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<p>It depends on whether or not you need money to enjoy life.</p>
<p>It depends on whether you want to do anything besides eat, sleep and sit on your porch.</p>
<p>Sryrstress, I understand.</p>
<p>BCEagle91, I like your attitude about money and life. I understand doct too.</p>
<p>A friend’s mom sold her house. She has 800000 in cash. No other assets. Her SS income after paying for Medicare is 6,000 a year. That is her total income. She has a great chance to live another 20 years. She is going to invest some of that money. Is that money going to run out? It sounds like a lot of money. We read that seniors are sucking the wealth away from the younger people. The elderly live on fixed incomes and for most of the elderly the wealth is used to live on. Is that 800,000 going to last long enough?</p>
<p>10,000 in financial assets…</p>
<p>[Study:</a> Almost Half Of Americans Die With Less Than $10,000 In Assets « CBS Connecticut](<a href=“CBS News - Breaking news, 24/7 live streaming news & top stories”>CBS News - Breaking news, 24/7 live streaming news & top stories)</p>
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<p>Well, I work out a lot. That can cost some money but it doesn’t have to.</p>
<p>I play tennis too. That can cost some money but it doesn’t have to cost much.</p>
<p>I can work on open source software projects. That costs a lot of thinking.</p>
<p>I suppose that I could spend a lot of money on services and things which would grow old, obsolete and get rusty too.</p>
<p>$800K should last 20 years in Costa Rica.</p>
<p>Lol…</p>
<p>Let’s be real. She lives in Berkeley. She doesn’t live high. She takes advantage of what UC Berkeley has to offer. She sits in on some classes. Rents are high in Berkeley. I think it costs her 15,000 to 20,000 a year in rent and she shares the place. I was told the rent yesterday but I forgot already.</p>
<p>Her son talked about her running out of money…</p>
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<p><a href=“https://www.coursera.org/[/url]”>https://www.coursera.org/</a></p>
<p>That is a nice link. I thought I was going to use an online source like that but I guess I was wrong about that.</p>
<p>She doesn’t have an Internet connection in her place. She does go to libraries for internet connections. She loves being in a real classroom with great professors. </p>
<p>I like that link for me.</p>
<p>Oh… You have to sign up for the classes…</p>
<p>Have you taken any online classes?</p>
<p>I was just making up numbers though, not sure what the real ones are. It just seemed like every scenario I put in it made more sense to take the lump sum. I haven’t played with it in a few years.</p>
<p>Well someday you will have real numbers… </p>
<p>Situations change so what works best today may not work best tomorrow…</p>
<p>For those of you that have or had a pension in the private sector did you contribute to it or was it completely funded by the company? I am not talking about your 401k.</p>
<p>I haven’t done any courses at Coursera but have done them from Berkeley, Yale, MIT and Stanford. The Coursea courses are free but they have extras which they can charge for. I think that there will eventually be some kind of credit system for either Coursera or the bricks-and-mortar schools.</p>
<p>[webcast.berkeley</a> | UC Berkeley Video and Podcasts for Courses & Events](<a href=“Webcast and Legacy Course Capture | Research, Teaching, and Learning”>http://webcast.berkeley.edu/)</p>
<p>[Open</a> Yale Courses](<a href=“http://oyc.yale.edu/]Open”>http://oyc.yale.edu/)
[MIT</a> OpenCourseWare | Free Online Course Materials](<a href=“http://ocw.mit.edu/index.htm]MIT”>MIT OpenCourseWare | Free Online Course Materials)
[Stanford</a> School of Engineering - Stanford Engineering Everywhere](<a href=“http://see.stanford.edu/see/courses.aspx]Stanford”>http://see.stanford.edu/see/courses.aspx)</p>
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<p>I believe that mine was completely funded by the company. I would have to go back through my paystubs to confirm that but I think that I would have noticed a deduction for that. I was frankly shocked when I received a benefits letter a few years ago indicating how much I will supposedly get.</p>
<p>BC- I think that is the bigest misconception with government pensions most people do not know that government employees are mandated by law to contribute to them.</p>
<p>People who had private sector pensions generally made no contribution and do not know that is not the case with government plans.</p>
<p>I would like to contribute more to my own savings plan as busdriver suggests but having to pay 7% limits how much additional I can save.</p>
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<p>I don’t know that who pays really matters. If they contribute to a pension, then that leaves less room for salary.</p>
<p>One of our VPs basically told us that they could spend more money on furniture or salaries when our building was in construction. So people didn’t complain about the furniture.</p>
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<p>You can always just open a brokerage account and put money into it and pay taxes regularly on the earnings. You won’t have to pay taxes on it when you take it out. There’s never anything stopping you from saving.</p>
<p>I am saving. The issue is I am mandated by law to contribute to my pension which means I can not save that portion in anything but the pension. Yes you are correct that overall compensation is a total figure including salary, benefits and retirement plans. </p>
<p>If a company runs into financial problems do you think it is okay for them to clawback (not stop) but take what was previously contributed to an employees 401K plan? How much of the 401k plans that a company holds in trust for their employees should the company have the right to use for their own needs?</p>
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Private sector pensions are typically much less generous, IME. My father worked for the same company for 40 years, his pension was about 60% of the average of his last few years’ salary. No COLA, stingy healthcare.</p>
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Are you paying FICA tax?</p>
<p>For the 12.4% “contribution” to SS that I and my employer pay, I can expect a “pension” that will pay about 25-30% of the taxed income amount. </p>
<p>I am guessing your state pension will pay 70-80% of your final income? That’s a pretty sweet deal.</p>
<p>"I said the future…</p>
<p>People retiring in 10 years with 2 million and then living another 30…well some of them are going to have problems…not everyone…</p>
<p>Spending of $80,000 ten years out is equivalent to spending $60,000 today if inflation averages 3 percent a year compounded annually during those ten years…</p>
<p>A net worth of 2 million 10 years from now is equivalent to 1.5 million
today.
Most parents on this board are in their 40’s and 50’s. </p>
<p>I don’t think spending $60,000 a year these days is extravagant living in
most parts of the US."</p>
<p>dstark - The 4% withdrawal rate that I quoted includes indexing for inflation. Your example is already taken into consideration. </p>
<p>Once again, if $2,000,000 isn’t enough for folks, IMO it’s largely a spending problem. Heck, this months issue of Journal of Financial Planning advocate INFLATION ADJUSTED withdrawal rates of 4% - 5%.</p>
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<p>I think that there are legal frameworks around 401Ks and that part of the appeal of the 401K is that it is held with a separate financial institution and not managed by the company so the money is more than arms-length from management. There have been cases, though, of companies not paying taxes when they withheld, which is, of course, illegal.</p>
<p>As far as clawbacks go, I think that those are starting to show up in the workplaces though I think that they are only applicable in isolated cases.</p>