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| Wednesday, June 07, 2006 |
| Retirement Bust |
USA Today has the article: Study: 43% not saving enough to retire well But the study probably understates the proportion of retirees at risk. Its projections assume that people retire at age 65, cash in on their home equity through a "reverse mortgage" and exchange their assets for a stream of income by buying an immediate annuity.
Yet many people retire before 65, according to the center, and don't necessarily buy immediate annuities or take out reverse mortgages. Nor does the research take in account the "wild card" of health care costs — and how these expenses will affect retirees' standards of living, says Alicia Munnell, director of the center at Boston College. If reverse mortgages or home equity play such a large role in Baby Boomer's ability to fund retirement - what does that mean for today's workers who are priced out of home ownership? Does the inability to buy a home really indicate a longer term inability to retire well? |
| posted by Boston Gal @ 8:28 AM *
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| 5 Comments: |
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Home ownership is at an all time high. Especially for minorities. I dont think todays workers are priced out of buying homes. Where I am at, just north of Indy, we have subdivisions poping up all over the place. In my town alone, we have tripled in size frown what our population was in 1990. These are all new homes with young families moving in.
I do not think it is very difficult for today's workers to buy a home as compared to prior generations.
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"But the study probably understates the proportion of retirees at risk.:
Sure, it does. I think the vast majority of people are at risk when it comes to retirement savings. Only a small percentage have set their retirement number and have a realistic plan in place to get to it.
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True FMF - I can't imagine what would happen to me if I did not focus on my eventual retirement financials...
Hi Mike,
I tend to forget that homeownership is much more achievable in other parts of the country. It was a struggle for me to purchase my home - but then I live in a very expensive region.
Perhaps this means just folks who live in expensive areas and remain renters will be penalized financially in retirement...
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"Perhaps this means just folks who live in expensive areas and remain renters will be penalized financially in retirement..."
Perhaps, Jane, but often more expensive areas also have higher-paying jobs. I live in a very affordable area, but the salaries are low here. I worry that if I don't move to a more expensive (and hopefully higher paying) area while I'm still relatively young, my home equity and especially my retirement nest egg will only be enough to allow me to stay where I am now, or even move somewhere even cheaper. Although where that would be I just don't know. Kansas, maybe?
But on the other hand, even if I lived somewhere with higher paying jobs, like oh, say, San Francisco, the cost of living would be so high I wouldn't be able to save as big a percentage of my income. So I'm probably better off staying here, continuing to earn very little, but saving proportionally more than I could elsewhere.
Sorry. Tangent. Your post just got me thinking.
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I live around Boston as well, but I plan to try to find a cheaper suburb like Marlborough or Malden. I believe that they will perform better than some of the premium locations like Weston and Wellesley. Then again, I can't afford those areas, so my options are limited.
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Home ownership is at an all time high. Especially for minorities. I dont think todays workers are priced out of buying homes. Where I am at, just north of Indy, we have subdivisions poping up all over the place. In my town alone, we have tripled in size frown what our population was in 1990. These are all new homes with young families moving in.
I do not think it is very difficult for today's workers to buy a home as compared to prior generations.