Posted on 09/27/2016 6:25:46 PM PDT by Be Careful
In business, the 80/20 rule states that 80% of your business will come from 20% of your customers. In an economy where more than 2/3rds of the growth rate is driven by consumption, an even bigger imbalance of the “have” and “have not’s” presents a major headwind.
(Excerpt) Read more at zerohedge.com ...
Blondes can be dangerous. I married one.
The baby boomers who think they can live off Social Security are going to have a rude awakening. They’ll end up moving back in with their millennial kids and there will be a plethora of multigenerational households just like there used to be. Only it used to be that the most generations in one household was three. Now with people commonly living into their 90’s there could be four or five. Gonna need a bigger house.
Pushing 65, divorced in ‘89. I was able to save more and spend less when I run off my ex.
I work because I love my job and I can’t believe they pay me this much to have this much fun. I don’t need to work.
From what I see, it's the other way around. Millennials can't afford housing, and are moving in (or staying in) their baby boomer parent's homes. Of the baby boomers who have no homes, neither do their millennial children - they all rent. So it's more of a sharing of rent arrangement for those baby boomers who don't own homes, sharing rent between multiple generations.
You can live off Social Security if your home is paid off, you have no debts, and your property taxes are reasonable. It's a tight squeeze but doable. If inflation continues to outpace SS COLAs as has been happening, then the squeeze will be a stranglehold. I don't rely on my SS income in retirement because I have investment income - never have counted on SS being there for me.
“And lucky us Generation X & Y’ers that are responsible enough to save for a rainy day or two that get to support them!”
I’m a GenX’er. And I save. I save until it hurts.
I look at articles that demonstrate how little the average American saves and it’s appalling! We’re not taught finance and economics properly! I suppose the subjects are too liberating.
I work in finance, and some very smart people, in finance, are not putting anything away, zero!
I tell them, man, you need to start and yesterday! Tax deferred, compounding interest, employer matches and the time value of money.
Though I will admit, I look at our nest egg and often think of what a political target that must be for far too many...
Wonderful!
And many don’t really want to.
hope you leave them a little something when you kick the bucket...
We’ll both be out by 55. been planning it for 15 years.
The real reason is that I started thinking ahead at about 30, and really kicked it into high gear about 40.
No so sure about avoiding interest. DW and I bet heavily on inflation through owning rental real estate, and that has paid off well.
Study the economics and history of inflation. High inflation benefits governments so we will always have it. And it has been with us since before the time of Christ, so it has a long track record.
Save, buy property now with a mortgage you can handle, and pay it back with inflated dollars in the future. Rinse, repeat as often as possible.
My wife and I bought a house that met our needs instead of extending ourselves and we didn't do a ,lot of extravagant vacations along the way to retirement. Too many folks never get started thinking about it until they're in their mid 50's and end up living the "simple" life due to no other options.
While the economy sucks, all it really takes is to stay steadily employed and to sock some away every payday before splurging - self discipline is an archaic concept these days.
My millennial kids (in their 30’s) have nice houses, but they scrimped and saved for about a decade so they could afford decent downpayments.
As a millennial, if you got and kept a decent job before the 2008 crash and didn’t get laid off then, you’re probably okay. It’s the ones who didn’t get a good job by then or who are in their 20’s and can’t find a decent job now who are stuck.
I guess it is possible to live off SS alone, but only if you live in a cheap area, own your house and car, and live very simply. Very simply. And thanks to Obamacare, if you’re under 65 and buying your own health insurance, forget it-you’d be eating dog food.
My millennial kids (in their 30’s) have nice houses, but they scrimped and saved for about a decade so they could afford decent downpayments.
As a millennial, if you got and kept a decent job before the 2008 crash and didn’t get laid off then, you’re probably okay. It’s the ones who didn’t get a good job by then or who are in their 20’s and can’t find a decent job now who are stuck.
I guess it is possible to live off SS alone, but only if you live in a cheap area, own your house and car, and live very simply. Very simply. And thanks to Obamacare, if you’re under 65 and buying your own health insurance, forget it-you’d be eating dog food.
State was just a job after a couple of civilian jobs in same field.
Proud of my service. Probably upset you that the wife is retired Army, also. We're not "well off", just disciplined.
Do you have a problem with defending the nation or just with compensating those who do it?
I’m a “Y’er”.
Like you I’ve been saving for a long time with that employer match.
Not too many of us around that do this in our age groups.
We are a political target, but for now we’re very responsible.
Too many people live for today - animal mentality.
Social Security has always been an inter-generational income transfer program. Benefits for any given generation are paid by an earlier one.
However, Boomers have found themselves in a difficult position, due to Congress undermining Social Security in the 70's. Benefits were raised higher than could be sustained, on an actuarial basis.
It became obvious that it would run out of money when Boomers retired, so taxes were increased about 50% in the 80's. That's part of the reason why many Boomers haven't saved enough on their own. But, Boomers found themselves paying for the Social Security benefits of their parents and grandparents, and pre-paying a substantial part of their own benefits. That's why the Trust Fund has about $2.7 billion in it right now.
But there's a problem: the economic and demographic assumptions were too optimistic. Social Security was supposed to be actuarily sound for 75 years (i.e. until 2060 in 1985), but now it's only expected to last until 2034. At that point, Social Security will exhaust the Trust Fund, and by law, can only pay benefits that are funded by incoming tax revenue. They can't borrow money. At this time, it's estimated that benefits must be cut 21 percent, across the board.
Baby boomers wrote their fate more than anybody else. They thought that big government was a great thing.
This problem wasn't created by the Boomers. It was Social Security beneficiaries back in the 70's that created it -- they were a formidable lobby, led by the AARP. Social Security was considered the "third rail", and anyone who even suggested touching it was burned badly. That's why these unsustainable changes were made to Social Security. But since then, no substantial group of people have been willing to advocate the changes that are needed.
Freepers are better informed than most LIVs, but I've found that even Freepers have their head in the sand when it comes to Social Security. They won't accept that while they personally aren't responsible for the plight of Social Security, they have to share the pain of fixing it.
The usual meme is "they stole money from Social Security". No, every dime is accounted for: Social Security loaned excess taxes to the federal government, as specified in the original legislation. That's what is in the Trust Fund: special obligation Treasury bonds.
What the federal government did back in the 60's: they borrowed money from Social Security, but didn't add it to the official deficit. So, the $19 trillion debt is actually about $22 trillion, when you add in the obligations to Social Security. There are also additional obligations to federal employee pensions, but that's another subject.
Social Security stopped collecting enough taxes to pay benefits a few years ago -- about 5 years earlier than expected, due to the recession. So, the Trust Fund is being drawn down, as expected. The rate of withdrawal will accelerate, until it's all gone.
We missed the chance to fix Social Security back in the 80's. Other countries like Chile, Australia, New Zealand and Singapore have discarded inter-generational transfers in favor of an asset-based system, sort of like a national 401(k). The (second) Bush administration suggested that option, and was shouted down.
At this point, we really only have two choices: raise taxes, or reduce benefits. Taxes have to be raised substantially, or benefits have to be reduced, substantially. The Social Security administration has pages of proposals they have evaluated, and none of the popular options (like means testing) make any significant difference -- the best they do is kick the can down the road a little longer.
At this point, you may be ready to click that post button and flame me. Don't waste your breath, because I've studied this for the past year, trying to quantify the effect on my retirement plans. If you have a question, I'll try to answer it. But, if all you want to do is bitch about how it's someone else's fault, you are wrong. Collectively, the fault belongs to all of us, because we let Congress take the easy way out.
Let's get these out of the way immediately: The Disability Insurance (DI) program is certainly being abused, but it's separately funded and accounted. The old age and survivor insurance (OASI) program funds retirement benefits, and even outright elimination of DI wouldn't fix Social Security. And while the Supplemental Security Income (SSI) program is administrated by Social Security, but is funded separately from the general fund.
Here's the absolute truth about what went wrong: Social Security has been paying more money that it can afford to your grandparents, parents, and you -- in the past, now, or in the future. That's what happened to most of the money, leaving current and future taxpayers holding the bill.
If you still want to blame someone else, I'll leave you with this quote. I can't take credit for it, but I think it fits this and many other situations:
Conspiracies make things easy. If there's a conspiracy, you can blame it for any problem, and your own problems, and not do anything, because there's no point. It's much easier then self-responsibility.
I've been telling relatives and co-workers that for years. My kids and nieces/nephews are entering the workforce, and I've been doing a lot of new-hire training.
Don't leave that employer match on the table! Make at least the minimum contribution to get that. I also do some quick calculations to show how much it will be in 40 years, with a modest rate of return.
I'm sure you figured this out, but tell everyone you know: the time to start planning retirement is in your 20's. If you wait until your 30's, you'll have much less to spend or you will have to work until your 60's.
My wife and I retired in our 50's, and because we maxed out our retirement contributions, we minimized our spending. That's an additional benefit -- we didn't have to lower our spending in retirement.
I got you beat by 10 years on the retirement age but you did good. Now, do you have any suggestions for that impulse to get back in the work day hunt? You know, wake up to an alarm clock, be stuck in traffic...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.