Fixed income(?)

[HawkeyeNFO]

Why do so many people complain about having a "fixed income?"

I argue that anyone who is salary is on a fixed income. Hourly employees can work more hours or overtime, commissioned employees can sell more stuff, but I as a member of the military have no way to really change my income, so am I wrong to tell people that I too have a fixed income?

 

[TN_INVEST]

Every time I have ever heard somebody use the term "fixed income" it was from somebody that was already retired. I assume they were drawing social security and maybe a small pension and did not have a lot of resources or wiggle room each month.

I'm not so sure I would say they were complaining. Most were merely stating a fact and explaining why they are unable to spend money on irregular expenses.

 

[rescueme]

Heck, in the corporate world I was "fixed income", receiving the same gross amount every month (paid monthly) regardless of the hours I put on the j*b (expected minimum - 40 hrs / expected reality 40+++ hours ).

When still wor*ing, I had to account for those "extras", same as I do now in retirement...

The major change? I still get a fixed income, but don't have to put in an hour for "the man" ...

 

[donheff]

I think it came from the concept of having a "fixed" pension that did not grow over time leading to a slow squeeze as inflation relentlessly eats away at the purchasing power.

Edit: Just googled the term and the first definition was:

fixed in·come

Noun: An income from a pension or investment that is set at a particular figure and does not vary (as a dividend) or rise with the rate of inflation. More »
Wikipedia - Answers.com - Merriam-Webster

 

[chinaco]

I never thought too much about it.

But I always thought it represented two issues:

1 - Nominal pension (no cola) where the income never increases and looses spending power.
2 - The person is not working and cannot increase their income in real terms (e.g., work more hours or get a second job) - IOW - improve income over and above a general inflation adjustment.

The implication... there may be a tight budget. New expenses or increases in existing expenses could cause financial strain.

 

[Nodak]

It goes back to years ago when Social Security and most pensions had no COLA attached to them so inflation ate away at peoples income.

 

[martyb]

Why do so many people complain about having a "fixed income?"

I argue that anyone who is salary is on a fixed income. Hourly employees can work more hours or overtime, commissioned employees can sell more stuff, but I as a member of the military have no way to really change my income, so am I wrong to tell people that I too have a fixed income?

When I was in the military (Air Force) I certainly had ways of earning more income. It's called a part-time job. Of course, if you're on a ship at sea, or in a combat zone, that might be a little harder to do. While I was on active duty, I worked part-time at a local used car dealership. Also, at other times, I bagged groceries in the commissary for tips. I made pretty good cash there, was paid daily and reported zero to the IRS or anybody else. What went in my pocket stayed there. And yes, my military job subjected me to sometimes odd hours, exercises, TDY's etc. That's why I had the kinds of outside jobs that I could be flexible with.

I know currrent military people who operate their own lawn care businesses, work as realtors, substitute teach....do all kinds of things. There's always (almost) a way.

 

[ERD50]

I think it came from the concept of having a "fixed" pension that did not grow over time leading to a slow squeeze as inflation relentlessly eats away at the purchasing power.

Edit: Just googled the term and the first definition was:

fixed in·come

Noun: An income from a pension or investment that is set at a particular figure and does not vary (as a dividend) or rise with the rate of inflation.

A pet peeve of mine is that people use the term to refer to their SS payments which are inflation adjusted.

I get frustrated when I hear some retired person complain about some expense and exclaim "I'm on a fixed income!". Heck, they get their COLA adjustment, many working stiffs were getting pay freezes or cuts.


-ERD50

 

[FinanceDude]

but I as a member of the military have no way to really change my income, so am I wrong to tell people that I too have a fixed income?

Why can't you work on gaining the next rank? I thought there were ways to take exams and do work that gets you a higher rank? Maybe the military folks on here can comment on that?

 

[rescueme]

Why can't you work on gaining the next rank? I thought there were ways to take exams and do work that gets you a higher rank? Maybe the military folks on here can comment on that?

Being "long gone" military (67-71) I'm sure the rules have not been changed.

Just because you are qualified for rank (through testing) there is also a "time in grade" consideration.

As an example, I made E5 in just over three years. That rank included my Nam service, my OIC recommendations, and the "awards" I had been awarded during my service.

However, upon consideration for retention (e.g. re-up) the fact of the matter is that I would have served TIG (time in grade) for 2-3 years before my next promotion.

Also, with the current scheduled draw downs of current troops, the "open slots" are sure to be reduced. You need not only to be able to be eligible (testing, recommendation) but you can't be promoted unless there is an open slot.

You are limited - unlike the "commercial" world for advancement. And you can't quit to take a better position at another company...

 

[HawkeyeNFO]

Why can't you work on gaining the next rank? I thought there were ways to take exams and do work that gets you a higher rank? Maybe the military folks on here can comment on that?

I wish officers did have to take promotion exams sometimes. If I am so lucky as to be promoted, will I not not still be on a "fixed" income after my promotion?

Also, as an officer, I can get in big trouble if I go work at another job. Now, rental property.......

 

[FinanceDude]

I wish officers did have to take promotion exams sometimes. If I am so lucky as to be promoted, will I not not still be on a "fixed" income after my promotion?

Also, as an officer, I can get in big trouble if I go work at another job. Now, rental property.......

By your definition, literally EVERYONE who works at a salaried job, govt job or not, is living on a fixed income. However, I think the traditional view of fixed income are the retired folks with all their money tucked away in CDs and/or a non-COLA pension.........

 

[youbet]

By your definition, literally EVERYONE who works at a salaried job, govt job or not, is living on a fixed income. However, I think the traditional view of fixed income are the retired folks with all their money tucked away in CDs and/or a non-COLA pension.........

+1

HawkeyeNFO, you're taking a very literal view of the term "fixed" which I do not think is congruent with how the word been used historically in the context of "fixed income."

Generally, employed people see their total income increase more rapidly over time than retired people. When inflation is significant and when employed people, in general, are seeing income rise much faster than retired people (thus retired people are suffering the effects of inflation more) then retired people complain of "fixed income" vs rising prices. Their income is not absolutely "fixed," but is likely rising more slowly than employed people.

It's relative. Hardly anyone's income is absolutely and literally "fixed" over long periods of time. It's a colloquiism applied to folks whose income rise is slow compared to inflation causing them a significant reduction in purchasing power.

You need to try to get over this.......

 

[FinanceDude]

Warren Buffet has a "fixed income" because he pays himself a salary of $100,000 a year, and that amount has not changed much in a lot of years. However, I doubt he fits the fixed income description.............

 

[Texas Proud]

+1

HawkeyeNFO, you're taking a very literal view of the term "fixed" which I do not think is congruent with how the word been used historically in the context of "fixed income."

Generally, employed people see their total income increase more rapidly over time than retired people. When inflation is significant and when employed people, in general, are seeing income rise much faster than retired people (thus retired people are suffering the effects of inflation more) then retired people complain of "fixed income" vs rising prices. Their income is not absolutely "fixed," but is likely rising more slowly than employed people.

It's relative. Hardly anyone's income is absolutely and literally "fixed" over long periods of time. It's a colloquiism applied to folks whose income rise is slow compared to inflation causing them a significant reduction in purchasing power.

You need to try to get over this.......

Not all pensions have a COLA... two sisters and a mother are drawing from the Texas teachers retirement system... there is no COLA... the only way they get more money is if the gvmt votes for an increase... with the way the pension is now they don't see that happening in the next 10 years... one of my sisters has been retired 3 or 4 years with no increase.. so that will be 'fixed' for her...

 

[youbet]

Not all pensions have a COLA... two sisters and a mother are drawing from the Texas teachers retirement system... there is no COLA... the only way they get more money is if the gvmt votes for an increase... with the way the pension is now they don't see that happening in the next 10 years... one of my sisters has been retired 3 or 4 years with no increase.. so that will be 'fixed' for her...

I'm not sure how your comments relate to my post TP, but I certainly agree, not all pensions have a COLA. In fact, mine doesn't! I think about that everyday as I watch Bernanke and his manipulations.

Yes, the less opportunity you have for income increases to offset inflation (and it sounds like your sisters and mother are in that boat) the more you'd fit into the commonly used "fixed income" category and suffer from inflation.

 

[Bestwifeever]

We love to toss out the saying, "But we're on a fixed income!" in a crotchety voice when someone suggests some random activity that costs money and that we actually don't want to do (e.g., buying $100 tickets to a "charity" fund raiser).

 

[FIREd]

We love to toss out the saying, "But we're on a fixed income!" in a crotchety voice when someone suggests some random activity that costs money and that we actually don't want to do (e.g., buying $100 tickets to a "charity" fund raiser).

Exactly!!!

 

[youbet]

We love to toss out the saying, "But we're on a fixed income!" in a crotchety voice when someone suggests some random activity that costs money and that we actually don't want to do (e.g., buying $100 tickets to a "charity" fund raiser).

I love that!

When I first decided to not search for further employment after MegaCorp kicked my sorry butt out 5+ yrs ago, some friends assumed we must be financially "well-fixed" in order to do that. I admit to throwing out the, "sorry our fixed income status doesn't allow for that" excuse a number of times too!

Since being on a "fixed income" has such an unclear meaning, I never felt deceitful........ and I enjoyed the eye-rolls it always triggered!

 

[Bikerdude]

A pet peeve of mine is that people use the term to refer to their SS payments which are inflation adjusted.

I get frustrated when I hear some retired person complain about some expense and exclaim "I'm on a fixed income!". Heck, they get their COLA adjustment, many working stiffs were getting pay freezes or cuts.


-ERD50

+1

 

[travelover]

We love to toss out the saying, "But we're on a fixed income!" in a crotchety voice when someone suggests some random activity that costs money and that we actually don't want to do (e.g., buying $100 tickets to a "charity" fund raiser).

+1

I use this to ward off parasitic relatives.

 

[donheff]

I like the term "Old Age Pensioner" to ward off parasites. Speaking of which, has anyone heard anything from OAP? I enjoyed some of his posts.

 

[Texas Proud]

I'm not sure how your comments relate to my post TP, but I certainly agree, not all pensions have a COLA. In fact, mine doesn't! I think about that everyday as I watch Bernanke and his manipulations.

Yes, the less opportunity you have for income increases to offset inflation (and it sounds like your sisters and mother are in that boat) the more you'd fit into the commonly used "fixed income" category and suffer from inflation.

I just picked one... yours was last

But you did mention that most increase over time, when in fact I don't think it is most... that would be interesting to see how many people who are collecting a pension has then COLA adjusted and who does not... and which are gvmt jobs and which are not... poll anyone

 

[IBWino]

I just picked one... yours was last

But you did mention that most increase over time, when in fact I don't think it is most... that would be interesting to see how many people who are collecting a pension has then COLA adjusted and who does not... and which are gvmt jobs and which are not... poll anyone

I think many pension plans give a choice at the time of retirement for COLA or non-COLA, with a lower payout for the COLA option (this is how my wife's plan is set up). I wouldn't be surprised if many/most select the non-COLA option to get the higher initial payout.

 

[FinanceDude]

+1

Also, a big +1. Looks like USPS is getting rid of Saturday delivery, and that will save $20 billion. So, does that mean that 3 times a week delivery would save us another $40 billion? Then, lets' do it..........