Political Wrinkles  

Go Back   Political Wrinkles > Political Forums > Economics
Register FAQDonate PW Store PW Trivia Members List Calendar Search Today's Posts Mark Forums Read

Economics Discuss Why do so many assume that retirement means settling for less income? at the Political Forums; It truly does seem odd to me that so many people appear to assume that retirement automatically means less income. ...

Reply
 
Share LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 04-30-2020, 04:17 PM
PW Enlightenment
 
Join Date: Mar 2009
Location: Tennessee
Gender: Male
Posts: 10,584
Thanks: 13,175
Thanked 4,714 Times in 3,028 Posts
Default Why do so many assume that retirement means settling for less income?

It truly does seem odd to me that so many people appear to assume that retirement automatically means less income. (The widow living on nothing but a Social Security check--and with "more month than money," as the old saying goes--is the prototype for this.)

I retired over 15 years ago; and I am currently far better off, financially, than I ever was previously.

Of course, my particular case should not be viewed as emblematic of everyone else.

But neither should that widow, living on "nothing but a Social Security check," be seen as typical of all.

Comments?
__________________
"In his second inaugural address, [Franklin D.] Roosevelt sought 'unimagined power' to enforce the 'proper subordination' of private power to public power. He got it…"—George Will, July 8, 2007
Reply With Quote
  #2 (permalink)  
Old 05-01-2020, 12:06 AM
cnredd's Avatar
Administrator
 
Join Date: Oct 2007
Location: Philadelphia
Gender: Male
Posts: 55,945
Thanks: 2,307
Thanked 36,693 Times in 20,839 Posts
Default Re: Why do so many assume that retirement means settling for less income?

The term "Saving for a rainy day" is out the window...

Longterm money management almost ALWAYS depends on one person in a marriage/couple...and there's a 50% chance that person will pass on first, and there's a chance that person didn't have much set up, leaving the remaining person in desperate need...

If a couple is financially OK because of one person's pension and that person moves on, that pension doesn't necessarily move to the spouse or next of kin...leaving the still-living spouse with the same bills but without the checks to cover them...

__________________
"You get the respect that you give" - cnredd
Reply With Quote
The Following User Says Thank You to cnredd For This Useful Post:
  #3 (permalink)  
Old 05-01-2020, 08:09 AM
GottaGo's Avatar
Sanity is overrated.
 
Join Date: Aug 2009
Location: Miles to go before I sleep
Posts: 13,311
Thanks: 11,532
Thanked 9,612 Times in 5,915 Posts
Default Re: Why do so many assume that retirement means settling for less income?

Quote:
Originally Posted by pjohns View Post
It truly does seem odd to me that so many people appear to assume that retirement automatically means less income. (The widow living on nothing but a Social Security check--and with "more month than money," as the old saying goes--is the prototype for this.)

I retired over 15 years ago; and I am currently far better off, financially, than I ever was previously.

Of course, my particular case should not be viewed as emblematic of everyone else.

But neither should that widow, living on "nothing but a Social Security check," be seen as typical of all.

Comments?
The term, I believe, is 'replaceable income'.

When one is no longer actively receiving income from employment, and is relying on what has been saved plus investments (if they have them) and social security, they don't have a method of replacing what is spent, or if it happens, emergency medical costs, loss of a spouse (if there is one) or other various unexpected expenses. If they take into consideration their personal health situation and current expenses, average number of years in future retirement, and divide that into what they actually have in the way of funds or assets they could liquidate, they may adjust their style of living accordingly.

As to the 'Widow living on a Social Security check', you have to remember, back in the day women were not the primary earner in the house, and many were financially ignorant. The average Joe didn't have major investments, much life insurance or money squirreled away. The loss of a spouse quite often meant loss of a house, and other assets to pay off debts.

Things have change, some. People in general have become more financially savvy, with some exceptions. However, those who rely just on Social Security as their retirement means, will always be with us.
__________________
Your life is the sum total of the choices you make.
If you don't laugh at yourself, a whole bunch of people will volunteer to do it for you
I never lose. I either win, or I learn....
Reply With Quote
The Following User Says Thank You to GottaGo For This Useful Post:
  #4 (permalink)  
Old 05-01-2020, 10:18 AM
Conservative Sage
 
Join Date: Mar 2010
Location: Scottsdale, AZ
Posts: 18,729
Thanks: 12,162
Thanked 13,081 Times in 7,650 Posts
Send a message via ICQ to AZRWinger
Default Re: Why do so many assume that retirement means settling for less income?

To the extent people develop a financial plan for their retirement at all the projections for full income replacement require far too much sacrifice from current income. They are apt to view the goal as impossible and so discard the entire exercise of retirement planning. I want to retire early becomes I'll work til I drop.

Social Security was sold as a base income to keep old people out of poverty. At the time it was implemented average life expectancy was around 62 with pension benefits beginning at age 65. Of course if you died before collecting your pension the beneficiary was the Federal government.

In our advanced modern age life expectancy has increased while the minimum age for pension benefits has declined. Even more significant is the belief that the Federal government is obligated to provide you with the income to support the lifestyle of your choosing in retirement. If SS alone is insufficient to do this, it's not your fault you have been "left behind" by a society run by the greedy rich. You are a hapless victim.
__________________
What is a 30 something year old single man with a rock in one hand and a Honduran flag in the other?

An asylum seeker.
Reply With Quote
The Following User Says Thank You to AZRWinger For This Useful Post:
  #5 (permalink)  
Old 05-01-2020, 12:47 PM
PW Enlightenment
 
Join Date: Mar 2009
Location: Tennessee
Gender: Male
Posts: 10,584
Thanks: 13,175
Thanked 4,714 Times in 3,028 Posts
Default Re: Why do so many assume that retirement means settling for less income?

Quote:
Originally Posted by AZRWinger View Post
To the extent people develop a financial plan for their retirement at all the projections for full income replacement require far too much sacrifice from current income.
The goal, however, need not be "full income replacement." That is because in retirement, there are far fewer expenses than previously existed: Presumably, the mortgage will have been paid off, for example.

And the kids will have grown up entirely; so there is no further need to pay (or even help pay) their college tuition.
__________________
"In his second inaugural address, [Franklin D.] Roosevelt sought 'unimagined power' to enforce the 'proper subordination' of private power to public power. He got it…"—George Will, July 8, 2007
Reply With Quote
  #6 (permalink)  
Old 05-01-2020, 06:21 PM
Conservative Sage
 
Join Date: Mar 2010
Location: Scottsdale, AZ
Posts: 18,729
Thanks: 12,162
Thanked 13,081 Times in 7,650 Posts
Send a message via ICQ to AZRWinger
Default Re: Why do so many assume that retirement means settling for less income?

Quote:
Originally Posted by pjohns View Post
The goal, however, need not be "full income replacement." That is because in retirement, there are far fewer expenses than previously existed: Presumably, the mortgage will have been paid off, for example.

And the kids will have grown up entirely; so there is no further need to pay (or even help pay) their college tuition.
You are making assumptions. Many people use their homes like an ATM refinancing when they want cash. The mortgage never gets paid off. Obamacare reset the age standard for independence to 26 but it can be later still.
__________________
What is a 30 something year old single man with a rock in one hand and a Honduran flag in the other?

An asylum seeker.
Reply With Quote
  #7 (permalink)  
Old 05-02-2020, 02:48 PM
Bat Bat is offline
Hinged
 
Join Date: Jan 2016
Posts: 2,020
Thanks: 86
Thanked 1,378 Times in 831 Posts
Default Re: Why do so many assume that retirement means settling for less income?

Quote:
Originally Posted by pjohns View Post
It truly does seem odd to me that so many people appear to assume that retirement automatically means less income. (The widow living on nothing but a Social Security check--and with "more month than money," as the old saying goes--is the prototype for this.)

I retired over 15 years ago; and I am currently far better off, financially, than I ever was previously.

Of course, my particular case should not be viewed as emblematic of everyone else.

But neither should that widow, living on "nothing but a Social Security check," be seen as typical of all.

Comments?
I see retirement more as requiring less income. Once I retire I will no longer be paying 6.2% of my income to social security, I will no longer be setting aside 20%+ of my income towards retirement savings. There you have it, I've already reduced my cost of living by 26% when I retire.

You mention widows....
My mom is a widow, my father died 2 years ago. Mom is living off social security plus his $200/month pension and she is doing fine. She lives in the Monterey Bay area of CA which is an extremely high cost of living area.
Reply With Quote
  #8 (permalink)  
Old 05-02-2020, 03:07 PM
PW Enlightenment
 
Join Date: Mar 2009
Location: Tennessee
Gender: Male
Posts: 10,584
Thanks: 13,175
Thanked 4,714 Times in 3,028 Posts
Default Re: Why do so many assume that retirement means settling for less income?

Quote:
Originally Posted by AZRWinger View Post
You are making assumptions. Many people use their homes like an ATM refinancing when they want cash. The mortgage never gets paid off.
You are correct in all this.

The "assumption" that I am making is simply that the person under consideration is reasonably mature--and reasonably responsible.

If he (or she) is, then he (or she) will have a fairly robust savings account; and will, therefore, not refinance in order to receive some cash.
__________________
"In his second inaugural address, [Franklin D.] Roosevelt sought 'unimagined power' to enforce the 'proper subordination' of private power to public power. He got it…"—George Will, July 8, 2007
Reply With Quote
Reply

Tags
assume, for, income, less, many, means, retirement, settling, that, why

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

Forum Jump


All times are GMT -5. The time now is 06:10 PM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2020, vBulletin Solutions, Inc.

Content Relevant URLs by vBSEO 3.2.0