above doesnt happen anymore.
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  • SilpatSilpat 1282 replies20 postsRegistered User Senior Member
    Busdriver11, would you please describe some of the steps you've taken to diversify? Dh has similar concerns about our current retirement savings. He's mentioned precious metals and land, among other things, but my concern is liquidity as well as safety. Plus, I'd hate to forget where we put something.
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  • Evergreen1929Evergreen1929 137 replies16 postsRegistered User Junior Member
    edited May 2014
    busdriver: The government doesn't hold your 401K or Roth so technically they can't raid it. What some "paranoid siders" think may happen is that the "tax free" or "tax deferred" status may go away and you may not get the amount out that you counted on.

    I live in an area that has former Bethleham Steel employees. When they went under they lost a lot of health care benefits that left many people in the lurch at pre Medicare age. one man in particular had a wife with an expensive chronic illness so he became a long distance truck driver at 60 to get insurance coverage.

    I don't expect social security to go away but I expect it will cover less and less of a percentage of retirement income. H and I are lucky to have 401K and pension. Wherever our income is at retirement, we will move/adjust or whatever to make the lifestyle fit the money.

    Retirement is really one of the scariest things. I've always worked and it is almost impossible to think about the morning I wake up and there is no paycheck coming. The ability to work full time is like a security blanket to me.
    edited May 2014
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