There's a good possibility that Social Security and Medicare

[NaMeaHou]

will be wiped out within 25 years.

I have a question for economic/financial folks out here.

If a person started saving now at age 20 for retirement, how much would they need to put away monthly to likely have enough to live on comfortably in their elder years?

Same question if they are starting now to save at age 40.

Let's assume the tax cuts are made permanent, and the resultant damage to the economy affects interest rates as you believe they would over time.

A commentary to peruse if you choose:

http://sierp.tc.pl/wlodek/social-s.htm

[wyldwolf]

1. I think there is a calculator for this on motley fools website..

[ScotTissue]

2. Same answer in every situation, year, millenia

Save as much as you can for yourself and your loved ones.

I am 32 years old and not a huge earner but have never for a second thought that I will receive the Social Security moneys and other benefits that my parents and grandparents received.

IT DOESN'T PAY TO RELY ON PROMISES!

So I save as much as possible: max contribution to 401(k) which fortunately my small business employer allows, one hundred dollars on top of that per pay period to a Roth, and a pickle jar full of cash in the kitchen which every time it fills up I put in money market and bonds.

Got a kid on the way--there are nice savings incentives for education, which I plan to take advantage of.

NEVER THINK ANYONE ELSE HAS YOUR BACK.

[SoCalDem]

3. The problem with "self financed" retirement is this..

There will come a time when you want to buy a house, pay for college, pay medical expenses, buy a car, etc etc etc...and if you are of modest means, it's difficult to save a LOT of money, so "dipping into the stash" is easy, and once you do it, it gets easier and easier..

The beauty of SS is that you do NOT have access at all until you reach 65.. It's a pact from one generation to another.. We will care for YOU now,and the ones after us will care for us, and so on , and so on..

When you save your own money, ONE serious illness can wipe you out, and then what do you do ???

[genius]

4. Not if Dennis becomes President.

We need a Democrat with courage who won't go along with right-wing Social Security cuts because he thinks they are popular.

[Mikimouse]

5. Retirement? Bwhahahahahaha

We gave up any notion of retirement a long time ago. Neither of us has ever been in a secure emough position to open an IRA, or any other type of retirement account, though my wife does have an annuity in Canada. Unfortunately, two things have happened with it: 1) we have lost a considerable amount of the annuity because of the economy here (the investments are in American companies), and 2) the holders of the annuity have recently moved the maturation date up by about 15 years (so we will be lucky to live that long). Snark!

[NaMeaHou]

6. How do they move the maturation date up?

Who does it take to approve it?

[Mikimouse]

9. Beats the heck outta me

All I know is that her broker sent us the renewal last year (after we had paid to lock it at a certain level- thank goodness we did that when we did-Clinton's last year in office). Anyway, she had been anticipating using it to pay for some land in our retirement, and it isn't going to happen. Before she signed the renewal, she called her broker (her cousin, who is trustworthy) and he said that the holding company did the same thing to everyone that year. We appealed, but to no avail, so we're stuck with it. Oh well, I alwasy have my social security (ROFLMAO). I have been paying into SS since age thirteen, soif the program survives *, we will have something. And the grandchildren will go to college, so all is not lost.

[rasputin1952]

7. One of the planks of the GOP...

is to disable, then destroy SS and Medicae. I have no idea WHY they want to do this, but it has been part of their thinking for quite some time.

Bottom line, SS will not fail. Once someone is in that can actually start the economic ball rolling again, things will get set straight.

One of the reasonsSS is going insolvent, is because they keep taking out of the system to cover their butts on other things. If they left the SS ACct $ alone, we'd be sitting good for 100 years.

:kick:

[whathappened]

8. yes these robber barrons

have had there fingers in the cookie jar so long , they think it is there's to spend , down with all of them and we will start fresh with a new bunch who no's what the s.s. and medicare fund is for

[VOX]

13. And that's the "lockbox" idea that Gore was crucified over!!

Keep the damn Republican mitts *off* Social Security and Medicare!!!

:kick:

[Yupster]

10. Let me get my future value calculator

Let's see, the key variable is interest rate. It makes a huge difference.

So, let's get a few examples.

In all these examples, you save $ 100 per month for 45 years.

Example A -- money in cd's earning 4 % per year...
$ 151,044.68

Example B --a money in diversified mutual funds earning 7 % per year
$ 366,902.12

Example C -- money in stock market earning 10 % per year
$ 948,954.38

* For simplicity sake, I made it an annual purchase of $ 1,200 per year rather than 12 monthly purchases of $ 100 per year. That depressed results, but only slightly.

[NaMeaHou]

11. Thanks for putting the effort into that!

I wonder now what 150,000 in 45 years would be worth with some kind of realistic interest rate (I know, it's a fantasy - we can't look two years down the road, much less 45), but it would give some kind of sense of the value of the savings.

How long before the *co get rid of the FDIC? Hey! We don't need the government guaranteeing our savings! That's downright socialist!

[quaker bill]

12. Based on the notion

That the stock market will make 10% a year on average. (a bit high)

Also based on the notion that market values won't go from an index of say 5000 to 1600 the year you happen to want to retire. That would be a big oops.

[Clete]

14. It wouldn't matter what you saved if you didn't

start life with a rich inheritance. The money you save today won't have the same value forty years from now. An era of rampant inflation could devalue your savings into worthless crap. A family crisis or disease could wipe our years of savings. Even if you invest for growth, one more Republican Administration will cut your nest egg down from 30% to 50%, like has happened to many of us since Bush took office.

Social Security is collected and paid in today's dollars. So all the money you pay into social security won't be enough for your retirement, however, when you retire, you too will receive benefits in the dollars of that future date. So if you pay maximum Social Security right, which would be 15% of $80,000 per year (split between you and your employer) you would pay $12,000, which is an average benefit for one old geezer per year. Most likely you have a grandparent who is collecting social security, so you are essentially paying for his retirement.

This doesn't mean you shouldn't save too. This is what tax deferred IRAs and 401Ks are for. Investing in a home is also a good move, but never give up your Social Security and never let it be privitized.