# One million dollars needed for retirement?! **URL:** \ **Category:** In My Humble Opinion\ **Created:** [April 21, 2024, 8:36pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593 "2024-04-21T20:36:17Z")\ **Posts on this page:** 20\ **Page:** 12
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [May 17, 2024, 8:29am UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/221 "2024-05-17T08:29:56Z")
One reason lower paid workers don’t save in 401(k)'s is because they’re so stretched day-to-day. If you’re homeless _today_ how do you put aside anything for a hypothetical retirement decades away? Below a certain income level saving for long-term goals is pretty much impossible. ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [May 17, 2024, 12:04pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/222 "2024-05-17T12:04:50Z")
> [@Broomstick](#): > > If you’re homeless _today_ how do you put aside anything for a hypothetical retirement decades away? Someone scraping by for basic needs certainly isn’t going to be able to. But I do wish more people were aware of the Saver’s Credit. A single head of household with an AGI less than $32,625 gets a 50% tax credit on retirement savings up to $1000. It’s not much, but it’s a start. ---
**Author:** ![puzzlegal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puzzlegal/32/3827_2.png) [@puzzlegal](https://boards.straightdope.com/u/puzzlegal)\ **Post date:** [May 17, 2024, 12:53pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/223 "2024-05-17T12:53:41Z")
> [@Dewey\_Finn](#): > > Why would one of those financial planners tell anyone they’ve saved enough? It’s not in their interest to do so. I don’t know how their compensation is related to their advice, but i know an awful lot of people who’ve been told by a financial planner that they’ve saved enough to retire ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [May 17, 2024, 1:02pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/224 "2024-05-17T13:02:22Z")
At that point, their role switches to helping the client manage their account and not run out of money. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [May 17, 2024, 4:26pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/225 "2024-05-17T16:26:14Z")
Exactly (as I had also noted). Homeless or not, when you have to worry about paying routine bills, a nebulous retirement seems not worth worrying about. I’ve vented before about my daughter. She actually has some spare cash flow - she is living in a cheap town, and we are helping with the rent… but she Will Not Take The Step of asking at work about a 401(k), nor of adding money to an IRA. > [@Munch](#): > > But I do wish more people were aware of the Saver’s Credit. A single head of household with an AGI less than $32,625 gets a 50% tax credit on retirement savings up to $1000. It’s not much, but it’s a start. I may or may not have heard of that before - but my daughter would absolutely fall into that bucket. Is it a “refundable” credit? Her income is low enough that she doesn’t pay Federal taxes anyway, so if it’s not refundable, she won’t benefit (except, of course, by having money saved). eta: nope, looks like it’s non-refundable. Which, to me, means it’s nearly useless; how many people earning that little are paying much in taxes anyway? ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [May 17, 2024, 10:51pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/226 "2024-05-17T22:51:14Z")
> [@Munch](#): > > Someone scraping by for basic needs certainly isn’t going to be able to. But I do wish more people were aware of the Saver’s Credit. A single head of household with an AGI less than $32,625 gets a 50% tax credit on retirement savings up to $1000. It’s not much, but it’s a start. Someone making the Federal minimum wage - still $7.25/hour - is only making $15,080 a year. They aren’t making enough to owe taxes so a tax credit doesn’t do jack for them - except if they have a legit job taxes will be withheld, leaving them with even less in their pocket until they file a tax return. And that’s assuming they get a full 40 hours of work a week 52 weeks a year. A tax _credit_ is an effing joke under those circumstances. Even more so if that “head of household” has actual other people dependent on them. It’s not totally useless - I take advantage of it myself - but it’s _only_ useful on the upper end of the qualifying income range. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 18, 2024, 9:48am UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/227 "2024-05-18T09:48:10Z")
> In 2021, only 5.7% of taxpayers claimed the credit, with an average credit amount of $191. 🎉🥳 Apparently there’s some Saver’s Match in the works that I’d competent missed: > **[Federal Saver's Match Could Benefit Millions of Low- to Moderate-Income...](https://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2024/04/federal-savers-match-could-benefit-millions-of-low-to-moderate-income-americans)** > > In 2022, Congress passed a suite of retirement provisions commonly referred to as SECURE 2.0, which included a federal matching contribution for low- to moderate-income workers who contribute to a retirement savings account. Preliminary estimates... ---
**Author:** ![Humans](https://avatars.discourse-cdn.com/v4/letter/h/dfb087/32.png) [@Humans](https://boards.straightdope.com/u/Humans)\ **Post date:** [May 19, 2024, 3:38pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/228 "2024-05-19T15:38:24Z")
People have very different spending levels so the savings they need before they’re financially independent vary. If your monthly spend is $1k than a million is excessive, you could get by very safely with less than half that. You can get your monthly spend very low if you relocate outside the US, where a dollar gets you much more than it does in north america. ---
**Author:** ![enipla](https://avatars.discourse-cdn.com/v4/letter/e/54ee81/32.png) [@enipla](https://boards.straightdope.com/u/enipla)\ **Post date:** [May 19, 2024, 3:56pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/229 "2024-05-19T15:56:28Z")
Switching gears just a little bit. I have decided that I AM going to retire in about 18 months (I’ll be 65). And I have come into some more money from the sale of my mother’s house. It’s not a fabulous sum, but it’s not gonna hurt. We’ll be fine money wise. My wife might continue working for another year past my retirement. My deal is that my job changes so fast and furiously, that I’m finding it hard to keep up. And even at this point, I’m refusing to get involved in any big projects. They last for years, and even decades. So my question is - How do I find a good CFA (Certified Financial Advisor)? I’m thinking I’ll ask the tax person that handled my mothers estate. That’s ongoing, but she knows her stuff. Is that where I start? ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [May 19, 2024, 4:55pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/230 "2024-05-19T16:55:42Z")
> [@Voyager](#): > > > [@Mama\_Zappa](#): > > > > Of course with a 401(k), you have the HUGE problem of employees not always saving what they should. To me, THAT is the biggest flaw. If you have little disposable income anyway, it’s pretty hard to basically make 5-10% of that disappear (and far too many people take that money, with all the tax and penalty issues that entails, when they change jobs). > > Mandatory contributions would help to fix that. The amount they would put into a pension put into a 401(k), with the ability to match more, would help also. More financial education would help. But the fable of the ant and the grasshopper shows this is not a new problem. It also shows why privatizing social security would be a disaster. I’ve been getting links in my various social media feeds to articles saying the 401k may becoming “obsolete”. I don’t know if it’s just click-baity noise or something actual financial thought leaders are considering (FWIW, I work in a management consulting firm for banks, wealth management firms, and other financial services companies and it’s not something that I’ve seen on our radar as a real trend). In any event, it just seems like one more example for how our society hasn’t quite figured out the problem of most people eventually outliving their ability to make meaningful contributions to the economy: - Companies don’t want to take on the burden of pensions (and I don’t think many people want their economic futures tied to the same company their entire life) - People don’t have a lot of faith in the Government’s ability to maintain Social Security as a going concern. - A lot of people either lack the discipline or the ability to manage their own future retirement. - Global warming is reducing the number of ice flows we can put send old people out to sea on. What’s to be done? ---
**Author:** ![enipla](https://avatars.discourse-cdn.com/v4/letter/e/54ee81/32.png) [@enipla](https://boards.straightdope.com/u/enipla)\ **Post date:** [May 19, 2024, 5:53pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/231 "2024-05-19T17:53:04Z")
> [@msmith537](#): > > Companies don’t want to take on the burden of pensions And for the retiree, pensions come with their own minefields IMHO. Sure, it’s great, but if you haven’t saved as well… Pensions stay the same. The cost of living goes up. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [May 19, 2024, 6:10pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/232 "2024-05-19T18:10:09Z")
There are very few general statements you can make about pensions - both my pension and the pension system I previously belonged to provide a cost of living adjustment. Anyone who does have a pension should check ( if it matters to them). ---
**Author:** ![P-man](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/p-man/32/3606_2.png) [@P-man](https://boards.straightdope.com/u/P-man)\ **Post date:** [May 19, 2024, 8:36pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/233 "2024-05-19T20:36:52Z")
Same with mine. COLA won’t be enough to account for inflation, but hopefully with everything else it’ll be enough. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 19, 2024, 9:47pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/234 "2024-05-19T21:47:07Z")
> [@msmith537](#): > > In any event, it just seems like one more example for how our society hasn’t quite figured out the problem of most people eventually outliving their ability to make meaningful contributions to the economy: The real problem is that we stopped creating enough new people to take care of the expanding army of old people. We’ll have it even worse if we stop compensating for the low birth rate with younger immigrants. Good for the planet in the long run, really tough in the short run. ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [May 19, 2024, 9:51pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/235 "2024-05-19T21:51:01Z")
> [@Voyager](#): > > Good for the planet in the long run, really tough in the short run. Need to think long term. Low birth rates are awesome long term for resources management and climate change. Will also start to decrease the increases in housing costs which will help retirement. Full circle and all. ---
**Author:** ![chela](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chela/32/21582_2.png) [@chela](https://boards.straightdope.com/u/chela)\ **Post date:** [May 19, 2024, 11:26pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/236 "2024-05-19T23:26:30Z")
However globally the places where the birth rate is increasing is on Africa. Decreasing elsewhere. ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [May 20, 2024, 12:27am UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/237 "2024-05-20T00:27:07Z")
> [@enipla](#): > > Is that where I start? That’s a _great_ place to start. Decide what you want from the relationship, and form some questions from there that you’ll use to interview anyone you come across. Going the route of a CFA/CFP is excellent, because tax professionals are already working from a few-based structure, so you’re less likely to run into conflicts of interest. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [May 20, 2024, 9:23pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/238 "2024-05-20T21:23:45Z")
> [@doreen](#): > > There are very few general statements you can make about pensions - both my pension and the pension system I previously belonged to provide a cost of living adjustment. Anyone who does have a pension should check ( if it matters to them). For the most part, COLAs are not available from private sector pensions. I won’t say NONE do, but I’ve personally never heard of them. Certainly my “brand name pet food” defined benefit pension does not have one; my benefit from that will be exactly what they calculated when they discontinued it, 25ish years ago. In hindsight, if it had been an option, it would have been better to take it as a one-time distribution and roll it into an IRA. Though, I still work for a successor employer (the one that bought the consulting division), which apparently messes up the calculations - and it may not have been an option. I do know that I could have started taking that pension right then (50ish bucks a month, woohoo). I know that when I do retire, I could take it as a one-time distribution, and I suppose I could dump it into an IRA right then (to avoid paying taxes on the whole amount). I looked at my company’s most recent “pension” scheme (a defined contribution plan) and if I retire a year from now, it’ll yield a glorious 76 dollars a month!! That, I think, I will DEFINITELY dump into an IRA if I can. We had a call with our financial planner today. They swear we’re fine - obviously barring anything really catastrophic happening to the world economy. I don’t care what “they” say. I’m going into retirement screaming in pure terror. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [May 21, 2024, 10:26pm UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/239 "2024-05-21T22:26:41Z")
> [@What\_Exit](#): > > > [@Voyager](#): > > > > Good for the planet in the long run, really tough in the short run. > > Need to think long term. Low birth rates are awesome long term for resources management and climate change. Will also start to decrease the increases in housing costs which will help retirement. Full circle and all. It’s a bit of a tough sell to tell actual poor people now they have to stay poor so we can help some theoretical poor people in the not too distant future. ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [May 22, 2024, 12:38am UTC](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593/240 "2024-05-22T00:38:08Z")
Don’t think that has anything to do with my post. Less kids usually means less poor. Raising kids is expensive. [Previous page](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593.md?page=11) [Next page](https://boards.straightdope.com/t/one-million-dollars-needed-for-retirement/1000593.md?page=13)