Ignorance in accumulation phase "compounded" in decumulation phase

[ladypatriot]

Interesting article from Yahoo that's relevant to our discussion.

people-work-into-70s-marketwatch: Personal Finance News from Yahoo! Finance

And from that article, this:

Still, there's a problem for those who plan to work well into their 70s: That strategy assumes they'll keep their jobs and stay healthy.

"Planning not to retire is not a retirement strategy," Collinson said. "Too often, life's unforeseen circumstances can dictate otherwise, be it through a job loss, health issues or life's other obligations."

What are these non-retirement people thinking? That they won't age? I understand that many people love their jobs...but sometimes their bosses just don't love them back quite so much. And I understand my generation (boomers) are generally fitter and healthier than our parents were at our ages, but we're still going to age. And some people whose jobs involve physical labor simply cannot keep up the same level of productivity and energy at 65 that they could manage at 55. They just don't know that yet.

And the article goes on to say that these non-retirement people have also failed to come up with a back up plan. For many people, I suspect it will end up being SS and a reduced standard of living.

LadyPatriot

 

[W2R]

What are these non-retirement people thinking? That they won't age? I understand that many people love their jobs...but sometimes their bosses just don't love them back quite so much. And I understand my generation (boomers) are generally fitter and healthier than our parents were at our ages, but we're still going to age. And some people whose jobs involve physical labor simply cannot keep up the same level of productivity and energy at 65 that they could manage at 55. They just don't know that yet.

And the article goes on to say that these non-retirement people have also failed to come up with a back up plan. For many people, I suspect it will end up being SS and a reduced standard of living.

LadyPatriot

Those I have talked to in real life, either think they will never age or often they seem to be thinking in the back of their minds that their children are going to take them in and support them if need be.

To me that seems like a huge burden to put on a child during the years when the child should be struggling to save for his/her own retirement. So, there is no way I am going to appear, hat in hand, on my daughter's doorstep with big moon eyes and tears at age 80+. But different families and different cultures view this practice differently, and of course they have as much right to do things their own way as I have to do things my way.

 

[MasterBlaster]

The sandwich generation

Those I have talked to in real life, either think they will never age or often they seem to be thinking in the back of their minds that their children are going to take them in and support them if need be.

To me that seems like a huge burden to put on a child during the years when the child should be struggling to save for his/her own retirement. So, there is no way I am going to appear, hat in hand, on my daughter's doorstep with big moon eyes and tears at age 80+. But different families and different cultures view this practice differently, and of course they have as much right to do things their own way as I have to do things my way.

they have a name for people supporting both their indigent parents and putting their children through college and attempting to save for their own retirement. They call them the sandwich generation.

It's a struggle.

 

[Jay_Gatsby]

Those I have talked to in real life, either think they will never age or often they seem to be thinking in the back of their minds that their children are going to take them in and support them if need be.

To me that seems like a huge burden to put on a child during the years when the child should be struggling to save for his/her own retirement. So, there is no way I am going to appear, hat in hand, on my daughter's doorstep with big moon eyes and tears at age 80+.

My parents assumed financial responsibility for my grandparents when the latter were no longer able to drive and/or started to run out of money (lived until their 90s, with one still alive at 100+). I believe it's appropriate for children to assume such a burden. By such time, the adult children are probably in their 60s and have the financial resources to do so. Medicaid, Medicare and Social Security can help ease the financial costs. Besides, and not to sound morbid, but the "burden" of caring for aging parents in their 80s or 90s probably won't be more than 10 years (if not less).

That said, it's another thing entirely for a spendthrift parent to show up at his/her children's doorstep when s/he is still fit enough to get a job. My grandfather applied for a retail shoe store job at 75 and got it over a dozen other guys - many of whom were much younger than him. He didn't do it for the money (though it certainly helped), but rather because it kept him young. Dealing with discerning customers (it was a high-end men's shoe store), combined with going to the back room and climbing the ladder to shelve/unshelve shoes, gave him plenty of stimulation.

But different families and different cultures view this practice differently, and of course they have as much right to do things their own way as I have to do things my way.

This seems to be the traditional "Asian" model. Yet many young Asians in the U.S. are resistent to the idea that their parents will move in with them, even though there are certainly some advantages (in-home childcare, help with cooking and cleaning around the house, etc...)

 

[Gone4Good]

Anyone who tells you when inflation and Treasuries are going to begin their ascent is a Dirty Market Timer, and I ain't one of those.

I don't think this has anything to do with market timing. It has a lot to do with bad economic analysis, pushed by places that should know more than they apparently do (like the Wall Street Journal).

 

[Beryl]

Those I have talked to in real life, either think they will never age or often they seem to be thinking in the back of their minds that their children are going to take them in and support them if need be.

To me that seems like a huge burden to put on a child during the years when the child should be struggling to save for his/her own retirement. So, there is no way I am going to appear, hat in hand, on my daughter's doorstep with big moon eyes and tears at age 80+. But different families and different cultures view this practice differently, and of course they have as much right to do things their own way as I have to do things my way.

Many of us have prepared for long-term independence. It took quite a while for me to learn how to say, "No" to family members who come with their hands out: "We have children and you have so much with just you to support. Can't you help us out with a loan?"

If I have some to GIFT, I will but never to LEND.

My savings and investments are my children who will care for me as I age.

 

[rescueme]

I believe it's appropriate for children to assume such a burden.

I don't ..

My parents didn't do it for my grandparents.
I did not do it for them.
I don't expect my son to do it for me.

In most cases, "burdens" are self created, and should be self managed, IMHO.

 

[Independent]

Interesting article from Yahoo that's relevant to our discussion.

people-work-into-70s-marketwatch: Personal Finance News from Yahoo! Finance

The rest of the survey is here: http://www.transamericacenter.org/resources/TCRS12thAnnual WorkerNewRetirementFINAL05162011.pdf

 

[Independent]

What are these non-retirement people thinking? That they won't age? I understand that many people love their jobs...but sometimes their bosses just don't love them back quite so much. And I understand my generation (boomers) are generally fitter and healthier than our parents were at our ages, but we're still going to age. And some people whose jobs involve physical labor simply cannot keep up the same level of productivity and energy at 65 that they could manage at 55. They just don't know that yet.

And the article goes on to say that these non-retirement people have also failed to come up with a back up plan. For many people, I suspect it will end up being SS and a reduced standard of living.

LadyPatriot

My guess is that they know the will celebrate more and more birthdays, but they don't really expect to decline physically.

When I was 35 I could imagine myself working till 70, because I couldn't really imagine how growing old would feel. By the time I was 55 I had a few nagging chronic conditions that I could easily see getting worse as I got older. I could imagine growing old physically. It was plain that I would want to retire before 70.

Fortunately, we had always been the LBYM types, so I was positioned to make that happen.

Frankly, if they end up living on just SS, because they didn't save when they could have, that's okay with me. Not ideal, but okay.

 

[Hamlet]

Most people are not able to take in information that conflicts with their worldview.

When I read Galbraith it meant that I had to completely redefine my thinking about economics (which led to redefining my thinking on morality, politics, etc).

It would have been much easier to just dismiss his arguments because they didn't agree with the way I saw the world.

That is what most people seem to do most of the time.

I don't think this has anything to do with market timing. It has a lot to do with bad economic analysis, pushed by places that should know more than they apparently do (like the Wall Street Journal).

 

[Nords]

I believe it's appropriate for children to assume such a burden. By such time, the adult children are probably in their 60s and have the financial resources to do so. Medicaid, Medicare and Social Security can help ease the financial costs.

I have to admit that if all parents knew up front that someday their kids would be choosing their parents' care, then most parents would cultivate a much more thoughtful approach to the job.

However there might be gaps in the logic. If the parents are financially unable to support themselves in their "golden years", then they probably weren't much better off in their 60s. Why then would we assume that their children could do so? Does that also include an assumption that the children are employed and able to support their parents from their income? Will the adult children (supporting their parents) spend all their salary & savings on their parents because their own children will someday support them?

Seems to me that we'd need some sort of optimal family worker:beneficiary ratio to determine whether the aging parent could count on the kid's support. Things might work out quite well when four or five adult children's wages are supporting an aging parent. The system might not work so well with one or two workers. Gee, maybe Social Security & Medicare have more ideas about that...

Besides, and not to sound morbid, but the "burden" of caring for aging parents in their 80s or 90s probably won't be more than 10 years (if not less).

I've been getting a heckuva tutorial in that area. I don't know why you used "quotes" around the word burden, but IMO it's a psychological and financial minefield for the adult children even if the parent has been ready (both psychologically and financially) for it.

My grandfather lived for over 14 years in a care facility, and I suspect that Grandma (while she was alive) was covering for him before that. The effort of managing Gramp's finances and checking on his care consumed a large part of my father's time, energy, and focus-- to say nothing of hundreds of thousands of frequent-flyer miles. It was a horrific burden even though Gramps had the assets and was generally in good health.

Today I'm facing the same burden with my father. He's at most two years into his Alzeimer's diagnosis. I hear you about the "probably", but statistics are cold comfort in this case.

This seems to be the traditional "Asian" model. Yet many young Asians in the U.S. are resistent to the idea that their parents will move in with them, even though there are certainly some advantages (in-home childcare, help with cooking and cleaning around the house, etc...)

I was unhappy enough with my upbringing that I'd never want my parents raising my kids. As I got to know my parents-in-law, I arrived at the same conclusion.

 

[bubba]

I would sell a kidney to raise money for a parent who is running out of funds, but the idea of living in the same house makes my skin crawl. Didn't like it 40 years ago; not interested today, but if the bottom falls out, and mother was unable to care for herself, I would not let her live in the street (father passed away 10 years ago).

 

[youbet]

I would sell a kidney to raise money for a parent who is running out of funds, but the idea of living in the same house makes my skin crawl. Didn't like it 40 years ago; not interested today, but if the bottom falls out, and mother was unable to care for herself, I would not let her live in the street (father passed away 10 years ago).

I feel pretty much the same way bubba. DW and I help her mom out financially (with help from DW's siblings). At 86, she currently lives off SS and a reverse mortgage on her condo and can pay for her ongoing expenses such as condo fees, utility bills, food, meds, an occasional tank of gas for the car, etc. But we chip in with a few things to make her life more pleasant. And, importantly, we research tax breaks, gov't subsidies, programs for the aged, etc., for her and make sure she gets full benefit from these things.

As you feel regarding your mom, I can't fathom having her move in with us. She's a nice enough old gal (for a MIL ), is thankful for the help and always treats me with respect. Still, it would be worth significant expense to keep her in her own place if that ever became necessary. Privacy and personal space are important in my life. And I'm sure she likes it better being in her own place too.