Retirement

[Nesikep]

I don't know where they got gas for $0.15. I am 70 years old. It was $0.25 except the occasional gas war.
The wife and I were just talking about this. Minimum wage here was $1.25. Gas was $0.25. One hour bought 5 gallons of gas. Today here everything is starting at $14+ an hour. Today gas is $3.65. About 4 gallons for a hours work. A year ago gas was $2.35. Almost 6 gallons for an hours work.

what were the income tax rates for a minimum wage person back then? EI/Medical/Comp, as well as rent?
I remember in 2000 or so I didn't have a problem finding a basement suite for $400/month utilities in, it wasn't a fancy place but it wasn't an hour commute to work either.. If I were to look in the same areas today I think I'd be hard pressed to find something for $1000 (CAD)

 

[Nesikep]

I also don't know how it is in the US, but if you're a young person and don't have a long driving record, your insurance premiums are going to be really high, quite possibly $4-500/ month if you have decent coverage on the vehicle

 

[Son of Butch]

Roth IRA is great, but so are the traditional IRAs.
You get an immediate tax deduction increasing your disposable income at a time in life when you need it and if your SS retirement check is under $2100 month you are allowed to withdraw the difference from a traditional ira tax free.
Restrictions apply, so you need to consult a 'good' financial tax advisor or be able to read and understand IRS regulations yourself.

I'd recommend having both, and using the tax savings to fund your Roth.
Although paying off credit card debt or feeding your family ect might be the better option.

It all depends on individual situation.
There was a comedy skit years ago depicting Suzy Orman advising the homeless on using IRAs.

 

[504RP]

My parents are age 80 and 78. They both retired at 62. Never made a plan outside of social security. I had my suspicions, and asked a few times, how they were making it. Found out 3 1/2 years ago, they were living off the equity in their home and farm. They were completely upside down on their mortgage, shut off from borrowing, and facing foreclosure. My brother wouldn't help ( I don't blame him we both tried to talk to them over the years and they wouldn't listen). I had to buy their place ( gave them a lifetime estate), and we still have to help with living expenses as well as upkeep and maintenance.
It has put us in a pretty tight spot. I had to come out of retirement, and now work two jobs and farm. It was that or they'd file bankruptcy and move to a trailer park. I honestly have days I wish I'd have allowed that ( hate myself on those days). It is very draining making two households float. I honestly thought I understood hardwork and forgiveness. I assume I had a little more to learn.
The take home from this, for you……please don't plan on social security to see to your financial needs in old age, it won't do it.

" I honestly have days I wish I'd allowed that ( hate myself on thoes days ) "

Big foot, The last thing you should feel is the way you feel sometimes and to hate yourself for feeling the way you do !!!

For you to have taken on the immense responsibility that you have done says a hell of alot about you brother. You have absolutely NOTHING !!! To be ashamed of the way you feel and I do mean NOTHING !!!

You have my greatest admiration and respect for taken on the responsibility you have chose to do !!!

99 out a 100 people would have probably taken easy way out and left their parents fend for themselfs.

People like yourself are very rare. Anyone that knows you should consider it a privlige to know you and to be your friends and neighbors.

I have never met you but consider you as a friend anyway and if i lived close enough that I could help you out farming or whatever i would sure be there to help share your burden or better yet the responsibility you have taken up on yourself !!!

Hang in there brother !!!

 

[1982vett]

She's got 15+ years before tapping savings.
S&P 500 index fund, but $3000 minimum to open an account.
A lower minimum option:
Vanguard 2050 targeted all in one fund $1,000 minimum.
mix of 90% indexed stocks and 10% indexed bonds that automatically rebalances each year {targeted for retirement in 2050)
Throw a $1,000 in it and in 10 years you can explain the performance to her.
Then she can have a goal of adding her baby sitting money or whatever to it until it reaches $3,000 and use the money to buy a 500 indexed fund.
or
best option might be Vanguard 529 College Savings Plan
not sure of details, but check into it as it might have certain limitations depending on your state's 529 rules. It's targeted to your home state 529 plan for favorable state tax benefits, creditor protection, financial aid and other benefits offered in your state.

I'm a fan of Vanguard because they are known for having the lowest fees in the industry.

One if the first funds I bought at Vanguard was the STAR fund. It's a balanced fund made up of Vanguard funds. https://investor.vanguard.com/mutual-funds/profile/VGSTX https://investor.vanguard.com/mutual-funds/profile/portfolio/vgstx

 

[504RP]

Sounds great but you can only put like 6K per year in a Roth last I checked.

The taxes you pay on a 401k are suppose to be based on your age that you are when you start drawing it. The older you are the less taxes you pay if i am not mistaken ?

 

[504RP]

That movie called " The Mule " starring Clint Eastwood seems to be the perfect solution to retirement .

 

[Bigfoot]

" I honestly have days I wish I'd allowed that ( hate myself on thoes days ) "

Big foot, The last thing you should feel is the way you feel sometimes and to hate yourself for feeling the way you do !!!

For you to have taken on the immense responsibility that you have done says a hell of alot about you brother. You have absolutely NOTHING !!! To be ashamed of the way you feel and I do mean NOTHING !!!

You have my greatest admiration and respect for taken on the responsibility you have chose to do !!!

99 out a 100 people would have probably taken easy way out and left their parents fend for themselfs.

People like yourself are very rare. Anyone that knows you should consider it a privlige to know you and to be your friends and neighbors.

I have never met you but consider you as a friend anyway and if i lived close enough that I could help you out farming or whatever i would sure be there to help share your burden or better yet the responsibility you have taken up on yourself !!!

Hang in there brother !!!

that was kind words. This to shall pass. I probably posted that partly to vent. We really shouldn't lament the lows in life, especially when we have the opportunity to rebuild from it. I honestly want people to know, that their golden years won't be very enjoyable living on just SS. It will be a dire situation. Even if they only have a few years left to save, any little bit will help.

 

[Caustic Burno]

that was kind words. This to shall pass. I probably posted that partly to vent. We really shouldn't lament the lows in life, especially when we have the opportunity to rebuild from it. I honestly want people to know, that their golden years won't be very enjoyable living on just SS. It will be a dire situation. Even if they only have a few years left to save, any little bit will help.

You describe more than you know.

 

[Dave]

My Dad always said that SS wasn't designed to be a retirement plan. It was just a safety net. He said when he was a kid old single people with no relatives often killed themselves because they were unable to support themself.

 

[Caustic Burno]

My Dad always said that SS wasn't designed to be a retirement plan. It was just a safety net. He said when he was a kid old single people with no relatives often killed themselves because they were unable to support themself.

Most jobs even off farm when SS started didn't have retirement plans. Secondly very few of that generation trusted any type financial institutions, they had seen friends, neighbors and kin loose everything to them.
After the war was over you could get a lifelong job with benefits and retirement.
Companies started getting out of the retirement business with the ERISA act of 76 I think the year is correct. Lifelong jobs with a company have slowly been disappearing as well as retirement plans for the "401" created by ERISA.
This gets back to most people can't manage money and the only thing that has stopped us from full circle is SS. You have to ask without would it what cost to feed and shelter the elderly be.
We could discuss this till the cows come home.
What it was designed for was great as a supplement income and an insurance for your wife and kids wouldn't starve in the event of your death.
Again LBJ to the rescue screwing it up.

 

[Brute 23]

There are too many simple ways to improve on ss to keep running it like this. No matter what your thoughts are... the facts are it's not working and some thing has to change.

 

[Dave]

There was a neighbor over on the coast who got hurt pretty bad logging. After two years on L&I they roll you on to SS. Now I had seen him helping his neighbor put up hay so I know he was capable of working but he liked sitting at home with the check coming in every month. So he sat on SS. He had 3 kids. So he was drawing for 3 kids and himself. The kids were real together in age. So as each kid got out of school they dropped off the SS. In just a few short years he went from riding the gravy train to complaining how do they expect a person to live on this.

 

[simme]

The taxes you pay on a 401k are suppose to be based on your age that you are when you start drawing it. The older you are the less taxes you pay if i am not mistaken ?

I don't think so. Withdrawals from a regular 401k are taxed as ordinary income - same as wages. After you retire, you must start withdrawing it by age 70 1/2 years (recently changed to 72 years in the covid acts) and withdraw at least the minimum amount as established by the government rules. Minimum withdrawal rate is determined by life expectancy tables to try to get all the money withdrawn and taxed before you die. This is to ensure that the government gets to collect taxes on it instead it it growing for your heirs. If you mess up and don't take enough out during a year, there is a severe tax penalty for that year. Taking money out of a 401k early (before 59 1/2 years old) will result in a 10% penalty in addition to taxes except in a few situations (hardship withdrawal).

 

[Dave]

The wife had a cousin. He worked for the state of Washington for years. The state retirement has several options when you retire. You can draw the full amount or several plans with varying amounts of surviving spouse payment. He is quoted to have said he was going to get every dime out of them. So he took the full amount with no surviving spouse benefit. He died 2 months later. I think the kids are having to take care of mom.

 

[Caustic Burno]

I don't think so. Withdrawals from a regular 401k are taxed as ordinary income - same as wages. After you retire, you must start withdrawing it by age 70 1/2 years (recently changed to 72 years in the covid acts) and withdraw at least the minimum amount as established by the government rules. Minimum withdrawal rate is determined by life expectancy tables to try to get all the money withdrawn and taxed before you die. This is to ensure that the government gets to collect taxes on it instead it it growing for your heirs. If you mess up and don't take enough out during a year, there is a severe tax penalty for that year. Taking money out of a 401k early (before 59 1/2 years old) will result in a 10% penalty in addition to taxes except in a few situations (hardship withdrawal).

You are 100% correct.
On top of the penalty it is added to your yearly income before 59 1/2.
That can incur a whole nuther bunch of tax liabilities. After 591/2 it's taxed as ordinary income.
On withdrawal at 72 it has to be 10% of the account.
The biggest mistake I see retirees make is forgetting there is no raises coming unless you give it to yourself. The SS raise isn't going to keep up.

 

[jltrent]

The wife had a cousin. He worked for the state of Washington for years. The state retirement has several options when you retire. You can draw the full amount or several plans with varying amounts of surviving spouse payment. He is quoted to have said he was going to get every dime out of them. So he took the full amount with no surviving spouse benefit. He died 2 months later. I think the kids are having to take care of mom.

Seen that happen similar also. The surviving spouse payments does not cost you that much per month.

I worked with one guy who remarried a woman about half his age and left her his pension payments/insurance if he dies before her. Well not long after, she left him (divorce), and he wanted to change it. You can't change as all he could do was out live her. His first wife took him back.

 

[Brute 23]

If we dont make a change these politicians will turn it in to another full on welfare program and SS will be just another tax that disappears. When they have to make up these short falls I can guarantee it's going to come out of the top end, not the bottom.

 

[shaz]

If we dont make a change these politicians will turn it in to another full on welfare program and SS will be just another tax that disappears. When they have to make up these short falls I can guarantee it's going to come out of the top end, not the bottom.

I'm worried about the FED coming after us "rich land owners". With all the environmental BS going on why not just tax cattlemen out of existence?

 

[jltrent]

I'm worried about the FED coming after us "rich land owners". With all the environmental BS going on why not just tax cattlemen out of existence?

Kind of worried about property reassessment, as this is the year for it to happen here. Land prices are way high and they said a drone would be used to look over the property. It would not surprise me if property taxes double.