Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: baby boomers article
Old 03-05-2006, 02:33 PM   #21
Thinks s/he gets paid by the post
JPatrick's Avatar
 
Join Date: Jun 2005
Posts: 2,494
Re: baby boomers article

Then there is this little tidbit that will make many here feel good about being in the Top 10% of net wealth.
The net worth of the typical family in the richest 10% rose to $831,600, a 6.5% increase from 2001, adjusted for inflation. In contrast, the net worth of the typical family in the bottom 25% fell 1.5% to $13,300.
The top 10% here excludes the big guys in the Forbes400 and the top 1 % is many times higher.* Net wealth incudes cash type assets,(401K, stocks, savings accounts etc)* cars, and real estate.* Does not include defined benefit pensions and of course your liabilities are subtracted.
More info here
http://bigpicture.typepad.com/commen...agnant_ne.html
__________________

__________________
JPatrick is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: baby boomers article
Old 03-06-2006, 08:32 PM   #22
Recycles dryer sheets
 
Join Date: May 2005
Posts: 58
Send a message via MSN to cons Send a message via Yahoo to cons
Re: baby boomers article

here are some articles i recently found:

http://finance.yahoo.com/columnist/a.../yourlife/2808

Standards of Life in the Future: Think Grim
by Ben Stein

Monday, March 6, 2006
[Ben Stein]

I've had a couple of bad experiences recently that sharpened my worry about what life will be like for retirees in the future -- I fear that a catastrophe of declining standards of life is heading our way.

I'm thinking about how bad it has gotten in terms of how customers are treated. A few days ago, I called the saleswoman at an auto dealer who sold me my last car a few years ago. I asked her to come over and show me the newest model of my car and told her if I liked it, I would buy it on the spot.

"Sorry," she said. "Too busy."

"Really? Are you selling that many Cadillacs?"

"Well, I'm not really selling any, but a lot of people are looking and wasting my time," she said.

"But you know I'm a qualified buyer who has bought from you before," I protested.

"Maybe I'll fax you some stats," she said helpfully. I never got them.

How Much Worse for the Masses?

Today, I was supposed to have a nice comfy seat on United Airlines. Full-fare first class. When I got to the gate, the agent said my seat had been changed to one up against the bulkhead, and there was no way she could move me. No apology, not even looking me in the eyes.

On the plane, no flight attendant would help until an older one, from the days when United actually had some self-respect, asked a young man to change with me. He did, and I was happy. But meanwhile, the flight attendant who did help me told me I was the only full-fare first-class passenger in the cabin, and still no one had wanted to help me until she came along.

My point is how terrible service is -- even at the higher end in 2006 -- and then to add this chilling thought: If this is how bad it is at the high end now, can you imagine how awful it'll be for everyone in 2020? When all vestiges of service are gone? When no one speaks English? When all customers are just ciphers?

Look at it this way: Think of the most crowded freeway you're on every day. Imagine what it'll be like in 10 years. That's what hospitals will be like -- if they're not that way right now.

Retiree Vulnerability

To make the situation worse, retirees and those who will soon retire are far from financial safety (see "Living Hand to Mouth -- and Barely Getting By"). I recently calculated that the Baby Boomers need to have saved -- on average -- $400,000 per household to even start to come up with what they need to live on. Instead, they have saved about $50,000 per household if they have a rental home and about $110,000 if they own their home.

So, what will they do when they retire? What will it be like to cut pills in half, to have to sell your home and move into a trailer, to be faced with unaffordable repairs for your car?

Try this experiment: Imagine you have to slash your spending by half. What goes first? Restaurant meals -- fine. Vacations -- fine. New clothes -- fine. But that won't even come close to cutting spending in half for most people.

The sad fact is that retirees will suffer. And for the leading edge of the Boomers is: It's too late. Many of them cannot escape a drastic ratcheting down in income and lifestyle. A crisis akin to the Great Depression is racing our way: A ruinous drop in standards of life.

Shoring Up Your Retirement Savings

What will it be like to live in the horrible new dog-eat-dog world, with no one caring whether you live or die -- and have no money? What will it be like on that crowded freeway? You don't want to find out.

How do we get to high ground? I suggest -- unless you're already on track to have 15 times what you need to live on at retirement socked away by age 65 -- taking 20 percent of your paycheck if you possibly can, putting it in the Fidelity Fund (FFIDX) or the Vanguard Total Stock Market Index Fund (VTSMX) until you're 55, then putting half of it into the Fidelity Total Bond Fund (FTBFX) or Vanguard Total Bond Market Index Fund (VBMFX).

Maybe if you have a few bucks extra, buy the iShares MSCI Emerging Markets Index ETF (EEM) or the iShares Russell 2000 Value Index ETF (IWN) for developing market or small-cap exposure. But for heaven's sake, do it now.

When you get to 65, put half of it into a fixed or variable annuity -- chosen so you know what every dime in expenses goes for and without buying anything you don't need or understand -- and then know you won't totally run out of money ever (see "A Retirement Portfolio With Staying Power"). Or do something else with a reputable financial planner.

But be very scared -- and start doing something about it now. Tomorrow is too late. Do it now




http://www.fool.com/Server/printarti...ry06030315.htm

Prepare for a Gruesome Retirement

http://www.fool.com/news/commentary/...ry06030315.htm

By Selena Maranjian (TMF Selena)
03/03/2006

It's time for some tough love. I want you to have a comfortable retirement, doing things that you enjoy and things you've always wanted to do. That may mean dining in some fine restaurants, traveling to the Galapagos Islands to see blue-footed boobies, taking your grandchildren to Hershey, Pa., and living in a spiffy retirement community. But judging from some statistics I recently ran across, you're in danger of a retirement that instead features dining on Salisbury steak TV dinners, traveling to the Git'n'Go down the street for a bag of chips, taking your grandchildren to the Salvation Army store with you as you shop for some new clothes, and living in your grouchy daughter's damp basement.

The facts
According to the 2005 Retirement Confidence Survey (RCS), we can be confident that many people will have gruesome retirements. Why? Here's a clue: According to a another survey, 31% of Americans would rather scrub a bathroom than plan for retirement. That's right -- if you've been putting off planning for your retirement, you're not alone.

Check out the RCS numbers below, which reflect the total savings and investments (not including the value of the primary residence) of today's workers, broken down by age groups:


Retirement Savings All 25-34 35-44 45-54 55+
Less than $25,000 52% 70% 50% 41% 39%
$25,000-$49,999 13% 12% 15% 14% 12%
$50,000-$99,999 11% 9% 14% 13% 7%
$100,000-$249,999 12% 5% 10% 17% 23%
$250,000 or more 11% 4% 10% 16% 19%


These numbers might not seem so scary, until you think them through a little. First off, remember that the numbers above ignore Social Security. That may be just as well. I've still got at least two decades until retirement. I recently received my latest statement from the Social Security Administration. The amount I can expect to receive at my full retirement age of 67 isn't much more than my current mortgage payment. My 30-year mortgage won't be finished by the time I hit the big 6-7, and my mortgage and tax payments will likely be much higher because of rising taxes. Making matters worse is the possibility that we can't be entirely sure that Social Security will be around in much the same form in our own golden years.

Pensions? Well, darn few of us have traditional pensions anymore. Check out this snippet from an Associated Press article: "In 1985, 89% of Fortune 100 companies offered traditional pension plans, but that had fallen to 51% by 2004, according to Watson Wyatt Worldwide, a human resources consulting firm. Some 11% of the plans in the Fortune 1000 were frozen or terminated for new employees, up from 5% in 2001."

So let's rely instead on those factors that are under our control -- our savings and investments.

What the facts mean
Let's say you're a typical American 40-year-old worker. According to the table, there's about a 50% chance that your savings and investments total less than $25,000. Let's be generous and assume you have $20,000 socked away. You've also got about 25 to 30 years until you retire. How will that money grow for you? Check it out -- let's assume you earn the market's average long-term return of 10%:

* 2006 (age 40): $20,000
* 2016 (age 50): $51,875
* 2026 (age 60): $135,550
* 2036 (age 70): $349,000

Now let's use some information I've gleaned from our Rule Your Retirement newsletter: In order to make your nest egg last, you should conservatively plan to withdraw about 4% of it per year in retirement, to live on. So 4% of $349,000 is almost $14,000. That's nearly $1,200 per month. Will that be enough? Well, according to an inflation calculator I checked, over the past 30 years, what cost $1 initially ended up costing about $3.75. Let's say that prices only triple over the next 30 years. If so, your $14,000 in 2036 will buy you what $4,700 will buy you today. That's less than $400 per month.

Another way to look at it is to realize that the 4% withdrawal rate should include inflation-indexed increases, so if you're taking out $14,000 in the first year and inflation that year is 3%, the next withdrawal will be 1.03 times $14,000, or $14,420. Can you see how quickly your money will get depleted this way? (Note that you can withdraw more each year. If you're taking out 5% annually over 30 years, you have roughly a 3-in-4 chance of not running out of money, but that's much less of a sure thing.)

If you want to live off the current equivalent of $50,000 per year in 30 years, you might estimate that you'll have to be able to withdraw $150,000 yearly. If that's 4% of your nest egg, it will need to be ... $3.75 million.

It's better ... and worse
Of course, this is just one hypothetical example, and there are lots of other concerns that make matters both better and worse. For example:

* Many of us are well past 40 and still have less than $25,000 socked away. Heck, 39% of those 55 and older are in that camp.
* But remember that we can all make the situation better by investing regularly. A rule of thumb is to save and invest 10% of your income, but more is better.
* Many of us will have home equity to tap, if need be, in retirement. We'll also likely be receiving at least something from Social Security, and perhaps even a little from a pension.
* Keep in mind that the stock market's return over the next 10, 20, and 30 years isn't likely to match the historic average of 10%. It may well be higher -- or lower, meaning you can end up with a considerably smaller nest egg than you expected. It's similar with individual stocks. Look at Intel(Nasdaq: INTC) as an example. Between March 1996 and March 2006, its stock advanced roughly 200%. But over the decade starting three years earlier, between March 1993 and March 2003, its stock rose about 365%.
* Don't assume that your stash of company stock will save you. Having too much of your financial future resting on the fate of one company is risky. If you'd acquired shares of stock in the Gap(NYSE: GPS) five years ago, for example, you'd be underwater by more than 20% today. Investors in Coca-Cola(NYSE: KO) haven't fared much better, leaving investors who've hung on for the past 10 years not much richer than when they started. This doesn't mean these companies won't ultimately surge and reward us, but if anyone was counting on them to do so by a certain time, they've likely been disappointed.






Personally, I'm not a big fan of Ben Stein because of his constant talk and love for annuities. I did like the Fool article better. However, neither of these authors mentioned the fact that many baby-boomers will be receiveng an inheritence before or by the time they retire (mid-sixties). I remember reading somewhere that cureently, we have the richest senior-citizens ever, compared to past generations of senior-citizens.
__________________

__________________
cons is offline   Reply With Quote
Re: baby boomers article
Old 03-06-2006, 08:41 PM   #23
 
Posts: n/a
Re: baby boomers article

Ben Stein is a pompus idiot!
__________________
  Reply With Quote
Re: baby boomers article
Old 03-06-2006, 08:47 PM   #24
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,124
Re: baby boomers article

Quote:
Originally Posted by cons
Personally, I'm not a big fan of Ben Stein because of his constant talk and love for annuities. I did like the Fool article better. However, neither of these authors mentioned the fact that many baby-boomers will be receiveng an inheritence before or by the time they retire (mid-sixties).
What both articles failed to mention is that a significant number of the financially unprepared (those whose health will permit) will NOT be retiring in their mid-sixties. They will be forced to continue working as long as they can as they will really have no choice.

We pointed this out in another thread and found some comfort in the fact those who continue to work will continue to fund SS. Looks like Ben Stein missed the fact that these old folks might also be more customer friendly.

Then again if they are forced to continue working when they want to be retired, they may be a customers worst nightmare.

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: baby boomers article
Old 03-06-2006, 08:58 PM   #25
Full time employment: Posting here.
 
Join Date: Feb 2006
Posts: 784
Re: baby boomers article

Quote:
Originally Posted by cons
It's time for some tough love. I want you to have a comfortable retirement, doing things that you enjoy and things you've always wanted to do. That may mean dining in some fine restaurants, traveling to the Galapagos Islands to see blue-footed boobies, taking your grandchildren to Hershey, Pa., and living in a spiffy retirement community.
Personally, whenever I see blue-footed boobies I find that's a sign of ill health and not a good kind of booby.
__________________
Cool Dood is offline   Reply With Quote
Re: baby boomers article
Old 03-06-2006, 09:57 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: baby boomers article

Quote:
Originally Posted by Cut-Throat
Ben Stein is a pompus idiot!
CT - stop holding back...you've really gotta express your true feelings. Let it out! Save yourself years of therapy!

Quote:
Originally Posted by Cool Dood
Personally, whenever I see blue-footed boobies I find that's a sign of ill health and not a good kind of booby.
Ok, its not just me that thought that. I think thats good... :|
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 11:16 AM   #27
Recycles dryer sheets
starry night's Avatar
 
Join Date: Mar 2006
Posts: 86
Re: baby boomers article

Another good source for info on coming retirement/boomer crisis is Brookings Institute (www.brook.edu). They have all kinds of projects, analyses, reports. Try searching for topics "Retirement", etc.
__________________
The best things in life aren't THINGS!
starry night is offline   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 12:39 PM   #28
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
Re: baby boomers article

Quote:
Sometimes I feel I should take my pile of marbles and move to another "younger" country...i.e. one that doesn't have the same oncoming trainwreck of demographics...course I don't know what country that would be.
Ask HaHa! Of course, in the US, it's the immigrants who are coming in working and and in particular birthin' all the babies who are going to pay into SS in the future... (By that measure, maybe we aren't letting enough people in.)

---
I was just reading "How to Retire Early and Live Well with Less than a Million Dollars". One weird thing in the book was the author's premise that once boomers start retiring en masse, the consequent withdrawal from the stock market will lead to an overall decline in prices.

With the low numbers everyone is citing for retirement savings, is this likely? Does anyone know what percentage of the US market is held by pension plans and individuals, say 45-50 and over? Who holds the rest?
__________________
ladelfina is offline   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 01:21 PM   #29
Thinks s/he gets paid by the post
Rustic23's Avatar
 
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 3,624
Re: baby boomers article

[
Quote:
Originally Posted by ladelfina
the author's premise that once boomers start retiring en masse, the consequent withdrawal from the stock market will lead to an overall decline in prices.
Does the author address the increase savings in the market by non-BBs that don't expect SS to be available? Perhaps there will be some what of an offset.

__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
Rustic23 is offline   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 01:27 PM   #30
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
Re: baby boomers article

No, but that's a good point. Wonder how many people will actually be doing that, though. (Not many if reports here are correct.)
__________________
ladelfina is offline   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 01:32 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: baby boomers article

Quite simply, boomers wont be retiring 'en masse', I'll bet half or more keep working to 70+. And yeah, the sense of distrust thats been created around pension plans and social security availability for those in their 20's and 30's *should* lead to a little more personal investment...but the spending and savings habits of most people leave that area in question.

I predict a pretty soft landing from all of this.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 03:32 PM   #32
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,618
Re: baby boomers article

Quote:
Originally Posted by ladelfina
... once boomers start retiring en masse, the consequent withdrawal from the stock market will lead to an overall decline in prices.
Funny how this board can simultaneously discuss:
- Social Security is broke,
- Medicare is broke,
- we're running out of workers, and
- the @#$%ing Boomers are gonna crash the stock market,

when all the time the solution has already been taken care of. The Boomers are spending all their money now, working until they're in their 80s, and dying at their desks. They'll pay plenty of SS & Medicare taxes while hardly taking anything out of Medicare-- a double bonus!

Instead of complaining how the Boomers are inhibiting the advancement of younger workers, I think the younger workers should ER and let the Boomers support THEIR lifestyle!

Oh, wait, that's called parenting...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is online now   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 03:57 PM   #33
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
Re: baby boomers article

From The Onion satirical newspaper:

More Companies Phasing Out Retirement Option

http://www.theonion.com/content/node/44679

"With pension funds dwindling as retirees enjoy longer, more capable lives, many businesses have opted to freeze their workers' employment status and keep them on the job through their sunset years.
...To the list of outmoded and costly business practices such as health insurance, overtime pay, and lunch breaks, add age-based quitting.* Post-retirement age labor is great for companies and it's a great way for seniors to stay active. But multi-tasking on the job can take its toll.* GE customer-service rep Esther Fischbeck, 88, is juggling career, widowhood, and early-stage Alzheimer's disease...There's a place at our organization for everyone--the young, the old, the mentally incapacitated, the moribund.."

__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Re: baby boomers article
Old 03-08-2006, 10:16 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: baby boomers article

That explains those problems getting my refrigerator serviced.
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Will baby boomers retire different from their parents johnbrady Life after FIRE 30 11-03-2006 07:27 PM
How the Baby Boomers will Rock the Market PsyopRanger FIRE and Money 17 07-10-2006 11:00 AM
Baby Boomers renferme Life after FIRE 64 02-09-2006 06:01 PM
Will Boomers Cash In Mountain_Mike Other topics 85 03-22-2005 01:24 PM
Baby stuff cute fuzzy bunny Other topics 36 11-04-2004 12:22 PM

 

 
All times are GMT -6. The time now is 01:10 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.