Time to Retire the Idea of Retirement

[Rerun]

Originally Posted by Cheese

I'd give my left nut to live long enough to see half of the gen Yers and Xers in the exact spot the Boomers are in...just because ALL of them have it figured out! Lol

LOL... half of the people that I know that are in their 20's and 30's can't even get a credit card because their credit rating is so screwed up.

And they live from paycheck to pay check, rent, and have all the latest toys. I sincerely doubt that by the time they are old enough to retire they'll be any better off than the current generation of boomers.

There's a lot of Xers and Yers on here who aren't in that situation but their education and income levels also aren't the norm. When you have a lot of disposable income its a lot easier to save for retirement. Most people don't have that ability.

[Zulu29]

Not sure if I'll be able to retire at 55, but I HOPE to be able to retire close to that number. I started my career at 20 and with my job can retire after 25 years service. I'll likely do 35 to max out my pension which puts me at 55, then double dip for 5 years or so.

At this point though, even though I make what I think is good money, it's hard to pay the mortgage and bills and still save...

[Slava]

Originally Posted by Rerun

LOL... half of the people that I know that are in their 20's and 30's can't even get a credit card because their credit rating is so screwed up.

And they live from paycheck to pay check, rent, and have all the latest toys. I sincerely doubt that by the time they are old enough to retire they'll be any better off than the current generation of boomers.

There's a lot of Xers and Yers on here who aren't in that situation but their education and income levels also aren't the norm. When you have a lot of disposable income its a lot easier to save for retirement. Most people don't have that ability.

I partly agree, but partly have to disagree. I'm a believer that there are very few people who can't afford $25 a month (for example). You can start with that little, and then as your income increases stick to your savings plan and add more to your monthly savings amount...maybe now its $35 a month. Through time you will save a decent chunk of money this way. Compound interest being what it is also helps. The bottom line is that people can save, and should.

I think people assume they need huge money to get going, and then do nothing. Its a shame because even starting out small is better than doing nothing, buying toys and making excuses for yourself. So while some people say they can't afford to save money, I often think its a cop out.

[chemgear]

Originally Posted by Slava

I think people assume they need huge money to get going, and then do nothing. Its a shame because even starting out small is better than doing nothing, buying toys and making excuses for yourself. So while some people say they can't afford to save money, I often think its a cop out.

They don't do nothing.

They spend/eat/buy something instead. Anything. To make themselves feel better about the situation and then wonder what the hell happened to all their money.

[squiggs96]

Originally Posted by MarchHare

Your personal anecdote is not statistically significant.

Nearly half (45%) of Canadians aged 50-59 have less than $100,000 saved for retirement, and most plan to work past the traditional retirement age of 65 to make up for their failure to save appropriately.

Source: http://www.newswire.ca/en/story/1023...d-keep-working

I had no idea it was that bad. I cannot imagine working 25-40 years and not being able to save $2,000 per year. That's really depressing.

I'm 34 and I plan on retiring when I'm 55. I'm on pace, and if most things continue to go as planned, I'll achieve my goal of moving to Pinehurst, North Carolina and golfing my years away. It's a matter of lifestyle and priorities. I've chosen to not have children and to invest a lot of my excess cash. Others want a family, and this can get very expensive, and take away time that you could be working and earning income.

[MarchHare]

Originally Posted by squiggs96

I had no idea it was that bad. I cannot imagine working 25-40 years and not being able to save $2,000 per year. That's really depressing.

I'm 34 and I plan on retiring when I'm 55. I'm on pace, and if most things continue to go as planned, I'll achieve my goal of moving to Pinehurst, North Carolina and golfing my years away. It's a matter of lifestyle and priorities. I've chosen to not have children and to invest a lot of my excess cash. Others want a family, and this can get very expensive, and take away time that you could be working and earning income.

High five for living childfree and enjoying an early retirement!

[Dion]

Originally Posted by Slava

I partly agree, but partly have to disagree. I'm a believer that there are very few people who can't afford $25 a month (for example). You can start with that little, and then as your income increases stick to your savings plan and add more to your monthly savings amount...maybe now its $35 a month. Through time you will save a decent chunk of money this way. Compound interest being what it is also helps. The bottom line is that people can save, and should.

I think people assume they need huge money to get going, and then do nothing. Its a shame because even starting out small is better than doing nothing, buying toys and making excuses for yourself. So while some people say they can't afford to save money, I often think its a cop out.

If only people would learn to take a certain percentage off the top of their paycheck before they actually get it and put it in an RRSP. Problem is the vast majority of people say i'll use whatever is left at the end of the month, which is often nothing. It's a great plan for those who can't manage thier money.

[squiggs96]

Originally Posted by Dion

If only people would learn to take a certain percentage off the top of their paycheck before they actually get it and put it in an RRSP. Problem is the vast majority of people say i'll use whatever is left at the end of the month, which is often nothing. It's a great plan for those who can't manage thier money.

Excellent point. In addition, if you fill out a T1213, you are able to have reduced taxes taken off of your pay cheque if you contribute regularly to an RSP plan. This will allow you to take home about the same amount, while contributing to your retirement plan. It will also allow you to build up your plan throughout the year and earn returns monthly, instead of waiting until you receive an income tax refund. This is about the least desirable timing for investing. The T1213 only takes a few minutes to fill out, but it takes several weeks to receive the response from CRA. If you want to have this applicable to your first pay cheque in 2014, they suggest you have the request in by November 1, 2013. When you receive the approved form, simply make a copy and give it to your payroll administrator.

I'm a huge fan of the theory that an income tax refund is bad. It means the government was able to use your money interest free. You should get your money to earn income if it's not in your hands. You can't achieve this by giving it to the government early.

[Shawnski]

Serious question MarchHare.

Should BabyBoomers retire and get out of your way?

[MarchHare]

Originally Posted by Shawnski

Serious question MarchHare.

Should BabyBoomers retire and get out of your way?

My way? What makes you think this is personal? My posts in this thread have only been about statistics and macro trends, not about individuals.

[Shawnski]

Originally Posted by MarchHare

My way? What makes you think this is personal? My posts in this thread have only been about statistics and macro trends, not about individuals.

Perhaps I can rephrase then if you like.

Should the BabyBoomers retire and get out of the 20-(or 30) somethings way?

[MarchHare]

Originally Posted by Shawnski

Perhaps I can rephrase then if you like.

Should the BabyBoomers retire and get out of the 20-(or 30) somethings way?

I would never suggest that forced retirement at a given age is an appropriate solution to the gray ceiling problem. I'm not even sure if there is an appropriate solution; its existence is just another data point in a long series of data points that shows that Gen X and Gen Y will be worse off financially than the baby boomers were.

The ideal scenario would be if the boomers as a collective group had been more financially responsible throughout their careers and had saved more (see my earlier post - 45% of Canadians aged 50-59 have less than $100k in retirement savings). If their generation had been better at managing their money, they could afford to retire without so many of them being forced to work past 65. It's far too late to right that ship now, though.

[Dion]

Originally Posted by MarchHare

I would never suggest that forced retirement at a given age is an appropriate solution to the gray ceiling problem. I'm not even sure if there is an appropriate solution; its existence is just another data point in a long series of data points that shows that Gen X and Gen Y will be worse off financially than the baby boomers were.

The ideal scenario would be if the boomers as a collective group had been more financially responsible throughout their careers and had saved more (see my earlier post - 45% of Canadians aged 50-59 have less than $100k in retirement savings). If their generation had been better at managing their money, they could afford to retire without so many of them being forced to work past 65. It's far too late to right that ship now, though.

I hope the current generation learns from our mistakes. What I see and read in the news doesn't give me much hope on that.

[Yakbutter]

Started working in law enforcement when I was 21. I can retire when I'm 51 with 30 years service.

Every month my employer takes about $300 off my pay and puts it into a mandatory retirement benefit.

I don't think about it much right now, but I'm sure when I'm getting close to 50 y/o I will care a lot more about retirement. I don't see what the big issue is with saving for retirement. Assuming you can pay off your mortgage before you retire and save some money off every paycheck you would be fine? Maybe people just don't live within their means.

[V]

Many people don't have a sweet pension to rely on for their retirement. Makes things a little tougher.
FTR, I do have a sweet LAPP, so I can relate to your retirement scenario.

[Shawnski]

OK, now you (MarchHare) alluded to the issue that the two largest financial strains to the 20-somethings are education costs and home prices.

What do you believe are the root causes of each of those? When did things change? Why?

[MarchHare]

Originally Posted by Dion

I hope the current generation learns from our mistakes. What I see and read in the news doesn't give me much hope on that.

This is only one article, but it indicates that Gen Y are becoming disciplined savers:

http://www.cnbc.com/id/100779725

The youngest U.S. adults are shown in survey after survey to be conscious that the American Dream is no longer a guarantee, and that knowledge seems to have made them better savers, more risk averse and more worried about their retirements than their parents or their grandparents.

[...]

George Walper, president of Spectrem, attributes both the millennials' financial conservatism and their awareness of the world around them to two landmark events, "September 11, 2001 and 2008," he said. The terrorist attacks and the onset of the recession at once opened them up to the world and caused them to protect their futures.

[AMG_G]

My company has a rrsp matching plan where they match my contribution + 1%. I put away 8% and they match 9%. It's free money but the participation rate is less than 50%. What gives?

[Dion]

Originally Posted by MarchHare

This is only one article, but it indicates that Gen Y are becoming disciplined savers:

http://www.cnbc.com/id/100779725

This is the problem with the generation of today

While many BMO survey respondents had not started saving for life after work, the majority (82 per cent) agreed that retirement planning was important.

Even so, only 23 per cent of respondents had consulted a financial planner for assistance.

“While it’s great news that young adults appreciate the importance of retirement planning, it’s a concern that many are not backing it up with concrete action,” said Di Vito.

http://www.ctvnews.ca/canada/few-you...-says-1.900060

[8sPOT]

Don't forget divorce! That put a nice little dent into RSP savings, and well, any other asset I had.

New plan, find a girl from a wealthy family.