Stupid boomers; how is this possible?

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JOhnH

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Back when I had a company 401K plan, I put as little in to it as possible. Just enough to get the company matching contribution, since I didn't want to be locked in to a limited choice of mediocre investments. Now my main brokerage account on the other hand....
 
I have zero in a 401K, but I still have plenty of assets! It would be interesting to see retirement assets held in a different manner.
 
Sac Arrow said:
Back when I had a company 401K plan, I put as little in to it as possible. Just enough to get the company matching contribution, since I didn't want to be locked in to a limited choice of mediocre investments. Now my main brokerage account on the other hand....
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That's decent advice - max out the company contributions in your 401(k), then put the rest of your savings somewhere else.
 
That Vanguard 401(k) number of $58k: How many times do people change jobs, roll over their 401(k) into an IRA and then start over with a new 401(k) at their new job? That $58k average might not be a bad thing.
 
Matthew said:
That's decent advice - max out the company contributions in your 401(k), then put the rest of your savings somewhere else.
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That's exactly what I did most of my working career. But when I retired, I had WAY more than $58,000 in my 401K along with my other assets. And I don't consider myself rich.
 
Matthew said:
That Vanguard 401(k) number of $58k: How many times do people change jobs, roll over their 401(k) into an IRA and then start over with a new 401(k) at their new job? That $58k average might not be a bad thing.
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I guess that could be one explanation.
 
A lot of people are going to take exception to this. Its like going to the dental hygienist at 35 and being told that you have gum disease because no one ever taught you how to floss.

If you've got a good start on your financial estate, then good on you!

When I was a new chief petty officer in the Navy, one of the first tasks I was assigned was to reach out to sailors and their wives who seemed to be having trouble bouncing checks at the Navy exchange, and at businesses in town who were savvy enough to complain to the base commander about it.

I was amazed to learn that many of our sailors (and their wives) did not know how to balance a check book, how to make a budget, or even how to use a dish washer.

Times are always changing, and keeping up means learning at a faster and faster pace. Now, if we can get average citizens to learn how Social Security really works, instead of reposting the stupid claims about congress stealing it, maybe we can save it so all those stupid old baby boomers will at least have something in their golden years.
 
Matthew said:
That Vanguard 401(k) number of $58k: How many times do people change jobs, roll over their 401(k) into an IRA and then start over with a new 401(k) at their new job? That $58k average might not be a bad thing.
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Man, I sure hope that largely explains that statistic. I am skeptical, though.
 
PPC1052 said:
Man, I sure hope that largely explains that statistic. I am skeptical, though.
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You're probably right, though. I've known enough people over the years that put into their 401(k) when they start, then realize they are living paycheck to paycheck and cut back on their contributions so they can afford whatever it is they decide they need. Then they quit contributing altogether and brag about how much they got back on their taxes every year.
 
"Average investor 65 and up?" The average person dies around 85. By then, they've been taking distributions and making medical copays for a long time. Just sayin'.
 
The Boomers also believed in Social Security and the limitless bounty it would provide. ;)
 
dtuuri said:
As a "boomer" I can tell you not a one of us thought that, else we wouldn't have invented the 401k. Our mistake was having kids, they're ruining the country.
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Well, having too many Millennials. But not enough Gen Xers.
 
Well, I guess it is about time we had another generational spat. My generation is great. Yours sucks.

Btw, I believe that many in my parents’ generation, which some folks call the greatest generation, took far more from social security than they put in. How great is that?
 
SkyDog58 said:
How great is that?
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Not very. But, SS is designed to be a Ponzi scheme. What do you expect? At least there are a lot of you guys to pay for us when Gen-X retires.
 
Sac Arrow said:
Back when I had a company 401K plan, I put as little in to it as possible. Just enough to get the company matching contribution, since I didn't want to be locked in to a limited choice of mediocre investments. Now my main brokerage account on the other hand....
Click to expand...

Matthew said:
That's decent advice - max out the company contributions in your 401(k), then put the rest of your savings somewhere else.
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That's what I'm doing now. However, I put a bunch more in the post tax side of the 401k and roll it into my Roth IRA a couple times a year.

Matthew said:
That Vanguard 401(k) number of $58k: How many times do people change jobs, roll over their 401(k) into an IRA and then start over with a new 401(k) at their new job? That $58k average might not be a bad thing.
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That's where I'm at. I've now had six 401ks and one SEP. All were rolled into IRAs as soon as I switched jobs. 401ks are okay, but like Sac, I hate being corralled into just a few investments. I'd rather pick and choose on my own.

wilkersk said:
I was amazed to learn that many of our sailors (and their wives) did not know how to balance a check book, how to make a budget, or even how to use a dish washer.
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Unfortunately, they don't seem to teach finances in school, so folks that are just getting into the world have no idea what balancing a checkbook means, let alone anything to do with retirement planning.

Lachlan said:
The Boomers also believed in Social Security and the limitless bounty it would provide. ;)
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I suspect some of the problem is that many of their parents had pension plans of some sort, as such they never did any real retirement planning because the company would take care of them. The result is that no knowledge of retirement planning was passed down.
 
Matthew said:
Ida Fuller - first person to get Social Security.

Paid in $24.75, first check was for $22.54 at 65, she lived to be 100. Total benefits were $22,888.92

https://www.ssa.gov/history/idapayroll.html
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Personally, I'm looking at SS to be a nice little pay raise when I turn 70. I would have to do some serious lifestyle changes to live on that small of a check every month.
 
Anymouse said:
Personally, I'm looking at SS to be a nice little pay raise when I turn 70. I would have to do some serious lifestyle changes to live on that small of a check every month.
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That's my strategy, too. My first company had a pension plan, then phased that out when 401(k) became a "thing". Anyone in the pension will still get their pension, but new-hires later weren't eligible. I was with that company for 10 yrs, so I'll end up getting a monthly beer money check.

After that, my 401(k) and resulting IRAs from rollovers were my plan. I didn't want to rely on SS for anything, so whatever I do get will be bonus. It was a plan, and time will tell if it was a GOOD plan. I'll be finding that out soon enough.
 
It would be interesting to see the average and median for total retirement savings. Or maybe total net worth. Just out of curiosity. All I know for sure is my own numbers. I've used numerous well meaning so-called "retirement calculators" that try to estimate what I'll need to last me through retirement. All of them seem to make broad assumptions without saying that those assumptions are. Things like, "You'll need XX% of your pre-retirement income to maintain the same standard of living". Really? Howzat? What if I could maintain this standard of living on 70% of what I make now? How about if we retire with zero debt, as any sane person would do? These things make no sense. One told me I needed to save up an additional $6MM if I didn't plan to die before I turned 75.

I've worked up my own spreadsheet with my own educated estimates, mostly pessimistic on both income and expense, that I keep refining to tell me when I can likely afford to retire. And even that involves mostly crystal ball gazing, to be honest.
 
Matthew said:
That's my strategy, too. My first company had a pension plan, then phased that out when 401(k) became a "thing". Anyone in the pension will still get their pension, but new-hires later weren't eligible. I was with that company for 10 yrs, so I'll end up getting a monthly beer money check.
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I left AT&T in the mid-80s. Earlier this year I was contacted by Fidelity and found out that I'll be getting a pension from them starting when I turn 65. I'll be getting ~$155/month!! :rollercoaster:
 
Don’t spend it all in one place now ya here.....
 
DaleB said:
It would be interesting to see the average and median for total retirement savings. Or maybe total net worth. Just out of curiosity. All I know for sure is my own numbers. I've used numerous well meaning so-called "retirement calculators" that try to estimate what I'll need to last me through retirement. All of them seem to make broad assumptions without saying that those assumptions are. Things like, "You'll need XX% of your pre-retirement income to maintain the same standard of living". Really? Howzat? What if I could maintain this standard of living on 70% of what I make now? How about if we retire with zero debt, as any sane person would do? These things make no sense. One told me I needed to save up an additional $6MM if I didn't plan to die before I turned 75.

I've worked up my own spreadsheet with my own educated estimates, mostly pessimistic on both income and expense, that I keep refining to tell me when I can likely afford to retire. And even that involves mostly crystal ball gazing, to be honest.
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My goal is to have $100,000/year post tax retirement income. I definitely won't spend it all, so each year after that it should grow. But when I hit that I'm done working for the man...I mean, me. In theory I will have enough $$ to last me even if I live 40 years after retiring.
 
As others have said, I'd be curious as to the whole picture. I do know that a lot of people are terrible at saving, and you have some folks with low enough incomes that saving towards retirement is essentially impossible. That said, with multiple employers many have multiple 401ks, and the concept of a pension was something that boomers had whereas in my career it's essentially disappeared. IRAs were a bigger thing for boomers, I think. Nowadays I see companies moving towards 401ks and in some cases putting money in your 401k regardless of whether or not you contribute anything.

I've always followed the policy of maximize the match, make sure you get full vesting. I'm also assuming Social Security will disappear entirely by the time I retire, but I'm also not expecting to actually stop working - just perhaps retire from the day job and do something else.
 
I've always paid the SSGI while working, but the last 5 quarters I worked for DOD I paid the maximum allowed.
now reaping the benefits
 
Sac Arrow said:
Back when I had a company 401K plan, I put as little in to it as possible. Just enough to get the company matching contribution, since I didn't want to be locked in to a limited choice of mediocre investments. Now my main brokerage account on the other hand....
Click to expand...
Matthew said:
That's decent advice - max out the company contributions in your 401(k), then put the rest of your savings somewhere else.
Click to expand...

Depends. My wife and I can't deduct IRA contributions nor can we use a roth-IRA. Any growth/income in any other savings is taxed. Swap funds/investments and we get taxed. Not so in a 401k or IRA. For others it works better.

I agree with Sac Arrow though, I have far more options with my IRA, SEP-IRA funds that were rolled over. That's my one beef with my current 401k investments. It's a plus for changing jobs; then I would have more options on investments.
 
SkyDog58 said:
Well, I guess it is about time we had another generational spat. My generation is great. Yours sucks.
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I started this thread with more of a "my generation sucks" attitude. Succeeding generations suck too, but that is because of the way they were raised. We seem to be in a downward spiral. But at some point, I think (hope) the pendulum will swing back again. I just hope it isn't too late because Chinese is too hard to learn.
 
The sad case of my older sister, the owned and worked a dairy farm 195? to1972, then sold it all lock stock and barrel, the money from the cattle, machinery, when in the bank. they decided the land into 7 pieces of property, minimum down and they held the mortgages at high interest. though they had it made. Then interest rates dropped and every mortgage was refinanced and they got paid off. and the government too most of it as taxes.
 
wayne said:
Depends. My wife and I can't deduct IRA contributions nor can we use a roth-IRA. Any growth/income in any other savings is taxed. Swap funds/investments and we get taxed. Not so in a 401k or IRA. For others it works better.

I agree with Sac Arrow though, I have far more options with my IRA, SEP-IRA funds that were rolled over. That's my one beef with my current 401k investments. It's a plus for changing jobs; then I would have more options on investments.
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Yep. I can't deduct IRA contributions, and my current 401(k) has become more of an incentive to change jobs than anything else. Not a big enough factor to get me to actually look for another employer, but if I were to get an offer... I might consider it now, where I would not have before.
 
JOhnH said:
I am sure this doesn't apply to most of the boomers here, but:

https://www.cnbc.com/2019/04/01/the...st-will-be-unable-to-afford-a-solid-life.html

At first, I couldn't believe it. But then I got to thinking about a lot of boomers I know, and realize it probably is very common. And these are some of the people that b1tch about millennials.
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PPC1052 said:
Man, I sure hope that largely explains that statistic. I am skeptical, though.
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There may be more out there in IRA, Roth-IRA funds. Or not. We know how bad reporting is for aviation, and I've seen it equally poor for computers. This could be for all retirement savings.

I'm not surprised that the savings are poor for most people. Start with the average household income being in the $45-55k for much of the past 20 years and there isn't much income to put into savings. Add that most people live paycheck-to-paycheck, even at higher incomes it's common, that people are spending every penny they make, and some spend even more than they make. Which again leaves little to nothing to save.

In a review with a financial advisor a few years ago I asked about all the Tesla and other expensive cars I see and wondering how much those people made. She said often they make no more, or less than my wife and I, and they are instead up to their eyeballs in debt. At the time we had only one mortgage, and probably around 5 or 6% debt to income. So, we could do that if we just didn't bother to save for retirement and went heavily into debt as well. Yeah, no.
 
Time for a little reality check here. Until about the beginning of the 20th century, if you had to work for a living, you worked right up until you couldn't work anymore. And, then you became the oldster on the porch, pottering around until you kicked off, at the ripe old age of around 50 (if you were lucky).

If you really believe the world is going to hell in a handbasket (politicians aside), you should read this book:

 
Tom-D said:
The sad case of my older sister, the owned and worked a dairy farm 195? to1972, then sold it all lock stock and barrel, the money from the cattle, machinery, when in the bank. they decided the land into 7 pieces of property, minimum down and they held the mortgages at high interest. though they had it made. Then interest rates dropped and every mortgage was refinanced and they got paid off. and the government too most of it as taxes.
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Huh?
 
A few thoughts. "SS" was only supposed to Supplement your retirement income, maybe 40%. I've never expected to get SSN and saved and invested accordingly. I'm trying to rebuild my contingency fund so I'm only putting in enough to get the full match plus 1% . I have two 401Ks, one from a former employer, who had a brokerage linked account option. That company is the Berkire-Hathaway of Silicon Valley. The current employer 's 401I has a fund that is super low cost but isn't available to me from a brokerage account. The average of my accounts is well over Vanguard's 401I average, and the bulk of my investments are in an IRA, mostly from rolling 401I'd into it and appreciation .
 
Its funny, between my wife and I we put close to that amount in 401K every year not counting the match (we are limited to $25K/each now that we're over 50).

I think there are several things missing that offset the number you see. First off, some have multiple 401K accounts (as said earlier). Also, many were doing ROTH's but probably never built up a large ROTH number with the upfront tax hit to load it up. And the obvious one, lots and lots of boomers had pensions and probably were paid a bit less so less 401K to have the big pension at the end. It seems like every other couple my parents know has a pension of some sort (IBM, Ford, Military). If not a pension then a disability (Military and non-military). Finally land assets. Some boomers are sitting on houses and farm property that is now worth a lot of money. My folks (not much 401k) sold land and put it into a REIT and they are living quite comfortably on that.

To me the part that drives me the most crazy. Friends that I know who are not that responsible with money will be inheriting money from their boomer parents that did do well. Its as if they know its coming so they are buying huge houses at 50 with minimum down or spending all their paychecks with little savings and counting on inheritance to be their retirement money. My wife and I won't see that yet we seem to working the hardest, saving and investing. But the non-savers will retire earlier and someplace warmer....argghhh!
 
Sinistar said:
I think there are several things missing that offset the number you see....

To me the part that drives me the most crazy. Friends that I know who are not that responsible with money will be inheriting money from their boomer parents that did do well.
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Don’t forget in-service withdrawals begin at 59 1/2, allowing workers with a 401k to roll it over to a corresponding IRA.

The second part.

As boomers fly west, their generation will begin the largest transfer of wealth in history. Between all their assets and life insurance, up to $30T (or more) has the potential to move to the next generation.

https://www.forbes.com/sites/nextav...make-the-greatest-wealth-transfer-in-history/
 
TCABM said:
As boomers fly west, their generation will begin the largest transfer of wealth in history. Between all their assets and life insurance, up to $30T (or more) has the potential to move to the next generation.

https://www.forbes.com/sites/nextav...make-the-greatest-wealth-transfer-in-history/
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I wonder how much of a bite death taxes will take. I think the bar is pretty high before inheritance taxes kick in (both Fed and State) - but if States start seeing so much money being passed along and their inheritance tax levels are just a little too high and aren't able to catch any of it, if we then start seeing those limits change.
 
Matthew said:
I wonder how much of a bite death taxes will take. I think the bar is pretty high before inheritance taxes kick in (both Fed and State) - but if States start seeing so much money being passed along and their inheritance tax levels are just a little too high and aren't able to catch any of it, if we then start seeing those limits change.
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Life insurance isn’t taxed at all. Liquid assets can be set to Transfer on Death, bypassing or deferring the tax obligation. Just went thru this when my mother passed. For her non-qualified accounts, we only paid tax on the gains, not the basis.

It doesn’t take a rocket scientist CPA/JD to implement a successful strategy to limit tax exposure. A little intent and education can go a long way.
 
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