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Old 10-26-2009, 03:41 PM   #61
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I should have said "real wages" and not salaries. Real wages have declined since the early 70s and with the drop in pensions, 401k matches and increasing health care costs it's going to be increasingly difficult to be in the position to ER. I'm not sure that the concept of ER even existed before the 1970s. Let's face it for most of history 99.9% of people had to work until they died.
Which is all the more reason why I've long thought "early retirement" as a realistic goal for a majority of the American middle class was/is a temporary blip created by a perfect storm of fortunate economic and geopolitical events, primarily related to a post-WW2 period when the most other major industrial economies were broken apart by war and the "emerging markets" hadn't begun to emerge yet. It was a time when the U.S.A. was rebuilding much of the world with very little significant global competition.

Those days were a fortunate fluke for the American worker born at the right time who benefited from it, and those days are over -- Europe and Japan were rebuilt and the emerging markets with huge amounts of low-cost human capital emerged. Now we're suffering the hangover caused by using debt to pretend it was sustainable for decades after it was increasingly obvious that the rules were changing and that it's not 1960 any more.
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Old 10-26-2009, 03:45 PM   #62
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IMO, the number of retirees we can afford is driven by the number of workers.
If all those workers are making $20K a year, having more of them won't allow us to support a significantly higher number of retirees.

Real wages are headed down due to global competition, and there's no stopping that. The best we can do is make ourselves as competitive as possible--with a first-rate education system and a business climate that encourages innovation and work.

Trying to legislate some type of artificial standard of living (minimum wage laws, mandatory benefits, government entitlements, tarriffs, import quotas, etc) is only going to allow the developing world to outcompete us at an accelerating rate, and hasten the reduction in US living standards. We've had a short-lived temporary advantage since WW-II. We made good use of some of it (e.g. developed a top-notch interstate highway system and good universities and corporate research facilities) and squandered much more of it. Now the playing field is becoming more level across the world, and it's unlikely our grandkids will enjoy the same amount of discretionary income that we and our parents had. On an absolute level, their lives will still be better than our parents (who had a 45" television 30 years ago? Who at that time could cross the country in 8 hours at a cost of less than one day's wages?). But relative to the rest of the world, they'll be sinking. From a big-picture perspective, that's great news--doubling the per capita income in Asia or Africa will probably buy a lot more "good" and happiness than an equivalent pot of money spread among the inhabitants of North America and Europe.
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Old 10-26-2009, 04:02 PM   #63
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Real wages are headed down due to global competition, and there's no stopping that.
And don't forget Technology.

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The job of the man will be to feed the dog. The job of the dog will be to prevent the man from touching the machines.

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Old 10-26-2009, 04:35 PM   #64
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Originally Posted by nun View Post
I should have said "real wages" and not salaries. Real wages have declined since the early 70s and with the drop in pensions, 401k matches and increasing health care costs it's going to be increasingly difficult to be in the position to ER. I'm not sure that the concept of ER even existed before the 1970s. Let's face it for most of history 99.9% of people had to work until they died.
My source is this Census site: Historical Income Tables People
I have to combine tables P-16, 17, 25, and 26 to get a picture. But I think it says male wages were stagnant since the early 70's, in spite of rising average educational levels. Female wages went up, probably due to more education and less discrimination (maybe one reason males were stagnant). I think real wages went up significantly before then.

This is cash wages, adjusted for CPI. So I don't think I need to make another adjustment for medical expenses.

I think the idea that "I should have a lot of children so I have someone to take care of me in my old age" has been around for a very long time. However, the concept that median income people can quit working entirely while they are still healthy is a "modern" idea. I'd agree that most didn't achieve it in the US until SS got fairly mature, and even then only a minority had something significant beyond SS.
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Old 10-26-2009, 04:48 PM   #65
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If all those workers are making $20K a year, having more of them won't allow us to support a significantly higher number of retirees.

Real wages are headed down due to global competition, and there's no stopping that. The best we can do is make ourselves as competitive as possible--with a first-rate education system and a business climate that encourages innovation and work.

Trying to legislate some type of artificial standard of living (minimum wage laws, mandatory benefits, government entitlements) is only going to allow the developing world to outcompete us at an accelerating rate, and hasten the reduction in US living standards. We've had a short-lived temporary advantage since WW-II. We made good use of some of it (e.g. developed a top-notch interstate highway system and good universities and corporate research facilities) and squandered much more of it. Now the playing field is becoming more level across the world, and it's unlikely our grandkids will enjoy the same amount of discretionary income that we and our parents had. On an absolute level, their lives will still be better than our parents (who had a 45" television 30 years ago? Who at that time could cross the country in 8 hours at a cost of less than one day's wages?). But relative to the rest of the world, they'll be sinking. From a big-picture perspective, that's great news--doubling the per capita income in Asia or Africa will probably buy a lot more "good" and happiness than an equivalent pot of money spread among the inhabitants of North America and Europe.
I'll agree - retirees don't get much benefit from more workers if the workers aren't very productive.I assume that's what you mean by $20k. In particular, we don't "save SS" by importing a lot of unskilled laborers.

Theoretically, I shouldn't care about relative incomes. If I have a high absolute standard of living, I should be happy that more Chinese and Indians can match me. OTOH, I may be more worried about military imbalance. And keeping my absolute income up means better and better technology so I can live well with a smaller share of the world's raw materials.

I guess I see the retirement future as whether technology can outrun demographics, with a couple side issues of whether we measure ourselves against sustainable consumption, or the un-sustainable we've supported by borrowing.
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Old 10-28-2009, 06:31 PM   #66
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What you could see too is the amount of people ERing overseas to take advantage of a lower cost of living and cheaper health care.
Been there, done that. I had a baby "blue" tooth that did not have a permanent tooth behind it that finally had to go at age 39-1/2, at which time I got an implant. I got the implant base put in by an American dental surgeon for $1500. I could have gotten the cap put on by an American dentist for $1000. I got a Ukrainian dentist to put one on for $100.

Also, another time in Ukraine I got punched in the nose and got an X-ray done - cost: $1.40.
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Old 10-31-2009, 03:11 PM   #67
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Also, another time in Ukraine I got punched in the nose and got an X-ray done - cost: $1.40.
Jeez, I can't imagine why someone would do that...
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Old 10-31-2009, 05:45 PM   #68
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We'll get digital TX/RX/GPS nanotechnology implanted in our forearms and noise cancelling microphones implanted in our upper lips. We will be interconnected wirelessly and able to use speech-to-text translators to do our posts in real time, and text-to-speech for the reading them. We will hear each other in full duplex on real time multichannel comm systems.
[end of geek-burst]
A lot of this technology already exists stand alone, it just has not been fully integrated for this purpose. Oops, I just did a public release of my next invention.
Stuff like this is not so far away, folks.
Maybe one of our Young Dreamers will see this post and do the math and design a system. Have fun!
Why do all of that? Use telepathy. Of course need to have spam blocking in place. And mind your thoughts, and other non-public ideas.
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Old 11-01-2009, 11:41 AM   #69
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Medical care is an interesting problem - medicare is spending an amazing amount keeping MIL ticking - her clock is running down, but she's still cogent and interested to go out and watch the space shuttle go over - still, could probably keep a thousand or two African children alive on what she costs.
Thank your lucky stars that these Africans haven't yet figured out how to vote in American elections.

Maybe remember too, that much African Aid winds up being sold by the army or political leaders, and the proceeds stashed in a Swiss bank.

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Old 11-01-2009, 03:54 PM   #70
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They don't need to - the AARP does. It is ironic that the most vocal opponents of health care reform are those on Medicare. I guess if they get theirs it really shouldn't matter if anyone else is cared for. Its the same Social Security model.
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Old 11-01-2009, 04:04 PM   #71
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It is ironic that the most vocal opponents of health care reform are those on Medicare.
We are talking about the broad category, "Health Care Reform," aren't we? Do you have evidence to support your statement? Granted, I haven't really been listening (not that interested) but, other than the "kill grandpa" foolishness, I haven't heard anything like you suggest.

I quickly looked at Senior Citizens News and Information Daily On The Web at SeniorJournal.com and found nothing. I try to read everything AARP publishes (not the junk mail) but, again, may have missed it.
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Old 11-01-2009, 04:34 PM   #72
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Many of us on here can FIRE because we save, LBYM and invest sensibly. But big factors are also the good benefits like pensions and health care we have from our emplyers that younger workers no longer get. So my question is simple. With the death of these benefits will anyone be able to FIRE in the future?
Eventually yes. To answer your question. I feel ER is a short term situation in the big scheme of things. I am grateful I will experience it. However, I feel down the road for those little ones I see every now and then. They will handle the heavy burden. Shame on me.
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Old 11-01-2009, 04:56 PM   #73
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We are talking about the broad category, "Health Care Reform," aren't we? Do you have evidence to support your statement? Granted, I haven't really been listening (not that interested) but, other than the "kill grandpa" foolishness, I haven't heard anything like you suggest.
I'm speaking from the experience of three recent town hall meetings (two of which were held by local congressmen). To a person, the ones screaming were senior citizens. And they were screaming loudly. The most common refrain was literally "Leave my Medicare alone!". I seriously doubt that any of them actually knew anything at all about any proposals.
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Old 11-01-2009, 05:32 PM   #74
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I seriously doubt that any of them actually knew anything at all about any proposals.
Yeah. Them and other "spokespersons" for us.
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Old 11-01-2009, 05:58 PM   #75
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I seriously doubt that any of them actually knew anything at all about any proposals.
And there are plenty of people/PACs/lobbyists/pundits/politicians that like it that way.

The mushroom theory...
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Old 11-01-2009, 08:10 PM   #76
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The mushroom theory...
You must be wary of mushrooms...
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Old 11-01-2009, 08:25 PM   #77
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You must be wary of mushrooms...

You know. Ive had the darn hankering to make mushroom soup. But have you seen the prices of mushrooms lately! I cant even find any deals either. Ive been patient for months.

Bleh one of these days. Ill ignore the expense factor and just go for it on the soup
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Old 11-01-2009, 09:43 PM   #78
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Adding to Randyman's town hall meetings, here is a poll: Seniors Most Skeptical of Healthcare Reform

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Seniors are the least likely of all age groups in the U.S. to say that healthcare reform will benefit their personal healthcare situation. By a margin of three to one, 36% to 12%, adults 65 and older are more likely to believe healthcare reform will reduce rather than expand their access to healthcare. And by 39% to 20%, they are more likely to say their own medical care will worsen rather than improve.
I'll agree with the general impression that this probably means they aren't paying attention (though a few with "Medicare Plus Choice" may be correct in worrying that reform will reduce the gov't payment to these plans).

I think this is partially a "don't like anything new" or "don't like bigger government" attitudes, and partially the fact that they have no recent personal experience with losing group insurance.
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Old 11-01-2009, 11:55 PM   #79
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Adding to Randyman's town hall meetings, here is a poll: Seniors Most Skeptical of Healthcare Reform



I'll agree with the general impression that this probably means they aren't paying attention (though a few with "Medicare Plus Choice" may be correct in worrying that reform will reduce the gov't payment to these plans).

I think this is partially a "don't like anything new" or "don't like bigger government" attitudes, and partially the fact that they have no recent personal experience with losing group insurance.
I'm not sure why people believe the Medicare crowd hasn't thought this through. Both the Senate finance committee proposal and the newly announced House proposal call for very large cuts in Medicare reimbursement rates for doctors. These seniors already know it's getting harder to find care providers that accept Medicare because of the low reimbursement rates. Maybe they have good reason to doubt that these plans will improve their situation.

Interestingly, they might be the only people in America who believe the government will actually do something to reduce Medicare expenditures.
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Old 11-02-2009, 10:25 AM   #80
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I'm not sure why people believe the Medicare crowd hasn't thought this through. Both the Senate finance committee proposal and the newly announced House proposal call for very large cuts in Medicare reimbursement rates for doctors. These seniors already know it's getting harder to find care providers that accept Medicare because of the low reimbursement rates. Maybe they have good reason to doubt that these plans will improve their situation.

Interestingly, they might be the only people in America who believe the government will actually do something to reduce Medicare expenditures.
I agree with samclem. The Medicare eligible people have good reason to fear these changes. My mother's doctor retired recently, and she had an incredibly difficult time finding another doctor in her small city area who would take a Medicare patient. It might be easier in bigger cities, I don't know. But the reimbursement issue is going to be huge (if it happens).

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I think this is partially a "don't like anything new" or "don't like bigger government" attitudes, and partially the fact that they have no recent personal experience with losing group insurance.
Just because you're paranoid doesn't mean they're not out to get you.
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