Boomers Find 401K Plans Come up Short....

[Virgderon]

Dh and I have a goal to be debt free and mortage free when we retire. Any other goals are secondary. We lost so much in the last few years- his higher paying job, the equity in our house, 401ks took a hit, and having to borrow from the 401k to move halfway across the country for a job.

If we would have known what was going to happen, we would have taken less vacations and spent less overall on our kids, clothes, eating out, etc. - BUT we should have done that anyway I guess.

Thank goodness we moved to Florida where the cost of living is less, and we have 15 years to make up for some of what we lost. Retiring with $636k is not going to happen tho.

We NEVER thought DH would go through 2 layoffs in 8 years- he is a very good IT programmer.

For those of you that are doing really well and feel comfortable-thats great- but keep saving, keep getting the company match if you get it. We are in our low 50s and never thought our finances would fall apart the way they did.

 

[juliebean]

My husband and I save as much as we can right now and will definately up that amount when I return to work soon. He is lucky to be a pension actuary and actually have a small pension, along with a 401K with matching.

Because...my mother was diagnosed with Stage 3 cancer at 61 and has not been able to return to work. My dad could no longer work quickly enough as a mechanic at 60 and is now unemployed. What savings they had are gone and we are not sure what the future holds for them.

My FIL is a machinist who has had a knee replaced, and a hip and can barely make it through a work day, but invested life savings in a business that failed ten years. MIL's business failed and now she is 55+ and can't find a job. They have lost their home and are living with relatives, not sure how they will retire.

I don't think any of them planned these ends to their careers, so we try to help them - but we definately will save as much as we can - no one can be sure they will work to 65 or older.

 

[adkkev]

As for New York's state pension fund, I'm not exactly sure what you mean by "doing very well". I've been reading for the last couple of years that the NY pension fund is in trouble. Here's an article from late last year.....saying that the 132 Billion dollar fund is underfunded by 71 Billion. I guess maybe you mean that it's not as bad as others? Here's the article from Bloomberg

http://www.bloomberg.com/news/2010-1...port-says.html

And yet in other articles I've read that only four states could claim that their funds were "fully funded" in 2008, along with just three other states.

So, perhaps New York is in the "top four".....but if being in the top four means that they're only underfunded by 71 Billion...over half of the entire fund's value. Makes me wonder what a fund in good shape looks like.

The report you cite from Bloomberg is from a conservative group in NYS & is their opinion ... certainly not fact.

Look at this:http://www.governing.com/topics/public-workforce/pensions/pension-preparedness.html

and you'll see something different.

 

[nunzia]

Dh and I have a goal to be debt free and mortage free when we retire. Any other goals are secondary. We lost so much in the last few years- his higher paying job, the equity in our house, 401ks took a hit, and having to borrow from the 401k to move halfway across the country for a job.

If we would have known what was going to happen, we would have taken less vacations and spent less overall on our kids, clothes, eating out, etc. - BUT we should have done that anyway I guess.

Thank goodness we moved to Florida where the cost of living is less, and we have 15 years to make up for some of what we lost. Retiring with $636k is not going to happen tho.

We NEVER thought DH would go through 2 layoffs in 8 years- he is a very good IT programmer.

For those of you that are doing really well and feel comfortable-thats great- but keep saving, keep getting the company match if you get it. We are in our low 50s and never thought our finances would fall apart the way they did.

Hang in there...we lost it all in a stupid decision to open a restaurant..really..what was I thinking?? anyway..we are digging back up to having a decent amount saved, but certainly not what we 'should' have..

 

[Purseval]

This is nothing new. When IRA's, 401K's and the like first started becoming popular the GAO came out with a report called The Myth of the IRA Millionaire, basically stating that inflation would eat away most of their gains.

 

[juliebean]

I ask my husband about these state pension underfunding articles - we live in NJ and it's a popular topic here too. He spends a good chunk of everyday evaluating pensions for financial health. The state gov hasn't funded the pension plan for way too many years (just as bad as any of us not saving every year), BUT he always points out that these evaluations are based upon decades of projections and billions of dollars and a change of even a half a percent in investment returns can make a pension fund go from funded to not fully funded. Most plans are considered not fully funded because of the recent financial troubles in our economy. Not that states should not fully fund pensions - but the amounts recommended are based upon very complicated equations that predict decades in advance and have to be constantly adjusted. A couple of good years for their investments and a pension's status can improve rapidly.

Not that we shouldn't all protect our futures by saving - but the statistics involved in pensions can be manipulated for political (or for companies wanting business from investors) reasons.

 

[mrodgers]

I don't disagree, but how many couples beyond entry-level make 30K? Steal away! I've picked up many a good idea from this site.

Half? Median single income is somewhere around $3x,000. Median family income is $50,000. $30K for the husband and $20k for the wife?

Edit: Whoops, you said couples make 30K....