What retirement advice would you offer to younger people?

StarSong

StarSong

Awkward is my Superpower
Location
Los Angeles Suburbs
I'd strongly advise people in service industry or gig economy to declare their tips and income, meaning they should pay their taxes. So many seniors are barely scraping by on very low SS because a lot of their income came under the table.

Retirement will arrive before they know it.
 

When you are young and establishing relationships/family live cheap and save then buy a comfortable home in a good school system just before your kids start school.

Develop skills and interests that can be shared with friends and family use those skills to save money and create value while enjoying yourself.

Avoid consumer/credit card debt and pay as you go for most things other than a house.

Spend on the things that are important to your family and scrimp on the things that aren't.

Don't worry too much, enjoy your life and create some great memories to sustain you in your final years.
 
If at all possible, pay off your mortgage before you retire. For me it was the best thing we did, also if you have children once they leave the nest start seriously saving as much as you can.

Be careful with the credit cards, only charge what you can pay off at the end of the month. Paying interest is like throwing money away.
 
All of the above. Plus:

If what you're buying is for safety or important usage or for long term frequent use, buy the best you can afford.

If it is unimportant or a single-use item, buy the cheapest that will do the job.

Buy and use frequently a good electric tooth brush. Your retired teeth will appreciate it.
 
Understand the difference between a need & a want.

Understand that life & the world change about ever 10 years, be as ready as possible for whatever comes with the changes. Give examples of change.

Pay attention to what politicians promise.

Read about money management & investing. Compare your circumstances to what you learn.

Depend on yourself to live the best life you can.

As for advice from old folks. I remember the advice to work with the fattest person on any job. Not because they are lazy but because they will find the easiest way to get the job done. That rang true over the years working at different jobs.
 
I agree with the main points about saving early and investing. I would add that in order to save, you need to look at your overall lifestyle and how it affects your expenses. Therefore, make your own coffee, learn to cook and limit eating out, try to get as inexpensive rent as you can, drive an inexpensive auto, be an informed consumer, learn about cash back credit cards and dozens of other items that used together, can save you thousands a year.
 
retiredtraveler said:
I agree with the main points about saving early and investing. I would add that in order to save, you need to look at your overall lifestyle and how it affects your expenses. Therefore, make your own coffee, learn to cook and limit eating out, try to get as inexpensive rent as you can, drive an inexpensive auto, be an informed consumer, learn about cash back credit cards and dozens of other items that used together, can save you thousands a year.
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In short "be in survival mode". Another good way is have a rich loving son. Boy are we blessed!
 
1. Start saving at least 20% of your income as soon as you start working.
2. Once you build up an adequate emergency fund, start investing that 20% (if possible). Read financial and investment articles to educate yourself if you decide not to use a professional.
3. Even if your job offers a 401K, put some money into a Roth as well. Tax free withdrawals will come in handy down the line.
4. Aspire to be debt free by the time you retire.
5. Don't wait until you're too old to enjoy retirement to do it. And have some things lined up that you will love doing once you retire.
 
I may be wrong, but it sure seems like things today are way more complicated and apts (even old beat up ones if you could find them) cost more than in the old days relative to starting out pay for a lot of the younger generation. In our day rents were cheaper and it was easier to save money. Then you could buy an old "first" house that required major hacking and fix it up yourself. Then sell it and make money. You could drive an older car or take public transportation. Today the commutes would cross a cat's eyes!
 
Liberty said:
I may be wrong, but it sure seems like things today are way more complicated and apts (even old beat up ones if you could find them) cost more than in the old days relative to starting out pay for a lot of the younger generation. In our day rents were cheaper and it was easier to save money. Then you could buy an old "first" house that required major hacking and fix it up yourself. Then sell it and make money. You could drive an older car or take public transportation. Today the commutes would cross a cat's eyes!
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That's true but you have to look at the other side of the coin too, my first real job paid $3.60/hour gross.

IMO the only thing that has changed is the numbers.
 
Liberty said:
Maybe not:

https://www.cnbc.com/2017/06/21/lif...ive-for-you-than-it-was-for-your-parents.html
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The video reminded me of my stepfather, he believed that if you made $12,000.00/year and lived in a new $30,000.00 house you couldn't ask for anything more.

I still think kids today are just like we were when we were young.

If you can't afford to go to Harvard you go to a state school or a community college and if you can't afford a two-bedroom apartment you get a studio in a sketchy part of town, etc...

I feel the same way when I read the scary stories about the high cost of retirement.

We all need to bring our expenses into line with our income and do the best we can with what we've got.
 
Aunt Bea said:
The video reminded me of my stepfather, he believed that if you made $12,000.00/year and lived in a new $30,000.00 house you couldn't ask for anything more.

I still think kids today are just like we were when we were young.

If you can't afford to go to Harvard you go to a state school or a community college and if you can't afford a two-bedroom apartment you get a studio in a sketchy part of town, etc...

I feel the same way when I read the scary stories about the high cost of retirement.

We all need to bring our expenses into line with our income and do the best we can with what we've got.
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Sometimes I think those frightening retirement articles do more harm then good. If you thought you might be able to retire and read something like that - well, talk about feeling deflated...lol. Who can be prepared for everything!

Sometimes no matter how much money they may have, the so called "experts" will tell them its not enough. Then they may always have the retirement "poverty mentality" and not be able to even enjoy their golden years for fear of something bad happening.
 
Recognize that all retirements are different:
If you truly love your work, then your long term financial security is largely dependent on how long you work rather than how much you make.
Otherwise, marry wisely, save like the devil, invest smartly, hope for the best, and plan for the worst.
 
Liberty said:
Sometimes I think those frightening retirement articles do more harm then good. If you thought you might be able to retire and read something like that - well, talk about feeling deflated...lol. Who can be prepared for everything!

Sometimes no matter how much money they may have, the so called "experts" will tell them its not enough. Then they may always have the retirement "poverty mentality" and not be able to even enjoy their golden years for fear of something bad happening.
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Agreed, This article is so exaggerated that whatever truths lie within are easily lost. Back in 1980, I sure as heck didn't know anyone who could afford a 2 BR apartment on a 40 hour minimum wage paycheck. I made well over minimum and always needed roommates, even though rents were low in Los Angeles at that time. Roommates were the rule, not the exception.

In 1964 my parents sold their Long Island home for $32K and bought a home in NJ for the low $40s.

When hubby & I bought our house in 1985 (for $135K), our payments snagged far more than the idealized 1/3 share of our income. Everyone in our age group was in the same boat. We'd saved like crazy to put together the 20% down ($27K). No mean feat when our average COMBINED salaries came to an annual $26K (before taxes - I just checked our SS records so I know that the number is accurate).

The first few years we scrambled to afford the mortgage, because (surprise!) twins in addition to our two year old so I had to quit working or pay my full salary in daycare. Forget vacations, fancy restaurant dinners, etc. The thing is, we weren't doing anything special - EVERYONE did the same to buy their first homes.

I'm not saying it's easy for young adults to buy homes - far from it. However, it is more than possible for those who avoid crazy levels of student loan debt, go to community colleges and then public universities, and get degrees in fields that offer decent salaries (art history majors don't qualify). Then, like generations before them, they have to be willing to pay some serious scrimping and savings dues in order to get there.

I also notice this article skips over interest rates.
To compare apples to apples, I just did a comparison of a $400K 30 year mortgage at the going rate of 3.75%. Total $1891 per month.
Our $110K mortgage in 1985 at 13.25%? $1238 per month. That same $1238 in 2020 dollars? $2958.

Just sayin...
 
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Oh yes, sure do remember working multiple jobs to be able to afford things. Even in high school, worked after school and on weekends. Also remember posting the PHD job positions on the bulletin board at Case Western Reserve U. - at the time I was doing legal secretarial work and remember deciding to give up anthropological (earth science) studies as I made almost as much as these "Plenty, Heavy deep, profs" made. Couldn't afford it...lol.

But, now the college teachers - especially the Ivy league ones - make so much more money and have so many extra perks. Thinking we will be looking at more tech school educations that pay off in the future. After all, a lot of parents can't continue afford to pay these high tuitions.
 


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