The retirement crisis - yet another study

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WiseOne
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The retirement crisis - yet another study

Post by WiseOne » Tue Mar 21, 2017 7:26 am

Almost one-quarter of workers said they and their spouse combined have less than $1,000 saved for retirement, according to a report from the Employee Benefit Research Institute. Nearly half of everyone surveyed said they had less than $25,000.
Sure, $25,000 can sound like a lot. But it's a reasonable goal to have that much stashed away by the time you're 30 years old.
http://money.cnn.com/2017/03/21/retirem ... index.html

My emphasis.
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Maddy
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Re: The retirement crisis - yet another study

Post by Maddy » Tue Mar 21, 2017 8:14 am

MangoMan wrote:You do realize that, one way or another, the people on this board and others like them, who saved diligently for a lifetime will be called on [at gunpoint] to bail these people out? It may be hidden/stealth, but you will do it.
It's inevitable. Which is why it may make sense to aim for the mean.
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Re: The retirement crisis - yet another study

Post by Libertarian666 » Tue Mar 21, 2017 8:15 am

MangoMan wrote:
WiseOne wrote:
Almost one-quarter of workers said they and their spouse combined have less than $1,000 saved for retirement, according to a report from the Employee Benefit Research Institute. Nearly half of everyone surveyed said they had less than $25,000.
Sure, $25,000 can sound like a lot. But it's a reasonable goal to have that much stashed away by the time you're 30 years old.
http://money.cnn.com/2017/03/21/retirem ... index.html

My emphasis.
You do realize that, one way or another, the people on this board and others like them, who saved diligently for a lifetime will be called on [at gunpoint] to bail these people out? It may be hidden/stealth, but you will do it.
It will be rather hard to steal my savings by stealth, since they aren't in the bond or stock markets, nor are they particularly dependent on the US "dollar".

They can certainly steal them at gunpoint, but that tends to get people riled up, so they prefer the indirect ways, which won't work on me.
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Re: The retirement crisis - yet another study

Post by Libertarian666 » Tue Mar 21, 2017 8:16 am

Maddy wrote:
MangoMan wrote:You do realize that, one way or another, the people on this board and others like them, who saved diligently for a lifetime will be called on [at gunpoint] to bail these people out? It may be hidden/stealth, but you will do it.
It's inevitable. Which is why it may make sense to aim for the mean.
What does that mean (no pun intended)?
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Xan
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Re: The retirement crisis - yet another study

Post by Xan » Tue Mar 21, 2017 9:16 am

I think she means to aim to be as wealthy as the average person, rather than much more wealthy or much less wealthy. Getting too wealthy makes you a target. May as well spend it and have fun.
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Re: The retirement crisis - yet another study

Post by Libertarian666 » Tue Mar 21, 2017 9:17 am

Xan wrote:I think she means to aim to be as wealthy as the average person, rather than much more wealthy or much less wealthy. Getting too wealthy makes you a target. May as well spend it and have fun.
That would be the median, not the mean.

Which would be considerably lower than the amount needed to have any reasonable retirement income.
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Re: The retirement crisis - yet another study

Post by WiseOne » Tue Mar 21, 2017 10:07 am

Libertarian666 wrote:
MangoMan wrote:
You do realize that, one way or another, the people on this board and others like them, who saved diligently for a lifetime will be called on [at gunpoint] to bail these people out? It may be hidden/stealth, but you will do it.
It will be rather hard to steal my savings by stealth, since they aren't in the bond or stock markets, nor are they particularly dependent on the US "dollar".

They can certainly steal them at gunpoint, but that tends to get people riled up, so they prefer the indirect ways, which won't work on me.
Very few people follow the Libertarian666 formula, but this is one of the situations Harry Browne had in mind when he recommended holding part of your wealth in gold. I also foresee something coming down the pike. It may be as simple as an increase in FICA taxes, or it could involve means-testing for Social Security benefits that takes both income and net worth into account, or it may be as in-your-face as a one-time wealth tax on retirement accounts.
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Re: The retirement crisis - yet another study

Post by Jack Jones » Tue Mar 21, 2017 10:37 am

WiseOne wrote:or it may be as in-your-face as a one-time wealth tax on retirement accounts.
This scares me. The notion that it's just to take money from the wealthy to give to the less fortunate is almost not even up for debate anymore. It seems to be a core belief held by liberals I know.

So, now that we all agree that wealth redistribution is a good thing, the next step is to redefine what it means to be wealthy. The author of this piece felt the need to point out that $25,000 in retirement savings isn't actually a lot. How might readers classify someone with $1,000,000 in retirement savings?

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Re: The retirement crisis - yet another study

Post by Jack Jones » Tue Mar 21, 2017 11:12 am

TennPaGa wrote:Another option would be something like a Citizen's Dividend.
Doesn't that fall under:
MangoMan wrote: It may be hidden/stealth, but you will do it.
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Re: The retirement crisis - yet another study

Post by farjean2 » Tue Mar 21, 2017 11:50 am

I'm just a skeptical old man but when I see all the stories and T.V. Commercials about how people aren't saving enough for retirement I wonder if it's really driven so much by concern for people's retirement or is it fund managers worrying about not collecting enough in fees for their own retirement?

Personally, when I moved into our double-wide at the age of 32 along with my wife, 3 kids, and mother-in-law I was about 5 years into my career and had zero savings. I probably hadn't saved a penny until I was close to 40 and then got wiped completely out around 50. Retired last year with 7 figures, so it can be done.
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Xan
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Re: The retirement crisis - yet another study

Post by Xan » Tue Mar 21, 2017 11:55 am

Harry Browne's investment rule #2: Don't assume you can replace your wealth.
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Re: The retirement crisis - yet another study

Post by Jack Jones » Tue Mar 21, 2017 11:59 am

TennPaGa wrote:
Jack Jones wrote:
TennPaGa wrote:Another option would be something like a Citizen's Dividend.
Doesn't that fall under:
MangoMan wrote: It may be hidden/stealth, but you will do it.
Not necessarily. I'm simply thinking of direct payments to everyone.
To me, that falls under hidden/stealthy ways to redistribute wealth. We're not going to be taxing each citizen $40,000 in order to provide $40,000 to their neighbor. The "wealthy" will be taxed at a higher rate, of course.
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Re: The retirement crisis - yet another study

Post by Jack Jones » Tue Mar 21, 2017 12:29 pm

TennPaGa wrote:
Jack Jones wrote:
TennPaGa wrote:Not necessarily. I'm simply thinking of direct payments to everyone.
To me, that falls under hidden/stealthy ways to redistribute wealth. We're not going to be taxing each citizen $40,000 in order to provide $40,000 to their neighbor. The "wealthy" will be taxed at a higher rate, of course.
I'm not following you (I can miss the obvious sometimes, though).
My point was that although a Citizen's Dividend might seem fair to all citizens because all citizens get paid, it's not fair to the wealthy because they will largely be called upon to pay for the program. That's why it seems like a hidden/stealthy way to redistribute wealth to me.
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Re: The retirement crisis - yet another study

Post by Jack Jones » Tue Mar 21, 2017 12:50 pm

TennPaGa wrote:
Jack Jones wrote:My point was that although a Citizen's Dividend might seem fair to all citizens because all citizens get paid, it's not fair to the wealthy because they will largely be called upon to pay for the program. That's why it seems like a hidden/stealthy way to redistribute wealth to me.
Ah. OK.

I was thinking that the payments would be financed via T-bond/T-bill purchase, which doesn't seem stealthy to me.
Hmm, yeah perhaps they would be.

I always assume that taxpayers end up paying for everything, but I guess that's not always the case. ¯\_(ツ)_/¯
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Re: The retirement crisis - yet another study

Post by Tyler » Tue Mar 21, 2017 1:07 pm

I feel like they buried the lede. Reading the study they're referencing, 40% of people across all ages under 55 believe they will never retire. Why save for retirement if you believe it's impossible? In fact, when seen in the context of maintaining an emergency fund rather than thinking about retirement, I wager that a good portion of the people with under $25k in savings see themselves as perfectly financially responsible.

Financial attitudes have really changed. The lack of savings is just a symptom of a larger malaise.
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Re: The retirement crisis - yet another study

Post by Tyler » Tue Mar 21, 2017 2:22 pm

Xan wrote:I think she means to aim to be as wealthy as the average person, rather than much more wealthy or much less wealthy. Getting too wealthy makes you a target. May as well spend it and have fun.
Financial nihilism is not a plan. IMHO, those who plan ahead will always be afforded more options than those who do not.
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Re: The retirement crisis - yet another study

Post by moda0306 » Tue Mar 21, 2017 2:54 pm

Well we can all imagine a citizen's dividend and who will fund it, but until then, let's be clear... it's not the "wealthy" that fund Social Security... it's mid-to-high income wage/salary or self-employed income earners. In my experience, the vast majority of the time, these people aren't really all that "wealthy," and to the extend some are, their wealth is hardly responsible for much tax burden.

A "wealthy" person can live a relatively tax-free life.

A working "high-income-earner" can't.
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Re: The retirement crisis - yet another study

Post by Maddy » Tue Mar 21, 2017 3:09 pm

Remember Obama's statement--something to the effect of "You didn't build that?" He was referring to people who have built successful businesses, but I can easily see the same philosophy being applied to the acquisition of wealth generally. Dovetails nicely with the whole white privilege idea.
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Re: The retirement crisis - yet another study

Post by moda0306 » Tue Mar 21, 2017 3:32 pm

I'm sort of of the opinion that someone with a paid off house, $24k in SS income, Medicare, and $25k in savings isn't in as much of a "crisis" as the financial media would have us believe.

I could easily make that work.
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Re: The retirement crisis - yet another study

Post by farjean2 » Tue Mar 21, 2017 4:05 pm

moda0306 wrote:I'm sort of of the opinion that someone with a paid off house, $24k in SS income, Medicare, and $25k in savings isn't in as much of a "crisis" as the financial media would have us believe.

I could easily make that work.
And if you need long term care you may have to get rid of most of that $25k so you can qualify for medicaid and have the taxpayers pick up nearly all the tab.
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Re: The retirement crisis - yet another study

Post by I Shrugged » Tue Mar 21, 2017 7:05 pm

moda0306 wrote:Well we can all imagine a citizen's dividend and who will fund it, but until then, let's be clear... it's not the "wealthy" that fund Social Security... it's mid-to-high income wage/salary or self-employed income earners. In my experience, the vast majority of the time, these people aren't really all that "wealthy," and to the extend some are, their wealth is hardly responsible for much tax burden.

A "wealthy" person can live a relatively tax-free life.

A working "high-income-earner" can't.
You are correct.
What does that tell you about the US govt, elections, democracy, tax simplification, etc etc?

It tells me it is all democracy theater.
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Maddy
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Re: The retirement crisis - yet another study

Post by Maddy » Tue Mar 21, 2017 7:11 pm

Is it crazy to think that with a paid-off house you could hire some nice young person to provide you just enough help to allow you to stay permanently in your home in exchange for the deed when you die? (No nursing homes for me, thank you.)
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Re: The retirement crisis - yet another study

Post by ochotona » Tue Mar 21, 2017 7:17 pm

Maddy wrote:Is it crazy to think that with a paid-off house you could hire some nice young person to provide you just enough help to allow you to stay permanently in your home in exchange for the deed when you die? (No nursing homes for me, thank you.)
Good idea.
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Re: The retirement crisis - yet another study

Post by farjean2 » Tue Mar 21, 2017 7:32 pm

Maddy wrote:Is it crazy to think that with a paid-off house you could hire some nice young person to provide you just enough help to allow you to stay permanently in your home in exchange for the deed when you die? (No nursing homes for me, thank you.)
Probably is. Have you seen those commercials for Visiting Angels? What do you think you have to pay those folks? My sister works for an agency like that and it doesn't sound cheap though she doesn't get to pocket much of the money.

This is one of the reasons I've had plans to retire in the Philippines where my wife is from, even though on my last few trips over there I didn't feel so comfortable. In America, with everything done legally, you'd have to pay a lot of money to have people take care of you like that. And in the Philippines I think they would even have compassion for you while they were doing it. Just my observation.
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Re: The retirement crisis - yet another study

Post by Maddy » Tue Mar 21, 2017 7:55 pm

Another variation that I've always kept in the back of my mind: Years ago, a couple I know bought a piece of rural property from an older gentleman. He retained a life estate and had a contract with the buyers that allowed them to occupy the property and treat it as their own so long as he could continue living in his home situated in one corner of the property. My friends now own the property free and clear, and the gentleman died, happily, in his own home. He continued to work the property alongside my friends up until the day he died.
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