# Is saving for retirement a good idea? **URL:** \ **Category:** Great Debates\ **Created:** [August 15, 2010, 4:30pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335 "2010-08-15T16:30:56Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Superhal](https://avatars.discourse-cdn.com/v4/letter/s/b4bc9f/32.png) [@Superhal](https://boards.straightdope.com/u/Superhal)\ **Post date:** [August 16, 2010, 4:37am UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/21 "2010-08-16T04:37:06Z")
As **Hakuna** said above, it’s not just saving X, it’s getting interest on X over Y years that matters. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [August 16, 2010, 4:43am UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/22 "2010-08-16T04:43:11Z")
> [@Voyager](#): > > > [@Sam\_Stone](#): > > > > If the estate tax comes back, then if you die with money left over, 55% of it will go to the government. So don’t over-save. > > It is statements like this which make people think conservatives don’t know shit all about anything. > You don’t pay on the first $3.5 million dollars of the estate. [Cite](http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States). If you over-save to that level, it is reasonable to assume you can afford a tax planner. Yeah, you’re right. I knew that, but wasn’t thinking. Okay, don’t REALLY over-save. If you’ve got 4 million in the bank, treat yourself to a movie. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [August 16, 2010, 4:53am UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/23 "2010-08-16T04:53:28Z")
> [@Voyager](#): > > > [@Sam\_Stone](#): > > > > I’m with you, anyway. I don’t plan to retire. I plan to simply shift my work habits away from my current 9-5 job and into some form of self-employment and/or consulting work. > > Might work for you, but how many consultants do you see out there over 65? In my field, none. I fear that many people are going to fool themselves about consulting, and run into all the other newly retired people with the same idea. My wife is a freelance writer, and has built up a steady client list over a decade or two. It is not something you do right away. If I want to I can probably leverage on her client list, and I’ve got good clips for it. But I also wonder about how gung-ho people will be on working more after 40 years of labor. I hope at least some people have interests outside of work they can do - but maybe I’m wrong. Yeah, my situation is certainly unique. I have a number of sources of potential income that I’ve leaned on in the past - everything from freelance writing to web design to professional gambling. I have lots of interests, and I’ve found ways to make most of them pay me money, because I wasn’t rich and so I had to learn how to make money doing my hobbies if I wanted to be able to afford them at all. I agree that too many people think they’ll be able to just keep working as a consultant or part-time in low-stress jobs or whatever. And that works for some people, but for others their brains slow down too much, or they develop physical problems that prevent them from working, or they just discover that, at 70, what seemed like a good idea at age 40 now seems absolutely awful. Maybe I’ll just be tired all the time and want to sleep with a blanket over my lap. Another retirement option: Get an education that qualifies you for a job in an industry with a very good retirement system. Teacher, bus driver, nurse, engineer, any number of professional and semi-professional specialties and trades have organizations that provide very good retirement programs. Or, you could get a job with a large company that provides good retirement. My wife and I are doing all of the above. We both have pensions from our jobs, plus we save a certain amount of money, plus we have a home that is on an accelerated payment scheme so that it’s fully paid off several years before we retire. Between all these sources, we should be covered. ---
**Author:** ![panache45](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/panache45/32/64_2.png) [@panache45](https://boards.straightdope.com/u/panache45)\ **Post date:** [August 16, 2010, 6:17am UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/24 "2010-08-16T06:17:37Z")
For many people, their health problems increase exponentially with age. I’m 64, and have been in need of two knee surgeries and two cataract surgeries for quite some time. I’ve been putting them off, since I don’t have health insurance, and I’ll be getting Medicare on September 1st. Without Medicare it would be an extreme hardship to have to pay for these surgeries. Even with Medicare the deductibles and copays will be thousands of dollars. And don’t think that “Obama Care” is going to magically pay for everything. By the time you’re my age your cost will be a great deal higher. And so will every other expense in your life. Even paying for upkeep of your house and car and basic utilities can bankrupt you. So don’t think for a minute that you’ll retire into a way of life that has no expenses. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [August 16, 2010, 6:25am UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/25 "2010-08-16T06:25:54Z")
I love it when a financial plan comes together. ---
**Author:** ![LouisB](https://avatars.discourse-cdn.com/v4/letter/l/dfb087/32.png) [@LouisB](https://boards.straightdope.com/u/LouisB)\ **Post date:** [August 16, 2010, 10:23am UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/26 "2010-08-16T10:23:43Z")
> [@](#): > > Originally Posted by Sam Stone View Post > > I’m with you, anyway. I don’t plan to retire. I plan to simply shift my work habits away from my current 9-5 job and into some form of self-employment and/or consulting work. That was my plan and it was working until I was rear ended and had to have lower back surgery. I now have added a badly fractured femur and am, according to the surgeon, permanently disabled. I’m okay for day to day stuff, but I fear another accident or serious illness. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [August 16, 2010, 12:18pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/27 "2010-08-16T12:18:00Z")
If you’re a cop, you’ll get shot two days before retirement. They call it “retirony.” ---
**Author:** ![Sablicious](https://avatars.discourse-cdn.com/v4/letter/s/bbce88/32.png) [@Sablicious](https://boards.straightdope.com/u/Sablicious)\ **Post date:** [August 16, 2010, 12:22pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/28 "2010-08-16T12:22:46Z")
> [@Lakai](#): > > Is saving for retirement a good idea? **Translation:** Is waiting to live until when you’re 65 years old a good idea? ---
**Author:** ![Acid\_Lamp](https://avatars.discourse-cdn.com/v4/letter/a/d6d6ee/32.png) [@Acid\_Lamp](https://boards.straightdope.com/u/Acid_Lamp)\ **Post date:** [August 16, 2010, 12:58pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/29 "2010-08-16T12:58:40Z")
The question is overly broad and fails to ask two extremely key items. One: What is your current level of income, and Two: Do you have, or plan to have children? You should always put a little something away, even if its only 20.00 a month; it adds up over time and you’ll have some extra money to be comfortable with. If you have a level of income that is above minimum wage then you should be able to afford that without sacrificing much in your lifestyle. If your budget is SO tight that you cannot even afford that, then you shouldn’t bother saving. However, if you make an average salary and maintain an average lifestyle without children, there isn’t any reason NOT to save for your retirement. If you have kids, of course the whole ballgame changes. You’ll need a great deal more money to support them, to say nothing of perhaps saving to help with college. I do not come from the school of financial planning that insists that it’s your responsibility as a parent to pay for college; BUT I do think that you ought to at least consider your son or daughter’s financial futures when doing your planning. ---
**Author:** ![Acid\_Lamp](https://avatars.discourse-cdn.com/v4/letter/a/d6d6ee/32.png) [@Acid\_Lamp](https://boards.straightdope.com/u/Acid_Lamp)\ **Post date:** [August 16, 2010, 1:00pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/30 "2010-08-16T13:00:23Z")
> [@Sablicious](#): > > > [@Lakai](#): > > > > Is saving for retirement a good idea? > > **Translation:** Is waiting to live until when you’re 65 years old a good idea? No. The main reason why in my opinion is that a lot of those adventures help enrich your perspective on the world and broaden you as a person. That is something that is awful hard to start doing after 45 years of a 9-5 grind. ---
**Author:** ![sevenwood](https://avatars.discourse-cdn.com/v4/letter/s/6de8d8/32.png) [@sevenwood](https://boards.straightdope.com/u/sevenwood)\ **Post date:** [August 16, 2010, 1:02pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/31 "2010-08-16T13:02:14Z")
> [@Sablicious](#): > > > [@Lakai](#): > > > > Is saving for retirement a good idea? > > **Translation:** Is waiting to live until when you’re 65 years old a good idea? You know, when you’re 62 (like I am) having a good life at 65 (and 75, and 85…) doesn’t sound like that bad an idea… ---
**Author:** ![Mr\_Smashy](https://avatars.discourse-cdn.com/v4/letter/m/2bfe46/32.png) [@Mr\_Smashy](https://boards.straightdope.com/u/Mr_Smashy)\ **Post date:** [August 16, 2010, 2:09pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/32 "2010-08-16T14:09:55Z")
> [@Sam\_Stone](#): > > If you ask me, the retirement age for Social Security and Medicare purposes should be set to the average life expectancy - 5 years. If life expectancy goes up, the retirement age should go up. If you want to retire sooner than that, pay for it yourself. This. Or here’s what [Fox said about it](http://www.foxnews.com/politics/2010/08/11/longer-life-expectancy-straining-social-security-analysts-say/) > [@](#): > > When President Franklin D. Roosevelt signed Social Security into law in 1935, it was a lifeline to poor seniors and an easy promise to keep – the retirement age was 65 while life expectancy was 63, noted Rep. Paul Ryan, R-Wis., a member of President Obama’s fiscal commission. > [@](#): > > (In the 1950s) “The typical person claimed Social Security around age 68 and they could live to around age 76,” Biggs said. “So that’s around eight years of benefits they would collect. Today, the typical person claims Social Security at 62 but lives into their early or mid-80s.” ---
**Author:** ![Skammer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skammer/32/143_2.png) [@Skammer](https://boards.straightdope.com/u/Skammer)\ **Post date:** [August 16, 2010, 3:37pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/33 "2010-08-16T15:37:23Z")
If you’re not putting enough into your 401(k) to get the full company match (if your employer has one) you’re throwing money away. Also, you don’t have to wait until retirement. You can start withdrawing 401(k) money when you’re 59 1/2 without penalties. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [August 16, 2010, 4:12pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/34 "2010-08-16T16:12:57Z")
> [@Sam\_Stone](#): > > That’s a good point. Back when the retirement age was originally set at 65, the average life expectancy was something like 69 or 70. You weren’t expected to live a long time in a retirement. Only slightly true. The reason the average lifespan was a LOT lower was that a lot more people died a LOT younger. There were diseases of the elderly that killed people that we can cure - or extend lifespans - now, but our biggest gains in average lifespan have been in not having children die of measles and the like. If you made it to 65 in the 1930s your chances of making it to 80 weren’t that much lower than they are today. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [August 16, 2010, 4:37pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/35 "2010-08-16T16:37:01Z")
> [@Dangerosa](#): > > > [@Sam\_Stone](#): > > > > That’s a good point. Back when the retirement age was originally set at 65, the average life expectancy was something like 69 or 70. You weren’t expected to live a long time in a retirement. > > Only slightly true. The reason the average lifespan was a LOT lower was that a lot more people died a LOT younger. There were diseases of the elderly that killed people that we can cure - or extend lifespans - now, but our biggest gains in average lifespan have been in not having children die of measles and the like. If you made it to 65 in the 1930s your chances of making it to 80 weren’t that much lower than they are today. A VERY good point - and often overlooked. As noted, historically low life expectancy figures are skewed lower by the lack of things like vaccines and antibiotics in early life. > [@Superhal](#): > > As **Hakuna** said above, it’s not just saving X, it’s getting interest on X over Y years that matters. Don’t forget the effect of inflation Z on your spending needs. My parents retired 30 years ago with an income of $20K - today, the same spending power would require 53K (per CPI increase). Take that another 30 years for someone retiring today and you would need 140K. ---
**Author:** ![Hakuna\_Matata](https://avatars.discourse-cdn.com/v4/letter/h/a88e4f/32.png) [@Hakuna\_Matata](https://boards.straightdope.com/u/Hakuna_Matata)\ **Post date:** [August 16, 2010, 4:46pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/36 "2010-08-16T16:46:03Z")
> [@jasg](#): > > Don’t forget the effect of inflation Z on your spending needs. > > My parents retired 30 years ago with an income of $20K - today, the same spending power would require 53K (per CPI increase). Take that another 30 years for someone retiring today and you would need 140K. That is why I suggested the stock market as opposed to other vehicles for retirement. Stocks over time have traditionally returned 6-10% which hopefully outpaces inflation. Putting the money into a savings account will not do that, the money needs to be invested, not just saved. Of course nothing is guaranteed, but stocks have the best shot, then real estate in my opinion. If CD’s had a decent return you could ladder them, I have known people who do that, but I haven’t ever done it. Just need to find something that is acceptable to your level of risk and go from there. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [August 16, 2010, 4:47pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/37 "2010-08-16T16:47:50Z")
> [@Sam\_Stone](#): > > > [@Fear\_Itself](#): > > > > I intend to work until 75, then die and call that retirement. > > > > When did retirement come to mean an endless vacation? > > That’s a good point. Back when the retirement age was originally set at 65, the average life expectancy was something like 69 or 70. You weren’t expected to live a long time in a retirement. > > If you ask me, the retirement age for Social Security and Medicare purposes should be set to the average life expectancy - 5 years. If life expectancy goes up, the retirement age should go up. If you want to retire sooner than that, pay for it yourself. Expecting people to work for 30-40 years then spend another 20-30 years living off the public teat is a recipe for disaster. The need to provide huge retirement benefits also makes companies less competitive in world markets. Well, it sounds like a good idea in principle, but the net effect would be to shift the burden of caring for old people off the government and on to the private sector. I can’t imagine too many employers running out to hire a bunch of old people who cost an order of magnitude more to insure than twentysomethings and can’t use computers. OTOH, I think gradually upping the SS retirement age might be worth it. ---
**Author:** ![Uzi](https://avatars.discourse-cdn.com/v4/letter/u/91b2a8/32.png) [@Uzi](https://boards.straightdope.com/u/Uzi)\ **Post date:** [August 16, 2010, 4:52pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/38 "2010-08-16T16:52:37Z")
> [@Sam\_Stone](#): > > If you ask me, the retirement age for Social Security and Medicare purposes should be set to the average life expectancy - 5 years. If life expectancy goes up, the retirement age should go up. So, who is going to hire you if you are 70 years old? In some professions you can hang on, but many want you out the door sooner and aren’t going to hire you unless you are young. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [August 16, 2010, 5:37pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/39 "2010-08-16T17:37:13Z")
> [@Sam\_Stone](#): > > [That’s a good point. Back when the retirement age was originally set at 65, the average life expectancy was something like 69 or 70. You weren’t expected to live a long time in a retirement. That sounds closer to life expectancy at [birth](http://www.infoplease.com/ipa/A0005148.html#axzz0wn7jrtLK) - not at retirement age. According to this [chart](http://www.infoplease.com/ipa/A0005140.html#axzz0wn3DuJTc) shows that life expectancy at 60 has only increased about 4-6 years (depending on race) since the late 1930’s. It has increased from 75 to 81 for white males. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [August 16, 2010, 5:41pm UTC](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335/40 "2010-08-16T17:41:03Z")
> [@jasg](#): > > > [@Sam\_Stone](#): > > > > [That’s a good point. Back when the retirement age was originally set at 65, the average life expectancy was something like 69 or 70. You weren’t expected to live a long time in a retirement. > > That sounds closer to life expectancy at [birth](http://www.infoplease.com/ipa/A0005148.html#axzz0wn7jrtLK) - not at retirement age. > > According to this [chart](http://www.infoplease.com/ipa/A0005140.html#axzz0wn3DuJTc) shows that life expectancy at 60 has only increased about 4-6 years (depending on race) since the late 1930’s. It has increased from 75 to 81 for white males. And we’ve added four years to the retirement age. So we aren’t quite keeping pace, but it isn’t like we haven’t adjusted. [Previous page](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335.md?page=1) [Next page](https://boards.straightdope.com/t/is-saving-for-retirement-a-good-idea/550335.md?page=3)