Adult Children Are Costing Many Parents Their Retirement Savings (cbsnews.com) 570
pgmrdlm shares a report from CBS News: Half of American parents are unable to save as much as they'd like to for retirement, and their grown offspring -- whom they still count as dependents -- are to blame, according to a new Bankrate.com study. While they likely mean well, parents who support children into young adulthood often end up encumbered when they reach retirement age. They can inadvertently hamstring their kids, too.
Seventeen percent of the couples surveyed by Bankrate.com said that they sacrificed their own retirement savings by "a lot" to help their adult children. Another 34 percent said they'd "somewhat" sacrificed their savings plans. Not surprisingly, the lowest earners saved the least. Seventeen percent of couples making less than a combined $50,000 a year and have at least one child who is 18 or older said they were helping pay their adult children's bills but not setting aside any money for retirement. The study found a generational divide when it comes to perceptions of parents supporting adult children. "Millennials between the ages of 23 and 38 believe they should be supported for longer, and expect some expenses, like student loans, to be covered up to the age of 23," reports CBS News. "Baby boomers, meanwhile, think parents should wean children off their bank accounts sooner across almost every category of expense, including cell phone bills, car payments and travel costs." Millennials and baby boomers both agree that young adults by age 23 should be wholly response for bigger ticket expenses like health insurance.
Economic analyst Mark Hamrick says the 2008 financial crisis, Great Recession and lack of substantial wage growth are to blame for this dynamic. Changing societal norms also come in to play, as many young adults are "opting to pursue higher education, thereby delaying their entries into the workforce," the report says. "And by the time these degree-holders enter the workforce, they're saddled with student debt..."
Seventeen percent of the couples surveyed by Bankrate.com said that they sacrificed their own retirement savings by "a lot" to help their adult children. Another 34 percent said they'd "somewhat" sacrificed their savings plans. Not surprisingly, the lowest earners saved the least. Seventeen percent of couples making less than a combined $50,000 a year and have at least one child who is 18 or older said they were helping pay their adult children's bills but not setting aside any money for retirement. The study found a generational divide when it comes to perceptions of parents supporting adult children. "Millennials between the ages of 23 and 38 believe they should be supported for longer, and expect some expenses, like student loans, to be covered up to the age of 23," reports CBS News. "Baby boomers, meanwhile, think parents should wean children off their bank accounts sooner across almost every category of expense, including cell phone bills, car payments and travel costs." Millennials and baby boomers both agree that young adults by age 23 should be wholly response for bigger ticket expenses like health insurance.
Economic analyst Mark Hamrick says the 2008 financial crisis, Great Recession and lack of substantial wage growth are to blame for this dynamic. Changing societal norms also come in to play, as many young adults are "opting to pursue higher education, thereby delaying their entries into the workforce," the report says. "And by the time these degree-holders enter the workforce, they're saddled with student debt..."
Turnabout Is Fair Play (Score:5, Insightful)
What a coincidence. Our parents' generation is costing us the entire concept of retirement.
Job security, pensions, social security solvency...
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You should work more.
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See, complex problems often have simple solutions!
Re:Turnabout Is Fair Play (Score:5, Insightful)
decent paying jobs
Therein lies the rub. You want a job that's not too hard and pays very well. I took any fucking job I could get.
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No. I'm saying that if people have to take "any fucking job they can get" it will lead to social problems, like poverty and crime and a pension time-bomb.
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Re:Turnabout Is Fair Play (Score:4, Insightful)
Re:Turnabout Is Fair Play (Score:5, Insightful)
strawman
You misrepresented someone's argument to make it easier to attack.
By exaggerating, misrepresenting, or just completely fabricating someone's argument, it's much easier to present your own position as being reasonable, but this kind of dishonesty serves to undermine honest rational debate.
Example: After Will said that we should put more money into health and education, Warren responded by saying that he was surprised that Will hates our country so much that he wants to leave it defenceless by cutting military spending.
h/t Yourlogicalfallacyis.com
You should go there, it looks like you could REALLY use it. Unless, of course, your original intent wasn't to actually have a debate. In that case, you'd doing swell!
Re:Turnabout Is Fair Play (Score:5, Insightful)
Funny, for most of modern human history, people have been taking "any fucking job they can get"...and it hasn't caused the collapse of society.
They also had been leaving the house at earlier ages and when they reached adult age...they started taking care of themselves as an adult would.
Re:Turnabout Is Fair Play (Score:5, Insightful)
For most of modern human history there was a lot of social strife. Poverty, crime, war, revolution. It took a long time for unions and the law to find a balance that mostly avoided the worst of it.
Leaving home in your 20s was easier when most people didn't go to university, could earn a decent wage and buy an affordable house on it. My parents could buy a house on one fairly average salary. And rise two kids.
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This thing about kids living with their parents until WELL into their adult years is pretty recent.
We haven't seen this at any true level till maybe since the last decade.
Prior to that....most young adults not only did not want to live at home, they did NOT.
Geez, how does a guy these days get laid when he tells the girls he still lives with "mommy and daddy"?
Back in
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Hmm...well, when you talk about "fly over states", you're sounding a bit elitist...you think anyone that lives outside very dense urban centers like NYC or Los Angeles is fly over and really doesn't matter....soun
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Well, I'd say it has been slowing, steady improving as history has come along.
And that was accomplished to date by folks working, and doing whatever jobs they could get or do.
The best we can do, is try to give everyone as much opportunity as we can reasonably.....but that does not guarantee equal out come.
And by nature of the world, not everyone starts out on the same starting line, sad but that's just life.
Some people have to start
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Well, I'd say it has been slowing, steady improving as history has come along.
I'd say it peaked around the 50's or 60's. By the 70's wages stagnated and life has been getting worse ever since. For my entire life it has been shown that life is getting worse as college, housing, and medical costs have increased far faster than wages. Citation: https://www.pewresearch.org/fa... [pewresearch.org]
Re:Turnabout Is Fair Play (Score:5, Insightful)
decent paying jobs
Therein lies the rub. You want a job that's not too hard and pays very well. I took any fucking job I could get.
The RUB is that 'hard' is entirely subjective. Caring for multiple small children full time would be more than just hard for me, I'd end up insane...but I can solve complex technical or logical issues that many people can't even understand the premise. And so on...don't devalue someone's work just because it's easy for you.
Even within a field, 'hard work' is still so variable. Spend a long 8 or 9 hour day in back to back focus meetings with barely time to grab lunch from the table they set outside the conference room? Or spend 8 or 9 hours in the blazing sun laying several tons of paver stones after moving just as much dirt to level a patio? Or taking 50-60 customer orders an hour, every hour, for 8 hours with your mandated breaks only during convenient times during which your manager 'coaches' you about ways to improve your performance and lectures you about the one order you mixed up?
What's hard really?
Yes, the fewer people can do a job and/or the more requirements/training/skill it has the higher the pay should be ... but we've set the minimum at a level below livable which is nonsense.
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There have always been jobs that are not and have not been meant to make a living at.
This isn't a new thing.
A job pays what it is worth....some need to be done, but they are not worth enough for someone to make a living at, or support a family.
This isn't going to change.
IF you are in a job like that, say the proverbial burger flipper, you need to evaluate your current situation and realize you are not a teen with a part time jo
Re:Turnabout Is Fair Play (Score:5, Insightful)
No I did not say that.
I said that not every job is WORTH paying a living wage or enough for an adult to support himself or a family.
A weekend babysitting job for a few hours to go out for the parents is not worth $15-$20/hr.
But it is worth a bit less and a useful job. It is perfect for a teen to earn some extra money.
Hiring a kid to rake my lawn in the fall.....worth a "living wage" and benefits? No...but worth a few dollars for me to get my yard clean and worth it to him to get some extra spending money.
I would posit that simple burger flipping jobs and the like are in the same category.
There are jobs that need to be out there, for kids to work part time, to learn what it means to work...the value of money they earn, responsibility, etc.
There are and should be "training" jobs...stuff that needs to be done, but not something a grown adult should consider a career for supporting a family.
Re: Turnabout Is Fair Play (Score:5, Insightful)
Re: Turnabout Is Fair Play (Score:4, Informative)
When you have no skills[...] Our society needs a correction.
Yes, public education is horribly fucked; basic education is garbage, and higher education is unaffordable. Our society certainly does need a correction — it must embrace education.
Re: Turnabout Is Fair Play (Score:4, Interesting)
I can 100% say this is not true.
Any person (unless suffering from severe mental disabilities) can learn Math up to basic calculus - should they want to. Even those suffering from dyscalculi (though they will struggle a bit more). Learning calculus is no harder than driving a car. The difference is that math education today is so mind-numbingly boring most simply quit.
The trick is to motivate people, no more no less. :)
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if we want people to not have to work themselves into their graves
Funny, that's how the gov't proposes to keep Social Security solvent.
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It's not the older generation.
It's the ruling caste. Their policies and ideology.
Wealth is being transferred upwards at a relentless pace by laws and policies designed to achieve just that.
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Bullshit. It obvious that your parents spoiled you and instilled a false sense of entitlement. Those are all externalities, none of which are a birthright. Only you are responsible for you. Your comment amounts to "We're entitled to have our parents support us until someone else does."
Re:Turnabout Is Fair Play (Score:5, Insightful)
Your logic backs up mentil's complaint. If it's everyone for themselves then we should identify the people we need to take what we want from - our parent's generation. It's not entitlement, it's just the nature of the dog-eat-dog fuck-you-buddy-I-got-mine world your comment is premised on.
Re:Turnabout Is Fair Play (Score:5, Insightful)
and instilled a false sense of entitlement.
Seeing a generation before us live on social debt and having their politicians continuously screw the generation after kind of does make you feel like you're entitled to something more.
We see politicians who went to school for *free* (as in beer) decide that debt is too high and steadily increase school fees that didn't exist at all when they were in school.
We see politicians who retire at the ripe old age of 55-60 supporting amendments to raise retirement ages at steady intervals (with a grandfather clause, because you know why have a level playing field for the previous generation).
That was assuming you can get it at all now after all "defined benefits pensions" were a thing of the previous generation. These days it's up to you to put your money in the stock market and go to church on a Sunday to make sure that it doesn't all evaporate.
We see a constant wealth gap increase and housing getting ever more expensive while jobs get more and more concentrated in the more expensive places to live.
We see steady rising cost of transportation, steady inflation, everything is steady, except for protections like minimum wages, or social services.
You're right though. The previous generation definitely instilled a sense of entitlement. You're just wrong about how and why.
Don't fight among yourselves (Score:5, Insightful)
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Back in my day I paid for my university tuition working a summer job, all $500 of it.
Kids these days are just lazy.
Re:Turnabout Is Fair Play (Score:5, Insightful)
... all $500 of it.
That's the problem nowadays. Tuition pay and other essential costs (books etc.) can't be covered even with multiple months of full time labour earning a livable wage (not that minimum nonsense). Even in our country, where education is substantially subsidized, you can only study without a loan if you have a substantial financial backer. Parents that take care of you, for example (either you still live with them, or they pay part of your expenses). Two months of summer jobs isn't going to cut it.
And if it would, more youngsters would be willing to work straight out of college anyway. If they could get a proper wage and proper on-the-job education, than paid for education would only be needed if you have academic aspirations. But in this day and age, for most companies, education is an externalized cost bore in brunt by the prospective employees.
There are a few good, cheap schools (Score:5, Informative)
Many people go into debt paying for colleges that they can't afford. It's so easy to do.
There is also the option of seeking out an affordable school.
For example, I have a salary well into six figures after going to WGU, which costs $13,500-$18,000 or less, all-in. Final exams at WGU included the Cisco CNNA certification, a Microsoft certification, and other industry certs, so my income increased significantly before I even graduated.
(Cost after the $1,500/year tax credit).
For my masters, the number two top-ranked school for my field, cybersecurity, is Georgia Tech. Their online master's program will cost about $5,500, after the $1,200 tax credit.
So from no college to having a six figure income school cost about $14,000, add a master's degree from a top school for $5,500.
You can easily spend much more than that, just like you can spend $50,000 on a car. You don't have to spend $50,000 to get a car, and you shouldn't if you don't have $50,000 to spare. You can get a solid education without spending $50K, and if you can't afford $50k you probably shouldn't spend that much. Just like you wouldn't apend that much on a car.
Re:There are a few good, cheap schools (Score:4, Insightful)
Many people go into debt paying for colleges that they can't afford. It's so easy to do.
There is also the option of seeking out an affordable school. You can get a solid education without spending $50K, and if you can't afford $50k you probably shouldn't spend that much. Just like you wouldn't spend that much on a car.
I've had this conversation with all my kids. High schools should have a mandatory class on college costs, the implications of borrowing money to pay for it, and making sound financial decisions. The message should be: get the best education you can afford, with a cost that is commensurate with the ultimate benefit.
Unfortunately this "Buy what you need and can afford" often falls on deaf ears. People much prefer the "Buy whatever you want and someone else will pay for it" message.
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About half way through, the, why don't we have more arts and social science?
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Useless degrees are the problem When I started our degrees were free but spaces were limited and the government placed importance on what was needed Engineers Doctors Science etc. and places were limited to those who were the best based on scores that were weighted to courses you did advanced physics, Maths, Science bumped you up standard levels took your score down subjects that didn't match your application took you down further
About half way through, the, why don't we have more arts and social science? bandwagon starts playing suddenly fees are introduced along with loan schemes and anybody can do any course if they pay and universities sign them up knowing they will get a few years of fees. Students sign up to courses they can pass because a degree guarantees you a job, Right!! and rich overseas parents send their spoiled brats who are passed as they pay even higher fees than local students and we can't tell them they are dumb as the parents are paying and that might be racist.
So once a degree meant something as it was hard to obtain, now when someone turns up with a degree received in the last 15 years and thats if its actually a legit one (there are many fakes I have seen). it might as well be used as toilet paper
Well like most things in america they are mostly run privately for profit so I really don't know what you are expecting.
Re:Turnabout Is Fair Play (Score:5, Interesting)
I agree with all this, but there was another factor as well. When I got my degree someone who went and did an apprenticeship, or worked in a factory, could still afford to buy a house, car and raise a family. Now you need two degree qualified workers to be able to do that in most of the places where there are jobs.
So sure, on the one hand like you said, the govt removed the supply constraint, but on the other hand, overall policy changed our society from one where everyone did okay, to one where if you are not in the top 50% you might as well go die in a ditch somewhere. In my view this dog-eat-dog culture has done its fair share of driving people who should not be getting degrees towards believing they have not choice but to get one.
Re:Turnabout Is Fair Play (Score:5, Insightful)
Our economies changed from being primarily manufacturing based to being service based. Much of the unskilled labour was either automated or moved to places where it was cheaper.
That's why we have more people getting degrees now.
On top of that employers won't train people. Used to be that they would take a school leaver and train them in a trade. Now they want to pass that cost to the employee, requiring a degree to get an interview. Some are starting to realize what a bad idea that is, as it excludes lots of potentially good people, but it's still pretty prevalent.
It's hard to know what to tell kids these days. A degree can certainly help get a good job, but it's a big gamble. I quite like having artists and social scientists around too, as life would be boring without Game of Thrones and I see the improvements social sciences have delivered every day.
Re:Turnabout Is Fair Play (Score:5, Insightful)
I'd point at single motherhood as a much larger problem. Children without a father are much more at risk of career failure, of college failure, of falling to the temptations of drugs or selecting a "career" over a job and accomplishing no measurable good for the world or for one's own professional success.
Stop knocking up random chicks then.
Re:Turnabout Is Fair Play (Score:4, Insightful)
I'd point at single motherhood as a much larger problem.
Stop knocking up random chicks then.
Unless it's a rape, that's not how it works. Getting pregnant is a group activity. Both parties share responsibility. However, having children is a woman's decision, at least in states where abortion is available. The way it should work given who's got all the rights is that women have sole control over whether they have a child, and men should be able to avoid financial liability so long as they state unequivocally that they give up any and all rights to the disposition of the child. In fact, barring a contract stating otherwise, the financial responsibility should fall entirely upon the woman, since the decision whether to have a child is ultimately hers. It might also be reasonable to place some of the burden upon her family, if they raised her to believe that abortion is murder. It makes no sense to place any part of the burden upon the male, since he has no say in whether the child is brought to term.
Again, barring rape, fucking is a mutual decision — but having a child is not. Making men financially responsible for a decision they have no part in is just theft. Only in a world without abortion is it just to place that responsibility upon men. It encourages women to compound irresponsible decisions with more irresponsible decisions, and to blame them upon a man.
My mother chose to go out and find a guy in a bar to knock her up at forty instead of spending time working on her personal shit so that she could attract a worthy husband. That's how you wind up with a sperm donor. I doubt she'd have done that if she didn't have the promise of financial care dangled in front of her. I grew up raised by an incompetent single mother at least in part because of a legal system that assigns all the rights to women, and all the responsibility to men.
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If you make a baby, you have obligations for 18 years or so - even if you're the man. The 'chick' has her 9 months of chick problems - after that, its his child & responsibility as much as hers.
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DEBBIE: Do what?
DAVE: Fertilise me. Take advantage of me. Knowing that I was drunk and didn't have precautions.
DEBBIE: Listen, I assumed you'd taken care of that side of things. It's the man's responsibility. It's the man who get's pregnant. It's the man who has to suffer the agony of childbirth.
ARNOLD: Agony! This gets better and better!
DEBBIE: Well, what do you want me to do? I'm sorry, okay?
DAVE: Sorry? That's it? Sorry? Wham, bang, thank you mister
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Re:Turnabout Is Fair Play (Score:5, Insightful)
gender nonsense
as let's say chemists or computer scientists.
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For starters, both Marx and Engels are dead. Secondly, calling facts you don't agree with as alt-right crazy talk indicates a huge disconnection from reality. Even classic and moderate liberals call academia's bloated administration boom for what it is. Marxist bullshit and grifting government money at the expense of the tax payers while rendering some of the shittiest forms of education in the industrialized world.
And most of the problem lies in the policy that no child is left behind. Check some stati
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https://www.newyorkfed.org/res... [newyorkfed.org]
Compare, say Ethnic Studies or Liberal Arts with Chemical Engineering?
Re: Turnabout Is Fair Play (Score:3)
I guess you don't see the irony in you trying to be the arbiter of useful studies.
Re:Turnabout Is Fair Play (Score:5, Insightful)
In my first job I earned just $12K a year*, and that was enough.
Kids these days are just greedy.
*$55K when adjusting for inflation
In my first job I earned just $9.5K a year, but I was working part-time and in a gap year between HS and college, it wasn't enough, but by two years later I was making $11K as a McDonald's shift manager. That, plus student loans, were enough.
Note: This was 1996, not 1968. Inflation-adjusted, that $11K is $18K now, not $48K.
Millennials have a really, really, really bad sense of inflation and constantly forget about Gen-X.
Re: Turnabout Is Fair Play (Score:2)
My first job out of graduate school, in 2012, paid $13 an hour. Now, while I am making much more, they only place to find reasonably priced housing is 40 minutes north of the city, when my job happens to be south of the city. Between gutting of pension plans, social security about to go into the red, the recession/housing crash of 2008, and the prevailing fuck you I've got mine attitude of course boomers fucked us.
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My first job out of graduate school, in 2012, paid $13 an hour. Now, while I am making much more, they only place to find reasonably priced housing is 40 minutes north of the city, when my job happens to be south of the city. Between gutting of pension plans, social security about to go into the red, the recession/housing crash of 2008, and the prevailing fuck you I've got mine attitude of course boomers fucked us.
A 40 minute commute is pretty short in my area. Mine has been 90 minutes one way for most of my career.
There's nothing new here.
People generally commute because it is either too expensive or too crowded to live in the city close to work.
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My first job out of graduate school, in 2012, paid $13 an hour. Now, while I am making much more, they only place to find reasonably priced housing is 40 minutes north of the city, when my job happens to be south of the city. Between gutting of pension plans, social security about to go into the red, the recession/housing crash of 2008, and the prevailing fuck you I've got mine attitude of course boomers fucked us.
A 40 minute commute is pretty short in my area. Mine has been 90 minutes one way for most of my career.
There's nothing new here.
People generally commute because it is either too expensive or too crowded to live in the city close to work.
Like I said, I live 40 min north of the city, of which my job is on the southern outskirts. So 1 hr commute each way total, assuming there is no traffic. And it's only that short with carpooling (so HOV lane) and using a tolled express lane.Before the express lane 1.5 hours home was more common, with 2 hrs happening more than I would like. I would live closer to my work (but still outside city limits itself) but housing is unreasonable closer in unless you want a tiny old run down house or crappy area/neighborhood (not necessarily bad, just old, run down, etc)
Exactly. You are trading your time for a nicer house and/or neighborhood. It's the same choice people have made for generations before you. I certainly did when I moved out of Manhattan many years ago. There's no way I could afford to live there with kids. And I can't afford to move back now. Manhattan real estate is just one of the many things I can't afford.
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As for pension plans, seriously, who cares? I entered the work force in 2006, pensions were good well and dead by then. I've leveraged my companies 401Ks to their full advantage, I'm still a few years shy of 40 and have half a million saved for retirement.
Until the market crashes.
And the 2008 housing crash? Seriously, the best thing that ever happened to me. I was wise with my money, had saved up 50 grand by 2009 and bought a place at a deep discount.
Lucky you. By the time I finished school and had a job that could finance a home purchase, housing prices had rebounded. I bought a 20 year old house in my area for 200k. New builds in my area start at 350k now.
And man, 13 an hour? I was working all through my undergrad for $7.50 an hour at Best Buy stocking shelves while I studied EE.
I worked summers for $8 a hour while I was in undergrad, and worked part time for not much more while I was in grad school. When you went into t
Re: Turnabout Is Fair Play (Score:5, Insightful)
I think the OP was being sarcastic. Except for the most insane parts of America (Seattle, NYC, and SF) college graduates aren't even expected to be making $55K in 2019 dollars, and the entire point of this is that your "first job" should be BEFORE or CONCURRENT with college. My "first job" where I was putting in a solid ~25h+ a week (McDonalds) was first year of college.
Well, there are your problems:
a) Why TF do you have a car payment? Virtually no one should have a "car payment" starting out unless they're truly on their own. Did you buy new? Don't do that, buy a $1000 clunker. Get your parents to help.
b) cell phone is actually a good point. I didn't have to pay for that my first years in college, although I did by the end. (And I had to pay out the nose for airtime, too). Regardless, plans are still pretty cheap. Use campus computer labs as needed. You don't need a $1200 laptop. I work in the tech industry and I don't need a $1200 laptop.
c) Rent/utilities will vary dramatically based on where you live. But it's doable even in some of the more expensive areas. Although I never shared an actual room, I had roommates who did. Do what it takes to split costs until you get your feet on your ground.
d) Clothes are actually cheaper now, adjusted for inflation, than they were in the mid-90s. If you're broke, go to Target. I did. If you need something to get by, get a Target credit card and shop frugally (that 5% off adds up!)
Millennials think they're special and that their life is going to be amazing immediately. It's not. But nobody else's was either. Of course, every generation thinks the same way in their youth... The problem is that for later Millennials, their "youth" extends well into their mid-20s. Most of us were expected to figure this stuff out by the time we were 20, tops. And we had to do it with 1.5Mbps internet (if we were lucky), no wifi, and sketchy Napster downloads if we wanted to listen to cheap music. You'll live.
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There is an argument to be made for spending a few thousand dollars on a better used car like an older Corrola. That way you hopefully avoid a lot of the risk of breakdowns that come with buying clunkers. That said picking a school and place to live that let you get by with a bike and walking 95% of the time is even better. Walking and biking helps with maintaining fitness and saves all the money you'd spend on maintenance, fuel, and insurance.
I would argue that you still don't need a cell phone, they certa
Re:Turnabout Is Fair Play (Score:5, Funny)
Kids these days are just greedy.
Says the generation that raised them that way.
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Okay, then I'll say the same thing. You can't blame me for raising anybody under the age of 37 (my youngest). My children have educations, jobs, families, and a future.
Alright then, you raised the generation that raised them.
Re:Turnabout Is Fair Play (Score:5, Insightful)
Young people aren't greedy, they just want the same opportunities that their parents had. A not unreasonable ask.
Free education, affordable housing, decent pension, long term stable job... None of those things are available to them. Their parents enjoyed them, then pulled up the ladder. Left the world in a mess, financial and climate instability.
The greedy ones are the older generations who don't want to share the wealth. They don't want houses or rent to become affordable because those are their assets, their retirement plans. Protect their pensions at all costs, and blame the young for being lazy and entitled when they complain about not having the opportunity to get the same.
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I'm 46. I did not have free education, never had a pension, and fuck you with long term stable jobs... The only thing from your list I ever had was affordable housing because I didn't insist in living in the most expensive neighborhood of the most expensive city when I was poor. You are fucking delusional. Just because the boomers gave themselves all of this doesn't mean it was right and doesn't mean you deserve it as well. I worked my ass off to get where I am.
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Sure, and I did not mean to imply that you had it easier either. Just that those in their 20s today are even more screwed. The "zero hour contract" generation. University costs about 5x as much as when I was there now, probably more given how rents have increased.
The only viable pension plan these days is buy property and hope it appreciates.
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Young people aren't greedy, they just want the same opportunities that their parents had. A not unreasonable ask.
Free education, affordable housing, decent pension, long term stable job... None of those things are available to them. Their parents enjoyed them, then pulled up the ladder. Left the world in a mess, financial and climate instability.
The greedy ones are the older generations who don't want to share the wealth. They don't want houses or rent to become affordable because those are their assets, their retirement plans. Protect their pensions at all costs, and blame the young for being lazy and entitled when they complain about not having the opportunity to get the same.
My parents were poor and had little education, housing was very expensive for them, they had no pensions, and they ran a store to make a living. When they could afford a house it was a wreck that needed a lot of work.
Sure some things are more expensive now but the expectations people have are a lot higher too. What is considered poor today would have been considered well off by my parents. Talk to someone who lived through the great depression and then compare that to how hard you think it is today.
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Thing is young people can't even get a wreck of a house these days. They cost too much and get bought up by developers and buy-to-let landlords, renovated on the cheap and turned into multiple high-rent apartments.
Short-sighted. (Score:5, Insightful)
Well that seems to be very short-sighted of them.
"I'll pay your college, boy, but when I'm old I'm going to be potless and you'll have to support me through the longest part of my life where I'm unemployed, have no money, and yet require possibly the most amount of care".
You save up to *stop* your kids getting your debts and burden when you're older, not to give it all to them in their 20's and then be left with nothing.
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It's ironic, half the people who criticized Trump for his "small loan of $1 million" took out their own "small loan" of $0.3 million so they could do a useless liberal arts bachelor degree.
Difference is Trump turned his loan into an empire and you turned yours into a worthless bit of paper
Re:Short-sighted. (Score:4, Insightful)
Problem is that most people want to have their own place to live and their own kids in their 20s and 30s. Parents naturally want to help.
Every single person I still talk to from my school days only got on the property ladder with either support from their parents or when they inherited some money/property.
There's just no getting away from it. Most young people are going to need financial support from the older generations. The worst part is that it creates a situation where anyone with property doesn't want the value to fall and for it to become affordable, because it's their asset for retirement and/or their own kids to inherit.
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You don't know my friends, but I can assure you that they were not frivolous. They were buying music long before streaming existing, and most of it was second hand CDs. One couple I know bought their first place in an area with a really bad reputation because it was cheap, and because having grown up there they knew that the specific part they were buying in was actually okay.
Before buying they were living with parents, paying nominal "rent" to cover costs.
We are gen X, BTW.
And who is stuck in the middle? (Score:5, Insightful)
"Millenials" and "Baby Boomers", "Baby Boomers" and "Millenials" - who's missing?
The ones whose parents didn't cover their adult expenses, and whose children think they should cover theirs, but who you'll never see the media talk about anymore.
(I honestly think that most journalists these days are in their early 20s, and honestly believe the boomers were the generation before them - they've probably never even heard of Generation X)
Re:And who is stuck in the middle? (Score:4, Interesting)
To be fair, my parents (early Boomers) did support me and my brothers through college, directly and indirectly through taxes: in those days student received a modest stipend from the state for up to 6 years, and parents had to supplement that if they could afford it. If not, students would find a job, or they could get a government loan under generous terms. But my parents supported us over and above that, and the only time I had to work during my college days was to get some extra drinking money or for ridiculous purposes like a car (very few students here had one, and no one really needed one).
Our millennials have some cause to complain: the college stipend has been turned into a loan as well, which means most students graduate with a decidedly unhealthy debt right out of the gate. When this change was made, the minister insisted that this was a special loan that in no way or form would affect your credit rating or your ability to get a mortgage... and the banks followed up by saying that of course they will treat this like any other loan. So our graduates are not likely to qualify for social rental housing (besides, the waiting list for those is easily 10 years), and they have to rent on the open market at insane prices, as they will not be able to get a mortgage for the next couple decades. This is the reason so many of them opt to stay at home with their parents will into adulthood.
The problem was known already 60 years ago... (Score:5, Insightful)
The simple and clear statement is that all social expenditure must always be covered by the national income of the current period. There is no other source and there has never been another source from which social expenditure could flow, there is no accumulation from period to period, no 'saving' in the private sense, there is simply nothing but the current national income as a source for the social effort [...] So capital accumulation and pay as you go are not essentially different in substance. Economically, there is always only one levy system.
Your retirement savings are nothing else than an entitlement to get a share of the wealth that is generated when you are retired. For the dividend on the shares you own, for the interest paid on your bonds, someone else has to work and be productive in the period you get your payments. And whenever the systems to generate wealth or the wealth distribution systems change fundamentally or is in demise, your retirement savings are worth nothing. Each type of money (be it fiat money or gold based money or whatever) is only worth so much as you can buy at the time you want to spend it.
Each time period, there is a fight going on how the wealth generated should be distributed. Young people not starting to work because they have to finish their education first is just another way to redistribute wealth away from the older generation, and saddling young people with debts is a way to distribute it back to the older generation who hold the bonds and get interest on them when young people are paying off their debts.
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If your retirement savings are outside your country, then this isn't true, right?
For instance, I'm from Europe. I save for early retirement and although it's partially in European government bonds, there's other parts gold and global stock market.
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Indeed, but you play a dangerous game. For example, Japan traded lots of cars and electronics through the 80s/90s for a whole lot of US treasury bonds (claims on future taxpayers). Great idea for an ageing country with poor demographics right? Yet for the last decade the US has been running negative real interest rates, and buying up those same treasuries with printed money which you either sit on (and lose even more value) or dump into your favourite asset bubble to be destroyed at a later date.
Iceland bas
Re:The problem was known already 60 years ago... (Score:5, Informative)
Your retirement savings are nothing else than an entitlement to get a share of the wealth that is generated when you are retired.
The difference is in how you earn that entitlement and how it is financed. As for the idea that savings might suddenly be worthless, that's a risk which can be managed to some degree. When it can't, don't think for a second that it will not affect the ability of the economy to fund pay-as-you-go schemes as well.
Is your pension simply given to you in exchange for having paid a retirement tax during your working years? That's fine if the ratio of dependents vs. people paying into the system stays more or less constant. But if the demographic groups vary greatly in size, you may end up with a large group who pay very little to cover the relatively small group preceding them into retirement, while the next generation has to pay double to cover costs when that large group retires. That is exactly what is happening here with the Dutch state pension: the 'boomers paid very little into it, but now that they are retiring, costs are getting out of control.
In contrast, Dutch private pensions* consist of money saved up, with entitlements more or less depending on how much you paid into it (less so for older pensions with a guaranteed payout, more so for modern pensions). With the 'boomers set to retire, private pension funds are sitting on over a trillion euros to cover these, and despite some issues with overly generous entitlements for older policies, that pile of money means that the large group of 'boomers can retire without placing an overly large burden of those currently paying taxes and into the pension funds.
*) In NL, pretty much everyone (including the former Queen) receives a state pension of around €1100. Most working people are member of a pension fund who increase that amount to around 70% of their average wage, and they may have bought additional policies for extra money or early retirement.
Re:The problem was known already 60 years ago... (Score:5, Informative)
...that pile of money...
There is no pile of money. The numbers in your investment account are nothing more than relative claims on economic output of future generations (as the OP explains) vis-a-vis other savers. If the total 'savings' in the country are EUR 1 trillion and you have 1% of that in your savings account (lucky you), you will nominally expect to be able to claim 1% of the rentier income pool when you retire. The actual EUR amount you'll get paid will depend on the size of that rentier stream at the time (student loans, company profits, real estate rents) and has very little to do with the absolute value of the number in your account.
If the rentier stream cannot support all claims to it, then you will quickly discover that the value of your investment has repriced at a lower value. If banks/govts attempt to fill the gap using QE or debt acceleration, then you will quickly find that inflation destroys the value of your income stream. Either way, once retired folks start to withdraw their money piles enmass, they will quickly discover that the big numbers are a fraud and the real economy that will actually support them has been left to rot by malinvesment in shiny asset bubbles rather than real productivity growth (training, infrastructure etc).
Of course by then the bankers who set all this ponzi schem up and the politicians who endorsed it will be long gone.
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Oh, bullshit. To claim that is to deny that capital exists.
Re:The problem was known already 60 years ago... (Score:4, Insightful)
To claim that is to deny that capital exists.
Not quite. His claim is that capital is only worth what you can get in exchange for it. If the economy completely collapses and all wealth is wiped out your capital is gone.
Of course that's true, but it's not a good reason to avoid saving for retirement because the odds are very, very good that your capital will indeed have value in the future.
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If the total 'savings' in the country are EUR 1 trillion and you have 1% of that in your savings account (lucky you), you will nominally expect to be able to claim 1% of the rentier income pool when you retire
No, you will expect to claim 1% of the principal, which consists of the money you have paid into the pool plus the interest your share has accrued over its lifetime. Of course you don't get it as a lump sum; your monthly payout consists of a little bit of that principal plus interest earned on the remaining share of the principal. The way Dutch pension funds figure out payments is rather more complex, but it depends for a large part on your entitlement share rather than only the current income of the fund.
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Private pensions only work if people can afford to pay significant amounts in to them. If housing and the cost of living are very high relative to wages, those private schemes don't get enough put into them and the system doesn't work. You still end up with pensioner poverty.
That's what the UK is headed for. Endless warnings that people are not putting enough into pensions, but little is done to actually allow people to contribute more.
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That statement is true but also misleading. By saving (i.e. investing) instead of consuming, resources in society are redirected and there will be returns on those investments later on.
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In 1952, a German economist called Gerhard Mackenroth...
He wasn't an economist. He was a psychologist and member of the Nazi party. His theories of economics are suspect at best.
WARNING: Bank association study. (Score:3, Interesting)
Banks have an absurd number of properties they're still waiting to sell from the last real estate crash.
They can't maximize that income unless there's more demand for housing purchases and loans connected to those.
In the meantime, they can't rent out a sufficient number of them - and having them vacant is losing them ALL their lowball investments, since a house vacant tends to fall randomly to a lot of different things.
So - a report shows up about essentially shaming more folks into pressuring others into making giant life-staking decisions based on that shame.
I'd take that with a healthy dose of skepticism, as presented.
Ryan Fenton
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Parents costing adult children their retirement (Score:2)
What about the parents who think their children in their 30s should support them, even if it means sacrificing any hope of saving for retirement, which will be necessary since those children are definitely not ever inheriting anything from those penniless parents?
Easy Fix... (Score:2)
Millennials between the ages of 23 and 38? (Score:2, Insightful)
It's 2019. Therefore to be called a 'Millennial' you have to be born after 2000 and are probably a child of the X generation.
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It's 2019. Therefore to be called a 'Millennial' you have to be born after 2000 and are probably a child of the X generation.
The term Millennial is really too broad to cover the cultural situation "on the ground" IMO. I'm one of those borderline Xennials to begin with, but there was a *huge* delta between the incoming "Generation Y" and what we'd started to call the "Digital Natives" that came after (but before Gen Z now).
37 year olds and 29 year olds (as of 2019) are really, really different people.
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I consider it a slur. Take any article about millennials and replace "millennial" with "jew", and you'd think you were reading the daily stormer.
Equating criticism about Millennials with the slurs and suffering experienced by the Jewish people is the most Millennial thing ever.
Big ticket items. (Score:2)
Health Insurance? Student loans? What are these things? Most of the west would like to know.
Jokes aside I think they should help, but only help in a easy / general case. a) a loan with low interest but one that still needs to be paid back. b) combined family health insurance for some added discounts (I assume these exist, I wasn't joking when I asked above what health insurance looks like for a 23 year old). But the easiest one is: accommodation. As "lame" as it may look for a young adult to live with their
And parents are fucking their children up with it (Score:4, Insightful)
And parents are fucking their children up by supporting them like that. Instead of building a career and developing the critical "provider" skills, 30-year old "kids" sit on their parents' necks, completely unable to fend for themselves and salivate at the thought of "socialism" even though they don't fully understand what it is.
At 21 my parents had _me_ already. Nobody supported them. I support them now, when they let me, which they mostly don't. When I was in college the "support" was very, very slim as well, so I worked to support myself. There were days when I didn't have any money and had to eat eggs and potatoes - the two cheapest foods available. I can cook up a mean omelet even now.
10 years after that I was pulling down $100K. 20 years after that - half a million dollars a year. Compare this to my brother-in-law: 50 years old, freeloaded on his mom's dime his entire life. Mom has retired a couple of years ago. BIL is fucked beyond belief: no money, no job (mom can no longer hook him up with a decent one), no skills, wife (who can provide for herself) left with another dude. And there's really no way out of his predicament at that age which does not imply a dramatically lower standard of living.
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You might not think your incredibly lucky, but there are 99 (and some fraction) of people who do.
What's with the boomer hate? (Score:2)
I don't get the comments hating on the boomers. Every generation faces its own set of problems. It's easy to blame others, but what millennials (or any one else, really) need to do is face up to the challenges of their generation.
Burdened with student loans? Yes, the loan program is stupid, but...why did they have to go to that big name college, instead of the local community college? The education is arguably better at the latter. Why major in art history, or dance, or XYZ studies when they know there aren
I did arts. My daughter is doing medicine. (Score:5, Insightful)
Big difference.
My mom kicked me out at the age of 19. Well done. I did performing arts with frugal but essential free federal support for five years (this is Germany in case you're wondering how that happend). My mom supported me until I was 25 and then stopped. If you do arts, you will have inner fulfilment like no one else but you will most certainly live just above the poverty line most of your life. And maybe get one of those rare chances of a breakthrough. My decade or so of arts still has impact on my adult life in my late 40ies but I wouldn't want to miss it. I'm closing in on 50 and ride the bike, use PT and live in a single room appartment. Cult of less. I work part-time as a web developer and consultant, have truckloads of chilltime, excersize and eat healthy. The flip side is that I only get to do budget vacations and won't be all that richer when I'm old.
It was my choice and my deal, no complaints. I actually see a lot of folks my age envying me for going down that lane.
A very good counter-example is my daughter. She's doing medicine. 12+ hours per day learning and studying. A schedule I could only dream to handle. She does more in 2 months than a regular person in 2 years. I know I will have to support her big time for the next decade or so. That's life but she's doing medicine - something really really useful - and probably will rake in six figures when I move into retirement. Her life will very rarely be as chill as mine, but I will shell out any expense needed to get her through with the thing she wants to do. She's my sweetheart and if she choses the tought path she deserves respect for that and any support she can get. And I also somehow trust that her sparing 200 Euros per month for her old dad will sometime in the future be absolutely no problem for her.
Conclusion: How family members support each other should take into account what their plans are and what critical mass of resource accumulation they can optain with their occupation.
Wanna do arts? Go ahead. You'll get some allowance but you won't lazy out on your parents indefinitely. Doing tough shit like medicine or hardcore engineering? Yeah, sure you'll get extra cash extra long to get you through to your degree - that's pretty much self-understood IMHO. That's how things should work out. Just don't be a whiny pussy and expect the world to support a cushy lifestyle just because you chose to go to college.
My 2 eurocents.
Blame the children (Score:2)
Not my kids (Score:5, Insightful)
I raised my kids as my parents raised me, to be independent and confident. I would have been too embarrassed to ever ask my parents for help once I became an adult. and I forced myself to not take the easy way out and find solutions. That doesn't mean I didn't ask for advice, and my kids have asked for my advice many times.
The 'entitled' kids in the article are the result of helicopter parents who want to hover over their kids and protect them, instead of preparing them to live on their own. Parents who have no respect for their children's skills or capabilities and think they have to be taken care of instead of watched over.
And the BS about millennials 'expecting' to be supported, their parents did that too. My son moved out as soon as he could and spent 10 years traveling this country doing odd jobs. He only asked for money once, when he broke his glasses in St. Louis and didn't have the money to get back to his friends. My daughter lived with me until she got married with the understanding that she either went to college or she worked. But, to be fair, she was raised with a good work ethic and not given anything, she had to earn it herself. So getting her to find a job wasn't a problem. They are both in their 30s now and living productive lives without any government or parental financial support. And have done so their entire adult lives.
I also didn't have much of a retirement account until my kids got out of the house. But, in the years since, I've managed to squirrel away enough that I can support myself without Social Security if I have to. It's amazing how much money you can save when you reduce your debt and live within your means. When I bought both of my houses, the banks told me I could afford far more expensive homes than I bought. But I choose to do a budget and buy the home I could actually afford. The last house I bought has a 30-year mortgage, but I'll be able to pay it off in 10 years, or 7 years from now. By the time I retire, I'll be 100% debt free. Or I won't retire. That has to be earned too, it's not a right. No one is ever entitled to stop working unless they can afford to.
The only people to blame for this debacle with their finances are the parents who made poor life and financial choices raising their kids. Who tried to be their friends instead of their parents. Who gave them things instead of making them earn them. And yes, I have made plenty of poor life and financial choices myself. Fortunately, in the long run, I made more good ones than bad ones.
To future and new parents, there will be plenty of time after your kids become adults to be their friends. Suck it up and raise them so they can move out on their own and teach them the value of earning things instead of having them given to them.
It's OK to tell your kids 'because I said so'.
Pensions + Tuition + Healthcare (Score:2)
Each generation used to take care of their own. However we now have generational transfers in both directions. The current working generation will be paying off the retirement of previous ones, and the education cost of the future.
The cost of raising a child is estimated to be over $200,000: https://www.thestreet.com/pers... [thestreet.com] . We love our children, and gladly pay the costs. Nevertheless the amounts are too high.
Similarly, they currently take about 14% of paychecks (half from employer half from employee) to
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Social Security in the USA has actually always run that way and was planned that way from the start. Historically Social Security has run at a surplus but that is only possible with its design so long as there are many more workers than retirees. With the Baby Boomers retiring and them living longer than Social Security was initially planned for we're going to hit a point in the next few decades where the incoming money won't cover the outgoing. So at the worst benefits will get cut back to match what's com
Current Prosperity is for Rich Only (Score:4, Insightful)
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I'm 39 and have owned precisely one house in all my life, which was a do-upper from an absolute state, bought from a bankruptcy, which we owned for a few years and then sold that when I split with my ex.
The proceeds were not enough to do anything useful with (e.g. pay for moving out) but it was the cheapest and only way we could get a house. The banks say I could now get a mortgage for GBP 180K if I choose a 30 year mortgage (which would take me to near-70-years-old, i.e. past retirement) which'll buy me a
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You might think so, but 30 years ago when I was about to graduate in college we were told that the jobs market and wages would skyrocket as the boomers retired.
In theory would should be in the thick of that now -- the first half of the boomer generation is 63 - 73 years old. Yet besides a few cities ramping up the minimum wage, we're not seeing a huge jump in wages. Unemployment is low, but it's hard to say what that has to do with boomer retirements.
My guess is that most of the boomer retirement savings
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as the boomers retired.
They can't retire because they're supporting their adult children.
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They can't retire because they're supporting their adult children because their adult children can't find a full time job so are working 2-3 part time jobs to pay the crushing debt from their student loans. Rinse and repeat
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Even with all that I can barely afford the down payment to buy a good livable home in the city where I live. My mother is a realtor and I'm still going to have to pay for mortgage insurance since I can't hit the 20% down payment mark on the house I want (probably 400k+).
Check with credit unions. The credit union I am with (which was originally associated with my employer and still carries it's name) had a program for first time home buyers where they waived the 20% requirement for no PMI. Big money saver. Also, as another poster said, $400k+ is probably too much house for you. My wife and I combined make $100k and our house was in the 200-250k range. At $450k, that's a 90k down payment to avoid PMI. So for a 30 yr mortgage you're paying 1700 a month before property t