Millions of Americans Nearing Retirement Age With No Savings (cbsnews.com) 425
Millions of Americans nearing their golden years are still financially unprepared for retirement. From a report: According to U.S. Census Bureau data, 50% of women and 47% of men between the ages of 55 and 66 have no retirement savings. According to AARP, nearly 57 million Americans work for an employer that does not offer a retirement savings plan.
TL:DR no housing crash (Score:2)
What these people do have is home equity.
No matter what anyone in the financial press says, government is going to bailout housing, if that market continues to slide much below pre-pandemic levels.
Its the safest bet in the world. The US has no other plan for dealing with this. Until all the boomers are in the ground and a large portion of the Xs are their next to them, this will be policy. After that not sure but there is at least 20 years ahead of us where residential real-estate in all but the dingy-est
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The problem is that the property pyramid scheme has to come crashing down at some point.
From Gen X onwards, each generation has had to rely more and more on help from their parents, and now Gen Z are finding that their parents already used up all the inheritance money and are stretched too thin to do much for their kids.
Combined with an increase in buy-to-let among older people looking to supplement their pensions, home ownership among Gen Z is much lower. Generation Rent.
Of course all the good pension plan
Re: TL:DR no housing crash (Score:3)
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Maybe it's different in the UK. A lot of Gen Xers around here inherited money, sometimes in the form of property.
Re: TL:DR no housing crash (Score:2)
This is a story about Americans.
The UK is totally different. For example the UK does not have places like Iowa or Ohio.
Re: TL:DR no housing crash (Score:2)
Maybe it is different in your part of the UK. Around here a lot of Gen X saw the (admittedly shitty) jobs melt away along with the affordable (to buy ) housing and the affordable (to rent) Council houses.
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Where the hell did you live? Things were different in the midwest. I'm struggling to think of anyone whose mom worked. The only women workers I knew were our teachers (there was only one male at all in my elementary), and unmarried women, including many of my older relatives. I didn't live in some rich enclave; my mother was divorced and we lived on welfare.
Even when my mother did marry in the late 1980's, my step-father bought a house on his own wage as a general laborer. My mother eventually did start wor
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You may not be aware but it's not the 1970's anymore and your experience may not be what on the whole a lot of families experience today. We can all trade anecdotes but my parents also purchased a home in the 1970's and even inflation adjusted the cost to purchase that same house today is 2.5x what they paid, the market is way different. Even with the higher interest rates of the time thats a steep barrier to cross and now with interest rates back to what we should consider "normal" it's even more out of
Re: TL:DR no housing crash (Score:4, Interesting)
Re:TL:DR no housing crash (Score:5, Insightful)
And what makes you think that these people own houses?
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The boomers aren't driving house prices (Score:3, Insightful)
This has happened before and when it did the gov't created programs to force homebuilders to build lots of affordable housing. Stuff like Levittown [bloomberg.com]. The houses were smaller, but were on large plots of land so homeowners quickly added more rooms. This is how Americans build wealth, by owning a home so that the larges expense (housing) is taking care of.
Re:The boomers aren't driving house prices (Score:4, Informative)
The boomers aren't driving house prices
multinationals buying houses to rent or turn into AirBnBs (or just sit on so they can drive up prices, like Zillow did/does) is what's driving the price.
In my current area (Humboldt) it's boomers buying the houses to turn into airbnbs. I know of one woman who has bought three of them which are pure airbnbs in addition to her first house. She tried to kick us out of what had become a full time rental during the height of pandemic deaths in order to make literally no more money airbnbing the unit we were in, after telling us in email that we could stay as long as we want.
airbnb is evil and must be destroyed.
Re: The boomers aren't driving house prices (Score:4, Insightful)
Itâ(TM)s interesting that you started off talking about an evil boomer and blamed airbnb.
Maybe the problem is not airbnb, but the evil landowners.
Re: (Score:2)
Humboldt
My first thought was Humboldt, Michigan, and my first reaction was "I'm sorry", lol. (I used to live around there, wasn't exactly AirBnB hotspot material.) https://en.wikipedia.org/wiki/... [wikipedia.org]
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Actually most of them do not have home equity. Those that do are also the ones who most likely have retirement savings, having equity in your home shows you have some financial discipline. Most of these people rent or are mortgaged to the hilt and refinance constantly taking money out of their home.
This has been overlooked for years (Score:2)
This has been a secret shame of many babyboomers for years. Even (and often especially) babyboomers in upper management and even executive positions at companies. That's one of the main reasons why they haven't retired already, because they can't. They are upper management, but they simply can't quit because they have almost no assets besides their own homes that they live in. They are stuck working until they physically cannot.
Re: This has been overlooked for years (Score:2)
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It's going to be hard to find sympathy for PHB's.
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I have never seen any studies showing that those with high income are having similar problems with retirement savings as those with lower incomes. There may be some who don't have enough savings to maintain a $500k+ annual income in retirement, but they likely at least have a few million in the bank.
The unfortunate truth for those in senior management is they only got there by foregoing family and hobbies by spending all their time working instead. They don't have anything else in their life other than thei
Re:This has been overlooked for years (Score:5, Interesting)
There may be some who don't have enough savings to maintain a $500k+ annual income in retirement, but they likely at least have a few million in the bank.
Yeah, you can disbelieve it if you like, but most people that have made $500k+ still don't have enough to retire on. This is partially because of their lifestyle expenses, but also because they just spent all of that $500k. It's more famous with sports athletes that make multi-million dollar contracts that are then broke after just a few years of retirement, but the same thing happens with many high salary white collar guys. It's surprisingly easy to spend $500k per year and not actually save all that much.
(Most people that have retired were able to do so because they have a pension and didn't have to do the hard work of saving money themselves.)
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This has been a secret shame of many babyboomers for years...
And yet, as a boomer, I've been hearing this story since I graduated high school. You could have written this story in 1990. In fact, I'm pretty sure it was, including the parts about how SS was going to fail any minute so I shouldn't plan to get any SS payments.
(I think SS is still a problem, not because an on-paper trust fund will be exhausted but because we won't want to raise taxes enough to make the promised payments.)
The advice at the time is the same as now: save as much as you can, take advantage of
This is an excellent opportunity (Score:2)
Seriously though, just because people are living longer doesn't mean they're physically capable of working longer. Nor does it mean anyone will hire you. Age discrimination is real and almost impossible to prove.
But as people age they tend to vote Republican, thinking the leopard will never eat their face. And for a lot of them, especially the boomer generation, they'll die befo
Re: This is an excellent opportunity (Score:2, Informative)
Actual socialism does work. Most of Europe is largely socialist and they have far better healthcare than we do. Our standard of living is tanking while theirs aren't. Yes, there have been fascist governments that claim to be socialist, but they are far fewer than the actually socialist success stories. You won't hear about those on Fox "news".
Soviets not a good test of socialism (Score:4, Informative)
Soviet Union was not a good test of socialism because they were also not a democracy. This means less citizen feedback to fix problems. Northern European countries are a better model of socialism, or at least mixed systems (socialism + capitalism). It's where surveys show the happiest people on Earth live (not Disneyland).
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Not sure how Europe does it. The US spends twice as much as "socialistic" countries for health care (per capita and overall), retirement, and other benefits, mainly because it takes a lot more money to help someone in the ER than it does for preventative health care.
If the US wanted to "shake the bonds of socialism off", and save money, going to a single payer system would save a TON of cash. Adding social safety nets would save a ton of cash as well, because it is a lot more expensive for a society to de
Why do people "retire" and is it an entitlement? (Score:2)
When did "retirement" become a thing that everyone can and should do? I'm "retirement age", have savings, have no desire to "retire".
Retire and do what exactly? Play golf? Watch the grass grow? blech
I like being productive, I like working, and I will do it as long as I am able to. Heck my mother was still working when she called out sick from the hospital at age 90. She knew she was dying and told them "I can't make it, I think this is it".
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I’m decades away from retirement and I would do it tomorrow and be just fine. I have plenty of hobbies and interests to keep me busy. Everything from working on the yard to maintaining my vehicles to building circuits in my electronics lab. There’s millions of books out there to read and many places to travel if you don’t like sitting.
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Travel is super-expensive nowadays, though. I think that my retirement funds would disappear in 5 years if I took more than 2 or 3 trips a year that required flying somewhere.
SSI Taxable Income Cap Removal (Score:2)
One good start is to REMOVE the cap on income that is subject to SSI tax, but keep some cap on what you can pull out. Yes, truly rich people can still get SSI, but it will be capped as if they earned a much lower amount. This isn't about the individual, it's about society.
i.e. If you make $1,000,000 annually and still have significant assets when you are retirement eligible, you contribute the SSI tax on $1,000,000, but when you retire you can only draw on benefits for contributions as if you only put in
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What is an SSI tax? I had to look that up to make sure I wasnt the one hallucinating. Do you realize social security tax (OASDI tax) and SSi are two different things? SSI is for seniors or disabled people who are destitute and have low or no income. It is not based on how much you paid into it. Anyway, I get your point and you’re right but isnt that the same as just adding a new tax bracket for the wealthy?
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Yes, again, I was over simplifying and knew someone would provide more information. I didn't want to write a novel and posted my comment tomorrow after more researching to provide the necessary background in links people may or may not click.
Most people are simply going to know it as "Social Security" or "Social Security Insurance".
Soylent Green (Score:2)
Soylent Green will be People, it seems.
The blame game in this place is staggering! (Score:2, Interesting)
The blame game in this place is staggering!! Everyone's fault except your own! It's those nasty Republicans, or Boomers or just anyone you don't like!
Teach it in high school (Score:5, Insightful)
I fear that most people reach adulthood without anyone ever having The Talk with them. No, not about that. About their long-term financial health.
It need not be a long class that lasts a year, but I get the impression that little, if any, class time is spent showing students the benefits of taking steps to safeguard their retirement before they reach 65.
And that's not just 'putting a little aside'. All the choices you make in life contribute to where you stand once you hit 65 (or 70, or whatever). Did you splurge on a boat, or a sports car, or lots of vacations? Or, to be frank, a large family?
Financial health is not a partisan issue - it can affect everyone. (speaking as someone who really didn't start planning until my 50s)
We are talking 3rd world here, right? (Score:3)
Because such an abysmally bad state of affairs is unacceptable in the 2nd world and does not happen in the 1st world.
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You absolutely are talking Third World, and you're going to get modded into oblivion for daring to say so. When it comes to willingly lapping up their own country's propaganda, a lot of Americans aren't any different from a Russian peasant. In the Great White North, as far back as the 60s we used to joke that Chekov from Star Trek should have added "Y'all" to the end of his incessant claims that, "It was bigger/inwented first/done better in Russia".
Nomadland (Movie). Recommended. (Score:3)
Just watched Nomadland [wikipedia.org] the other week. Awesome movie. Can totally relate, although I'm not a US citizen but live in Europe. It's a perfect summary of the situation and very well done.
Tens of millions.... (Score:2)
Tens of millions of people in the third world are approaching "retirement age" with no savings.
The difference is that they don't see retirement as a necessity and will often keep on working as long as they are able. When they can't work their families will take care of them. They might be the last generation for whom this is possible. With increasing labour mobility those families are becoming more dispersed, so this is a crisis for future governments.
Unfortunately, their governments don't have the resourc
The US does actually have a (Score:4, Insightful)
Half have zero savings? Wow. Well, they aren't gonna have cushy retirement, complete with a nice sports car, lots of eating at restaurants, swanky digs in NYC or LA, and several trips and cruises per year.
To most people on this forum, this sounds like a fate worse than death, but the truth is that it's well above the poverty level. You find a cheap apartment in a small US city located in flyover country. You know, one of the places that DOESNT regularly make the evening news, where prices are still reasonable. Yes, plenty of these places exist, despite all the news about how apartments in the best parts of the best cities are sooOOOooo expensive. And you live out your retirement. Vacations happen once every few years, and only if you seriously save for it. And maybe, just maybe, you DONT FULLY RETIRE, unless you absolutely cannot work.
If you have no savings, never worked, and have no family or friends to fall back on? That's a different story. You are well and truly at the bottom of the heap. Our system will keep you alive, but nothing more.
This is why neither political party is going to cut social security, medicare or medicaid. There would be a LOT of grandmas and grandpas out on the streets.
Re:The US does actually have a (Score:5, Interesting)
> You find a cheap apartment in a small US city located in flyover country. You know, one of the places that DOESNT regularly make the evening news, where prices are still reasonable. Yes, plenty of these places exist, despite all the news about how apartments in the best parts of the best cities are sooOOOooo expensive. And you live out your retirement. Vacations happen once every few years, and only if you seriously save for it. And maybe, just maybe, you DONT FULLY RETIRE, unless you absolutely cannot work.
I get that you're suggesting this for the caste of retirees with no savings, but oh boy...
What you describe is borderline ostracizing these people. Picking up and moving elsewhere, at 60? Severing all local social connections built over decades? To some that is indeed worse than death...
Re:The US does actually have a (Score:4, Insightful)
It's pretty hard to live on 20k even where it's relatively cheap. Most of the places where rent is still cheap are absolute shitholes, too.
It's well past time to eliminate the contributions cap on social security.
No link to the underlying data? (Score:3)
I'm always suspicious of news articles that report some bad thing happening in society--but which fails to link to the underlying data. In this case, the article links to an earlier news article on CBS's own news site talking about preparing for retirement, and links to a site that plans trips for women [kindredwom...velers.com]--but does not link to the Census Bureau site, despite the fact that all such reports are provided and are easy to link to.
So I went spelunking, because I'm always curious about such things.
The best I could suss out with a few minutes searching was this article: Who Has Retirement Accounts? [census.gov], which, interestingly enough, limits the survey to participation in 401(k) (and similar defined-contribution plans), IRAs, and "defined-benefit" retirement plans--traditional pension plans. And yes, the savings rate is dismal, with some 40+% of boomers not having a retirement account at all.
But... the definition here is "owns a retirement account"--that is, a tax-exempt deferred savings or defined-benefit pension plan designed for retirement savings. It does not survey overall savings. Now, the number of people who have a "retirement savings account" that is not a tax-advantaged retirement account--say, they own a bunch of shares in E-Trade, or they have equity in a house they plan to tap at some point--are not being counted in this survey.
It could be the percentage of people who don't have a retirement account but who has other savings is minuscule. But the point is, we don't know. And the CBS News article linked at the top is singularly unhelpful.
Worse, I can't help but think that this article, giving scary statistics but without a link to the Census Bureau's data sets (all of which are easy to browse and even contain APIs so that you can build your own synthetic data sets if you're so inclined) is designed more to sway public opinion than to inform.
It may be the public opinion they're pushing--that so many people don't have a safety net that any attempts at restructuring the safety net of Social Security would be heartless and cruel--may be the correct one. But we don't know. And we can't know given the way the survey was performed, nor will the average person know to search the Census Bureau's own web site to find out more.
Stuff like this bothers me, because I can't help but think such articles are manipulative, rather than informative.
In my own case, I do have a SEP, and my wife has a Roth IRA. If we were to be surveyed about the amount of money we have in those retirement accounts--people doing the survey would hold us up as examples of two people who would be severely impacted by Social Security reform, because we don't have anywhere near enough money in those two accounts to even think of retiring. On the other hand, we also have two non-tax advantaged stock accounts (one with E-Trade, one with UBS) which accounts for 95% of our net wealth (not counting the equity in our house). Personally I think we're okay, even if our tax-advantaged savings is laughably small.
This isn't just a US problem (Score:2)
All over significant parts of the Free World, pension plans have disappeared and wages have stagnated as corporations gradually hollowed out and captured democratic governments. The biggest difference now outside Europe is how much of the tattered social safety net remains in various countries to save aging post-Boomers from destitution. Large scale homelessness and starvation are still waiting down the road, but not that far.
And... (Score:4, Informative)
Do they smoke?
Do they have a $1K internet terminal in their pocket?
Do they buy a new car every three years?
Did they sign a 15 or 30 year mortgage in the past few years?
Did they work for an employer that offered a 401K program they choose not to contribute to?
People make choices, then, when their choices don't work out, look to others to bail them out of their chosen situation (See "College Debt Cancellation).
Workers in the US pay into Social Security, and other social safety nets, but the problem is too many people thought SS was a retirement plan, when it is little more than a "supplemental" plan, like SNAP benefits. SS was never intended to fund 100% of a person's living expenses, yet like clockwork, we see celebrities, politicians and activists take the SNAP challenge and try to live on SNAPs "Supplemental" payments (Reminder - the "S" in "SNAP" stands for the word "Supplemental").
Re:No shit (Score:5, Funny)
You are to work until you are dead and you will like it! To think or say otherwise is Unamerican and the DeSantis Love and Peace are coming for you.
Very good, very good. Now could you throw yourself on the economic fire already? It’s starting to get slightly chilly.
This is life?!? (Score:2, Funny)
I don't recall cavemen whining on FaceTube they had no savings, and they seemed to survive fine.
Re:No shit (Score:4, Insightful)
Why is it so hard to just budget and live within your means? If you don't that's not anyone else's fault but your own.
Re: No shit (Score:4, Funny)
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"You were born in the Bronx? Why would anyone want to be born there?"
"Well, I wanted to be close to my mother."
Re: No shit (Score:4, Informative)
Re: No shit (Score:5, Insightful)
Nearly every american who really cares about it, can easily average saving 10% over their lifetime. Invested in index funds, this would be a very good chunk at 62 years old.
There will be some seasons of life where it doesn't happen, but it can happen for the VAST majority.
Here's how I know. There is always someone who makes 7% less than you that makes it in your city. So you can too. It's not easy, we've sacrificed a lot, coming from very poor upbringing, to have some decent investments as we hit the back 1/2.
Re: No shit (Score:5, Insightful)
Re: No shit (Score:4, Informative)
If you think "nearly every American" can save 10% of their income, you're out of your mind. If you think most of the people in the lower 50% even know what an index fund is, let alone how to invest in one, you're beyond delusional.
Here's some reality: The majority of Americans can't afford an unexpected $1000 expense. [fortune.com] 60% don't even have $500 in savings [cbs19news.com]
40 years of stagnant wages might have something to do with that. Get you head out of your ass.
Here's how I know. There is always someone who makes 7% less than you that makes it
First, that's obviously impossible. Think about that for just a few minutes and see if you can figure out why. Well, in your case, you might need a few days. Maybe take a remedial math course. As for "making it" what does that mean to you? Taking on crushing debt? Depending on friends and family to help carry them month to month? Charity and/or other social programs? Living out of their van? Cardboard box in an alley?
Financial advice from a right-wing nut who can't do basic math... ugh...
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If you think most of the people in the lower 50% even know what an index fund is, let alone how to invest in one, you're beyond delusional.
There's no excuse for this, regardless of income level. It's an educational failing -- both of the schools and the parents. Financial literacy is just as important as math and reading, and one of the most important factors in determining whether or not someone lives a happy, healthy, less-stressed life. Make it a graduation requirement for high schoolers that they k
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i TOTALLY agree.
My beef is with the thinking that literally 1/2 of people had no way to save anything. I'd accept 25%, but 1/2 points to "I don't care enough about this problem to address it personally" The quoted person in the article admits this openly!
Re: No shit (Score:5, Insightful)
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The median US income in 2022 was $54k, or $1041 per week. After subtracting $4131 for Social Security and Medicare, $2000 for health insurance (MA average per person), that leaves $47600 to be taxed. $2380 goes for State Income Tax at 5%, then $5565 for Federal Taxes, leaving you with $39924, or $3327 a month.
The median rental rate last year exceeded $2000 per month. $1327 left.
The lowest income quintile last year spend about $420 per month on food. $900 left.
You bought a really cheap car financed at $20
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Re:No shit (Score:5, Insightful)
You are to work until you are dead and you will like it! To think or say otherwise is Unamerican and the DeSantis Love and Peace are coming for you.
Every paycheck, the first person you should be paying is yourself, long before wants and desires re-define themselves as "needs" to feed a narcissist addiction. Employers not offering a retirement "plan", is a problem often negated with the fact they compensate nicely for that expense by paying you less to far-less when they do offer it, as confirmed by professional consultant rates often being 3-5x more than comparable salaried staff.
Only person actually responsible for planning your retirement, is you. Politics was hardly relevant to basic financial responsibility at 16 years old when the savings account should have been more emphasized instead of the Starbucks/XBox addiction. Incredible how narcissism brainwashed a lot into believing they are some kind of "victim" for being broke all the time while refusing to even glance into the expenses mirror. The reality of old age is a wall that comes for everyone. Personal responsibility is the only thing really dictating how good or bad that wall impact will be. Improper financial planning can lead to premature death. Pretty grim how easily it can be dismissed when you consider that outcome.
Yeah. I know. There are many who would mock and attack me for appearing to make light of those who simply cannot afford to save for retirement, especially now. That said, there's a lot more addiction than everyone cares to admit to, feeding that problem. Dealing with bills is one thing, but dealing with personal responsibility? Most know why the elites fought corruptly hard to keep cheap debt legal. We're all paying for it now.
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Every paycheck, the first person you should be paying is yourself
I do, and I have nothing left over for gambling for the future.
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Employers not offering a retirement "plan", is a problem often negated with the fact they compensate nicely for that expense by paying you less to far-less when they do offer it, as confirmed by professional consultant rates often being 3-5x more than comparable salaried staff.
No, just no. Companies pay contractors more than salaried staff because the contractors pay both the employer part and the employee part of their Medicare and Social Security taxes. So to make the same amount of money after taxes, you have to bring in more before taxes.
Also, they get paid more money because they have zero job security, and are often the first thing that gets cut when times get tough. Because the risk for workers is considerably higher, people won't take those jobs unless they pay more.
It
Re:No shit (Score:5, Insightful)
Boomers had great pensions. They turned out to be unaffordable, so they closed. Of course they couldn't be allowed to fail, so they were bailed out, and current workers paying into schemes are subsiding them.
So it's not all about personal responsibility. The reality is that you used to be able to get a lot more out for a lot less in.
On top of that we have deep economic problems, a lot of which stem from the times when boomers made a lot of money and enjoyed things like cheap fossil fuels. Climate change is getting expensive. A lot of the boomer wealth and pension investments are in property, which is now unaffordable for young people.
It's no wonder gen Z are cynical.
Re:No shit (Score:5, Insightful)
It stinks that your comment is the first one on SlashDot and marked Insightful. There's an old story about ants and grasshoppers that comes to mind. If you never prepare for tomorrow don't be shocked when tomorrow comes and you're unprepared. People, barring any horrendous catastrophe, need to be responsible for themselves. Some people just flat out don't want to work. I know some of these people. Some people legitimately need help (like people suffering a catastrophe). I know some of these people too. The problem is it's hard to tell these people apart (mooches vs legitimately needy). Like it or not, you need to work in this world. Nothing is free. Nothing is owed to anyone. If you can't afford to live somewhere, well, a lot of people can't either. Move! Not everyone gets to live by the beach in CA. My metro area was too expensive for me when I was in my 20's, so I moved a few towns over. 20 years later I own my home, cars, and have money for retirement. I've been working since I was 14. Everyone should. Everyone has the opportunity to pay attention in school. Everyone can put down the videogame controller and get a job or study. Everyone can do something more meaningful than watch youtube all night. Everyone can... But not everyone does. It's not a mystery.
Some other pro-tips:
* Avoid drugs
* Avoid bad relationships, and for goodness sake don't get married if you're in one
* No kids unless you're married and in a good relationship
* Obey the laws
* Don't associate with anyone that doesn't subscribe to the above unless you enjoy drama
Re:No shit (Score:4, Insightful)
There's an old story about ants and grasshoppers that comes to mind.
This is not. That has Ants that have the extra to stash away for later. Kinda hard to do that when you have no excess.
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Hard work in no way correlates with financial success -- or even stability. The poor are generally the hardest working people in our society.
My wife thinks I'm a workaholic, but I'm bone-idle compared to the guys working double-shifts just so that their kids can do their back-to-school shopping at Target instead of Goodwill.
What's so sad is how many of the folks breaking their backs just to scrape by actually believe the bullshit that you're selling. It's sick, and you should be absolutely disgusted with
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I can just feel all that freedom all the way over here!
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To be fair, by loosening COVID restrictions despite the recommendation of public health and pushing anti-vaxxer talking points with a wink and a nod, Ron DeSantis has done more to solve the problem of old people retiring without savings than anyone.
Re:No shit (Score:4, Informative)
You are confusing classical liberalism with social liberalism. Classical liberalism is a moral philosophy based on the rights of the individual, consent of the governed, political equality, and equality before the law. Both conservative and liberals in the US are classically liberal. Social liberalism (referred to as just liberalism in the US) puts extra emphasis on civil liberty, support for social justice, and a well regulated economy.
Globalist liberal policies have been overwhelmingly conservative values for many decades. Only the advent of Trump brought a much more protectionist platform to conservative politics in the US (the trend slightly pre-dates him, but he brought it to the forefront of conservative politics). Liberals in the US were traditionally the party of labor, although the success of globalism arguably saw liberals abandoning unions and the working class in the last 2-3 decades (giving room for Trump to step in).
Conservatism in the US has always been a bit hypocritical, but only if you ignore the true basis for the ideology. It wants to ensure current political and economic power structures stay in place. This can often mean large changes in the economy (such as globalism in the late 1900's) as long as the current power structures remain. In fact, globalism arguably allowed current power structures to stay in place because it fought against the rise of labor's power growth.
Not every liberal policy is going to improve things for the majority of people, but they almost always do give a little more power to the powerless. Sometimes that power causes damage, but part of the liberal ideology is that as long as you are distributing power more evenly over time things will gradually improve.
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People have no retirement savings for a reason: they've overlooked plans like IRAs, Roth IRAs, etc. and instead have spent all their money on immediate needs.
Re:IRAs (Score:5, Insightful)
Those fools! Wasting money on food/shelter/healthcare/education when they could have been propping up the stock market.
Re:IRAs (Score:4, Informative)
In the USA, one expensive medical "event" can undo a lifetime of careful saving and planning.
For example, 42% of cancer patients exhaust their life savings 2 years after their diagnosis.
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A quick Google search told me that 50% of Americans have a net worth of $0. Another Google search tells me that the median age of cancer diagnosis is 66, so the majority of cancer patients are on Medicare. 42% might be true in a literal sense, since that many cancer patients might be broke to begin with, but certainly, given what else we know, it's pretty misleading to suggest that half of cancer patients are bankrupted by enormous medical bills that their insurance didn't cover.
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This. Despite the fact that Canada's healthcare system is in a bit of a crisis, I am so glad to live in a country with universal healthcare. We pay much less per capita for health care than in the US and have generally better health outcomes. And I know that a serious medical emergency is not going to bankrupt me or make me lose my house.
For a wealthy country like the US not to offer universal healthcare is borderline criminal.
Re:IRAs (Score:5, Insightful)
The rest of the civilized world has figured out healthcare except for the good old USA. I'd start my own business but can't afford thousands of dollars a month paying for health insurance.
Re: IRAs (Score:4, Informative)
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What are you waiting for?
I paid in low-5-digits of federal and state taxes last year, maybe we could use some of that money?
Re: IRAs (Score:3)
Re:IRAs (Score:4)
You make the mistake of generalizing. For some people "living beyond their means" means buying a full gallon of milk instead of a half-gallon. You speak like someone who has never experienced true poverty.
Are there people that live beyond their means, sure. But you can't seem to see past those people to those who are truly destitute through no fault of their own.
Re:IRAs (Score:4, Insightful)
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I agree with you that healthcare should not be provided by employers. It causes more problems that way and prevents people from starting their own businesses due to the risk of not being able to afford healthcare. If companies were not allowed to provide health insurance then we would see the price decline.
I do think 401ks are great and all companies should offer them. Companies should be able to decided if they want to contribute or not, but offering them should be mandatory. I'd much rather get my tax bre
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Well that would require jobs that are well paid enough to leave something for saving.
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I've been paying into for decades that has much much lower returns than the market
Market returns are *expected* to be higher, but that's because you personally assume the risk of losing all of your investments in a market crash.
and probably won't be there for me when I need it.
The risks of SS not paying you is wholly political, and the main risk is getting a truncated payment because nobody has the guts to raise taxes and/or retirement ages to match changing demographics.
Without SS, you have to save enough to cover the eventuality that you live to be 100+ years old, and you forfeit the benefits of much of the extra savings if you die de
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You're thinking there are more financially responsible people in the US than there actually are. Not to mention, a lot of people barely make it paycheck to paycheck. This isn't necessarily because they are not responsible, they have low paying jobs and live in areas that are barely affordable. Most of their money goes to housing, food, transportation, then if they have some left over, the responsible people put the tiny bit of money left over away and the majority of those folks waste it on material junk
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Social Security won't go away, it'll just become less and less for you, unless you're in the bottom portion of earners. That's already been happening for the last few decades.
Social Security income used to be untaxed. Now it's taxed if you and your spouse have income over $32,000. That number isn't indexed for inflation, so slowly all Americans will pay tax on their social security income. Additionally, only 85% of social security income is taxable now, but congress could easily make that 100% with a lo
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Yeah, I've been hearing that bullshit for decades. Social Security is incredibly important, unbelievably popular, and trivial to "save". It'll be there for you if you just stop voting for the same people who are actively trying to sabotage it to prove that they were "right" about it all along.
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Disagree. It's complicated because certain actors in the financial services industry have an interest in making it complicated. The basics can be written on an index card:
https://en.wikipedia.org/wiki/... [wikipedia.org]
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There is also limit issues. It's what like 6k for an IRA per year max? That is a really small amount for anyone to get to a real retirement with. I max my 401k and max my IRA and I'm still concerned with maintaining my lifestyle in retirement so I put 2k extra in the market each month.
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I honestly doubt that limits to how much someone can put into these is an issue for almost everyone. They just either don't have the extra money to set aside and/or the discipline to do so.
My retirement plan is to get an old RV, a Starlink satellite, and do occasional consulting gigs to pay for the basic necessities. Then someday they'll find my remains sitting outside of my RV deep in the woods with a cheap glass of wine in my hand and a smile on my face.
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IRA is 6k, 401k is like 22k. If you over 50 its 7500 and 30k. Not to mention employer matching on the 401k which should be several thousand at least. That's a decent chunk to put away each year.
If 30 years of this level of savings isn't sufficient to maintain your lifestyle, perhaps your lifestyle is the problem (not to mention most people reduce their lifestyle in retirement. Downsize home, reduce bills, maybe move to an area that taxes retirement income less, and of course you are no longer saving for re
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Reduce bills and such sure, but it's a game of unknowns. How long will I live? What medical care will I need? What will inflation be like? What will taxes be like? WIll the market stay sane enough to make this actually grow?
my IRA will be about a million at retirement if the market does what is expected. That's 2 years of salary, so let's call it 8 years of retirement at best. The 401k was started in my 30's so it might be another million or two. I guess I just need to make sure I die 10-15 years into retir
Re:Product complexity. (Score:4, Interesting)
The problem with IRAs is that, if you have any other retirement plan during the year, you are not eligible.
We found this with my wife a couple of years ago. She worked 1 day for a local school district and they put a tiny amount into the teachers' retirement plan and that meant that, for the whole year, she was not eligible for IRA contributions.
Re: Product complexity. (Score:4, Informative)
I don't know about your specific scenario, but up can contribute to an IRA, a 401k, an HSA, a 529, and have a company pension plan - all in the same year. Each one has annual contribution limits but they don't affect each other.
Re: Product complexity. (Score:2)
Keep in mind that most people don't have an extra 2k to invest each month. Full-time employment at the federal minimum wage is only 1160 per month. Most people making minimum wage only get 32 hours so they don't have to be provided healthcare. That's 870 before taxes.
Re: Product complexity. (Score:4, Informative)
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You've told me enough that you make a lot more than most people in America. $6K is about $5K more than most people are able to save in a year. You really need to talk to more people to understand or realize you would be considered "wealthy" by most metrics. I consider myself financially responsible, there is no way I can max out my 401k let alone also contribute to and max out an IRA and then still have $2 per month left over to invest after paying expenses. Good for you, but you're in the minority by a
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I understand that I'm better off than most. My point is that if I'm scared at my income level and savings, the average american is basically screwed.