another gloomy retirement article

[brucethebroker]

I always wonder who the articles are aimed at...are they warnings to the young of dire consequences if not saving more for retirement (good luck with that), or are they provided for the better off retirees to read so they can feel smug?

Like others have stated, it isn't exactly breaking news.....

 

[Danmar]

I always wonder who the articles are aimed at...are they warnings to the young of dire consequences if not saving more for retirement (good luck with that), or are they provided for the better off retirees to read so they can feel smug?

Like others have stated, it isn't exactly breaking news.....

+1 They have little interest to me. But end up being common and long threads here?

 

[USGrant1962]

This article suggests that the "retirement crisis" has been exaggerated, primarily because people adapt to whatever income level they have.

What if the ‘retirement crisis’ has been exaggerated? - MarketWatch

I know this is click-baitey-Market-Watch, but the source is the Society of Actuaries and the report is here: https://www.soa.org/resources/research-reports/2017/2017-post-retire-exp-85-years-old/

Of course the study is of 85+ year-olds, so maybe not directly relevant to ERs, but I think the findings are valid for many people.

 

[ExFlyBoy5]

A Mike Judge fan and you own a DVD?! Yes, you are actually a GenX'er despite your age.

Meh. When I retired, my DW threw me an Office Space themed party complete w/ paper mache staplers (that were about 3 feet in diameter), a custom made true to the movie "Jump to Conclusion" mat and I have an authentic copy of a script signed by most of the cast. So yes, I am a fan boy.

It does frighten me that Mike Judge (also the creator of Beavis and Butthead) seems to be a modern day prophet, since it sure seems like the premise behind his film "Idiocracy" is playing out in real life...

 

[Andre1969]

Just because someone "owns their business" doesn't mean it will make a profit. I have known some people that have mortgaged their homes to keep it afloat. And letting someone manage their 401k is not that uncommon. Not everyone is financially savvy, so passing the risk on to individuals is going to be a problem in some cases.

Put me in the sympathetic category. I see MANY older people working, and I wonder why.

Yep, my guess is there's a lot of people out there who aren't financially savvy, so they just let someone else manage their 401k and other investments. One of my friends, a school teacher, almost got suckered into joining Primerica or Ameriprise or one of those investment companies. I always looked at them as a financial version of the Amway cult, where all they do is get you to sell overpriced stuff to your friends and family, get you to join their "team", and that if you don't want them to be successful, they're not really your friends. I told him right off the bat, I think it's BS. I also told him, don't ever try to sell me anything. He said that he knew better to even attempt that, that this company was there to help people who didn't know about investing and other financial matters. I think he realized what their game was, when he had to pay $50 or something like that for their "kit".

My parents and grandparents also didn't know much about investing, and didn't want to be bothered, so they pretty much just put it into safe, low-yield stuff, or got suckered by a financial advisor at the bank into putting it into something that gave a lot of kickbacks to the bank. They still managed to amass quite a bit, but that was because they had been saving for a long time, and they all got pensions, so they didn't have to rely on investments all that much.

I have an uncle who let me manage his 401k. He wanted nothing to do with it, and even when I tried to explain things to him, such as the rationale behind why I did certain things, he simply said he didn't care...I can do what I want, but if I end up bankrupting him he's gonna come live with me! Needless to say, I've made sure he's turned a profit, although once he gets old enough, he'll probably live with me, anyway. More of family looking out for each other than him being destitute, though.

I also have two friends, who refuse to invest too much time and effort into it. One of them, who's about 42, finally did ask me a few years back for some advice when his job started offering a SIMPLE, and I suggested he put 10% of his income into an SP500 fund. He doesn't pay attention to the statements, so I have no idea how it's doing...he's one of those types who thinks he'll just work forever.

My other friend is 31, and also puts away about 10% of his income into a 401k, but it's just going into a money market account. Inflation is most likely eroding it. I did talk him into investing in his company's stock, as they give a 15% discount. But, after a few months, he started getting leery of it, and is about to back out. He's another "work forever" type.

I'm sure we all have these types of stories, and that's probably one reason there's a demand for financial advisors.

 

[timo2]

Allow me to quibble I would have thought retirement porn would show old people who spend all their time living it up in places that look like those all-inclusive Caribbean resorts...not cleaning restrooms to keep food on the table

OK, fair point. how about 'Financial Voyeurism'. that would cover the positive and negative retirement articles. There clearly is a specific genre of articles about retirement that count as financial voyeurism. And this was one, IMO.

I have this vague feeling that I recall one of those couples being in a previous article in another magazine/paper. So maybe whenever a publication needs some looks, they dust off old stories and re-purpose them?

 

[Music Lover]

On the subject of teachable "stuff" in primary education, one are that I *think* would still have value would be typing and I say this from my recent experience in law school. For those unaware, the way most law school classes work is that you get one exam at the end of a course that counts 100% for the grade. Most of these exams are type writing essay-type exams. In many of these courses, there is a LOT to discuss and I have found that I will run out of time before I can get all these thoughts typed out. Mind you, I am a fairly quick typist, but I certainly could be faster. I have seen countless questions from folks that have asked, "How can I prepare for law school?" and the answers are quite varied, but I have yet to see anyone but myself offer the advice of taking a typing class.

I took typing for 2 years in high school just to fill in a couple slots but also as a way to meet girls as the classes were 90% female. Then I ended up in a job where I had to type reports on a regular basis, and the ability to type accurately at 45 - 50 words a minute really paid off. I soon noticed that I could complete a report in 45 minutes that took some others 2 or more hours to do.

 

[check6]

I thought it was pretty sad. My wife and I make very good $$$ and save ALOT (no kids), but I'm cognizant that there are folks who have children and perhaps no education and just can't salt it away like most of the folks on this board. It cost nothing to show some sympathy, you just never know how things may turn out.

I have always wondered why people have children before they can really afford them and then struggle the rest of their lives.

 

[Running_Man]

Compared with the old system of company pensions, the new retirement system does not serve the average American well, said Ghilarducci, the labor economist, who teaches at the New School in New York “It’s as if we moved from a system where everybody went to the dentist to a system where everybody now pulls their own teeth,” she said..

This Ghilarducci is mentioned in almost all of these types of articles, I wonder how many journalists have her as free to quote on financial articles about 401K's (she favors confiscation and monthly payments)

 

[ExFlyBoy5]

I took typing for 2 years in high school just to fill in a couple slots but also as a way to meet girls as the classes were 90% female. Then I ended up in a job where I had to type reports on a regular basis, and the ability to type accurately at 45 - 50 words a minute really paid off. I soon noticed that I could complete a report in 45 minutes that took some others 2 or more hours to do.

When I was in Jr. High, I took home economics and I was the only dude in the class. It was my favorite class..BY FAR.

 

[beowulf]

I have always wondered why people have children before they can really afford them and then struggle the rest of their lives.

The list of reasons is extremely long. Got married very young. Got pregnant very young and had no choice. Wanted to have kids right away. Always loved children and want to have them regardless of whether they felt they could really afford them. And the reasons go on forever.

My personal belief is that, if you try to wait until you can really afford them, you will never have them. For most folks who marry in their 20s, it's a great time to have kids. Their incomes will most likely rise over time and they are young enough to enjoy them fully. A poor, but valid analogy is buying a house. If you wait until you have the full price in cash, you may never get one. The sentiment is different, but the logic is the same.

I have friends who married in their late 30s, first marriage, and had kids as late as 45 or even older. Sending kids to college when you are in your 60s or older is a real drag on ER. Plus, little kids are a LOT of work.

Anyway, the decision to have children should hardly ever be dependent on your current income. Like the kids, it will grow. Of course, if you are talking about people who are destitute and living on the streets, one would hope they have the common sense to not have kids. But, after all, living on the streets doesn't demonstrate a lot of common sense. You can also wonder why people take drugs, invest stupidly, get married 5 times, live in flood zones, don't brush their teeth, and why the dinosaurs became extinct.

 

[karen1972]

I also wonder those that are too poor to have kids...to me its a chicken and egg thing. I know plenty of people that are poor because of their adult children. Plenty of co-dependent relationships there. During the recession nearly 80% of the people on my street had adult children living with them. I know far too many people who loan money, babysit for free (when they themselves need money), not to mention people pulling money out of their retirement to put their kids through college, etc etc etc.

I think the baby boomers forgot how to say NO. I know far too many enablers that then end up struggling and acting like its that they never had any money whatsoever... but its not true, they had some money and they chose to give it to your kids...just not via a typical inheritance (drops and dripples) and unfortunately that tends to become generational.

 

[Music Lover]

I know 2 people that were less than 5 years away from retirement and a modest pension that would have been enough had they not divorced. But they did divorce and subsequently lost half of that pension to the ex. Both couples also sold the houses as no one could afford to buy the other one out. Net proceeds from one of the house sales was a little over $100k (split in half), and I believe that the proceeds from the other house sale was similar (although I don't know the actual numbers).

All 4 exes are now living in separate apartments, and none of the 4 will be able to get by on just a half pension each.

 

[beowulf]

Karen1972- not sure what you are trying to say. Is it that parents shouldn't do everything they can to raise their children to be successful adults if it impinges on their retirement savings? Then only filthy rich people would have kids. There would be no blue collar workers, no waiters or waitresses, no middle class and certainly no bottom 20% of the population economically.

I have no idea whether you have kids or not. If you had a child that was extremely ill, are you saying you wouldn't spend everything necessary to help that child, even it it exhausted your entire savings? What if you had a child with a Downs Syndrome, some sort of degenerative illness or any other condition that meant you would have them dependent on you for the rest of their lives? Would you help a child who lost their job and their only option was to homeless?

Maybe you're not implying that, but it sure sounds like it. If you were in a situation where your child was in deadly danger and it was you or your child, would your first instinct be to save yourself? I'm not talking about overindulging them. Adult children should be self sufficient and that's the ideal outcome, but it doesn't always happen. No one is too poor to have kids. It's sort of a biological thing. But once you have them, you have an obligation to help them to the best of your ability.

As to college, if you are poor enough, your kids can always work their way through college or get scholarships, but wouldn't you want to help in any way you can? I don't think too many parents regret helping their children to the best of their ability. A rational decision on when to stop can often be made, and it can rip a family apart. Babysitting, giving them money in an emergency (not loaning money - you either give it to them with no expectation of repayment or not), even letting them move back with you in times of extreme Hardin, like after a nasty divorce, are all part of being a parent.

I knoew it's not that common for most Americans today, but for many cultures, parents raise their children, have them leave and then the parents move in with the kids. It ain't pretty, but it occurs in most of the third world. America is an anomaly in many ways. Most of the world doesn't have the luxury of doing what you say.

I have 2 kids. One moved out after college and never lived with us again. The other stayed 2 years after college and moved on, and didn't live with us after that. And yes, we paid for our kids college though it put us way back in saving for retirement. We even helped them with grad school when they needed help. And helped them when they were laid off. I wouldn't have it any other way. We didn't get to retire when we were 50, but the investment in our children was well worth it.

 

[karen1972]

beowulf - Of course I'm not talking about dire circumstances. However, in my home town most people make $30k or less so people more aligned with this article. The adult children are always "borrowing" money and making one poor decision after another. I don't know a family that doesn't have at least one child who is always going to be dependent on their parents to bail them out. At $30k, you spent every dime you had to raise your kids, when they turn 18 is your chance to start to maybe save some money and get a car that doesn't make that weird noise and is always in the shop. You make a go of it, its fine, you manage, and your kids are loved and all is well. But then you turn 65 and don't work and then you realize your totally hosed because you have no money and SS doesn't cover basic expenses.

Borrowing: there it is defined as your parents don't have any money, but they give you the last of their savings anyway and tell you not to tell the other kids because the other kids would be pissed because well mom and dad don't have money to borrow you as they skip meds or don't get their teeth fixed or car fixed because the loser sibling 'borrowed' money again.

It is a very very very common phenomenon at least in my experience since I can pick out each of my friends siblings that fall into that category. you can spot them by the pepole that go out and buy something stupid with their windfall tax return. They are renting and then have to buy a rental for that 4wheeler they got but can't put gas in the car because payday isn't until Friday.

 

[haha]

beowulf - Of course I'm not talking about dire circumstances. However, in my home town most people make $30k or less so people more aligned with this article. The adult children are always "borrowing" money and making one poor decision after another. I don't know a family that doesn't have at least one child who is always going to be dependent on their parents to bail them out. At $30k, you spent every dime you had to raise your kids, when they turn 18 is your chance to start to maybe save some money and get a car that doesn't make that weird noise and is always in the shop. You make a go of it, its fine, you manage, and your kids are loved and all is well. But then you turn 65 and don't work and then you realize your totally hosed because you have no money and SS doesn't cover basic expenses.

Borrowing: there it is defined as your parents don't have any money, but they give you the last of their savings anyway and tell you not to tell the other kids because the other kids would be pissed because well mom and dad don't have money to borrow you as they skip meds or don't get their teeth fixed or car fixed because the loser sibling 'borrowed' money again.

It is a very very very common phenomenon at least in my experience since I can pick out each of my friends siblings that fall into that category. you can spot them by the pepole that go out and buy something stupid with their windfall tax return. They are renting and then have to buy a rental for that 4wheeler they got but can't put gas in the car because payday isn't until Friday.

Without a solid expectation of reciprocity society falls apart. Without a cohesive society that can effectively levy sanctions, reciprocity falls apart. Confucianism works, the old Judeo-Christian social control worked. Not much works any more.

Ha

 

[Nemo2]

Without a solid expectation of reciprocity society falls apart. Without a cohesive society that can effectively levy sanctions, reciprocity falls apart. Confucianism works, the old Judeo-Christian social control worked. Not much works any more.

Ha

https://www.umanitoba.ca/faculties/arts/anthropology/courses/122/module1/social.html

We can best understand the social aspect of culture by realizing that the central function of human symbolization is communication and requires adherence to understood conventions.

 

[Danmar]

beowulf - Of course I'm not talking about dire circumstances. However, in my home town most people make $30k or less so people more aligned with this article. The adult children are always "borrowing" money and making one poor decision after another. I don't know a family that doesn't have at least one child who is always going to be dependent on their parents to bail them out. At $30k, you spent every dime you had to raise your kids, when they turn 18 is your chance to start to maybe save some money and get a car that doesn't make that weird noise and is always in the shop. You make a go of it, its fine, you manage, and your kids are loved and all is well. But then you turn 65 and don't work and then you realize your totally hosed because you have no money and SS doesn't cover basic expenses.

Borrowing: there it is defined as your parents don't have any money, but they give you the last of their savings anyway and tell you not to tell the other kids because the other kids would be pissed because well mom and dad don't have money to borrow you as they skip meds or don't get their teeth fixed or car fixed because the loser sibling 'borrowed' money again.

It is a very very very common phenomenon at least in my experience since I can pick out each of my friends siblings that fall into that category. you can spot them by the pepole that go out and buy something stupid with their windfall tax return. They are renting and then have to buy a rental for that 4wheeler they got but can't put gas in the car because payday isn't until Friday.

I have no doubt your experiences are based on fact, but you truly live in a different world than I ( and hopefully many others) do.

 

[beowulf]

That's pretty much my situation. I have no personal experience with families that earn $30,000 total and give so much of it pto their kids that it affects their ability to live. I do know several famililie where one or more kids either never left home or moved back in as adults. And a few where a daughter moved home with a child after a divorce and never left again. Even one or two where a kid married and both the kid and their spouse and child now live in the parents basement. But none of these famililies were so financially stressed that they had to lower their lifestyle in any major way or give up on their own retirement savings. Maybe delay accumulation for their retirement goals, but not have any savings at all.

I guess I do live in a different part of the country. There are poor people, there are street people, there are people on welfare and Medicaid, unemployed, etc., but I doubt that their situation has anything to do with what they gave their kids. I'm sure it happens, I just don't have any personal knowledge of it.

 

[UnrealizedPotential]

I have no doubt your experiences are based on fact, but you truly live in a different world than I ( and hopefully many others) do.

I am trying to get my sister not to rely on our parents so much. It is not an easy task. I give her solutions, but she doesn't like any of them. All she wants is money handed to her. Her daughter is just like her. I think they both despise me because of it. I mean she is over 40 , come on!

So let them eat the fruit of their own way. When our parents die she will have a BIG problem. She doesn't want to face up to reality. Life is hard. You must make tough choices to survive, but she doesn't want to make the tough choices. She just wants a handout. Life usually doesn't work that way.

 

[haha]

I guess I do live in a different part of the country. There are poor people, there are street people, there are people on welfare and Medicaid, unemployed, etc., but I doubt that their situation has anything to do with what they gave their kids. I'm sure it happens, I just don't have any personal knowledge of it.

I know several divorced women who give enough money to their daughters to make the mother's life constrained. Nobody has lost her house, but the usual way to deal with upkeep seems to be to find a handy boyfriend and hang on for dear life. I hope this will last as middle age becomes old age but I have my doubts.

I think they could go back into family court, but I suppose that poses a risk that she pay her lawyer, and not get a grant or a bump up. Also, these people are not dragons, so the personal pain involved can be tough.

There are many ways that bad judgement or unwise empathy can really make things tough. IMO "empathy" to the extent that it involves cash transfer is a highly overrated virtue.

Ha

 

[W2R]

I have no doubt your experiences are based on fact, but you truly live in a different world than I ( and hopefully many others) do.

That's for sure.

My own family dynamics were very different. Neither my brothers nor I ever asked our parents for a dime, nor would we have received anything had we asked. We were expected to function as full grown adults and pay our own way, once we were around age 18.

 

[Dash man]

Then there’s the other side of the coin. My ex is asking my son for money to pay the utilities. He’s got his own young family now and is at a loss how to deal with his 61 year old mother that doesn’t have a decent job. She hasn’t paid rent to her father in years, so is estranged from the rest of her family. I gave him some cash to get her through the winter months, but told him he should strongly encourage her to find any work she can or look into social services. The money stops in the spring. She thinks it’s coming from him.

 

[scrabbler1]

That's for sure.

My own family dynamics were very different. Neither my brothers nor I ever asked our parents for a dime, nor would we have received anything had we asked. We were expected to function as full grown adults and pay our own way, once we were around age 18.

My family dynamics were close to yours. My brother and I have been very successful in our adult lives. After college (my parents paid 1/2 the major costs after scholarship), the most my parents did for me was to lend me some money to cover the closing costs when I bought my apartment, and I repaid them in 7 months. My brother has his own business and is wealthier than I am (and my NW is over $1M).

My dad isn't wealthy but lives comfortably since he retired 23 years ago at age 63. (Mom is deceased for 22 years.) He jokes to my brother and me that when he has to spend some money unexpectedly, "There goes some more of your inheritance." Gives us a good laugh.

 

[Mdlerth]

Shaking head sadly

I am trying to get my sister not to rely on our parents so much. It is not an easy task. I give her solutions, but she doesn't like any of them. All she wants is money handed to her. Her daughter is just like her. I think they both despise me because of it. I mean she is over 40 , come on!

So let them eat the fruit of their own way. When our parents die she will have a BIG problem. She doesn't want to face up to reality. Life is hard. You must make tough choices to survive, but she doesn't want to make the tough choices. She just wants a handout. Life usually doesn't work that way.

I am in the same situation, only further advanced. Both sisters have been tapping our parents for between 10-20 years. Mom and Dad had been living on about 1/3 of their retirement income, and gifting the remainder to my sisters with an occasional bonus to one brother. Every week or two there went another check for a thousand, two thousand, ten thousand.

Of course, what my parents did with their own money is their own affair, not mine. But two months ago they had to move into a nursing home which is eating up their entire income, so the money spigot to my sisters got shut off. They are extremely unhappy about that, because they had become dependent on that side income stream.

It's gone. The girls spent it as fast as they got it and there's no more. There are hints that a lot of it went into some illicit pursuits, but again, it's really none of my beeswax.

It never rains, it pours. Both sisters' husbands in the past year have developed lung cancer. Very sad, and financially a major setback, since it both adds expenses and removes a source of household earning potential.

When I say it's none of my business, it's true... until it becomes my business. During the years before I knew the full scope of The Operation, I had been guilty of sending them the odd bailout. Once or twice a year, I'd drop an occasional k-note into their bucket, reasoning that "in my family, we have each other's back". I didn't comprehend that I was just a pawn.

One sister called me two weeks ago to lobby for a fresh donation. When it became clear I wasn't about to stroke a quick check for five large, she hung up.

I'm not budgeted to underwrite my sisters' questionable financial decisions. Nor am I inclined to engage in what I now recognize as enabling behavior. So now when her house gets foreclosed on, it's going to be my fault for being a cheapskate SOB who wouldn't help.

Life is indeed hard. But it's a lot harder when you've pi$$ed away a half million or more in free money just before the well runs dry.