A lot of us have to survive off of SS and Savings. Some do get a part-time job, while some simply can't physically work anymore and must really, really budget their monthly income. We know two couples that have retired and are getting a nice Pension, plus maximum amount of SS. Both couples live nicely, but had to stay on the same job for years to get that Pension. And, back then, a person had to work for someone that gave a Pension. For me, I wasn't too eager to stay on a job that: I ended up not liking my supervisor. Would've had to stay for up-teen years just to get a nice hourly wage. Ended up doing more than I applied for and didn't like the added-on work. Funny, my 1/2 brother told me, who is getting a nice Pension from the state of PA after 30 some years of work: "No matter what, you stay on the job." Well, I totally disagree! A person's dislike of their job, or who they are working for/with, can definitely show up in their home life. So, do you get a Pension and a good SS monthly or do you just have to live off of SS and Savings?
If this thread were in another forum for younger people, it might have a little more relevance than it does here but I’ll ride with it and maybe someone can advise their grandkids if they decide to ask some questions about it. First, I didn’t plan to live as long as I have nor have a reason to live as long as I have. I did what I liked doing at the time I did them. But, doing what I liked has it’s disadvantages because I really like Food and Beverage but there are only rare occasions when a restaurant situation will even have a pension plan much less a 401K plan. If a person doesn’t invest in a good mutual fund or some such then like me, you’re stuck living off of social security and doing a little side work to supplement the S.S. Don’t get me wrong, I owned a couple of very popular restaurants and was making a good life for the future, but a couple of x-wives planned better than I did and I have to admit, I was pretty easy prey. I really have to agree with your brother here @Cody Fousnaugh to some extent. When people first start making their way in life they should ask themselves if they are merely trying to survive or live well. Living week to week is okay if a person is content with doing that but that’s survival, not living to live well. Even the homeless survive. Even most people who attend a good college aren’t really looking at when they get to a retirement age but looking for that big buck to get that big house complete with the prestige of having that big job with the big bucks. They do not realize how far that attitude will take them nor how expensive retirement is going to be. Some make it, some do not. The banks doing well with the 2nd and 3rd mortgage folks not to mention the foreclosures they perform. But the thing is, whether a person is thinking of the future or not, jumping job to job and moving from career to yet another career isn’t as tasty as it first seems to be. Yeah, knowing a lot has some temporary perks and gives a person certain bragging rights but that’s about it: a lot of memories and no cash to support those memories. At least, the experiences I have been able to accrue throughout my life has enabled me to still do what I like to do, but now it’s not just a matter of doing it because I like it, but I now have to if I wish to continue living well.
@Cody Fousnaugh ..I do agree you should not continue on with a job that makes you miserable at work or home. We have a some funds- that clearly wont last but can not worry over everything. Most of my family were already passed at my age of 70...so these next few years are a hit and miss for me.
Well, Bobby, my wife was definitely the SMART one. She got her Bachelors Degree when she was 49, because she knew having it would pay a higher salary than not having it. Even though she has never been one, her resume looks more like one for a CFO rather than a Senior Accountant or Financial Analyst. She was able to save money, but with us having moved three times already, going on the fourth time now, that Savings has really dwindled. Before I met her, my highest hourly wage was $10 and I couldn't save a penny while earning even that. I have no college degree, just a high school diploma, which basically is nothing today. As for today, a lot of young folks want, whether they can afford it or not, the nice house in a nice area, descent (sometimes brand new) vehicle, go to Disney World or take their kids on a Disney Cruise and so on and so on. Many have a Bachelors or even a Masters Degree. They make a nice enough salary that they have no problem contributing to their 401k Savings. But, of course, we all definitely know that one major emergency and that Savings can get wiped out, even with medical and/or property insurance. I have read that there are specific places in the U.S. where retired Seniors can live that only have SS and savings to live off of. But, none of those places are where we want to live. As for me, I simply didn't make enough salary to even think about my future and finances.
My husband and I took early retirement from a large corporation; I retired with 28 years of service and he had over 30. We both have significant holdings due to savings and stock-match options and both of us received a full non-discounted pension. We also have insurance benefits, life insurance and other benefits as retirees. In a sense we are lucky, but then again we both made good decisions as young people and stuck with our careers though there were times that it was stressful and hard. Together we had five children to provide for, so we didn't have the luxury of whining about a job, or quitting when things got rough. We just got up and did it, and now we get to reap the benefits of those years. People need to accept responsibility for their own situation; the choices were largely yours to make.
I never discuss my finances on an open forum, and I won't be doing that now...except to say we don't have a 401K here, instead we have what's called PPP (pension) where with most employers they will match or better each contribution that the employee makes..Obviously the higher the contribution the better the ultimate pension. Equally here NI ( national Insurance) contributions are taken at source from our salaries, of those earning more than approx £9000 pa and under £50,000 at a rate of 12%.. Those on low salaries below £9000 pa pay no NI .. or Tax... if they are under retirement age and have no other personal taxable income Basic rate Tax is paid at 20% of our salaries over the first £10k and up to just under £40k...so in essence tax is paid on the last £30k ...then the second rate of tax which is the Higher rate Income tax is payable on earnings over £42, 000 up to approx £150 k at a rate of 40 % over your taxable allowance as above... It's different again for those who are self employed... in total, the deductions from salaries including NI and Basic Rate tax pan out at around just over a third of the average salary.. both are taken from the salaries at the same time by the government every pay day National Insurance contributions are paid from the first employment to the day of retirement..and are used to pay for State pensions, and Unemployment benefits for everyone, including those who have never worked or paid any NI in their whole lives whether tha's because they've been in minimum paid work or have always been on the dole. .. of course most people Pay waaaaay more in NI contributions over their lifetime than they will ever see in State pension payments which are extremely low, and only paid on a weekly or monthly basis,,,no lump sums at all..this isn't a private pension!! Anyway it's far too much to try and explain , if anyone is interested you can read more on these 2 links.. https://www.gov.uk/national-insurance http://www.moneyexpertise.co.uk/howmuchtax.html
@Cody Fousnaugh , may I ask...as you have no private pension and I'm presuming your wife has only had her 401k since she was 49 years old... will that be enough for you both to retire on?... Also is ''SS''.. a state pension?...and is it means tested?... Does everyone get the same amount regardless of earnings, or age?
Holly, depending upon the employer in the US, a person may get a company-funded pension which is separate from the employee savings plan and is paid by the company. The company I worked for matched savings contributions up to 6%, so in my opinion I'd have been stupid not to contribute at least that much to get the "free money" the employer was providing. For most of my working years I was able to contribute much more than that. I was just thinking about some terrible bosses I had, and several assignments that were really stressful during my career. Many times I'd have liked to have told them to "shove it," but I had children to feed and educate. At this point in my life I'm very happy that my sensible side won those arguments!!
SS is Social Security, and it is probably similar to what you call NI, @Holly Saunders , at least from what I saw in your post. When a person starts work, SS tax is one of the things that is taken out of the paychecks , and how much is deducted depends on how much you earn. At age 62, people can start drawing their SS pension, and it is federal, not state; but the earlier you take it, the less you receive each month. Some people have jobs that do not take out SS holdings, like farm jobs or some field hands, or even a person that has their own business. So, the longer you work, and the more you earned and had withdrawals for, the more you are eligible to receive.
Holly, depending upon the employer in the US, a person may get a company-funded pension which is separate from the employee savings plan and is paid by the company. The company I worked for matched savings contributions up to 6%, so in my opinion I'd have been stupid not to contribute at least that much to get the "free money" the employer was providing. For most of my working years I was able to contribute much more than that. pretty much the same here Beth .. with larger conglomerates they will Match 8% and sometimes more... smaller companies will usually only contribute 3%
ah yes, slightly different to here Yvonne, in that no-one can take their State pension which is what the NI contributions are for, until age 66 years old.. Until recently it was 60 years old for women , and 65 for men, but just a couple of years ago they changed it with very notice so now everyone born after 1954 has to wait until they're 66 before receiving the state pension (that's me and hubs) Further to that , regardless of how much NI has been paid over our working life here, the state pension is the same.. with only a few differences...ergo.. if you were earning a Million a year., and worked 50 years . you will get a standard state pension of just £8,767.20....but equally, if you worked the same 50 years and earned just £15,000 you will get the same pension amount!!. the state pension of less than £9,000 is a very low amount to live on for anyone.. so it's imperative that people have personal pensions or savings by the time they retire. there are some exceptions...anyone ( usually women) who only worked in Part-time jobs while raising children, paid what they called a lower NI stamp, so unless they make up the whole amount by the time they retire, they will receive a much reduced SS pension which will have to be made up with added social security benefits, or Pension credits . ..for example... have a look here https://www.lovemoney.com/news/61140/how-much-state-pension-pay-rise
“there are some exceptions...anyone ( usually women) who only worked in Part-time jobs while raising children, paid what they called a lower NI stamp, so unless they make up the whole amount by the time they retire, they will receive a much reduced SS pension which will have tobe made up with added social security benefits. ..for example...“ They adjusted the age for a person to draw their SS benefits here, too; but that is to receive the full amount, and I think that a person can still draw at 62, if they take a partial amount. The thing with women raising the family and not working is an issue here, too, and one that has affected me personally, because I was a stay-at-home wife and mother while raising my children, until they were into their teens, and then I was able to get a part-time job. My ex-husband had a good job, and also a pension plan, which should have been MY retirement plan also; but that does not happen if you get divorced, so basically, I didn’t start accumulating any SS benefits until I was well into my 40’s and started working full time. Then I had the heart failure in my 50’s and was physically not fit to work; so my SS benefits are next to nothing.
I had a similar experience Yvonne. I only worked part-time jobs around my daughters' school hours until she was in her early teens , and I could get a Full time job when I was in my late 30's... ( I raised her alone from when she was 6 years old after my divorce) .. so I only paid reduced NI... for quite a few years too... so I had a lot of catching up to do...