The vast majority of people cannot retire early. Some of them can retire at 65. Most cannot. That's the reality.
Is retirement the most important financial responsibility?
- Thread starter ack
- Start date
The vast majority of people cannot retire early. Some of them can retire at 65. Most cannot. That's the reality.
I have no idea what the percentages are. I said I know quite a few people who were headed in the right direction, and that's true. What's "full recovery?" If you mean did the portfolio eventually get back to what it was in 2007? Yes, mine did, but I lost many years of investment income, too close to retirement for comfort. Plus I, and a lot of people found ourselves grossly under employed for a few years and unable to make contributions to the retirement funds. I was lucky, and finally landed a job back in my field, though at significantly less than I was making 10 years ago. A lot of folks weren't as lucky because it's damn hard to land most jobs once you get past a certain age. They may have saved well, but had to hit deep into those savings just to stay afloat until decent work came. For a lot of them it hasn't come, retirement savings are diminished. Contributions were impossible, and now retirement age has arrived. I'll be ok. I can freelance, do contract work, make decent money as long as the brain holds out without expecting anyone to "hire" the old guy. Many are not nearly as fortunate.
It feels better to believe that most people just didn't save, that they did this to themselves, but it's nowhere near that simple. Of course the blame isn't simple either. But the people who are clearly most responsible? They're doing just fine. Same as it ever was.....
Tim
I retired early, and when Obamacare kicked in my healthcare premiums went up over 9%.
Stay healthy.
Don't know when you retired or what that really means, but The Affordable Care Act is just kicking in right now. Did you retire this summer?
Maybe in 2011? Employer health plan premiums went up 9% in 2011 (though just 4% in 2012). It had nothing to do with Obamacare.
I don't know how the people who are predicting the end of the world with Obamacare do math, but their position doesn't add up. I'm no Obama fanboy, but if you start out by pushing milliions of people into the health insurance system who were not there before, creating a huge amount of business for private insurance companies and putting a whole bunch of healthy (because many of them are young) people into the risk pool -- Good for business -- Then you require by law that these private insurance companies spend 80% of their gross income on participants' care (this is the part they lobbied so strenuously against; if all Obamacare was doing was increasing their premiums, insurance companies would love the stuff). They can only spend 20% on administrative costs, and that's if they think they can survive returning no shareholder value. How that leads to increased medical costs, and increased premiums, is one hell of a mystery, though Obama's detractors swear it's not only inevitable, but it is happening right now, even as healthcare costs dropped 5% in the last year. If insurance companies have a limited margin, premiums will come down with them. That math is pretty easy.
Tim
I got a letter from my carrier stating that as a result of The Affordable Care Act, my monthly rate was increased effective 7/1/13.
I think it depends on which stage of our lives we are currently on. If you're within 10 years of retirement, saving for retirement should be one of the first priorities, if you just finished college and just got married, then it doesn't have to be your top priority.
Me personally, I've always said that we spend our life working when we should be retired (young, healthy, with young kids, energetic, etc.) And then retire when we're old, not healthy, the kids are out of the house, etc, at that point might as well go to work! I always said it half joking, but when I turned 40 earlier this year, I was in a financial position where I could semi-retire, so I quit my corporate job of 16 years, sold my stock options and I'm enjoying life! Still contributing to society (and my bank account) by working about 20 hours per week and the rest is "retired time"! I figure if I stay semi-retired I don't have to worry about retirement, I can be semi-retired until I die =)
Just waded through our open enrollment presentations. Our cost goes up about 9.5% next year, 4% due to "normal" increase and 5.5% due to additional costs related to PPACA. The real bite comes next year in preparation for the 40% "cadillac" insurance excise tax my (high-tech) company is going to be required to pay. We are self-insured so they plan to start boosting rates next year so it's phased in while they build up the finances to over it. We are being told to expect out-of-pocket increases, reductions in coverage, and a smaller pool of doctors, and potentially shifting to exchanges with more limited coverage. Still a lot of uncertainty abot what will really happen over the next five years.
My wife works in the health-care industry and she is flat-out scared. A lot of doctors are getting out and there have been major layoffs at a number of hospitals due to the lousy economy and anticipated cuts under PPACA. Or so the paperwork she got says (50-50 economy and expected cuts under PPACA).
Several local restaurants are already cutting staff, cutting hours, and/or not hiring full-time workers because they are near the cut-off for employee count. Amazing how large a staff your local Chili's, VI, or even MacDonald's has... According to the local VI manager I spoke with a few weeks ago. He said they have been told to expect "big" premium increases and reductions in coverage. They are very nervous.
At least around here people are preparing to take a beating. All hype? I don't think so...
Back on topic, Fidelity sent an email saying you needed to have 8x your last working year's income saved for retirement. I have read anywhere from 5x to 10x, and others say to have $100k/yr for 20 years you should have at least $2M at retirement. I just don't see how people are doing that. We live in a fairly affluent area where a lot of folk are very well off (much more so than us!) but with few exceptions most of the people I know more personally (a group that includes very few of the local "rich" retirees) are looking at quite a bit less than that...
Long-term care is another huge issue. We are just starting to look more deeply at getting some (we are in our mid 50's). The cost is steep, but the cost of even assisted living is staggering.
My wife works in the health-care industry and she is flat-out scared. A lot of doctors are getting out and there have been major layoffs at a number of hospitals due to the lousy economy and anticipated cuts under PPACA. Or so the paperwork she got says (50-50 economy and expected cuts under PPACA).
Several local restaurants are already cutting staff, cutting hours, and/or not hiring full-time workers because they are near the cut-off for employee count. Amazing how large a staff your local Chili's, VI, or even MacDonald's has... According to the local VI manager I spoke with a few weeks ago. He said they have been told to expect "big" premium increases and reductions in coverage. They are very nervous.
At least around here people are preparing to take a beating. All hype? I don't think so...
Back on topic, Fidelity sent an email saying you needed to have 8x your last working year's income saved for retirement. I have read anywhere from 5x to 10x, and others say to have $100k/yr for 20 years you should have at least $2M at retirement. I just don't see how people are doing that. We live in a fairly affluent area where a lot of folk are very well off (much more so than us!) but with few exceptions most of the people I know more personally (a group that includes very few of the local "rich" retirees) are looking at quite a bit less than that...
Long-term care is another huge issue. We are just starting to look more deeply at getting some (we are in our mid 50's). The cost is steep, but the cost of even assisted living is staggering.
Your carrier is full of it. That's like saying the weather is cold as a result of next month. Obamacare isn't responsible for anything yet. Now, with that said, your carrier, and everybody else's has to spend 80% on care under the law. If they overcharge and take in more than 20% of the cost of care for profit and operating expenses, they have to refund the overage to policy holders at the end of the year. What would you rather do, charge too much and hold the money until the refund is due or charge too little and lose the difference?
You may actually see an increase. But not for long.
Tim
there is a tremendous amount of hype, from a couple of very powerful groups who do not want to see this thing last long enough to become as popular, and irreversible as SS and Medicare, so yeah, I think it's possible. I'm listening, though. 10s of millions of new customers. 80% of gross must be returned in care. Health insurance costs down 5% in the last year and falling. Somebody show me the math that makes premiums go up.
Chilis? Chilis and a whole lot of other businesses will raise a lot of concerns, and they'll try to get around the cost of insuring people. But in the end, they'll employ the number of people they need to meet the demands of the business. Your fajitas might go up a half a buck, but they're not closing down because they have to make health insurance available to their employees. That math isn't hard either.
Tim
Sure they will, but with more people working fewer hours. Here five full-time employees went to part-time and they are hiring more part-timers to cover. So it looks like a win job-wise if you only go by headcount... BTW, full-time for them is 30 - 36 hours/wk except for a very few managers. Six 5- to 6-hour days.
I'm still curious what amount people think they need to shoot for to retire? Of course, this is WBF, and judging by the systems I read about most of y'all have little to worry about...
I'm still curious what amount people think they need to shoot for to retire? Of course, this is WBF, and judging by the systems I read about most of y'all have little to worry about...
Spot on. For a better explanation of the 9% hike check the compensation package of the sr. leadership team of your insurance company. It's like raising the premiums on flood insurance because we have a hunch there may be more rain next year. I'm sure their lawyers are working overtime to figure out how management compensation can be classified as part of the 80% spend on care.
No private healthcare insurance company makes anywhere near a 20% profit margin. Indeed, heath insurance has a low profit margin compared to other industries within the healthcare sector or the economy in general.
No private healthcare insurance company makes anywhere near a 20% profit margin. Indeed, heath insurance has a low profit margin compared to other industries within the healthcare sector or the economy in general.
The difference between cost of care and revenue is not profit margin. It also includes overhead, which includes management compensation.
Ain't it granted to live in this beautiful country of ours where opportunities abound endlessly and where our entire life is like an eternal retirement vacation. :b
No private healthcare insurance company makes anywhere near a 20% profit margin. Indeed, heath insurance has a low profit margin compared to other industries within the healthcare sector or the economy in general.
Sorry jazdoc, that is total and utter horse manure.
http://www.huffingtonpost.com/ethan-rome/the-truth-about-health-in_b_863632.html
That 4.4 number is bullshit dreamed up by the industry and sent out in press releases.
Try ridiculous executive compensation, stock buybacks, and other bloated perks. The amount they pay out in claims is not even close.
In Canada we don't have that issue.
* $10 millions in bonds, you live from your interests, and you never retired because you love your job. :b
Debt-free, rent-free, bills paid all by themselves (automatic interests), and you still work and enjoy life.
Taxes? Somebody else is doing it for you; stress-free.
You love your family and your friends and they love you back, even when you'll leave this Earth for good.
How a better life than this can you dream of!
Retirement, what's that? ...That's for people who are slaves all their life from their work. ...I think.
And they won't even enjoy retirement because they don't know how to do it right.
No private healthcare insurance company makes anywhere near a 20% profit margin. Indeed, heath insurance has a low profit margin compared to other industries within the healthcare sector or the economy in general.
We're not talking about profit margins, we're talking about profit margins + administrative costs, and administrative costs alone have run as high as 40% in that industry. Administrative costs may be the reason why no private insurance company makes anywhere near a 20% profit margin, but 20 or 30 million new customers, many of whom are young and healthy, should help.
Here you go, doc:
http://www.google.com/search?client...ompany+administrative+costs&ie=UTF-8&oe=UTF-8
Unfortunately, Obamacare has so politicized the issue that objective information isn't all that easy to get, so you have to scan a pretty broad swath, picking up both sides of the issue and trying to avoid the blatant propaganda. Near the top of this Google search is a recent article from that scion of the liberal media, Business Week, that gets to the heart of the matter, IMO.
Tim
I'm sure their lawyers are working overtime trying to figure out how floors full of people working on denying coverage can be classified as spend on care. And I'm sure they'll have some successes. And I'm sure they'll lobby aggressively in the coming years for many little laws that will nibble away at the edges, getting more of the money back out of care and into their hands. Nature of the beast. The only way to avoid all of that was to kill the beast off and go to a single payer system, and that has it's own set of problems. The Affordable Care Act is a dog's breakfast of a law. It's the kind of messy sausage of policy that only a representative democracy which views corporations and lobbying organizations as among the most important citizens to be represented could create. But it managed to make it through with a handful of provisions that will make it, I believe, while tragically flawed, better than what we have. And while things like no pre-existing conditions and lifetime limits will be more popular, the insurance requirement and the limit on insurance company administrative costs will be the ones that will make it work.
The strenuous, on-going opposition is not because ACA will be ineffective. It is because of fear that it will be very effective, become very popular, and add another huge entitlement program that is politically impossible to significantly alter. But that opposition is ideological, not practical, and it is misguided. If they would work to strengthen the new system instead of trying to kill it, they could help bring the cost of healthcare in America down to the fiscal benefit of the nation's people and businesses. MHO. YMMV.
Tim
