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Old 03-30-2012, 06:33 PM   #21
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Originally Posted by Brdofpray

That may be true. But those who had the foresight, and the tenacity to make their retirement happen, shouldn't be faulted by those that did not. I have read articles about how its not fair for you to retire, if I can't. It's not fair.

And my daughter would say, "who said life is fair" (she learned that from me.).
My opinion is more selfish than it appears. If we dont force them to save for themselves, the tax burden for those that do could become greater to take care of them whether we want to or not. That is my concern.
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Old 03-30-2012, 06:59 PM   #22
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Geez, I could repeat a lot of what has already been posted. I was born to frugal Depression age parents who taught me a lot about how to stretch a dime. We've been "savagely saving" for retirement since our early 20s. I always advise young people to save as much as they can as early as they can for retirement, etc.

DH will FIRE this year. The crap shoot is the federal government and what they'll do with SS, Medicare, taxes, and where inflation is headed in the future. I will be a little more than perturbed if we are penalized because we planned and saved to FIRE.
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Old 03-30-2012, 07:37 PM   #23
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My opinion is more selfish than it appears. If we dont force them to save for themselves, the tax burden for those that do could become greater to take care of them whether we want to or not. That is my concern.
+1
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Old 03-30-2012, 08:27 PM   #24
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My opinion is more selfish than it appears. If we dont force them to save for themselves, the tax burden for those that do could become greater to take care of them whether we want to or not. That is my concern.
+2

that said, I see nothing selfish about forcing those who can save to actually do so rather than chosing not to and then imposing a burden on the rest of us (obviously, the taxpayer funded safety net should still be there for those who cannot)
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Old 03-30-2012, 08:36 PM   #25
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I suppose they all have their own stories. Some made a serious mistake and failed to save for their old age and some others may have ended up where they are through some very bad luck.
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Old 03-30-2012, 08:40 PM   #26
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If it was a truly individualized account, I would have no problem with this. While I am not a big nanny state guy, the masses have to be protected from themselves. And believe me there are plenty who do not or will not save.
One of the things I like about the Australian model is the element of choice - default options apply but you have the choice of selecting your own investments if you wish or even setting up your own private self managed scheme. I wish we have adopted something similar in Hong Kong (instead of the wealth destroying abomination we did adopt ).
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Old 03-30-2012, 10:17 PM   #27
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If it was a truly individualized account, I would have no problem with this. While I am not a big nanny state guy, the masses have to be protected from themselves. And believe me there are plenty who do not or will not save.
A truly individualized system would miss the main benefit that both SS and insurance company's annuities have: the mortality credit. Individually, each of us would have to save for the worst (longest) case of survival, say, 95 or 100 years. Very expensive and most people will save too much because they will die well before that. Not an efficient system. Instead save through SS or an annuity. Because only survivors collect, the whole cohort does not need to save as much and can fund a consumer economy instead. This is why the Chinese savings rate is anywhere from 30% to 48%. Because every individual has to save for the worst case even though it is not very likely.

Really, this should be taught in high school so that all Americans understand what an extraordinarily stupid step it would be to revert to individual precautionary savings.
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Old 03-30-2012, 10:52 PM   #28
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Originally Posted by Khufu

A truly individualized system would miss the main benefit that both SS and insurance company's annuities have: the mortality credit. Individually, each of us would have to save for the worst (longest) case of survival, say, 95 or 100 years. Very expensive and most people will save too much because they will die well before that. Not an efficient system. Instead save through SS or an annuity. Because only survivors collect, the whole cohort does not need to save as much and can fund a consumer economy instead. This is why the Chinese savings rate is anywhere from 30% to 48%. Because every individual has to save for the worst case even though it is not very likely.

Really, this should be taught in high school so that all Americans understand what an extraordinarily stupid step it would be to revert to individual precautionary savings.
Good points, and I am not opposed to your suggestion. I do worry something needs to be done as many of the masses arent saving anything. We are still in the transitional phase that could get scary. I believe one of Micheals linked articles stated around 40-50% of male retirees have pensions. In 20 more years many of these people will die off and the annuity protection of pensions for many of the masses over 65 will be long gone.
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Old 03-30-2012, 11:37 PM   #29
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Hopefully the young guys now realize no one will be taking care of them when they retire and they will save for it. I think the boomers have been somewhat caught in between great pensions and no pensions, and lower SS and Medicare expectations. If they didn't pay attention, do things differently than in the past, and adjust on the fly as benefits were reduced, they may have let things slide.
Well, maybe young people will save more, maybe they will decide that society has to be changed..Some kind of European socialist model..guarantied pension, free medicine..
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Old 03-30-2012, 11:49 PM   #30
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Well, maybe young people will save more, maybe they will decide that society has to be changed..Some kind of European socialist model..guarantied pension, free medicine..
Like Greece?
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Old 03-31-2012, 12:12 AM   #31
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Like Greece?
Like Sweden
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Old 03-31-2012, 12:32 AM   #32
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Like Sweden
Sweden certainly has a lot of good things going for it - have a look at the list on the lower left hand side here: Swedish economy faces great uncertainty in 2012 (ignore the headline for present purposes).

But it sort of begs the question why the Swedish model works so well and what, on the surface, look like very similar models work so badly in countries like Greece, Spain etc? Unless and until that question can be answered I would be very reluctant to go to any system that offers people any kind of free ride (especially if the demographics point to an ageing population).
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Old 03-31-2012, 12:35 AM   #33
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Originally Posted by ratto
Hopefully the future generations in this country will learn something from this and become more savvy in savings and frugal.
We're 33 and 35 and are saving assertively for a no pension, no SS future. It seems that to be OK in our retirement cohort you need to start early and save much. We worry about our friends who are delaying retirement savings because of poor job prospects or kid expenses.

I'm very grateful for being exposed to good books (Millionaire next door, Your money or your life, The wealthy barber) while I was a broke college student. A little education at the right time goes a long way!
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Old 03-31-2012, 01:26 AM   #34
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Sweden certainly has a lot of good things going for it - have a look at the list on the lower left hand side here: Swedish economy faces great uncertainty in 2012 (ignore the headline for present purposes).

But it sort of begs the question why the Swedish model works so well and what, on the surface, look like very similar models work so badly in countries like Greece, Spain etc? Unless and until that question can be answered I would be very reluctant to go to any system that offers people any kind of free ride (especially if the demographics point to an ageing population).
Spain, Greece traditionally more agriculture countries with low productivity. South, siesta Sweden industrial country with high productivity. It could be one of the reason. I have never compared those countries , cannot say.
What I'm trying to say, that I'm really afraid if retirement and medicine will be available only for chosen..it could end up in social problems what will be difficult to solve..already we have attempt to tax reach, all those comparison 99% vs 1%, etc..
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Old 03-31-2012, 03:19 AM   #35
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I agree with this.
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I fear that all of this is only going to get worse. Many, many boomers have a totally unrealistic idea of how far they can go on a 401K that is barely big enough to buy a new car.
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Old 03-31-2012, 10:15 AM   #36
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Like Sweden

+1

It is very difficult for lower income people and lower middle income people to save for retirement. Many struggle just to get by, especially single women. I think it unrealistic that voluntary retirement savings will occur with this population. And if they did save some money. Do you think it would be a very substantial amount. Since we are not from the Chinese culture, we need to change our culture in one way or another. Whether it be forced annuities, individual pension, or increase in social security deductions for a more generous payout. Everyone is not wealthy. Divorce has created financial havoc on this country, as many woman are left to raise children on their own with little or no support from the father.

Many were not able to go to college for one reason or another, so they remain in lower paying jobs often without health benefits. Many lack the intellectual capacity to secure a high paying job.

We have only two choices. We say "to bad". Your not my problem and I don't want you taking any of my money to help you out. Or we say, thank goodness I am one of the smarter ones who was fortunate to have a good job, save money and stay with my spouse to the end, and I am glad to be contribute to society to help those not as fortunate as I.
Rest assure those on the receiving end will not enjoy the life you will in your retirement.
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Old 03-31-2012, 10:19 AM   #37
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I stopped discussing retirement with my family and friends because it only upsets them. They seem to think that my retirement happened by winning the lottery instead of 30 years of careful saving and delayed spending in almost all areas of my life. The whole thing is depressing.
Been there, done (and still doing) that...

OHOH, I'm not depressed (along with DW). My/her family made their own decisions in life, and now have to live with the results. Who is to say they are wrong? While DW/me lived an LBYM lifestyle and put aside a good deal of our earnings toward our future, who's to say that others in our family were wrong?

You make your "bet", and you live with the results.
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Old 03-31-2012, 10:47 AM   #38
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It is very difficult for lower income people and lower middle income people to save for retirement. Many struggle just to get by, especially single women. I think it unrealistic that voluntary retirement savings will occur with this population. And if they did save some money. Do you think it would be a very substantial amount. Since we are not from the Chinese culture, we need to change our culture in one way or another. Whether it be forced annuities, individual pension, or increase in social security deductions for a more generous payout. Everyone is not wealthy. Divorce has created financial havoc on this country, as many woman are left to raise children on their own with little or no support from the father.
I don't want to believe this, but it's hard to argue with, even with solid to upper middle class and even some wealthy 'Millionaire's Next Door.' We held formal 401k seminars every year, and several others in between, basically focused on retirement planning - showing people how to easily estimate what they'd need, how to save & invest, etc. Year after year it fell on deaf ears with many of them. It seemed that some were saving 10-15%, and others would save less or nothing or empty out their 401k for any emergency.

Never understood it...life on Soc Sec alone will be a big reduction in standard of living for many. We really tried to find ways to get the message to sink in, and failed every time...
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Old 03-31-2012, 10:56 AM   #39
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I am amazed by my peers whose retirement plan is to be a "waiter". Not working at a restaurant - but waiting for a rich relative or in-law to die, then live of the inheritance.
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Old 03-31-2012, 05:29 PM   #40
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I am amazed by my peers whose retirement plan is to be a "waiter". Not working at a restaurant - but waiting for a rich relative or in-law to die, then live of the inheritance.
I had a peer who was counting on a substantial inheritance to fund his retirement. Due to a variety of reasons, some of his own doing, the inheritance was substantially less than what he was counting on, so he is still working.

He will be fine after all, but if his plan had been closer to the edge he would have had to work much longer than he was planning.

I kept trying to tell him not to include any inheritance in his retirement planning and if it comes it is gravy, but he wouldn't listen.
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