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Thread: Why I don't believe in saving for retirement

  1. #1

    Why I don't believe in saving for retirement

    I guess I was a little bored this afternoon and thinking about retirement. I'm still in my mid 30s and just starting my post-SCI career (after 9 years and a lot of schooling). I got some retirement info in the mail, and leafed through it briefly before chucking it in the trash. I just really don't believe in it, I have zero faith that if I save money for thirty years somewhere that money will still exist.

    I used to think this mindset was due to coming of age around the time of the financial crisis of 2007/2008. Had I gone straight to college I would have graduated in 2006, but I was busy working at the time instead of going to school. Lots of my peers who did go to school graduated just in time to find that they couldn't find a job other than waitressing or retail, despite the very expensive diplomas they are still paying off. If the financial crisis taught us anything it was that random chance (or perhaps more like random greed?) could wipe out any savings you have, no matter what it is (stocks, commodities, retirement funds, houses).

    But today I got to thinking that my experience with an SCI probably plays a big role in my lack of belief that saving money will do me any good at all in the future. I was 24 when I was injured and (for a 24 year old) had saved a decent amount of money. Poof it was all gone by the time I got out of the hospital and I was on medicaid all through the rest of undergrad and graduate school until I could get a better job. Looking back it wouldn't have mattered if I had $1.00 in savings or $100,000 or $500,000 it would have just disappeared slower and I would still have ended up on medicaid (despite having health insurance I purchased for myself at the time of my accident). Maybe the experience of inevitable destitution a decade ago makes me feel like it could happen at any time. And I figure it will probably happen again if I am lucky enough to get old enough that my body starts breaking down... so what's the point? Unless I die mercifully in a freak parasailing accident or get eaten by a vicious hippopotamus I can't see a future where I don't end up dead broke again, on medicaid and medicare (if such things exist several decades down the road).

    It's not that I spend my paycheck on hookers and blow every Friday, it's just that if you give me the option of putting money in a special account I can avoid taxes on if I don't take it out for decades and decades vs taxing the money now and putting it in my bank account, I will take the money now every time. I just don't believe it will be there in the future, best case scenario i will have to take it out early and it will get taxes anyway, so give it to me now. And despite the fact that I have a pretty decent paying job at this point with much more income potential in the future, I could definitely see myself saving a little chunk of money and then quitting and blowing it all on a trip around the world while I'm still reasonably healthy.... in fact that's one of my main goals in life.

    Anyway, to those of you who bothered to read my rant, am I all alone out here? Does anyone else think the same way or are all of you going to be laughing all the way to the bank when you turn 67 and drive past me on the way to your new condo in Orlando while I'm sleeping on the side of the road?

  2. #2
    It is understandable that you feel the way you do, because you lived the horrors of spending down to be covered by Medicaid. I've not had to live through that experience. I was injured at age 37, had a good job and very good medical and disability insurances and a pension plan. I continued to work through my time in rehab and after for about 20 years. I saved and invested and continue to save while my income comes from Social Security and my pension. I'm a senior on Medicare. I've been lucky and live a comfortable life.

    I admire your motivation and determination to get an education and find a job that gives you the wear with all to care for yourself.

    It is from that perspective that the only thing I can say to you is that is a lot more difficult to live under a bridge or by the side of the road, live rough, when you are old, disabled, and in pain. For me it is the difference in being able to decide how I want to live rather than having Medicaid fund a dreary room in a care facility. Is there risk in saving and investing, of course. Is it worth the risk? I think so.

    PS: Just in case, I thought I should mention, I'm not trying to gore your ox. And since I've used that phrase before and have been slammed, I mean, I'm not trying to goad or intentionally trying to piss you off.
    Last edited by gjnl; 01-04-2017 at 05:08 PM.

  3. #3
    Senior Member lynnifer's Avatar
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    I was not ready to stop working at age 40 (paralyzed at 12, started working at age 19 after a year off from moving away from the family farm). No family support - always on my own.

    I did not save enough for the unexpected complications from chronic paralysis. Still have a mortgage as well. Will need a new vehicle soon. No dependents .. but still not enough. Going back to work soon.
    Make America Sane Again. lol

    T-11 Flaccid Paraplegic due to TM July 1985 @ age 12

  4. #4
    Chopped up your post to answer more pointedly. You still have a sense of humor and some serious drive to have gone thru school and secured gainful employment. Sounds like patience is a little short. You are not alone! No I wouldn't laugh at you on the side of the road...I'd ask if you wanted a ride and then hit you up for some gas money

    Quote Originally Posted by funklab View Post
    If the financial crisis taught us anything it was that random chance (or perhaps more like random greed?) could wipe out any savings you have, no matter what it is (stocks, commodities, retirement funds, houses).
    If the financial crisis taught us one thing it is that each of us should take responsibility for our financial future as much as we are able.

    Quote Originally Posted by funklab View Post
    Maybe the experience of inevitable destitution a decade ago makes me feel like it could happen at any time. And I figure it will probably happen again if I am lucky enough to get old enough that my body starts breaking down... so what's the point?
    Can not tell you how deflated I was when my entire 401k (all in Centurylink company stock) disappeared in the dot com crash, and then another hit in 2007/2008 but not as devastating. I learned the hard way to diversify.

    I can't see a future where I don't end up dead broke again, on medicaid and medicare.
    You are right about one thing. You can not see the future. Whatever you think it will look like I guarantee...it will be different from what you envision.

    It's not that I spend my paycheck on hookers and blow every Friday
    Next time you do pls invite me over!

    if you give me the option of putting money in a special account I can avoid taxes on if I don't take it out for decades and decades vs taxing the money now and putting it in my bank account, I will take the money now every time.
    Sticking your moo la in a tax free special account is not the answer. But it is part of the answer. Here are some things I never imagined...I would own a home and it appreciated in value, that my old man would leave me a chunk of change when he passed, that my employer would allow me to buy stock at a reduced price, that some stocks will do well and reward the owner. Alone none of these are very impressive. But added together it is a different story. Your special tax free account (which is probably earning income depending how you direct it) will increase more in the last years of ownership.

    I just don't believe it will be there in the future, best case scenario i will have to take it out early and it will get taxes anyway, so give it to me now. And despite the fact that I have a pretty decent paying job at this point with much more income potential in the future, I could definitely see myself saving a little chunk of money and then quitting and blowing it all on a trip around the world while I'm still reasonably healthy.... in fact that's one of my main goals in life.
    One thing that helped me was to be unemotional. I looked at everything as a percentage. How much do you value traveling around the world? Do you think about it 20% of the time, then save 20% of whatever you earn toward that purpose alone. How much do you value a decent roof over your head...assign a percentage to it. That is how much you should spend on rent. What percent of your time is spent thinking about affording retirement...save that percentage of whatever you earn towards retirement. And yes you need to be disciplined enough not to withdraw early. This helped me enjoy my life more then and now, I stopped worrying and thinking about money all the time and just executed my plan every month.

    Don't mean to sound preachy. Good Luck to you!
    "Never turn your back on fear. It should always be in front of you, like a thing that might have to be killed." - Hunter Thompson
    T5/6 complete

  5. #5
    When I started a new job I also tossed out the papers describing the retirement accounts available. I needed every penny especially for my transportation needs. A few years later I had an accountant help me with tax return. He practically pounded the table, telling me I should be in the great employer-offered retirement savings plan. (it was not company stock). By then I was doing ok with bills so I decided to get into the plan at the maximum rate of 25% of my salary. Hubby did the same thing when he first started his position. Now we are retired, and I'm ever grateful for that accountant's advice.

  6. #6
    Quote Originally Posted by triumph View Post
    When I started a new job I also tossed out the papers describing the retirement accounts available. I needed every penny especially for my transportation needs. A few years later I had an accountant help me with tax return. He practically pounded the table, telling me I should be in the great employer-offered retirement savings plan. (it was not company stock). By then I was doing ok with bills so I decided to get into the plan at the maximum rate of 25% of my salary. Hubby did the same thing when he first started his position. Now we are retired, and I'm ever grateful for that accountant's advice.
    Many employee retirement savings plans offer some kind of company contribution for every dollar you invest. That is just free money that you can't pass on.

  7. #7
    I was injured when I was 25 and am now mid-30's like you. And like you I spent a lot on hospital bills. My insurance did have a catastrophic injury clause in it, one of which was SCI, so I didn't have to bankrupt myself completely. The three story townhome I was living in was no longer accessible and in 2008 the market was shit so I rented it out and got a new single floor home. A year before, when my friend moved out it was appraised about $10k higher than what I paid. Should have sold then.

    I don't blame you for thinking the way you do, I would/did too. But I met someone and got married along the way and now I put into my 401 for her in case something happens to me. Is looking forward to 30 more years in a chair before I can retire depressing? Of course it is. But I feel better about the future knowing at least something is in the bank somewhere. I think if I was single I wouldn't mind blowing that money. You earned it so enjoy it. But one day I'd like to think I can sip a Corona near the ocean somewhere and not have to go to work the next morning.

  8. #8
    Senior Member ZEN12many's Avatar
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    One of the reasons that it is important to save is to learn to live on less than 100% of your income. When you retire, even with a pension, you probably will retire with 75% more or less (could be lots less) of your income when you retire. The easiest way to start saving is to put $50 a month, $100 a month, whatever you can afford to save, away each month. When you get a raise, allow yourself one full paycheck, to see how much net increase you get. Then increase your savings by your net increase. You already are living on your income, so when you get a raise, stick it into savings, and continue to live the "level" of your current life.

    Re where to save the money. If you put it in a savings account that you have easy access to, then I really doubt you will save up any money and I doubt you will learn to live on less than 100% of your income.
    TM 2004 T12 incomplete

  9. #9
    Quote Originally Posted by ZEN12many View Post
    One of the reasons that it is important to save is to learn to live on less than 100% of your income. When you retire, even with a pension, you probably will retire with 75% more or less (could be lots less) of your income when you retire. The easiest way to start saving is to put $50 a month, $100 a month, whatever you can afford to save, away each month. When you get a raise, allow yourself one full paycheck, to see how much net increase you get. Then increase your savings by your net increase. You already are living on your income, so when you get a raise, stick it into savings, and continue to live the "level" of your current life.

    Re where to save the money. If you put it in a savings account that you have easy access to, then I really doubt you will save up any money and I doubt you will learn to live on less than 100% of your income.
    I always live on less than 100% of my income, and I save a lot. I just don't put it in 401k, etc that you get punished for tapping early because those are invested in stocks (or whatever type of fund) and I feel the odds of both me being alive at 65 (or whatever age you can access them) and the funds actually still being there are pretty low. And I'm definitely not saving for retirement, because idk what that is, so you're probably right the end result is I'm not gonna save anything for retirement, I'll probably blow it somewhere along the line (but hopefully in spectacular fashion).

    Also, being in my mid 30s I can't think of a single person my age (with the exception of a couple who have been in the military) who have a pension in their future. Is that a thing anymore??? I'm pretty sure it's not unless you're some sort of government employee.

    If there was such a thing as savings accounts I'd probably have my money in one. Even in my early 20s, the interest rates on CDs were like 5-6% and you didn't have to make more than a 9 or 12 months commitment. Rates haven't been like that since my SCI almost a decade ago. As it is I have my money in a checking account earning no interest as opposed to a savings account earning 0.03% or a CD earning 0.05% (I just looked up the rates at my bank, Wells Fargo).

    Also, what reinforced my feelings on this subject is the content of the retirement fund info they sent me. In my first 6 months of employment my retirement fund (that which I couldn't opt out of) has earned me a whopping negative 0.7%. I can do better than that by stuffing cash in my mattress.

  10. #10
    Senior Member Vintage's Avatar
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    Hi funklab. Me...no matter how much I might have saved, it would have been gone now anyway, due to the kind of accident I had. (I was the half-million dollar baby.) Like gjnl said, "...having Medicaid fund a dreary room in a care facility",... yep. That was exactly me. And getting out of there was like fighting quicksand. Now that I'm home, just cooking, keeping myself cleaned up, and coping with the pain is my full-time job. I watch Rick Steves travel shows with a slight bittersweetness. When the reality of my financial poverty closes in on me, I optimistically imagine myself finding a way to make money. What's the saying? Hope springs eternal...
    Last edited by Vintage; 01-08-2017 at 03:39 AM.
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