Posted on 04/18/2013 1:32:55 PM PDT by Hojczyk
If you think it’s hard saving for retirement as a couple, trying doing it as a single. According to a study—described by one expert as the most intriguing of 2012—the amount of money singles in their late 60s have saved up for retirement is dramatically less than that of married-couple households.
In fact, the median married household had in 2008 nearly 10 times more saved up for retirement than the median single-person household, $111,600 vs. $12,500. (Savings, for the record, included 401(k)s and IRAs and all taxable savings and investment accounts, but it did not include Social Security, pensions, or housing wealth. And single, at least for the purpose of this research could mean divorced, widowed or unmarried for most/all of their life.)
So what lessons can be drawn from the findings? In general, if you’re single you’ll need to accumulate much more in your nest egg than your married counterparts, according to Utkus.
Plus, you need to make sure you have the right kinds of insurance in place. “You need also to protect against large, unexpected claims,” he wrote. And that means, having disability, life, and health insurance. “The new health care act may help when you lose workplace coverage—but of course you’ll still need to buy a policy,” he wrote.
(Excerpt) Read more at marketwatch.com ...
A brother-in-law was telling me a few days ago, about a friend whose dad needed assisted living caretakers. The family got him a reverse mortgage on his home, hoping the money would take care of him for years to come. The money lasted a couple years paying for caretakers. Now they have nothing.
Late last year I was in line behind two gentlemen who appeared to be in their mid-60's. One was boasting to the other that he just retired, and was putting his nest egg of $6,000 that week into buying Apple stock (at the time over $600 a share). He figured the rising value would take care of him for the future. I shuddered at the thought, because $6G is nothing to me but that's all he had. Less than six months later Apple dropped to $400 a share. Hope he didn't have a heart attack, losing a third of his life savings. Stock investing is gambling! For the young, not old geezers unless you diversify into different assets.
When the interest rates go up, Hyper-inflation will set in wiping all savings out.
The Government knows it. They bought 1.9 Billion dollars in bullets to solve the problem.
Of course when you get divorced, you split up your grubstake 50/50, then the guy has to pay alimony and child support.
For twenty years of my life, from age 28 to 38, for every dollar raise, after tax, alimony, and child support, I got to keep 5 cents! Kinda hard to develop another grubstake for myself!
If only we had “means testing”, then all us knuckleheads who lived frugal lives and saved for retirement - - while passing up the fancy cars, gourmet restaurants, and lavish vacations - - could sacrifice our social security so that people who never save a nickel and maxed out their credit cards and lived like movie stars can have comfortable retirements.
One day my old company’s stock price dropped from a high of about $68 to close one day around $10. That day a lot of people learned the wisdom of considering 401K investments outside of company stock.
Most income tax breaks are specifically designed to benefit married couples with kids.
Single people who make a middle-class income and with no kids get taxed the maximum amount and it's really hard to save anything when approximately 50% of your income is instantly grabbed for federal (25%) and state income tax (8%), social security and medicare taxes (7%), states sales tax (6%), gasoline taxes, property taxes, excise taxes, etc.
I've seen newly graduated single people employed on their first real job go into "sticker shock" when they see how much is withheld from their paycheck. A few have cried.
‘If a couple has only saved 125K by their late 60’s they must have been living way above their means for a long time’
...........
Or lived on a low income, or had lots of kids, or gave heavily to church and charity, or had lots of medical/dental bills. The narrative is not always just option a or b.
“I’m eatin’ right and I’m livin’ good.
Doin’ everything I said I would.
I bet you never thought I’d really go.
I’d never get as far as Mexico.”
http://www.youtube.com/watch?v=t6_qu1ODjEg
My wife’s brother-in-law received a lot in stock options to supplement low pay at his telecom company, that he couldn’t cash in until being there so many years. At one point worth almost $400,000. Then the value of the company plummeted and the stock was worthless. Worked his butt off for nothing. Now working elsewhere. Tough to be in your fifties and start over trying to save money, but he’s happy. New job is in Hawaii, and no snow or cold weather.
Recent events in Cyprus disabuse us of the idea that our 401k accounts are anything but future revenue for the gov't.
You just figured out we are a debtor nations, head to toe?
Half the people I know live hand to mouth and could not get by without their next month’s paycheck.
Meanwhile, the government and inflation continues to take more and more of that check.
I finally bought a house post-bubble and have a nice modest tax write off. My ONLY tax write off.
Single people get slaughtered on taxes, unless they are in the 47% who pay no taxes or on the dole.
Which is not to say that married couples don’t get hit hard by taxes as well.
I have a friend who both he and his wife work as contractors and both pay their full Social Security amount of 15% or so, so they are getting killed from that.
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