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Old 06-06-2016, 03:47 PM   #61
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The average car loan is now over $30k. That boggles my mind.

US borrowers are paying more and for longer on their auto loans

While at a stop light today, noticed what looked to be a late 20-something next to me in a very expensive Mercedes (S-class, the kind that still have the hood ornament, which got my attention).

How is this possible? I'd never be retired if I decided to do that, even if I got promoted fast in my tech job. It would have killed all my savings.
Do you know the driver or owner of the car? Don't make assumptions because of the driver's age...you just don't know the circumstances.

Of course, that's no fun here when so many folks are better than everyone else...

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Old 06-06-2016, 03:48 PM   #62
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Life is full of choices.

Many, BUT NOT ALL, of the people that have no retirement savings are in that position because of life choices. They are in no way bad people. But, failure on the part of some, to get education, relocate if necessary, work in a well paying and in demand field, put people at a big disadvantage.

Life is full of choices.

Many make good money, but do not save. Their indulgence in Starbucks, cable TV, expensive cellphones, cigarettes, lottery tickets, casinos, recreational drugs, too much house, buying on credit etc. make it so that there is nothing to save.

People in large part, make the bed that they sleep in...
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Old 06-06-2016, 03:55 PM   #63
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I read a study a while back that stated that 80% of people are born, live and die in a 100 mile radius. Only 20% have "wanderlust" and followed the old slogan "go west young man"

All of my friends back in Michigan are yup, still back in Michigan.
However, unless you are Native American, you are by definition descended from someone who came a long way to get here. The same applies to non Aboriginals in Australia. Of course, some in both places did not come by choice.
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Old 06-06-2016, 04:02 PM   #64
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The latte phenomena - the $4 cup of joe, $30 nail job...

http://www.nirsonline.org/storage/ni...isis_final.pdf

The average working household has virtually no retirement savings. When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. Two-thirds of working households age 55-64 with at least one earner have retirement savings less than one times their annual income, which is far below what they will need to maintain their standard of living in retirement.

It some pretty scary statistics. Oh course I can't help but wondering why? Was income so low saving was and is simply impossible? Is it a question of poor priorities? The study suggest you need at least 8 times your income at retirement. I guess that too would be dependent on how much of your income you save.

In my own case we utilized the timex phenomena
1. We've always saved first then live on the rest
2. We avoided the $4 latte - I just can't do it.
3. We clip coupons and our big deal was pizza and a movie at home.
5. We made thrift a part of our lives...
You probably can guess the rest ...maintained drove cars until they were tired...etc.,

People generally don't talk about money much - other then to complain. I have observed a couple of things that seem to be prevalent in many friends and colleagues.
Spending windfalls whether it is from an inheritance, bonus, tax return, real estate sale...
The zoom zoom factor - buying too much car or truck ... Do you know what a well appointed f150 costs? I couldn't believe it.
Toys and some of the worse ones have a motor on the back - ( I must admit I have a yen to buy a 2 person kayak for the son and I to fish from)

Is it discipline? How terrible it is out there? Is it a cultural thing ...to much tv?
Your thoughts if you care to contribute?



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It's all about steady income through a steady working career. People are cashing out their 401ks in this giganomics economy and they are getting killed with tax and penalties.

People have to survive with that 401k money to make it to their next job.

If you are in the 100k plus income range you can max out a 401k and a Roth without much effort and be glad to lower your tax bill.


If you make 30k to 50k in annual income large 401k contributions are a burden and not happening unless you live at home with your parents.
Throw in student loan debt payments and high rent and a few emergencies like a huge car repair or medical bills and you are stuck in a middle-class debt trap. Credit card debt.

You can buy a bag of Starbucks at Costco and make that last but Costco isn't going to be a good idea if you are always broke and paycheck to paycheck.

Just imagine this retirement savings crisis when the millennial generation gets close to age 60. The majority of the millennial generation will have nothing saved and still be renting and paying student loan payments that almost equal a house payment.

You think its bad now. Yikes.
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Old 06-06-2016, 04:02 PM   #65
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These kid, will not take the time, to move, to spend 6 months to learn a new skill, leave there wife for 6-9 months to do a job. You get paid well for these jobs, and get rewarded over the years.
I suspect that the disconnect is here. Given my experiences with Corporate America, I think they would be foolish to believe this without something in writing. Next year, the boss is likely to be a new guy you just met with no understanding of the business or your past accomplishments.

I think the best strategy is to learn a valuable skill and always be willing to jump ship for more money now with an eye towards how the new job will give you skills that will earn you the job after that. Everyone is a contractor these days, whether they think they are or not.

I think the next best strategy is to learn enough skills and save enough money that you are comfortable telling the company "no" when they start trying to eat you alive.
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Old 06-06-2016, 04:08 PM   #66
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.........All of my friends back in Michigan are yup, still back in Michigan.
I'm still in Michigan but I'm trying to leave. Do I get any brownie points?
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Old 06-06-2016, 04:22 PM   #67
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Do you know the driver or owner of the car? Don't make assumptions because of the driver's age...you just don't know the circumstances.

Of course, that's no fun here when so many folks are better than everyone else...

Sent via mobile device. Please excuse any grammatical errors.
Of course not. I don't know them. I was admittedly using this experience as a kind of straw man argument.

The person in the S-class may have driving Dad's car to the hospital because he was ill, for all I know. Or that 20-something may have been a trust kid. Or maybe they made a $100M sale and got rewarded. All possible.

The straw man point is that many, many people buy or lease cars way beyond their means.

BTW, back when I lived in the bad old big city, the bad kids used to cruise around looking for parked Mercedes. The kids somehow got wire cutters and would pull up on the hood ornament (it was spring loaded) and cut the spring. So, most Mercedes were missing their ornament. It was always a surprise to see one driving around intact. I have no idea if this is today's design, I just know that most Mercedes don't have the ornament anymore. So when I see one, I notice it!
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Old 06-06-2016, 05:06 PM   #68
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I see a lot of parents that give their kids so much "stuff" it endangers their own retirement and enables an entitlement gene in their children. Drive by the local high school of the the next county over and the cars driven by students are brand new luxury brands much nicer than our cars or the ones driven by the teachers.
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Old 06-06-2016, 05:19 PM   #69
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I see a lot of parents that give their kids so much "stuff" it endangers their own retirement and enables an entitlement gene in their children. Drive by the local high school of the the next county over and the cars driven by students are brand new luxury brands much nicer than our cars or the ones driven by the teachers.
As a future parent (four months or so to go!), the best advice I think we've gotten from a friend was, "Provide for all of her needs; purposefully do not provide for all of her wants."
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Old 06-06-2016, 05:39 PM   #70
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This subject comes up often. I think part of it is human brains are generally programmed for short term thinking. There are many INTJs with higher than average long term planning and strategic thinking skills here and the other ER forums, compared to the 2% supposedly in the general population.
I think it's definitely a cultural thing. Several other cultures are big on savings, but in the USA we been programmed to be mindless consumers from very early ages. It takes an effort and some guts to back away, see through the programming and choose not to be that.
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Old 06-06-2016, 06:09 PM   #71
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Wait, there's a national institute of retirement??
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Old 06-06-2016, 06:15 PM   #72
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I see a lot of parents that give their kids so much "stuff" it endangers their own retirement and enables an entitlement gene in their children. Drive by the local high school of the the next county over and the cars driven by students are brand new luxury brands much nicer than our cars or the ones driven by the teachers.
but how can we know that?? lol seriously though, how can you possibly know how they paid for the cars?

I hear this "argument' all the time. seems like everyone "knows"kids riding around in lexus and Mercedes (except our own) yet camrys, civics and corrollas continue to be the highest sellers.

My kid has driven my ride many a day, does that automatically mean they are endangering their own retirement?

I really hate these reports. lol
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Old 06-06-2016, 06:18 PM   #73
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I think the INTJ's need to tone down their "J".

I find this to be a very informative and useful forum, but the "Judgement" gets too heavy too often.

I expect to be Judged for this comment....


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Old 06-06-2016, 06:27 PM   #74
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I think the INTJ's need to tone down their "J".
I'm trying hard to stay off everyone's lawn.
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Old 06-06-2016, 06:30 PM   #75
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I'm trying hard to stay off everyone's lawn.
Come sit on mine. We can trade homebrews, and enjoy watching the others.
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Old 06-06-2016, 06:45 PM   #76
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Wasteful spending and a consumer culture may be part of the problem, but there are many factors. In our area housing is crazy high these days. Our kids and most of their friends are fine. Many have either moved away, still live at home or they have degrees in fields where the pay is high enough to stay in the area and live on their own. But some of the kids who didn't go to college and don't have financial support from their parents are having a hard time. It is hard to move away when you have no money and all you have is your friends, and moving away takes away the friend part.

Some either have been or come close to homelessness or they've been taken in by friends' families. If there are all sorts of welfare programs that provide a nice life without working as some here have suggested from time to time, these young adults don't know about them and neither do the large homeless populations in our area and LA. Los Angeles is considering a tax on the wealthy to help the homeless. It is hard to save money when you can't even afford rent and groceries.
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Old 06-06-2016, 06:57 PM   #77
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From the article in the OP
Quote:
Public policy can play a critical role in putting all
Americans on a path toward a secure retirement by
strengthening Social Security, expanding access to low cost,
high quality retirement plans, and helping low income
workers and families save. Social Security, the
primary edifice of retirement income security, could be
strengthened to stabilize system financing and enhance
benefits for vulnerable populations. Access to workplace
retirement plans could be expanded by making it easier
for private employers to sponsor DB pensions, while
national and state level proposals aim to ensure universal
retirement plan coverage. Finally, expanding the Saver’s
Credit and making it refundable could help boost the
retirement savings of lower-income families.
This is probably the most positive part of the article. A change in public policy.
...........................................

That said, how many people really understand Social Security, and even more importantly know how it is funded... and then... the status of the funds.

From the government site:
Quote:
The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits.
https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

Interesting information about the timing, amount and availability of funds.
Should this be part of retirement planning?

and.. the most recent report from the SS trustees:
https://faq.ssa.gov/link/portal/3401...ty-trust-funds
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Old 06-06-2016, 07:04 PM   #78
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but how can we know that?? lol seriously though, how can you possibly know how they paid for the cars?

I hear this "argument' all the time. seems like everyone "knows"kids riding around in lexus and Mercedes (except our own) yet camrys, civics and corrollas continue to be the highest sellers.

My kid has driven my ride many a day, does that automatically mean they are endangering their own retirement?

I really hate these reports. lol
What difference would it make how they paid for the cars? Yes, I AM assuming the cars are not stolen. I am close enough to several examples including a very very tragic one right next door to know how SOME of these kids and their parents behave.
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Old 06-06-2016, 07:30 PM   #79
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....Just imagine this retirement savings crisis when the millennial generation gets close to age 60. The majority of the millennial generation will have nothing saved and still be renting and paying student loan payments that almost equal a house payment.

You think its bad now. Yikes.
I have some hope. If I look at DD, DS, their peers and my nieces and nephews (all in their 20s and early 30s) I think as a group they are much more cognizant of saving for retirement than we were at those ages because they see that some of their parent's generation are ill-prepared financially and since defined benefit plans are a rare thing these days they know they are left to their own devices.

I think for my generation that a lot of people either didn't get the "defined benefit plans are going away you need to save on your own" memo or chose to ignore it and are paying the consequences.
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Old 06-07-2016, 09:14 AM   #80
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I have some hope. If I look at DD, DS, their peers and my nieces and nephews (all in their 20s and early 30s) I think as a group they are much more cognizant of saving for retirement than we were at those ages because they see that some of their parent's generation are ill-prepared financially and since defined benefit plans are a rare thing these days they know they are left to their own devices.

I think for my generation that a lot of people either didn't get the "defined benefit plans are going away you need to save on your own" memo or chose to ignore it and are paying the consequences.
My DS is doing a great job also maxing his Roth IRA in his early 20s and it's cool to see the confidence and enthusiasm he has towards money as his vanguard investments grow.

If the millennials who invested early can keep their hands off the money they might be a great future retire early story.
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