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Article - Bleak retirement outlook for millions
Old 03-28-2008, 09:48 AM   #1
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Article - Bleak retirement outlook for millions

I'm sure that most folks on the ER forums are well aware of all this. It just underscores how unusual we FIRE-minded folk are (and I mean that in a good way) Pretty scary scenario for people who don't make plans beyond the weekend though

Bleak retirements for 150 million? - MSN Money
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Old 03-28-2008, 10:26 AM   #2
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So true. A lot of them just aren't putting aside enough money for a reasonable retirement. Others may be saving enough for a marginal retirement, but aren't putting anything aside for the unexpected.

In 10-20 years, expect to hear a lot of heart-rending stories on the news about retirees who were confronted by some minor obstacle and are now destitute.

After all my extreme LBYM'ing, I do NOT want to fund their recovery with further tax dollars. I suppose that if SS survives, maybe that would provide at least partial bare bones subsistence. However, these people who do not plan well are not likely to budget well or even know how to LBYM in a pinch.
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Old 03-28-2008, 11:50 AM   #3
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I'm with Want2retire - As I read this, I had the uncomfortable deja vu all over again feeling that we will be seeing something like the subprime bailout for spendthrift retirees who just can't get by on SS and it isn't their fault.

I shudder at the thought. It may get very ugly.
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Old 03-28-2008, 11:58 AM   #4
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We are inexorably moving toward a society where the ants will increasingly support the grasshoppers, and where there will be less and less incentive to be an ant.

When a critical mass of people believes and expects that government will bail them out for bad decisions and irresponsibility-- when a critical mass believes that there is no longer sufficient incentive to work hard, save your money and provide for yourself -- heaven help the economy.
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Old 03-28-2008, 12:17 PM   #5
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The prospect of people who save being penalized by having to support those that do not is terrifying. I'm only 25 and I'm sure I will have to support the Boomers who didn't save as well as the Gen Xers that didn't save. Maybe retiring to another country is the way to go...
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Old 03-28-2008, 12:39 PM   #6
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After all my extreme LBYM'ing, I do NOT want to fund their recovery with further tax dollars. I suppose that if SS survives, maybe that would provide at least partial bare bones subsistence. However, these people who do not plan well are not likely to budget well or even know how to LBYM in a pinch.
Aw, come on. All that Ha Ha and I are asking is another l5 years.

Playing tournament golf, and in Ha Ha's case, Salsa Dancing with 25 year olds aint cheap.

If you guys aren't up to it, I'll be forced to vote for a Democrat (first time ever), that will take care of us.
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Old 03-28-2008, 12:44 PM   #7
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If you guys aren't up to it, I'll be forced to vote for a Democrat...
Uh oh. Isn't outrageous behavior one of the first signs of dementia?
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Old 03-28-2008, 01:09 PM   #8
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DH and I have had numerous conversations predicting that the ants will end up taking care of the grasshoppers - he has even suggested that we join the grasshoppers (it just isn't in our nature). Just listening to the campaign promises provides a scary glimpse into the future. Sad that our future leaders don't believe in and encourage personal responsibility and hard work - I guess that won't get them elected.
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Old 03-28-2008, 01:09 PM   #9
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Uh oh. Isn't outrageous behavior one of the first signs of dementia?


You've definantly got a point there. I'll have to check it out with the guy that handles my mental health. (Billy-Bob's Bait and Tackle).
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Old 03-28-2008, 01:34 PM   #10
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So true. A lot of them just aren't putting aside enough money for a reasonable retirement. Others may be saving enough for a marginal retirement, but aren't putting anything aside for the unexpected.
Why would that be? I must say some people do want to live beyond their means. They borrow until they can't pay.

But in my experience I've seen far too many who can't make ends meet just due to their low income, and many times just plain bad luck. The working poor of today will be the biggest sector of the retired poor of tomorrow. The race to the bottom is on.
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Old 03-28-2008, 01:38 PM   #11
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Ive had quite a few family members and friends mention they would rather spend the money now than later.
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Old 03-28-2008, 01:40 PM   #12
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The perfect solution.......

The government can buy up all the foreclosed McMansions and rent them out as group homes to the aging low income boomers. Should be able to fit 5-6 couples into 4000 sq ft. Might even rent them an old car to share, but they get to buy the gas.
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Old 03-28-2008, 01:43 PM   #13
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Why would that be? I must say some people do want to live beyond their means. They borrow until they can't pay.

But in my experience I've seen far too many who can't make ends meet just due to their low income, and many times just plain bad luck. The working poor of today will be the biggest sector of the retired poor of tomorrow. The race to the bottom is on.
Life does take some unexpected turns. Many people decide to raise a family, buy a house and live the American dream. Unless you have a pretty good job with security and benifits it is pretty difficult to live your life and save for the future at the same time. I think it becomes a balancing act of trying to enjoy life at the present and saving for the future. No matter how hard some people try, it seems like some major unexpected expense puts them back in the hole.
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Old 03-28-2008, 01:45 PM   #14
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Ive had quite a few family members and friends mention they would rather spend the money now than later.
My Dad was like that. It worked for him cuz he passed away at 60.
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Old 03-28-2008, 01:49 PM   #15
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Ive had quite a few family members and friends mention they would rather spend the money now than later.
Notmuchlonger, maybe this will help with the doom and gloom to come.



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Old 03-28-2008, 02:46 PM   #16
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DH and I have had numerous conversations predicting that the ants will end up taking care of the grasshoppers - he has even suggested that we join the grasshoppers (it just isn't in our nature). Just listening to the campaign promises provides a scary glimpse into the future. Sad that our future leaders don't believe in and encourage personal responsibility and hard work - I guess that won't get them elected.
The ants probably will, but I'd rather be an overtaxed, means-tested ant who is still able to have a nice steak dinner overlooking a tropical beach than an unprepared, subsidized grasshopper eating cheap tuna fish for supper again in a small government provided apartment. And yes I agree that many folks will end up there through personal tragedy and trials rather than lack of preparation.
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Old 03-28-2008, 02:55 PM   #17
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But in my experience I've seen far too many who can't make ends meet just due to their low income, and many times just plain bad luck. The working poor of today will be the biggest sector of the retired poor of tomorrow. The race to the bottom is on.
This is also my experience. However, it is much deeper than that. The majority of humans are not wired to easily understand mathematics and thus money. I am always amazed at, for example, what some people consider a "tremendous bargain." Another example is the blank look I get when I tell people that their chances of winning the lotto (or winning at the slots) are the same whether they buy a ticket or not. It's not that they discount the information so much as they really and truly don't understand.

It is easy to blame them for not playing the game properly but the fact of the matter is they were never taught how. (Yes, the onus is on them to learn it themselves but...) In any event, they are not living their lives in the expectation that someone will babysit them in some vague future. I suspect that the same "wiring' is responsible for a crystal ball that is much more cloudy than the one us lucky few use.
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Old 03-28-2008, 04:05 PM   #18
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Life does take some unexpected turns. Many people decide to raise a family, buy a house and live the American dream. Unless you have a pretty good job with security and benifits it is pretty difficult to live your life and save for the future at the same time.
This particular "American Dream" differs a little from the dream of past generations:
- It is paid for not by saving for years but by going into debt.
- It is far in excess of what previous generations expected. Huge televisions. Eating out almost every night. Going on foreign vacations frequently. The dream of previous generations was to pay off their house, retire without being a burden on anyone, and maybe help the kids get a better education than they had. No mention of a big screen TV or a Lexus.


So, lots of folks are having problems affording everything they want and also saving some money. Every generation has faced the same problem, it's not clear why government should be the answer at this point. Unfortunately, the reason the government might step in is that nearly 50% of people are now net "takers" of government largess. As soon as takers outnumber "takees," the system falls into a negative feedback loop (with ever-increasing demands from voters for more gimmees). Luckily, the system eventually re-establishes equilibrium --as soon as everyone is equally impoverished.

Before it is too late it would be highly advantageous to establish a system that gives more people a stake in reducing taxes. We're about to "progressivize" ourselves over a cliff.
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Old 03-28-2008, 04:23 PM   #19
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Okay, I'm an LBYM'er, so I think other Americans don't save enough.

But, Where did these guys the the 150 million number??
They say that there are nearly 100 million Americans between 21 and 64 with full-time, year-round jobs. 51 million particiapate in employer sponsored retirement plans.
There are about 180 million Americans in this age range. So 80 million don't work full time - some have already retired, some are in school, some are stay-at-home parents (full or part time) while the spouse works. Why would we conclude that they won't be ready to retire just because they aren't contributing to 401k plans this year?

Of the 49 million full time workers, some save through IRAs or other pension plans, some just save. Some are just starting work and paying off debts is smarter than retirement savings.

I'd guess that their 150 million is overstated by a factor of 3, based on the data that they present.
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Old 03-28-2008, 04:28 PM   #20
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We are inexorably moving toward a society where the ants will increasingly support the grasshoppers, and where there will be less and less incentive to be an ant.

When a critical mass of people believes and expects that government will bail them out for bad decisions and irresponsibility-- when a critical mass believes that there is no longer sufficient incentive to work hard, save your money and provide for yourself -- heaven help the economy.
I completely agree. And I guarantee you that as that time draws closer, you will hear cries of, "Oh.... but have a heart!!!, they did not know any better, were not intelligent enough, had bad luck, they were disadvantaged, etc." All of which will be excuses to take what most of us here in the forum have worked VERY hard in our lives to achieve. Do not be surprised when in the future, people start pointing their fingers at US (people that did save for retirement) and proclaim..."But you are rich... you OWE me something now...".
This identifies the main reason why socialism, and socialist programs have never worked, at least not for very long. It is because socialism pre-supposes that everyone (as individuals) will always do what is best for everyone (the collective whole). This of course is just not in human nature, and will never happen. There will always be a percentage of people that will want more than their "fair" share. And once that percentage gets too great, the entire system begins to unravel. As my retirement comes to fruition, I will be watching very carefully for laws enacted to try to take it away from me all in the name of "the common good".
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