Anyone feel like they're not "keeping up with the Jonses"?

[mrodgers]

I think it is great that some can "fully fund" their 401k & IRA. But I think for A LOT that is not possible . I know for me that would take over 50% of my annual income.

I fully expect to have to work after "retirement."

I don't even make enough to put 100% away and max out retirement after the government and everyone else takes their cut.

 

[mnrose]

Many people receive healthcare through their employer at a subsidized cost. DH and I pay about $500 a month for both of us, which is taken out of his paycheck in installments each week pre-tax. Of course, a family would pay more. This price seems to fall in line with what our families and friends pay through their employer. Its certainly not free, but its manageable. At age 65, people become eligible for Medicare which is essentially free, save for optional supplemental plans that provide additional coverage at a sometimes nominal cost, depending on the plan.

Could we save more for retirement if we didn't have this expense? Certainly, but that's not what we're working with in America. To your point, this is part of the reason why many Americans are in debt and/or don't have enough in savings. Things like healthcare, taxes, high costs of living, low wages all add up and take their toll.

Just so you know, Medicare is not free. It costs, this year, 135.50 per month per person, and (of course) it only covers a portion of your health care (significant co-payments) and not too much of your prescriptions....this is why people have the "supplemental" plans, which would at least double the monthly cost....in other words, for a couple, north of $500 a month. Many people wrongly assume that Medicare is "free" and think it covers a lot more than it does.

 

[Searc]

Just so you know, Medicare is not free. It costs, this year, 135.50 per month per person, and (of course) it only covers a portion of your health care (significant co-payments) and not too much of your prescriptions....this is why people have the "supplemental" plans, which would at least double the monthly cost....in other words, for a couple, north of $500 a month. Many people wrongly assume that Medicare is "free" and think it covers a lot more than it does.

You beat me to it before I could get back to that post.

 

[nkereina]

Just so you know, Medicare is not free. It costs, this year, 135.50 per month per person, and (of course) it only covers a portion of your health care (significant co-payments) and not too much of your prescriptions....this is why people have the "supplemental" plans, which would at least double the monthly cost....in other words, for a couple, north of $500 a month. Many people wrongly assume that Medicare is "free" and think it covers a lot more than it does.

Thanks for clarifying! Clearly I'm not 65 yet

But, I do know that my parents have supplemental plans that cost them each approximately $30 per month. They pay essentially nothing for prescriptions and doctors. I know there are much more expensive supplemental plans too, but overall, their coverage is better than mine and they are paying significantly less.

 

[disneychrista]

I don't even make enough to put 100% away and max out retirement after the government and everyone else takes their cut.

I assume by everybody you mean support you pay to your ex/children. It’s tough. I understand. I worked with a guy who was living in his car because 60% of his net pay went to child support. It’s tough to live off 40% of $16/hr.

 

[china mom]

.... For example, I just went to Costco for lunch and spent $2.10 on pizza and then I got bottle water for 25 cents.

Stop braggin', Big Spender. My Costco lunch is eating all the free samples. I bring an extra change of clothes and a hat so I can go around twice

 

[RamblingMad]

Stop braggin', Big Spender. My Costco lunch is eating all the free samples. I bring an extra change of clothes and a hat so I can go around twice

The samples aren’t that great during the week.

 

[mnrose]

Stop braggin', Big Spender. My Costco lunch is eating all the free samples. I bring an extra change of clothes and a hat so I can go around twice

They don't care. You can go around multiple times if you'd like. LOL. I don't use it as my lunch, but it sure seems that some people do.

 

[disykat]

What your describing is called Locus of Control.

When I talk about poor mindset, I’m talking about the feeling that the next dollar might not come. This leads to two potential behaviors. You either irrationally spend or save. Combine this with my grandma growing up during the depression, I irrationally save since I have a hard time spending. For example, I just went to Costco for lunch and spent $2.10 on pizza and then I got bottle water for 25 cents. I also buy my furniture at IKEA, or I get stuff at Goodwill. My big spend is outdoor stuff that I replace about once a decade. And I bought up all of the trail runners I need for the year when they were half off. When I go to Disney I stay off property and stick to DL. I’m in the top 2-3% income bracket before investment income. This is completely irrational behavior.

LOL! I'm not in the highest income bracket like you, but we are financially comfortable. My first thought was "why would you spend money on water?" To me, the behaviors you describe are normal. I get your point, but it made me giggle.

The only time I've ever had income issues was in my early 20's. I didn't consider myself poor, just normal. At that point it was considered normal to be a "starving student" and no one in my circle really thought anything about it. We just took on another roommate or two and added another part time job.

 

[RamblingMad]

LOL! I'm not in the highest income bracket like you, but we are financially comfortable. My first thought was "why would you spend money on water?" To me, the behaviors you describe are normal. I get your point, but it made me giggle.

I don’t drink soda.

I also have three camping trips planned. The cost of my camp site for all three trips is $40. I’ll spend more on food.

I’m just not good at spending money. My last splurge was an OLED to replace my decade old HD tv. I suck at consumerism. Spending is hard.

 

[Christine]

I don’t drink soda.

I also have three camping trips planned. The cost of my camp site for all three trips is $40. I’ll spend more on food.

I’m just not good at spending money. My last splurge was an OLED to replace my decade old HD tv. I suck at consumerism. Spending is hard.

But, honestly, you generally sound pretty happy with your choices and that's what matters.

 

[RamblingMad]

But, honestly, you generally sound pretty happy with your choices and that's what matters.

I’ve made a ton of mistakes. My last house was a nightmare. Super stressful.

 

[disykat]

I don’t drink soda.

Neither do I, water only, but I don't spend money for water unless I'm traveling and the water is questionable. Soda would be even MORE expensive!

My point is that I don't think it's that unusual to not like to spend money - I certainly feel that way.
However, I do budget for things that aren't necessities and easily spend budgeted money because I know I have a plan in place.

 

[barkley]

The only time I've ever had income issues was in my early 20's. I didn't consider myself poor, just normal. At that point it was considered normal to be a "starving student" and no one in my circle really thought anything about it. We just took on another roommate or two and added another part time job.

absolutely. i remember those days with fondness. i remember a big night out for some of us who were over 21 was hunting for all our spare change to hobble together enough for each of us to buy one of the cheapest drinks at the local mexican restaurant b/c they had a free appetizer bar set up during happy hour (we nursed that one drink each until we got our fill of food). that was 'eating out'. ramen and ragu were the most common things i recall from back then but like you said-add another roommate or a part time job and just keep pushing forward.

 

[Kitty 34]

Just so you know, Medicare is not free. It costs, this year, 135.50 per month per person, and (of course) it only covers a portion of your health care (significant co-payments) and not too much of your prescriptions....this is why people have the "supplemental" plans, which would at least double the monthly cost....in other words, for a couple, north of $500 a month. Many people wrongly assume that Medicare is "free" and think it covers a lot more than it does.

It's amazing what people don't know about the whole retirement "stuff". My younger sister (57) dropped her jaw on what us 65 year olds and beyond have to pay monthly for Medicare. She also didn't know that once she receives her Social Security checks and her DH they have to pay taxes on that amount unless it's a wayyy small amount.

 

[skyblue17]

Interesting thought. To me, being constantly worried about money feels functional. It's just part of being a grown up. There's a life balance for sure, but part of the balance is worrying about money. That's where having a budget pays off - you pre plan for that $20 and set an amount to spend on things that help you keep that balance between spending, paying off debt, and saving.

I don't think I explained myself well. What I mean is that sometimes, it's important to make financial choices for your well-being that might be at odds at what's best financially. It's okay to, now and then, say "I really shouldn't buy this, but I'd rather spend the money on it than be depressed that it's yet another thing out of my reach." That can be good for someone's self-worth, mood and general well-being. Within reason, of course.

I completely agree that worrying about money is part of functioning. Right before coming to respond to this post, I was paying a credit card bill and thinking ahead to how much might be available to put toward it next month. I've made a lot of progress with my credit card bill over the past year, but I still overthink my balance, even though it's reasonable and manageable. It's part of life.

I grew up poor and DH and I were the definition of poor when we got married. We are comfortable now and live well.

I will never not worry about money. It doesn't matter how much we have in our checkbook, savings, 401k or investments.

I don't think i will ever not worry about money either, I just also try to balance it with the importance of enjoying things as well. If you spend all your time saving for a rainy day, you miss out on enjoying the sun.

 

[NotUrsula]

An excellent point. Two higher earning people who can pool their SS checks to pay living expenses (rent, utilities, etc) can do ok on just SS. But a single person? Good luck with that. My MIL collects roughly 1200 a month in her SS. Her rent is $560 of that. She also pays something every month for Medicare, and her Medicare supplement plan. She has to insure her ancient car (a 1996 car), repairs for it, and her utilities (which average over $150 a month). She lives very frugally. Very. Market rate rent for the place she is living would be 900, plus utilities. You see the problem? A one bedroom apartment in our area would be very hard to find for less than $850-900. She would never make it on her check alone. And, even two people with $2500 would have a hard time when you are paying for TWO Medicare monthly fees (135 x 2) plus the Medicare supplement (at least the same as Medicare Part B) for two people. So rent, at 900, health care at another $540 a month (two people for both Part B and Supplement), and you've spent way more than 1/2 your income. A single person would NEVER make it. Two people who are relatively healthy *might* make it (because that $540 a month of course does not pay for all your medical care...you have OOP on top of that).

I'm not saying it is a valid presumption (in fact, I know it really isn't), but the presumption when it comes to living on SS income is that you don't pay rent; the presumption is that you own your home free & clear by that point in your life. We cleared our mortgage so long ago that I don't even remember offhand when it was, but I know it was before my youngest child was born. Of course, that means that we are trapped where we are; we cannot afford to take on a mortgage when we have college costs yet to bear. (And yes, we saved enough to pay tuition as long as they choose relatively lower-cost schools, but it is still roughly equivalent to supporting two households.)

Our house is tiny and very outdated by today's standards. I do wish it were a *bit* larger, but wishes ain't horses, so it isn't. We really don't want to spend money trying to enlarge it, because if we did, it would run too close to the property lines for comfort, anyway.

I always tell people my retirement plan is dying young, LOL.

 

[LSUmiss]

I'm not saying it is a valid presumption (in fact, I know it really isn't), but the presumption when it comes to living on SS income is that you don't pay rent; the presumption is that you own your home free & clear by that point in your life. We cleared our mortgage so long ago that I don't even remember offhand when it was, but I know it was before my youngest child was born. Of course, that means that we are trapped where we are; we cannot afford to take on a mortgage when we have college costs yet to bear. (And yes, we saved enough to pay tuition as long as they choose relatively lower-cost schools, but it is still roughly equivalent to supporting two households.)

Our house is tiny and very outdated by today's standards. I do wish it were a *bit* larger, but wishes ain't horses, so it isn't. We really don't want to spend money trying to enlarge it, because if we did, it would run too close to the property lines for comfort, anyway.

I always tell people my retirement plan is dying young, LOL.

Also in many areas paying off your mortgage doesn’t mean you’re “rent” free. The amount of homeowners, flood insurance, & taxes I pay in my area equals about 1/2 of my “mortgage” payment now & those continue to creep up yearly. So I’ll still be paying a good bit once my mortgage is paid off.

 

[disneychrista]

It's amazing what people don't know about the whole retirement "stuff".

My mom thought that everyone just got the same amount from SS. She had no idea that it was tied to her earnings.

 

[mnrose]

Also in many areas paying off your mortgage doesn’t mean you’re “rent” free. The amount of homeowners, flood insurance, & taxes I pay in my area equals about 1/2 of my “mortgage” payment now & those continue to creep up yearly. So I’ll still be paying a good bit once my mortgage is paid off.

I own my house free and clear. It still costs me $750 a month in property taxes and insurance. Which means living on a limited SS check would be impossible. In other parts of the country, property taxes are even higher. A house I used to own in NJ has property taxes close to $20K per year. And, it's not an extravagant house. Kind of a plain jane, everyone has one kind of home.