All About Retirement in 719 words

Forget about the fact that according to Social Security, in 2034, the payroll taxes collected will be enough to pay only about 79 cents for each dollar of scheduled benefits. Forget about the thought that the government might pilfer the money YOU PAID IN for 55 years. Let’s put on the black glasses (they used to be rose colored, but, you know… pollution). You’re 64. You have no 401(k), and no company pension. You have $65,000 you scrimped on to salt away in the bank (at 1.8% per year) over the years. Spouse you divorced last year ran off with your proctologist. How in the world can you retire? Well, social security!

Let’s see. You can take it at age 70. But what is “it”? The agency helps. They have sent you regular estimates of your benefits which you don’t read.

You earned $1,346,200 in your lifetime and put $94,234 into social security (YOUR MONEY). Your IRS has a required minimum distribution annually of $2,372.26 (about $1,300 more than you earn on it).

Ready for your social security? $2,474 per month after Medicare is deducted (yes, they do that) .

Your last 10 years of work you averaged $50,000 per year and now you can expect $32,000 a year all in, which you still have to pay tax on. Of course, you can always take a part time job to help make ends meet. But, then, there’s more income tax, plus you have to pay into social security, and medicare (Yes, even though you’re taking it).

THAT’S NOT ME

Don’t be smug. Ok: born in 1960, finally went to work (after an MBA, law school and divinity school) in 1986, and you made good money: $100,000 a year every year. You have $750,000 in your IRA including 401(k) rollover. You, Mr Big, think you can retire at 62 years old. Let’s see.

THAT’S STILL NOT ME. I DID WAY BETTER THAN THAT

Congrats. You say you made 7 figures, have a couple mil socked away, maxed out on your 401(k), have an IRA with half a mil and your latest marriage of love was to a cosmetics heiress? You don’t even need social security? Not so fast; it could pay the lease on the condo in Belize. It’s your money. Take it and blow it on the heiress’s 21st birthday party.

I run a charity that provides investment and financial information, education and advice to the general public for free. Maybe you don’t need moneyculture.org; but, maybe you do. With that kind of stash, you could at least make a nice donation.

WANT TO BUY A BRIDGE?

Some people do not believe there is any sort of retirement crisis. I guess some of them live in the tiny condos of Palm Beach or the mansions of Isleworth. They sure don’t live in Yeehaw Junction, Florida or Paintball, Arkansas. Sure, so-called experts are divided on the topic. While Boston College’s Center for Retirement Research says the outlook is alarming, one outfit whose mission is “to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and responsibility, vigilant and effective defense and foreign policies, political accountability, and open debate” says Americans are doing just fine, thank you. They cite an ICI study that apparently says “the median retiree aged 66 to 72 had an income equal to 96 percent of his/her after-tax income just before retirement, while typical replacement rates for the poor are even higher.” I guess, it would be great to be poor, so I could have a higher replacement rate of my after tax income when I retire.

Some folks believe the world is flat.

HERE’S THE SECRET: THERE’S ONE THING YOU CAN DO TO HAVE MORE MONEY AT RETIREMENT

Save more. Period.