Posted on 06/15/2016 8:50:24 AM PDT by Lorianne
When American companies began switching from traditional pensions to self-directed 401(k)-like plans in the 1980s and 1990s, it was supposed to lead to a golden age of retirement security. No longer would workers be at the mercy of the company’s generosity or of Social Security’s solvency; workers themselves would be responsible for saving enough for a comfortable retirement.
Some 30 years later, the results are in: The median working-age couple has saved only $5,000 for their retirement, according to an analysis of the Federal Reserve’s 2013 Survey of Consumer Finances by economist Monique Morrissey of the Economic Policy Institute.
chart at source
(Excerpt) Read more at marketwatch.com ...
Well, look on the bright side. Thanks to Obamacare, their insurance premiums will be very affordable and so their little nest egg will see them through their golden years. /MAJOR SARCASM
I expect to see interest rates go negative. I read it has begun happening in Europe.
The thing that keeps coming back on the FairTax is how complicated it really is (see here); besides that, there's no reason that the FairTax couldn't be transformed over time into a monster worse than our current system; imagine, if you will a FairTax which varies the rate of the sales-tax based on your income (ostensibly to keep it from being "regressive") and then adding the type of item to the set of variables (oh, look ammo now has a 5000% tax!)… now imagine that system tied into commerce itself, say by forbidding buying or selling to anyone who isn't registered in this commerce/tax system (ostensibly to prevent fraud/tax-evasion; don't worry it's perfectly secure, by RF-microchip embedded in your forehead or right hand).
In short, the estimated savings in terms of combined yearly compliance/economic opportunity costs of the tax code is about 75%, not the 95% you get under FairTax.
I seriously doubt that 95% number.
My biggest problem with the Fair Tax is that it subjects post-tax income to new purchases (and therefore subject to the Fair Tax).
That means that I would have paid income tax on that money when I earned it under the current system, and then I’d pay the Fair Tax (the replacement for the current tax system) again upon buying something under the new tax system.
Post tax savings, that is. Sorry.
Not counting the fabulous wealth in store for them in the Social Security Trust Fund.
I’m in the same category as you and your spouse. My wife and I are far from rich, but we try to live within our means and put something away. Of course, we’re fortunate that I retired from the military and have a monthly pension check coming in, plus healthcare (TriCare has plenty of faults, but it’s a Cadillac compared to Obamacare). Unfortunately, there is a move afoot to push military retirees into the exchanges to pump some additional cash into BarryCare. The effort hasn’t been successful yet, but the bean counters in the Pentagon keep trying.
The folks I really feel sorry for are those under the age of 40. Meanwhile, many are stuck in dead-end jobs, living at home with mom and dad and burdened by enormous student loan debt acquired in the pursuit of worthless degrees—if they graduated. That’s why the snake oil from people like Bernie Sanders is so appealing. Sounds a lot better if your predicament can be blamed on someone else, instead of your own foolish decisions.
Ironically, the plan you talk about is still available to the younger generation. Sock away 15% of your income, no matter what you make and cut out a lot of your discretionary spending. I have a young woman working for me who has done just that. She came out of college with a meaningless degree (fashion merchandising) and thousands of student loan debt. But she resisted the temptation to take on more debt for another worthless piece of paper. Instead, she found a part-time job at the college where I work, moved back home and began aggressively attacking her student loan debt. She paid that off in two years and began putting money away. Now, she has accepted a full-time job with a major corporation and will start that position with virtually no debt and enough money to put down a payment on a town house.
There are a few young people who “get it” but the vast majority have been taught to demand everything now, no matter what the cost.
Watch out..negative interest rates are already in effect in Europe and they will be here before you know it.
I eventually had to pay off a car, some credit cards to improve my monthly cash flow since my new job only paid 60 % of what I was making before...
I didn't want to do it, but it was that or sell the house...
Thanks...Obama and the uni-party for screwing up the world greatest economy though Obamacare and new banking regulations...
Student Loans are going to crush the generation after mine. There's no ROI in taking on 20K, 50K, 100K in debt for a degree that's increasingly worthless.
I saw the writing on the wall when, at a former job, we had MBA's working the phones for 25 grand a year. They'd sunk 100K (or more) AND 6-ish years of their lives into an education .... to work a job cold calling other businesses.
Now, a few were promoted up, another few went up and out ... but IMO these few would have been successful no matter what. The rest will likely bounce around at the bottom and wonder why their expensive "magic degree" isn't opening the doors that it should. And this is with a degree (MBA) with a perceived value, in a business with a well-defined career path. There's just too much competition for too few spots.
A B.A. in "Anthropomorphic Feminist Studies" or "Social Justice" or other nonsense ... jeez, people like that have struck out before they've even gotten out of the dugout. Must be tough to be told how special and brilliant you are for 20-odd years, invest a fortune in time and money into yourself ....only to find that you're not qualified to do much more than pull beers in a Ruby Tuesday's for three nights a week.
'Tis why a complete socialist idiot like Bernie Sanders has such a large audience. "It's not your fault, and we'll just steal money from rich people" is a strong message to the weak minded.
Exactly. And I notice that those pushing the Fair Tax suddenly go silent when you bring that up.
Again, though, not many spots. And the work environment stinks, extremely high pressure, constant competition, terrible politics. One of divisions I handled was based out of NYC. Populated exclusively by nasty and difficult Asian women, and even nastier gay men. They'd cut your throat as soon as look at you, and there'd be 100 people waiting to step over your body before it got cold.
Place made a fortune though. You don't need to sell many sportcoats at $5000+ a pop (made in Vietnam. total cost? about nothing) to get seriously rich, very quickly.
My current job is in workforce development. If you look at the current job market, the biggest demand is for skilled workers with 6-18 months of specialized training beyond high school: welders, electricians, positions in advanced manufacturing; machining. You don’t even need an associate’s degree.
A colleague runs a highly-regarded machining program at a community college on the other side of the state. Grads from that program (less than two years) typically have 4-6 job offers from companies across the country. There are about 600,000 advanced manufacturing jobs currently unfilled because firms can’t find people with the right skill set.
Sadly, most young people today would rather pursue a worthless college degree (like Gender Studies) instead of enrolling in a Mechatronics certificate program. With that credential (and passing the Siemens Level I certification), you start off at $45K a year, plus overtime and full benefits. Earn your Level II and get a couple of years of experience, and you’re looking at $80K annually (or more, including overtime). Better yet, these are jobs that can’t be out-sourced, since they require IT, robotics, mechanical and trouble-shooting skills that are beyond the ability of low-wage workers overseas, or if you find someone with those skills, the labor cost advantage rapidly erodes and by the time you factor in transportation expenses, it becomes more cost effective to produce the item here in the States.
Obviously, we’re talking about highly specialized manufacturing and very skilled workers. But those jobs are out there. Unfortunately, most younger workers have been brain-washed that manufacturing jobs are dull, dirty, repetitive and likely to be shipped to China. So, they rack up $100K in student loan debt for useless degree that qualifies them to work at Starbucks.
I had a former boss that was a union machinist working at Cat. He tired of that and used his earnings to get multiple EE degrees. He likely would of been better off just staying a machinist, but he enjoyed his work as an EE...
At least he got a very marketable degree. If you can make it through electrical engineering, you’ve earned the nice salary those grads receive. Plenty of in-demand degrees; engineering, IT, accounting, even marketing. Unfortunately, today’s generation of snowflakes and cupcakes can’t handle the demands of a rigorous field of study.
The market still does a pretty good job in determining the relative value of a college degree.
I’ve asked about this for many years now, and invariably I get some fast talk about how all the goods I purchase will be less expensive since all the built in taxes will be gone.
Then I point out that my post-taxed dollar in savings has $ 1.00 of buying power and that’s exactly the same $ 1.00 in buying power that a freshly earned $ 1.00 will have.
We’re both subject to the new income tax, but the problem is that I already paid the income tax when I earned it (a burden the freshly earned $1.00 doesn’t bear).
Yep, I have never heard a coherent answer that will satisfy me regarding this nagging detail. Usually if I press the issue, Fair Taxers get upset at me and insist that I just don’t understand.
But folks like us do understand. :-)
No. The "median" is the score that represents 50% of the population being measured. It means that 50% of the couples have more than 5000.00, 50% have less than 5000.00. While some couples have zero, they cannot possibly be the majority.
Thank you for the clarification.
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