Stupid boomers; how is this possible?

Discussion in 'Hangar Talk' started by JOhnH, Apr 1, 2019.

  1. PPC1052

    PPC1052 Final Approach

    Joined:
    Feb 2, 2012
    Messages:
    5,011

    Display name:
    PPC
    I would expect that all that new "wealth" transferred to the young'uns will place upward pressure on prices.
     
  2. PPC1052

    PPC1052 Final Approach

    Joined:
    Feb 2, 2012
    Messages:
    5,011

    Display name:
    PPC
    This isn't the full story. Liquid or not, "transfer on death" does not affect whether the tax man cometh. Now, you might be able to avoid probate. But that's another matter.

    Also, life insurance may be taxed if not handled properly.
     
    Last edited: Apr 1, 2019
    TCABM likes this.
  3. Lachlan

    Lachlan En-Route

    Joined:
    Sep 23, 2015
    Messages:
    3,497
    Location:
    North Creek, NY

    Display name:
    Lachlan
    That’s a lot closer to the truth. :)
     
    bflynn likes this.
  4. Velocity173

    Velocity173 Touchdown! Greaser!

    Joined:
    Jul 3, 2012
    Messages:
    13,070

    Display name:
    Velocity173
    Well maybe if you’d get with the program and start riding a bicycle to work and go vegan we could extend that 12 years to at least 15.
     
  5. 455 Bravo Uniform

    455 Bravo Uniform En-Route

    Joined:
    Aug 18, 2015
    Messages:
    4,115
    Location:
    KLAF

    Display name:
    455 Bravo Uniform
    I need to look into something a bit further - that is whether retiring earlier and taking SS and 401k withdrawals earlier will actually put me in a lower tax bracket and as a result of being taxed less will result in more of my money regularly coming to me rather than the government. Does that make any sense? I haven’t quite thought through how to do that in a spreadsheet yet.
     
  6. Crashnburn

    Crashnburn Cleared for Takeoff

    Joined:
    Aug 8, 2018
    Messages:
    1,102
    Location:
    Sunnyvale CA

    Display name:
    Crashnburn
    Not to mention stop all flying that doesn't depend on brooms!
     
    Velocity173 likes this.
  7. Crashnburn

    Crashnburn Cleared for Takeoff

    Joined:
    Aug 8, 2018
    Messages:
    1,102
    Location:
    Sunnyvale CA

    Display name:
    Crashnburn
    No. The higher rate starts at the higher income and doesn't revert to your first dollar .
     
  8. SkyDog58

    SkyDog58 Touchdown! Greaser!

    Joined:
    Jun 11, 2015
    Messages:
    13,572
    Location:
    My own special place.

    Display name:
    Canis Non Grata
    I hadn’t heard that one. Can you cite your source? Hopefully it isn’t based on some silly cockeyed numerology from some old book of fables and myths.
     
    TCABM likes this.
  9. Velocity173

    Velocity173 Touchdown! Greaser!

    Joined:
    Jul 3, 2012
    Messages:
    13,070

    Display name:
    Velocity173
    Plenty of boomers that have make sound retirement investments but there are also those that could care less about living in wealth during their twilight years. That statistic about some living off $29K a year is where my parents are. No debt and no desire to travel and that number is easily doable. My neighbors are the opposite. They’ve made investments during their younger years to have a much more lavish lifestyle. They take long trips and cruises all the time. All depends on what type of lifestyle you want to lead in retirement.

    I’d also say that the pension and SS numbers in the article are a bit skewed. With my military pension and early retirement SS (62) I’ll be close to $60K a year. Just enough to pay for a “tiny home” with solar panels, a Model 3 (used of course) and an LSA. ;)
     
    Last edited: Apr 1, 2019
  10. Velocity173

    Velocity173 Touchdown! Greaser!

    Joined:
    Jul 3, 2012
    Messages:
    13,070

    Display name:
    Velocity173
    The 12 years is taken a bit out of context. We have about 10-12 years to do something about our cow farts before Armageddon.
     
    Last edited: Apr 1, 2019
    Cooter likes this.
  11. Gerhardt

    Gerhardt En-Route

    Joined:
    Aug 20, 2006
    Messages:
    4,534

    Display name:
    Gerhardt
    1. I absolutely believe the $58K number. And that's the Vanguard average of people who do have a 401. Keep in mind the number of people who have NOTHING saved.

    2. Back to my theory of the average person. Sadly, I think people on this board tend to be on the right side of the curve when it comes to intelligence and income.

    3. On your stop at Wal-Mart tonight glance over at a random ten people and ask yourself if you think they put ANY money away for retirement.

    4. There's a website that lists all the counties in the nation along with the percentage of people on foodstamps (whatever it's called now). The percentage is staggering. I live in a fairly affluent county and the percentage is still 14%. If you're living off welfare now, those plans aren't going to change when you hit retirement age.
     
  12. 455 Bravo Uniform

    455 Bravo Uniform En-Route

    Joined:
    Aug 18, 2015
    Messages:
    4,115
    Location:
    KLAF

    Display name:
    455 Bravo Uniform
    Can you explain please? I’m dense...
     
  13. Bell206

    Bell206 En-Route

    Joined:
    Oct 6, 2017
    Messages:
    4,533

    Display name:
    Bell206
    The one thing some people overlook is the amount of retirement money they have in qualified funds like 401k and IRAs (tax-deferred) and at what age they plan to withdraw that money. The age 70 1/2 RMD requirement has caught a few off guard and caused their tax rates to elevate due to the added influx of taxable income at 70. Since I retired early and am living off savings, I basically have no income. To offset my 70 RMD hit I'm withdrawing qualified monies now at a very low tax rate and using that to live vs my savings which has no tax liability. It was the best advice my account offered before I retired.
     
    TCABM likes this.
  14. hindsight2020

    hindsight2020 Final Approach

    Joined:
    Apr 3, 2010
    Messages:
    5,321

    Display name:
    hindsight2020
    This board is an echo chamber of above median earners who readily dismiss national economic insolvencies as mythical because their personal street looks posh. Look at the far end of the runway for once. The level of retirement insolvency in this country is staggering, and I'm no friend of the boomers mind you. But a spade is a spade. 401k and the loss of pensions was a bait and switch, and we re gonna see the outcome of this dynamic with the boomers first. Most people make nada, with employers who offer jokes of a retirement vehicle, in a country that demands high levels of consumption as a function of your already paltry income ratio.

    SS WILL be the national benchmark for retirement income in this country going forward, on a median basis, good bad or indifferent. No amount of finger wagging and self patting about being above that benchmark will ameliorate the fact that the majority will pull down on that rope. We need to prepare to deal with how this will change the look and feel of american main street and our own lives as future caretakers and eventual dependents ourselves. Not everyone will be able to expat to run away from insolvency in the home country.

    I recognize its all good advice here, but talking about 50k/yr retirement contributions while attempting to appropriate a "middle class" self reporting, will always come off as tone deaf. Don't shoot the messenger.
     
  15. EdFred

    EdFred Taxi to Parking

    Joined:
    Feb 25, 2005
    Messages:
    27,581
    Location:
    Michigan

    Display name:
    Ed Frederick
    Eh, I know people that are pulling in decent money and still not investing wisely. They blow it on stupid stuff. I get there are the poor that will never get ahead, but there are also the stupid who will screw themselves over due to shortsightedness.
     
    bflynn and Gerhardt like this.
  16. GeorgeC

    GeorgeC Administrator Management Council Member PoA Supporter

    Joined:
    Dec 5, 2010
    Messages:
    3,807

    Display name:
    GeorgeC
  17. DaleB

    DaleB Final Approach

    Joined:
    Aug 24, 2011
    Messages:
    5,124
    Location:
    Omaha, NE

    Display name:
    DaleB
    You betcha. We have friends who make pretty good money, but I'm betting their retirement plan is hope. I know I'm one to talk, with an airplane in the hangar and a classic Mustang getting restored in the garage, but these guys make me look like an amateur with the toys. I've got family members who are older than me and have, I would estimate, essentially zip saved. Their only income will be Social Security. It's crazy.

    My wife and I had exactly zero saved up until I was 40. We were young, I had a good paying job, but we had five kids and were so far underwater we couldn't see the surface. I was lucky enough to double my income over a period of 3 years, so now we're doing OK. We're still playing catch-up, but I would guess we're much better off than most.

    Having been there not all that many years ago, I do feel for the people who aren't able to save anything for retirement. Some of our kids are in that boat. They can barely make it from one paycheck to the next, let alone contribute to a 401(k) -- and since it's not mandatory, the money goes elsewhere. We've counseled, encouraged, and offered to help with planning and budgeting, but there's really only so much you can do.

    One of our jobs now is to set up our estate so that if we die with a lot left over, it doesn't provide a quick-burning pile of cash to our kids. We're trying to figure out how to budget what we leave behind to provide maximum benefit without supporting short-term stupidity.
     
    Cooter and Gerhardt like this.
  18. PaulS

    PaulS Touchdown! Greaser!

    Joined:
    May 29, 2007
    Messages:
    11,802
    Location:
    New England

    Display name:
    PaulS
    Rule of thumb, take the amount of money you need per year, divide it by 4% and that is how much you should have in a portfolio balanced for your risk level, which at retirement or near should be low. This is all I have.

    So if you need $100,000 per year all in, divide by 4% or $100,000/.04 = $2,500,000 . With 2.5 million supposedly you will be able to withdraw 100k without draining your capital.
     
    Last edited: Apr 1, 2019
    Cooter likes this.
  19. TCABM

    TCABM Pattern Altitude

    Joined:
    Apr 23, 2013
    Messages:
    2,034

    Display name:
    3G
    Does your estate planner know these wishes?
     
  20. idahoflier

    idahoflier Cleared for Takeoff

    Joined:
    Jul 21, 2017
    Messages:
    1,209

    Display name:
    idahoflier
    One aspect I have been curious about is how much of the market is tied up in retirement accounts and whether retirement withdraws will affect the market value by any appreciable amount. In other words, as boomer's retire and draw down their retirement accounts, will that drag the market down? Does anyone have any insight/data on that?
     
  21. Velocity173

    Velocity173 Touchdown! Greaser!

    Joined:
    Jul 3, 2012
    Messages:
    13,070

    Display name:
    Velocity173
  22. DaleB

    DaleB Final Approach

    Joined:
    Aug 24, 2011
    Messages:
    5,124
    Location:
    Omaha, NE

    Display name:
    DaleB
    Well, considering that our estate planner is currently me, then yes. I need to hire more estate planning staff... but trying to determine who is going to be worth what they cost has been a challenge. For that matter, getting them to disclose what they cost without investing a lot of time and information has been a challenge.
     
    TCABM likes this.
  23. Cooter

    Cooter Ejection Handle Pulled

    Joined:
    Dec 2, 2015
    Messages:
    2,412

    Display name:
    Cooter
    No, this is a new type of fable and myth. Way more harmful than the old ones.
     
  24. TCABM

    TCABM Pattern Altitude

    Joined:
    Apr 23, 2013
    Messages:
    2,034

    Display name:
    3G
    Oh you’re thinking about it all wrong. Play favorites; you’ll be dead anyway.
     
  25. Clip4

    Clip4 Final Approach

    Joined:
    Jun 27, 2013
    Messages:
    6,645
    Location:
    A Rubber Room

    Display name:
    Cli4ord
    Yes, that value is the average retirement savings for boomers. Subtract the substantial debt of the homes, cars, and credit cards from that value.. And there are ones this site who also carry debt on an airplane.

    If you are willing and able to work until you die it is not an issue.
     
  26. DaleB

    DaleB Final Approach

    Joined:
    Aug 24, 2011
    Messages:
    5,124
    Location:
    Omaha, NE

    Display name:
    DaleB
    I just want to try to do my part to encourage, through example, less stupid fiscal practices than what I used when I was young and poor. I like the idea of inherited wealth that doesn't encourage or even enable people to become lazy twits with money (which will soon be gone), but rather shows how it can be managed to improve the lives of those about whom you care. Ideally, I'd like to provide some way that they can also contribute something of substance financially to their grandkids and great-grandkids. Even if it's not a lot of money, maybe it can be a good example of how things can work.

    Idealistic and naive, I know.
     
    TCABM likes this.
  27. Crashnburn

    Crashnburn Cleared for Takeoff

    Joined:
    Aug 8, 2018
    Messages:
    1,102
    Location:
    Sunnyvale CA

    Display name:
    Crashnburn
    First, if you're a pilot, you aren't dense. I'm talking about marginal rates. If tax is 10% for the first 10,000, and 20% if you make more than 10,000, you'll pay 10% on the first 10,000, or 1000, and 20¢ for each dollar you earn after the first 10,000.
     
  28. Crashnburn

    Crashnburn Cleared for Takeoff

    Joined:
    Aug 8, 2018
    Messages:
    1,102
    Location:
    Sunnyvale CA

    Display name:
    Crashnburn
    :yeahthat:
     
  29. weilke

    weilke Touchdown! Greaser!

    Joined:
    Jan 26, 2010
    Messages:
    14,667

    Display name:
    weilke
    Thats pretty much what it is based on.
     
  30. SkyDog58

    SkyDog58 Touchdown! Greaser!

    Joined:
    Jun 11, 2015
    Messages:
    13,572
    Location:
    My own special place.

    Display name:
    Canis Non Grata
    Or multiply by 25 which is an easier concept for many people.
     
  31. Anymouse

    Anymouse En-Route

    Joined:
    Jul 30, 2007
    Messages:
    3,164
    Location:
    Clinton, AR (Sometimes)

    Display name:
    Total Stud Bush Pilot
    Too lazy to quote, however in my experience most of the people that say they have nothing left over to put away for retirement probably have things they can cut out of their spending. We're talking cigarettes, the daily trip to Starbucks, getting the highest level of cable when all you do is watch MSNBC.

    My biggest fear in retirement is that my savings will somehow be used to supplement those that didn't save.
     
    NHWannabe, PPC1052, Ted and 6 others like this.
  32. PaulS

    PaulS Touchdown! Greaser!

    Joined:
    May 29, 2007
    Messages:
    11,802
    Location:
    New England

    Display name:
    PaulS
    As long as they understand they can only spend 4% on the other end.
     
  33. kyleb

    kyleb Final Approach

    Joined:
    Jun 13, 2008
    Messages:
    6,223
    Location:
    Marietta, GA

    Display name:
    Drake the Outlaw
    Mine is a lengthy period of disability (wheelchair bound, for instance) where you pay a fortune for care unless you want to be chucked into the equivalent of a dog kennel for old people. Disability insurance is helpful, but usually times out after a few years, putting you back in the dog kennel.
     
  34. gkainz

    gkainz Final Approach

    Joined:
    Feb 23, 2005
    Messages:
    8,356
    Location:
    Arvada, CO

    Display name:
    Greg Kainz
    but feel like 30 ...
     
  35. wilkersk

    wilkersk Pattern Altitude

    Joined:
    May 21, 2015
    Messages:
    2,018
    Location:
    Puget Sound

    Display name:
    KennyW
    Oh, you mean income redistribution? That's already happening. The problem will be keeping the socialists from expanding these programs through higher income taxes on the "wealthy". They still haven't figured out that the truly rich don't have taxable income the way hourly and salaried employees do. So, those of us that have good jobs, mortgages, kids to send to college, and parents to worry about will continue to be subjected to bracket creep, under-witholding, and AMT.
     
    RudyP and TCABM like this.
  36. Anymouse

    Anymouse En-Route

    Joined:
    Jul 30, 2007
    Messages:
    3,164
    Location:
    Clinton, AR (Sometimes)

    Display name:
    Total Stud Bush Pilot
    Yep, kinda like how I got taxed to supplement the people that couldn't/wouldn't pay their mortgages a few years ago. I ended up paying my mortgage and some deadbeat's mortgage as well.
     
    bflynn and TCABM like this.
  37. 455 Bravo Uniform

    455 Bravo Uniform En-Route

    Joined:
    Aug 18, 2015
    Messages:
    4,115
    Location:
    KLAF

    Display name:
    455 Bravo Uniform
    Thanks for the benefit of the doubt, lol!

    What I was meaning is that by pulling the retirement ripcord sooner, my combined monthly income from SS, pension, and mandatory 401k/IRA withdrawals will not hit the next margin and thus stay at a lower tax when it’s eventually taken out (stays in and continues to grow tax free, and gets taxed at a lower marginal rate because I took SS and pension earlier than normal). I think I can make a couple Excel scenarios, but I need to figure out the various time triggers and subsequently the benefit payment amounts. The pensions (2) and SS will be easy to calculate totals, it’s the 401k and IRAs that I need to study when withdrawals can or need to start.
     
  38. WannFly

    WannFly Final Approach

    Joined:
    Nov 28, 2016
    Messages:
    6,378
    Location:
    KFAR

    Display name:
    Priyo
    You guys are airplane owners AND you max out your company match AND you put the REST somewhere else???


    Man I need a diff job
     
    Zeldman likes this.
  39. kyleb

    kyleb Final Approach

    Joined:
    Jun 13, 2008
    Messages:
    6,223
    Location:
    Marietta, GA

    Display name:
    Drake the Outlaw
    I figure that I put roughly 30% of my top-line income into various retirement vehicles. And I'm still not comfortable with the accrual rate. ;-)
     
    WannFly and TCABM like this.
  40. weilke

    weilke Touchdown! Greaser!

    Joined:
    Jan 26, 2010
    Messages:
    14,667

    Display name:
    weilke
    Make sure that in all of the scenarios you dont lose the forest for the trees and reduce your overall cash available due to the desire to 'save taxes'.

    As for the premise of the entire thread, the amount boomers have in their 401ks is a meaningless number to assess how they are set for retirement. It doesn't account for real estate, pensions and non-deferred investment accounts. Plenty of folks out there who retire owning more than one home because they moved around for work and turned their respective residences into rentals along the way.
     
    TCABM and 455 Bravo Uniform like this.