How much do you need to save up to retire?

[Flummox]

How much do I need to retire? - CNNMoney

 

I found this link online which calculates how much you need to retire, depending on your age and income level.

 

What's sad is, because my generation won't be able to reap the benefits of Social Security, I had to input "0" in the last box. After doing so, the box calculated that I need to save up over $800,000 ($2 million dollars in future value) to retire by the time I'm 65 if I want to make 50% of the income I'm earning now when I retire. Talk about depressing.

 

Since Generation Y isn't going to get the benefits of Social Security, are we really expected to save up 2-3 million dollars for retirement? How is the United States going to handle the welfare crisis?

Edited April 24, 2012 by Flummox

[tman666]

Yeah, I've pretty much accepted that I'll be working in some form or another until I croak. There is hope though for people who start saving for retirement early. With compounding interest, there are a couple of different tax deferred vehicles that can help earn one a lot of money in the long term. The trick though, as I mentioned, is to start as early as possible.

[Red Arremer]

The Boomers killed our social safety net, and going forward retirement will be a luxury afforded only to the wealthy while everyone else will have to work until they finally keel over and die on the job of an easily treatable medical condition that they can't afford to treat.

 

Welcome to the new America!

[Red Arremer]

Re: investing, I'm not even so sure that's going to help. If the past few years have been any indication, putting money in the stock market is sort of like throwing your money down a hole.

 

The plain fact of the matter is that if you weren't born wealthy, there is about a 99% chance that your life will suck at least as much as it does now when you hit retirement age.

[tman666]

Re: investing, I'm not even so sure that's going to help. If the past few years have been any indication, putting money in the stock market is sort of like throwing your money down a hole.

 

The plain fact of the matter is that if you weren't born wealthy, there is about a 99% chance that your life will suck at least as much as it does now when you hit retirement age.

 

Haha you have a point, but I suppose I'd rather remain an optimist. Luckily, a few years of a crummy market does not necessarily reflect what the trend will be for the next 20-30 years. I suppose if it does, we (as a country/society) are probably screwed far beyond our concerns about retirement.

[josie54]

Re: investing, I'm not even so sure that's going to help. If the past few years have been any indication, putting money in the stock market is sort of like throwing your money down a hole.

 

The plain fact of the matter is that if you weren't born wealthy, there is about a 99% chance that your life will suck at least as much as it does now when you hit retirement age.

 

I don't disagree that financially, many people are probably worse off today than they were a decade ago. But it concerns me that if too many people have this point of view, they'll use it as a reason not to save ANYTHING for retirement, which means that 1) they'll live in poverty, a tragedy in itself, and 2) they'll be forced to rely on welfare, Social Security (which I believe will be around in some form or fashion for at least the next 30-40 years...however, I do doubt that it will be paying what it's paying now), or other forms of public support. That puts a further burden on everyone.

 

I wish I'd started saving when I was in my 20's, but I thought then that I couldn't afford the $25-$50 a month that it would have taken to really take advantage of investing early. I started at age 30, first putting away $100 a month, and building up from there. But I put something away each month, and even with the ups and downs (mostly downs, these days) of the stock market, now in my early 40's, I have a decent chunk saved. Not as much as I'd like, but more than most.

 

My take is that you shouldn't get discouraged by the numbers, and thnk that just because you can't save $800,000 that it's a hopeless situation. Even $50,000 or $100,000 saved over two or three decades (which one CAN do if you're starting in your 30's or even 40's, saving the typical 5 to 10 percent of pre-tax income...even starting with $20 or $30 a month can be a good start), can lead to a good chunk at retirement--at least $500,000 and probably closer to $1 million, depending. That could mean the difference between living in poverty and being able to support yourself more easily in your retirement.

 

The stock market isn't always going to be "down." You're only "throwing your money in a hole" if you're thinking of taking it back out in a year. But saving for retirement is a 20-, 30-, or 40-year timeline. Saving now when it is a bit down is the best thing you can do. When it goes back up (in one, two, or five years), whatever you've invested will go right up with it.

Edited April 24, 2012 by josie54