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American workers are finding it harder to save for retirement !
Old 01-12-2007, 09:31 AM   #1
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American workers are finding it harder to save for retirement !

What's the best way to overcome this problem?
http://www.ibtimes.com/articles/2006...pectations.htm
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Re: American workers are finding it harder to save for retirement !
Old 01-12-2007, 09:44 AM   #2
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Re: American workers are finding it harder to save for retirement !

I figure the easiest way to solve this problem is to accept that when they are retired and eating dog food because they spent all their money on HDTVs and trips to Cancun when they were younger, the government will institute a wealth tax, because it obviously will not be fair that I have $2M and they have nothing.

I can't wait !
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 11:02 AM   #3
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Re: American workers are finding it harder to save for retirement !

As bbuzzard implies, the problem is that people are living beyond their means. They seem to believe that they can afford a much higher standard of living than reality dictates. It's as though they decide they "deserve" a certain standard of living, and live according to their fantasy whether or not they can actually afford to do so.

Priorities need to be re-aligned. How can someone insist that they cannot afford to save for retirement, but they can afford a car, living quarters that they don't have to share, or taking on a dependant spouse and/or kids?

wog777 asks, "What's the best way to overcome this problem?". I can't say that I know the BEST way, but I do know that paying off credit cards and loans before expanding your lifestyle is a good start. Don't even think of taking on obligations like a car, house, or dependent spouse until you are debt free, living on your income easily, and have enough left over to fund your plans without going into debt to do so.

It's not as easy to live well now, as it was 50 years ago. Getting on sound financial footing is pretty much a prerequisite. Reality is pretty harsh sometimes but I think it has to be faced.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 11:39 AM   #4
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Re: American workers are finding it harder to save for retirement !

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It's not as easy to live well now, as it was 50 years ago
want to have some 1957 surgery?, limit yourself to 1957 drugs?, live in a 1957 house?, drive a 57 chevy (maybe)? etc. etc. our living standards are greatly improved over the last 50 years. what has become problematic, is that many have apparently misused some of the financial/debt instruments which were not then available. 50 years ago one had no choice but to live within their means ... today it's too easy not to do so.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 11:46 AM   #5
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Re: American workers are finding it harder to save for retirement !

I think that sound bite solution would be to have everyone on a budget that takes into account the need to save for retirement. But unfortunately, a significant number of people aren't really interested in doing that. It will take a lot of education. I know that the company that I work for (very large Dow component) has simplified the retirement plan to a few choices in order to get people to contribute. They also sponsor these sort of financial seminars to try to get their employees involved.

Of course, Steve Martin has this problem too.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 12:23 PM   #6
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by bbuzzard
.... when they are retired and eating dog food ....
and licking their genitals as well - apprently dogs do this to take away the taste of the dog food :P
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 02:48 PM   #7
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by d
want to have some 1957 surgery?, limit yourself to 1957 drugs?, live in a 1957 house?, drive a 57 chevy (maybe)? etc. etc. our living standards are greatly improved over the last 50 years. what has become problematic, is that many have apparently misused some of the financial/debt instruments which were not then available. 50 years ago one had no choice but to live within their means ... today it's too easy not to do so.
Back then, people didn't make a purchase unless they had the money in hand to pay for it. Today, we figure if we can afford the monthly payment, or defer payment for 6 months, then we can afford the purchase. Just think how often financing is used to sell a product today....you can drive this car off the lot for only $250 a month (oh yeah.....$250 a month for 60 months).
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 02:53 PM   #8
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Dog
Back then, people didn't make a purchase unless they had the money in hand to pay for it. Today, we figure if we can afford the monthly payment, or defer payment for 6 months, then we can afford the purchase. Just think how often financing is used to sell a product today....you can drive this car off the lot for only $250 a month (oh yeah.....$250 a month for 60 months).
I remember hearing how stressful it was to sit down with a banker and ask for a mortgage.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 03:15 PM   #9
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by bbuzzard
I figure the easiest way to solve this problem is to accept that when they are retired and eating dog food because they spent all their money on HDTVs and trips to Cancun when they were younger, the government will institute a wealth tax, because it obviously will not be fair that I have $2M and they have nothing.

I can't wait !
Yeah, it's already been discussed but not implemented. It's called means testing. If it's ever implemented, I guess it will work something like this......

Joe, our average American, lived well. He had cars, HD TV, all the cable channels, country club, vacations, and credit card debt. Now he is retiring and he is dependent on Social Security and his $15k roth ira he started three years ago. He needs Social Security to survive. Mr. bbuzzard on the otherhand saved diligently for 20+ years and now has a nestegg of $2M. He therefore does not "need" his Social Security to survive. He has the means to live well without it. Mr. bbuzzard's Social Security (and who knows what else) will be "adjusted" downward so that those that "need" their SS won't have to take a cut. Ouch. Means testing.......to those who haven't saved, it's a great way to make sure that no one goes without in their later years.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 03:22 PM   #10
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Re: American workers are finding it harder to save for retirement !

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I remember hearing how stressful it was to sit down with a banker and ask for a mortgage
I remember hearing how stressful it was to sit down with a banker and ask for a mortgage
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 03:32 PM   #11
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by dusk_to_dawn
Yeah, it's already been discussed but not implemented. It's called means testing. If it's ever implemented, I guess it will work something like this......
In the UK it works in increased handouts. It always makes my father mad to see so many of his friends and neighbors getting all sorts of govt handouts because all they have is their govt pension. (ie SS). He has a small private pension which just takes him over the means tested threshold.

In France they tax an individual's net worth over ~ $1m

http://www.frenchentree.com/fe-legal...le.asp?ID=2173


Wealth tax is payable by any 'household', resident of France, whose combined worldwide assets are valued at more than 732,000 euros on January 1, 2005. Your 'household' includes spouses and dependent children, and it should be noted that stable unmarried couples are also taxed together. Non-residents of France may also have a wealth tax liability, but only on their French property assets.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 03:51 PM   #12
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Re: American workers are finding it harder to save for retirement !

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Originally Posted by Alan
Wealth tax is payable by any 'household', resident of France, whose combined worldwide assets are valued at more than 732,000 euros on January 1, 2005. Your 'household' includes spouses and dependent children, and it should be noted that stable unmarried couples are also taxed together. Non-residents of France may also have a wealth tax liability, but only on their French property assets.
I suppose this is a tax on all assets and that would include real estate. I don't live in an area with really high real estate prices like LA, San Francisco or New York, but I would imagine there are some high real estate areas in France, and 732,000 euros would be a threshold that many hit if they have held onto real estate for many years. Oh well, there is no escaping death and taxes.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 03:51 PM   #13
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Re: American workers are finding it harder to save for retirement !



TV and other forms of advertising. created by Madison Ave. do such a good job most people have expectations for material wealth that is unrealistic.

It begins with Sat. morning cartoons and continues throughout your life as you are bombarded with advertisements. Just look at your kids and grandkids to see the super consumers they have become.

Hard to save money when you're always looking to buy the next must have status product or take that vacation that you "deserve".
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 03:58 PM   #14
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Re: American workers are finding it harder to save for retirement !

Quote:
Originally Posted by dusk_to_dawn
I suppose this is a tax on all assets and that would include real estate. I don't live in an area with really high real estate prices like LA, San Francisco or New York, but I would imagine there are some high real estate areas in France, and 732,000 euros would be a threshold that many hit if they have held onto real estate for many years. Oh well, there is no escaping death and taxes.
Yes, the net worth includes equity in real estate.

The recent rise in French and UK property prices, particularly in the south of both countries, means that the number of people liable to wealth tax has increased dramatically.....
Wealth tax does not exist in the UK, and the concept sometimes comes as a surprise to the British, since not only are you paying an annual tax on the value of assets that you built up out of your taxed income, but the authorities also oblige you to list everything you own, which can leave some people feeling that their privacy has been invaded.


However I can never see this happening in the US as we would never put up with the loss of privacy.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 04:01 PM   #15
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Re: American workers are finding it harder to save for retirement !

Since the article does not include reasons that people find it hard to save, it would be hard to provide a solution. I can think of two reasons: not making enough money, spending too much. I guess living below your means is one solution and making more money is another.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 05:52 PM   #16
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Re: American workers are finding it harder to save for retirement !

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However I can never see this happening in the US as we would never put up with the loss of privacy.
The IRS has been summoning the credit card associations (Visa and MasterCard) to give up records for foreign banks issuing cards people who might be evading taxes on their income. I would think that doing the same thing on their assets would just be another step.

http://www.usdoj.gov/opa/pr/2002/August/02_tax_485.htm
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 06:23 PM   #17
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Re: American workers are finding it harder to save for retirement !

A good example of spending - needing the biggest and best....
In 2001 I bought(brand new) a Kawasaki Prairie 400 ATV - it was the biggest and badest quad out there then. I bought the quad because where I live now has incredible places to ride to and enjoy.

I ride w/ a group of 5-7 at least 2x per month. I still have the same quad - runs perfect, looks good - - it is the oldest and smallest quad in the group now. All others are 650 - 800s - these guys buy new quads every time there is an increase in cc! I am the same age - or younger and the only one retired. It is almost like they can't enjoy the ride if they don't have the biggest, best machine and this attitude extends thru their lives.

They ask me when am I gonna get a new machine...I tell them when I can't keep up with them! Has'nt happened .... yet.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 06:43 PM   #18
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Re: American workers are finding it harder to save for retirement !

Um, any of you read "The Two Income Trap"? A somewhat flawed analysis, but very eye-opening and makes it pretty clear that the problem isn't SUVs and lattes.
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 07:09 PM   #19
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Re: American workers are finding it harder to save for retirement !

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Um, any of you read "The Two Income Trap"? A somewhat flawed analysis, but very eye-opening and makes it pretty clear that the problem isn't SUVs and lattes.
OK, you gonna tell us what it is.....
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Re: American workers are finding it harder to save for retirement !
Old 01-13-2007, 07:13 PM   #20
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Re: American workers are finding it harder to save for retirement !

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OK, you gonna tell us what it is.....
Its a whole book, but briefly they show that the basics (buying a home, family car, etc.) consume most of two incomes for most families, vs. much of one income back in the day. Today's families have relatively little discretionary income andthings get really bad if either earner is out of a job. Sending a second family into the labor force has made families less financially secure.
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