11 Replies Latest reply on Mar 25, 2013 12:44 PM by smaneck

    Uncertain about Retirement

    lbailey52
      I am 59 and thinking about retirement around 65 if social security and TIAA_CREFF make it possible.  My TIAA-CREFF account has been totally employer funded since until now I haven't made my own contribution.  To complicate matters, my employer has frozen our salaries for the last three years and last year cut the University's contribution to our pensions [even while our President's salary has increased to over $625,000 and the salaries and perks of top administration have increased substantially].  I am beginning to think I will never be able to retire!  Any advice or consolation?
        • Re: Uncertain about Retirement
          jkom51
          If you're 59 then I assume your full SocSec retirement age is not until age 66? Taking it at 65 would be an 8% cut in payout.
           
          Only a balanced analysis of your mortality/morbidity factors would determine whether taking SocSec early would be worth it or not, to you.
           
          Medicare pays on average less than 60% of total medical costs. There are still drug costs, co-pays, emergency services (most insurance policies don't cover them; did you know that?), home healthcare, and long term care - all costs you must cover, with or without Medigap insurance.
           
          Have you ever done a retirement budget or any planning? There's no point in thinking about people "at the top" who make more money than you do. Unless you're Bill Gates (and even then) there's always somebody who's going to have more money than you've got.
           
          It's my understanding that TIAA-CREF has planners that will work with members. I already have access to independent CFPs (I used to work for one, and learned a lot) so I don't have any experience with the service. But anything's better than nothing, as they say.
           
          The trick with planning and/or working with planners is that you don't assume everything is going to go right for you, through the decades. You analyze what your financial situation is, figure out what you need to retire, and work towards that goal. Just like you'd do if you wanted to buy a house or a car - you make a plan, and have a flexible strategy that accounts for those times when things go wrong.
           
          We never made a lot of money and still retired on time. Didn't save as much as we could have, but did our best. Planning in advance really helped, but the biggest obstacle is always just inertia.
           
          Even if you're starting late, you've got to start somewhere. There's no better time than the present to begin. You can do this, other people have. Figure out the biggest risks in your life and make a plan to deal with them before they sabotage your senior years. 
           
          Ignore the outside "noise" and concentrate on learning what your options are, going forward. You want to have the odds be in your favor, rather than wandering aimlessly around in circles. You need to take active control of your life. Empowerment is precisely that - YOU are in charge, and in control of your fate.
           
           
          • Re: Uncertain about Retirement
            Chrysalis
            I agree with jkom--no matter how old you are or what your financial situation, you can only benefit by getting serious now about your retirement picture. 
            One of the things that intimidated me for a long time was all the advertisements I saw showing beautiful, tanned, silver-haired people enjoying their retirement by cruising the world in their private yacht. I knew that I would NEVER achieve that level of financial comfort no matter how much I scrimped and saved for retirement. So I didn't bother to try.
            But now I realize that that marketing-driven false picture of retirement is just like all the advertising messages of beautiful, slim bodies after going on this diet program or purchasing that exercise machine or whatever. Ordinary people think, "I'll NEVER look as good as that person, so why bother to diet at all?" While it may be true that you will never be a size 6, losing some weight and exercising some will definitely make you healthier and happier and looking much better.
            So don't let unrealistic marketing messages discourage you from  taking every step you can now to prepare for retirement. I think you will surprised to discover that economizing a little now, saving a little now, paying attention to your investments now will give you a feeling of power and control and will result in you being happier and financially healthier when you do retire. 
            • Re: Uncertain about Retirement
              JerryD
              Jkom has some really good advice. I would like to totally confirm the advice so far that says to start putting money into your retirement. We don't need to know your financial situation but within your ability max out your employer plan, specially if it raises the employer match. Once you do that, if you can, look into contributing to a Roth IRA. There is no immediate tax relief but in the future anything you take out is tax-free. I look at a Roth partially as an emergency retirement relief fund with no tax consequences.
               
              It's easy for people to throw around the word "plan"  which can seem so obscure if you haven't done that. It is as simple as putting in budget (food, house, etc.), income (savings, SS, pension, etc.) and major spending events (new car or vacation)  into a spreadsheet. This can be as simple or as complex as you want AND you can tweak it as your plans change or your desire to improve  your level of control increases.
              • Re: Uncertain about Retirement
                winter
                I did not know that members of TIA/CREF could have a Roth IRA.  I have an SRA to increase my retirement benefits, but would like to save more for retirement that won't be taxed.
                  I plan to retire in two years.  Anyone have any tips to help the process flow.
                   Winter
                 
                  • Re: Uncertain about Retirement
                    JerryD
                    Call your HR rep or call the TIAA-CREF 800 number. I have had a Roth IRA at T-C for years, mostly due to transfers from other brokers. I have also been converting as much as we can afford from our T-C IRA's -> Roth's and paying the taxes in order to permanently shelter these funds from taxes in the future. These Roth's will become emergency funds and for any unexpected large purchases/costs without tax consequences. They will also pass to future generations tax-free and grow over their life expectancies.
                    • Re: Uncertain about Retirement
                      BATC
                      Save in the roth for the pocket monies that you will need when you retire.   After 5 years of saving there, you can withdraw and not be taxed.   I have very little there and probably need to put more in, but feel good about no taxes.    I am saving poor, so I feel buting in a set about, (25 - 50) a month and see it grow will help depending on what you want to invest.    Also know that the government will allow you to put so much in and lower your taxable income.   Good look,
                        • Re: Uncertain about Retirement
                          JerryD
                          I went through a few temp jobs with low pay but I took all of that income and placed it equally into a Roth for both my spouse and me. I also looked for any opportunities where my tax deductions exceeded my income and used that tax deduction to offset the taxes on converting an IRA to a Roth.
                           
                          Where there's a will there's a way.
                            • Re: Uncertain about Retirement
                              BATC
                              JerryD
                               
                              I work a second job for two reasons, not enough income, a sick husband and need more for expenses.   As of this year, they have lowered my alloted time for working where I had stated to live and play catch up with the second income.  Now a no go.    
                               
                              I work one day a week and that keeps gas and lunch monies in my pocket.    I get paid once a month and it is unbelievable how extra bills can collect in my budget or miscellaneous.   I do save in TIAA CREF, but need to find another means, like yourself to offset the taxes.    Right  now, as I have stated so many times, I am saving poor.   But I know it will be to my advantage when I decide to not work.
                               
                              Think I will try to cut some other things and see if I can't contribute the second job monies to the ROTH and see if that helps.   Never thought of that.  Good suggestion.
                          • Re: Uncertain about Retirement
                            smaneck
                            winter said...
                            I did not know that members of TIA/CREF could have a Roth IRA.  I have an SRA to increase my retirement benefits, but would like to save more for retirement that won\'t be taxed.
                              I plan to retire in two years.  Anyone have any tips to help the process flow.
                               Winter
                             
                            Yes, in most cases you can. If you are over 50 you can contribute 6K for 2012 and 6.5K for 2013. TIAA-CREF has Traditional, Roth, and SEP IRAs as well as SRAs. You can contribute up to about 17K in an SRA and if you do consulting work on the side (as I do) you can put about 20% of your self-employment income in a SEP IRA. 
                          • Re: Uncertain about Retirement
                            taconner
                            I'm almost 66 & my wife & have sufficient funds to retire but we're still taking care of an elderly parent, 88, & have one child, 27, living at home who may never be able to move out on her own. Consequently, am not anxious to retire until things are more settled. My wife, 64, is likely going to retire next year on her birthday but I will continue to work at least a few more years & see where we're at. We really want to travel & see the world & are concerned if we wait too long we may not be able to. Currently our health is fine but I certainly noticed that my energy levels tend to deplete as we age. Both my wife & I actively work out five or six days a week but recently we find our recovery from a hard workout takes a bit longer. Currently I have a well paying job & am concerned that once I exit the workforce it will be difficult to get any type of job other than low paying. So I remain uncertain about retirement also.
                              • Re: Uncertain about Retirement
                                smaneck
                                taconner said...
                                I\'m almost 66 & my wife & have sufficient funds to retire but we\'re still taking care of an elderly parent, 88, & have one child, 27, living at home who may never be able to move out on her own. Consequently, am not anxious to retire until things are more settled. My wife, 64, is likely going to retire next year on her birthday but I will continue to work at least a few more years & see where we\'re at. We really want to travel & see the world & are concerned if we wait too long we may not be able to. Currently our health is fine but I certainly noticed that my energy levels tend to deplete as we age. Both my wife & I actively work out five or six days a week but recently we find our recovery from a hard workout takes a bit longer. Currently I have a well paying job & am concerned that once I exit the workforce it will be difficult to get any type of job other than low paying. So I remain uncertain about retirement also.
                                 Something you might consider doing when your wife retires is for you to apply for Social Security (presuming you have reached full retirement age) and then suspend payments. Then have your wife collect Social Security as your spouse. This will in noway negatively impact the amount of Social Security you will be able to collect if you decide to work until you are 70. Her own Social Security, on the other hand will continue to build at about 8% a year. When she turns 70 if her own Social Security benefit is higher than what she will receive as your spouse she can begin collecting it under her own name. I know it sounds like a scam, but it works.