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Old 05-17-2011, 07:30 AM   #41
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I wouldn't be too worried about the fate of people who haven't saved enough. All the Gov't can do is raise your taxes to pay for them and from what I 've seen recently there is a very strong political faction that is againt raising taxes in the US.
Situation is no worse than it has always been. We are truly lucky(smart?) to be where we are so other than through philanthropic activity I'm not sure what more we can do?
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Old 05-17-2011, 09:01 AM   #42
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Originally Posted by glippy View Post
Sure, but in the decades past people had pensions.

And before that they had a big family all living in one house to take care of them.

Now they have wal-mart.
When Baby Boomers start retiring in droves, you may see a fair number of parents moving in with their kids. Naturally, they'll play the "I sacrificed for you" card, even though they know that their financial position is more the result of poor planning than sacrificing for their children.
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Old 05-17-2011, 09:05 AM   #43
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I wouldn't be too worried about the fate of people who haven't saved enough. All the Gov't can do is raise your taxes to pay for them and from what I 've seen recently there is a very strong political faction that is againt raising taxes in the US.
We may simply see a continuation of the current trend of Baby Boomers not retiring for several years past their traditional retirement age to capture more of their high salaries for retirement. Unfortunately, this doesn't allow the next generation to advance in their careers, which will result in a loss of talent to companies who do not have an aging workforce, or even better, new startup companies where advancement and higher pay are possible.
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Old 05-17-2011, 09:12 AM   #44
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When Baby Boomers start retiring in droves, you may see a fair number of parents moving in with their kids.
I can't see that happening (of course, I could be proven wrong).

The stories today show that a lot of young folks have returned to the "nest", without making a nest of their own...

I/DW being older came from a different generation (along with a different generation of parents). When we struck out on our own, our respective parents basically told us not to come back. As my parents often said, "you made your bed, now sleep in it"...
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Old 05-17-2011, 10:20 AM   #45
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As my parents often said, "you made your bed, now sleep in it"...
So we can say the same thing to Baby Boomers who try to move in with their kids, or more broadly, who ask for handouts from the government, other people, etc...?
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Old 05-17-2011, 11:05 AM   #46
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So we can say the same thing to Baby Boomers who try to move in with their kids, or more broadly, who ask for handouts from the government, other people, etc...?
Yes (I/DW represent the remark - since we are early boomers ).

BTW, parents/in-laws have been long gone. Guess their advice suited us well, since we learned at an early age to make it on our own.

And we are not asking for any "handouts", IMHO. Only a slight return of the programs we've been contributing to over the last 45+ years of employment....
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Old 05-17-2011, 11:52 AM   #47
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Yes (I/DW represent the remark - since we are early boomers ).

BTW, parents/in-laws have been long gone. Guess their advice suited us well, since we learned at an early age to make it on our own.

And we are not asking for any "handouts", IMHO. Only a slight return of the programs we've been contributing to over the last 45+ years of employment....
Not disagreeing with you about getting what you've been expecting. I think the real issue is expecting such benefits while voting for politicians who spent the very money needed to pay for them on other things.
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Old 05-17-2011, 01:31 PM   #48
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Not disagreeing with you about getting what you've been expecting. I think the real issue is expecting such benefits while voting for politicians who spent the very money needed to pay for them on other things.
I think that most people who post here* understand that the "other things" that most of the money bought was SS payments and Medicare benefits to the WWII generation.

Both SS and Medicare are primarily paygo. The boomers paid taxes to provide for their parents. Boomers are hoping their children will continue that practice.

The WWII generation had three kids per couple, boomers only had two. The way I do the math, boomers either get 67% the benefits their parents got or the boomers kids pay 150% of the taxes. That's something that politicians have trouble saying.


* I understand there is a lot of misunderstanding about SS finances in the general public. A few people probably still think there's an account somewhere with their name on it. More people think that if the money isn't there is must have been spent on foreign aid or welfare.
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Old 05-17-2011, 01:36 PM   #49
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I think that most people who post here* understand that the "other things" that most of the money bought was SS payments and Medicare benefits to the WWII generation.

Both SS and Medicare are primarily paygo. The boomers paid taxes to provide for their parents. Boomers are hoping their children will continue that practice.

The WWII generation had three kids per couple, boomers only had two. The way I do the math, boomers either get 67% the benefits their parents got or the boomers kids pay 150% of the taxes. That's something that politicians have trouble saying.


* I understand there is a lot of misunderstanding about SS finances in the general public. A few people probably still think there's an account somewhere with their name on it. More people think that if the money isn't there is must have been spent on foreign aid or welfare.
While what you post is (strictly) true.

I believe that most boomers have the expectation of getting what they paid into.

There would be hell to pay if they try now to take it away. Just saying that "your money went to the previous generation" won't cut it .
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Old 05-17-2011, 01:55 PM   #50
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While what you post is (strictly) true.

I believe that most boomers have the expectation of getting what they paid into.

There would be hell to pay if they try now to take it away. Just saying that "your money went to the previous generation" won't cut it .
Yet that's been the undeniable fact about the system since it was created many decades ago. The easiest way to solve the SS problem is simply to extend the benefit eligibility date. Yes, this could be perceived as "moving the goalposts," but it's either that or something more painful (e.g., means testing, burdening the next generation with higher taxes, etc....)
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Old 05-17-2011, 02:30 PM   #51
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This conversation reminds me of the oft heard comment that you cannot make things foolproof because fools are so ingenious.

People who have a saver/investor mentality will do ok with just about any set of circumstances. People who have the spender mentality will always end up at the end of the day with not much to show.

Unfortunately, the former always end up paying to support the latter when these folks are broke.

Please forgive my generalizing....
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Old 05-17-2011, 03:47 PM   #52
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* I understand there is a lot of misunderstanding about SS finances in the general public. A few people probably still think there's an account somewhere with their name on it. More people think that if the money isn't there is must have been spent on foreign aid or welfare.

HEY..... there IS an account somewhere with my name on it.... and it says how much I am supposed to get when I retire....


But I am smart enough to know there is no real money in the account...
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Old 05-17-2011, 03:57 PM   #53
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We may simply see a continuation of the current trend of Baby Boomers not retiring for several years past their traditional retirement age to capture more of their high salaries for retirement. Unfortunately, this doesn't allow the next generation to advance in their careers, which will result in a loss of talent to companies who do not have an aging workforce, or even better, new startup companies where advancement and higher pay are possible.
The pool of available jobs isn't fixed. As more people enter the labor market the price of labor goes down and more people become employed (because jobs that weren't economical to do at a certain price become worthwhile at lower wages). Lower wages are exactly what the US needs to regain a competitive advantage in manufacturing--we've already got most of the other key factors in our favor. So, while lower wages may be bad news for individual workers, it's good news for the US economy as a whole.
And so what if younger workers have to compete against older workers for jobs and the highest pay? Nobody is owed a job, and if a younger person wants to move up he/she might just need to work a little bit harder to displace Ol' Joe. It's hard to work up a tear over that, especially as the more recent problem has been the forcing out of older workers to hire somebody cheaper (lower health care costs, lower wages, etc).
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which will result in a loss of talent to companies who do not have an aging workforce, or even better, new startup companies where advancement and higher pay are possible
I don't understand what this means. Every company (startup, mature, declining) will benefit when the supply of willing workers increases.
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Old 05-17-2011, 08:21 PM   #54
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While what you post is (strictly) true.

I believe that most boomers have the expectation of getting what they paid into.

There would be hell to pay if they try now to take it away. Just saying that "your money went to the previous generation" won't cut it .
I'll agree that politicians seem to assume that the simple truth is political suicide. For some reason, getting elected in the US means telling people they can have gov't services without paying taxes.

But that's just me ranting.
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Old 05-17-2011, 08:32 PM   #55
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I believe that most boomers have the expectation of getting what they paid into.
Sure, as long as we ignore the additional $13 Trillion borrowed over the past 40 years, the books look about balanced.

I don't think you can double the national debt as a percentage of GDP over you're working (and voting) career and then claim that you're somehow owed something because you paid taxes. Sounds like you did pay nearly enough.
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Old 05-17-2011, 08:57 PM   #56
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Sure, as long as we ignore the additional $13 Trillion borrowed over the past 40 years, the books look about balanced.

I don't think you can double the national debt as a percentage of GDP over you're working (and voting) career and then claim that you're somehow owed something because you paid taxes. Sounds like you did pay nearly enough.
+1

You forgot to mention all the unfunded/underfunded entitlement programmes which are not reflected in the $13 Trillion.

No amount of higher taxes is going to close the gap - materially reducing entitlements one way or another will have to take place as well as rasing taxes accross all economic demographics.
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Old 05-17-2011, 09:52 PM   #57
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I believe that most boomers have the expectation of getting what they paid into.
I don't think you can double the national debt as a percentage of GDP over you're working (and voting) career and then claim that you're somehow owed something because you paid taxes. Sounds like you did pay nearly enough.
That may be the case, but there are two problems that could have been avoided:

1) Don't have a separate line item labeled "FICA" on a paycheck. If you 'compartmentalize' the withdrawal every single pay period of a person's career, don't be surprised if the average citizen 'compartmentalizes' some accounting of where that money is going and who paid into it. Real or not. Perception is reality.

2) Educate the public - SS is some convoluted, oddball, quirky form of a social safety net (* see note below). Teach people that this is to provide the basics, that they need to put aside money of their own for retirement. Give them some guidelines of how much they will need, and how much they need to save each year to get to that goal. No guarantees, other than someone who plans and saves will be better off than someone who doesn't. Scare them with dog food stories if they aren't saving enough.

(*) - convoluted, oddball, quirky form of a social safety net - I never understood SS. The less you earned over your life, the more you may need a safety net. Yet, SS is just the opposite - the more you earned the more you get (weighted towards lower incomes, and with a cap). I see our social safety nets like our taxes - not just one big chunk, but we get nickeled and dimed by an elaborate and complex system of taxation, with tons of overhead for each tax and 'loopholes' for avoidance. On the safety net side, there is a bunch of complex, overlapping systems, with overhead and 'loopholes' to take advantage of. I'd be all for one tax, one safety net. KISS. But that makes it too hard to fool people.

-ERD50
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Old 05-17-2011, 11:35 PM   #58
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There are times on this forum when I think I really grew up in a different world than everyone else here and so did my DH.

When I was kid my grandmother shuttled around among her children to live. She had very little money and would spend a month here then a month with another kid and so on. When she stayed with us, she slept with me. And it didn't seem strange and she wasn't unhappy.

Among my parents and my husband's parents and their siblings it all is pretty much the same. They earned modest incomes but retired with a paid off house. They made had a couple of hundred thousand dollars saved (some had more and some less). They drew SS and maybe had a few very small pensions or take RMDs from IRAs. Living on $20,000 a year or so is fine.

It was just a given that retired people were "on a fixed income" (mostly SS) and had to watch money and couldn't spend a lot. And they are fine.

I see plenty of people doing fine with SS, a paid for modest house and a couple of hundred thousand dollars for extras.
Wiki has 28% of the households in the country getting by on less than 25K a year. A 60 year couple in which the husband makes 25K will make at least 1500/month in SS benefits if he works to 67. More if she has been working in the past. My cleaning lady has been getting by on $650 social security check and the occasional cleaning or elder care job and Hawaii is a very expensive place to live.

Now if you are a renter or have a big mortgage the situation is far more grim for retirees.
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Old 05-18-2011, 08:19 AM   #59
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My cleaning lady has been getting by on $650 social security check and the occasional cleaning or elder care job and Hawaii is a very expensive place to live.
Yeah, I've got some friends there who don't make much (teachers) and I wonder how e heck they can afford to live in Hawaii.
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Old 05-18-2011, 09:26 AM   #60
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The pool of available jobs isn't fixed. As more people enter the labor market the price of labor goes down and more people become employed (because jobs that weren't economical to do at a certain price become worthwhile at lower wages). Lower wages are exactly what the US needs to regain a competitive advantage in manufacturing--we've already got most of the other key factors in our favor. So, while lower wages may be bad news for individual workers, it's good news for the US economy as a whole.
Have to disagree with you. We cannot compete with China, India, etc... based on lower wages. Not possible when the cost of someone in the U.S. is 5x the same person in China. Our real competitive advantage is advanced technology, sophisticated manufacturing, etc...

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And so what if younger workers have to compete against older workers for jobs and the highest pay? Nobody is owed a job, and if a younger person wants to move up he/she might just need to work a little bit harder to displace Ol' Joe. It's hard to work up a tear over that, especially as the more recent problem has been the forcing out of older workers to hire somebody cheaper (lower health care costs, lower wages, etc).
Younger workers can't compete against older workers for the highest pay in most organizations. The latter are entrenched, and are often the decision-makers for promotions. If there is no room at the top, nobody gets promoted. I never said anything about forcing older workers out to hire somebody cheaper.

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I don't understand what this means. Every company (startup, mature, declining) will benefit when the supply of willing workers increases.
Highly-talented younger workers who see no career/promotion path (or feel that their careers are being stymied) will leave for companies where such opportunities exist - or will start their own companies.
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