WSJ: A Retirement Wealth Gap Adds a New Indignity to Old Age

[pb4uski]

You raise an interesting observation.

The reason that I have such trouble accepting an assertion that educational and social opportunities are a primary determinant of success is the scores of situations out there where siblings have widely different outsomes in the game of life despite virtually identical educational and social opportunities. We have so many threads here of posters whose family who have had virtually identical opportunities in life have family living hand to mouth and looking to "borrow" money from their more successful family members.

While I agree that educational and social opportunities are an important factor, hard work and persistance must also be an important factor... otherwise we would not see such variation in outcomes.

[DAYDREAMER]

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Originally Posted by corn18 Can we give examples of what we feel was good or bad luck in our lives? Mine was being adopted by a great middle class family which provided me with the opportunity to be where I am today. Beyond about age 15, everything that happened to me was my fault.

I was lucky to be born in the USA.

[HtownRose]

The example given in the article is a valid concern IMO, and not just for retirement communities. As much as I don't enjoy dealing with a yard, the potential of skyrocketing HOA dues keeps me from considering a move from my SFD neighborhood to a more "townhouse" type setting. I could save on the cost of the home, but the continuing expenses are much higher & much less predictable. Something I remember from college econ about capital vs. ongoing expenditures...

BTW even if I had unlimited funds, I would be voting against everyone having to pay for the pickleball court - let those who want it finance it IMO. We have a lovely pool complex in my neighborhood that used to cost extra if you wanted a pool pass, then they raised the dues on everyone & it was "free" for everyone. Great for those who use the pool, not so much for those who don't.

[youbet]

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Originally Posted by corn18 Luck is the intersection of opportunity and preparation.

Especially so-called “bad luck.”

[daylatedollarshort]

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Originally Posted by corn18 Can we give examples of what we feel was good or bad luck in our lives? Mine was being adopted by a great middle class family which provided me with the opportunity to be where I am today. Beyond about age 15, everything that happened to me was my fault.

My family didn't have a lot of money but I lived near a university I could commute to that had a good tech program where companies like IBM and AT&T recruited from. Early on I worked in some then obscure software that became high demand. I was living in a city with 3 or 4 employers for this kind of software. I bought a Bay Area paper at a news stand one day and found huge ads for people with my skill set plastered all over the help wanted section and within a few months had 8 job offers plus relocation. We had many more lucky breaks after that.

I could have been born in a country where women were not allowed to drive or attend school or in this country as a crack baby with health issues and in the foster system. So sure I worked hard in school and I had to pass the job interviews but luck played a huge role.

[hausfrau]

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Originally Posted by corn18 Can we give examples of what we feel was good or bad luck in our lives? Mine was being adopted by a great middle class family which provided me with the opportunity to be where I am today. Beyond about age 15, everything that happened to me was my fault.

I was lucky enough to both meet my handsome, down to earth husband and discover that he actually liked me. This was after I ended a long-term relationship with someone that wasn't really going anywhere. At the time, I was in my late 20's and it was more difficult to find someone unattached. I thought I was doomed to never find anyone to seriously build a life with.

[hausfrau]

The WSJ article about the retirement community scares me away from ever wanting to live in one of those places. I don't think there is enough autonomy. I get that places/towns/cities change over time, but I'd hate to be bound by all those rules and fees. I feel the same way about owning a condo too. We are DIYers and I'd hate to have to submit to a group vote on anything. I never like paying for anything I can do myself.

[Mr._Graybeard]

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Originally Posted by NW-Bound Eh, have y'all read the article quoted in the OP? Here it is, but not from WSJ so open to the public: https://www.msn.com/en-us/money/reti...age/ar-BBNWwV1. The story is about the conflict in an adult community in Santa Rosa, California. Some of the residents wanted to fund development of a pickleball court, while others did not want to see their dues go up. The division between the two groups came from the difference in their retirement incomes. The president of the HOA one day found a paper bag on his front porch. Inside was the chopped-off head of a rat. Also, there was a note with a succinct message: "You are next". The article's point is that this epitomizes the conflict between the haves and have-nots among retirees. Whether you are or consider yourself lucky or unlucky, how do you feel if you receive such a paper bag on your front porch?

Strange article -- and one that hardly reflects the headline. It would be so easy to resolve such a petty squabble, but some folks have a need for drama in their lives.

It reminds me of an article I read awhile back about an assisted living complex where the residents stole from each other just to have something to do.

[Hermit]

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Originally Posted by NW-Bound Eh, have y'all read the article quoted in the OP? ...

This is not a new situation. I had a workmate many years ago that was the board president for a condo association in Aspen, CO. Aspen had become a major destination for the rich and famous while he and other middle income families had purchased units in the condo in prior years. The rich started buying the condos as the came up for sale and soon it was an all out war between the rich who wanted to upgrade everything after purchasing their condo at a bargain. In other words, they wanted to kick out those who could not afford the additional fees.

Maybe it should be called "Gentrification" of Oakmont Village?

[pb4uski]

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Originally Posted by HtownRose The example given in the article is a valid concern IMO, and not just for retirement communities. As much as I don't enjoy dealing with a yard, the potential of skyrocketing HOA dues keeps me from considering a move from my SFD neighborhood to a more "townhouse" type setting. I could save on the cost of the home, but the continuing expenses are much higher & much less predictable. Something I remember from college econ about capital vs. ongoing expenditures... BTW even if I had unlimited funds, I would be voting against everyone having to pay for the pickleball court - let those who want it finance it IMO. We have a lovely pool complex in my neighborhood that used to cost extra if you wanted a pool pass, then they raised the dues on everyone & it was "free" for everyone. Great for those who use the pool, not so much for those who don't.

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... For many, of course, the issue wasn’t really about pickleball. It was about a divide that had opened between wealthier residents who moved to the village more recently and the less well-off, who said clubhouse updates, new fees and expensive amenities would be budget-busters. .... .... The community now splits neatly into two camps. Some believe it should only “fix things that break,” he says. “Then there are people like the people who are starting to move in. They have a lot of money and want to live the lifestyle to which they’ve become accustomed and they want to do it here,” he says. “People are having more trouble getting along.” ... "There were clearly sides. One side felt that we’re an active-adult community and it’s our responsibility to provide activities and facilities to the membership,” says Oakmont resident Al Medeiros, 71, who now sits on the board. He counts himself in that group, which he says had been “vilified.” “The other side seemed to think that well, we’re poor, so we really need to make sure our dues don’t go up and we should just provide the minimum,” he says. ....

I can relate. Our condo association is going through this right now. New residents want to see some upgrades and updates to the 40 year old facilities and are willing to accept some increases in HOA fees in return and the older residents just want more of the same and to keep HOA fees as low as possible.

While many of these older residents cry poverty they nonetheless have newer vehicles in their parking spots, some renovations in their units, etc.

What they fail to understand is the impact on demand and property values of keeping the facilities "relevant" and desireable to today's buyers. For example, we have been debating a renovation to the clubhouse to modernize it and make it more functional... currently, when we have a party we are elbow-to-elbow with no room to move about... meanwhile fully 1/2 or more of the clubhouse space are bathrooms from back in the days when saunas were popular... for the men, we have 4 showers, 3 toilets, 3 urinals and 3 sinks that take up bunch of space and get limited use... ditto for the ladies less 1 shower and 3 urinals. The renovation would cost ~$1,000 per unit where units go for $150-300k. It is easy for me to see that a nicer, updated and more functional clubhouse would improve values by 3 to 7/10ths of 1 percent but many members just can't see it.

Now all of that said, $300k for a "tournament-quality pickleball complex with tiered spectator seating" seems excessive (and I like and play pickleball).

[bclover]

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Originally Posted by JDARNELL About 3 years ago a couple of people that I know from a social group always would say to me "it must be nice to be retired." Bothered me at first but then I was like screw that. Now when they say it I say "Yep. I highly recommend trying it."

Never understood why folks felt the need to explain. Once in a while if some one says I'm "lucky" I just smile and say "I prefer to think of it as Blessed".

Ironically I was playing on one of my disney fan sites (yes I'm a big lover of the mouseworld) and we were discussing the raise in food and drink prices and I said, 50 cent on a bottle of soda wasn't going to bite me on vacation.

Got a snide remark, "well all of us can't be wealthy retiree's, some of us have to watch our budgets".

I just said "sorry to hear that, I like being a wealthy retiree". lol sorry I am not about to explain nor apologize

[daylatedollarshort]

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Originally Posted by NW-Bound Eh, have y'all read the article quoted in the OP? Here it is, but not from WSJ so open to the public: https://www.msn.com/en-us/money/reti...age/ar-BBNWwV1. The story is about the conflict in an adult community in Santa Rosa, California. Some of the residents wanted to fund development of a pickleball court, while others did not want to see their dues go up. The division between the two groups came from the difference in their retirement incomes. The president of the HOA one day found a paper bag on his front porch. Inside was the chopped-off head of a rat. Also, there was a note with a succinct message: "You are next". The article's point is that this epitomizes the conflict between the haves and have-nots among retirees. Whether you are or consider yourself lucky or unlucky, how do you feel if you receive such a paper bag on your front porch?

Part of the problem with living in that particular retirement village is there isn't as much else to do as there is in a closer in more urban area or some of the newer villages. We looked at living there and rejected it for that reason. I think the "haves" should have considered before they moved there instead of trying to change the place and force out the "have nots".

[timo2]

I was lucky I was born into the post-WW2 egalitarian societal framework. That is the first piece of luck for most people in this forum. That framework is what allowed us to use our ambition to earn a decent amount of money. Societies without that framework don't allow a person without pre-existing wealth to get ahead, no matter how ambitious.

1) my father came from an auto worker family but through the GI bill he was able to get an engineering degree. 2) the economy until the 1980's allowed one earner incomes to support a family 2) University tuition was affordable in the 1970's 3) Thanks to modern medicine and decent health insurance I was able to get past a heart attack at 51 and continue earning in the high earning years. 4) there still is social security and medicare for us older folks.

Most of those situations are not available for the current younger generations in the USA. Interpret that as you will, but it it is the actual case.

[ceciledian]

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Originally Posted by CoolRich59 What I found objectionable was the implication that wealth is accumulated by "luck" or "timing" -- well timed-home purchases or well-timed stock buys. I guess I'm a little thin-skinned on this topic because I've been hearing it from family members. I went to school at night while w@rking full-time, w@rked hard and advanced my career, put away money every month, generally lived within my means, and was able to FIRE this year. But, according to family members I was able to retire early because I was "lucky".

Earlier this week my sister in law told us we were lucky because of our ability to go south for the winter. My husband had the same reaction to the term “lucky” as you because we also planned and LBYM in order to FIRE. I on the other hand took it to mean we are lucky to escape the Minnesota winter. [emoji38]

[Fedup]

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Originally Posted by bclover Never understood why folks felt the need to explain. Once in a while if some one says I'm "lucky" I just smile and say "I prefer to think of it as Blessed". Ironically I was playing on one of my disney fan sites (yes I'm a big lover of the mouseworld) and we were discussing the raise in food and drink prices and I said, 50 cent on a bottle of soda wasn't going to bite me on vacation. Got a snide remark, "well all of us can't be wealthy retiree's, some of us have to watch our budgets". I just said "sorry to hear that, I like being a wealthy retiree". lol sorry I am not about to explain nor apologize

I have had some of this at some college website. They have no problem wealth shame me, same as fat shame, but I never told them their health would improve if they stop using marijuana regular. Maybe not, but that’s my claim.

[timo2]

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Originally Posted by NW-Bound Eh, have y'all read the article quoted in the OP? Here it is, but not from WSJ so open to the public: https://www.msn.com/en-us/money/reti...age/ar-BBNWwV1. The story is about the conflict in an adult community in Santa Rosa, California. Some of the residents wanted to fund development of a pickleball court, while others did not want to see their dues go up. The division between the two groups came from the difference in their retirement incomes.

Thanks, I was pay walled out of WSJ.

Personally, I like living around people with a mix of ages.

[Fedup]

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Originally Posted by timo2 I was lucky I was born into the post-WW2 egalitarian societal framework. That is the first piece of luck for most people in this forum. That framework is what allowed us to use our ambition to earn a decent amount of money. Societies without that framework don't allow a person without pre-existing wealth to get ahead, no matter how ambitious. 1) my father came from an auto worker family but through the GI bill he was able to get an engineering degree. 2) the economy until the 1980's allowed one earner incomes to support a family 2) University tuition was affordable in the 1970's 3) Thanks to modern medicine and decent health insurance I was able to get past a heart attack at 51 and continue earning in the high earning years. 4) there still is social security and medicare for us older folks. Most of those situations are not available for the current younger generations in the USA. Interpret that as you will, but it it is the actual case.

Most of the young generations don’t give a whit about cost. My kid’s best friend is on her second year of master degree in Classics, she did graduate Tau Beta Pi from Berkeley, but now she has to borrow money to pay for the MS degree. And it doesn’t stop there, she probably will have to fund a PhD too, her father said she might be lucky to teach somewhere with that degree afterwards.
From what I’ve read, she most likely teach at some small college when she gets her PhD paying somewhere in the $40K-$50k. I’m sure she will have huge loan balance by then.

[pb4uski]

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Originally Posted by Fedup Most of the young generations don’t give a whit about cost. My kid’s best friend is on her second year of master degree in Classics, she did graduate Tau Beta Pi from Berkeley, but now she has to borrow money to pay for the MS degree. And it doesn’t stop there, she probably will have to fund a PhD too, her father said she might be lucky to teach somewhere with that degree afterwards. From what I’ve read, she most likely teach at some small college when she gets her PhD paying somewhere in the $40K-$50k. I’m sure she will have huge loan balance by then.

It is one thing to be idealistic, but it is another to be impractical.

During my junior year in high school I decided that my top choice for a profession didn't pay enough and I didn't want to be poor for my life so I moved to another choice... and my higher education plans were a function of that choice of profession.

NPR had a piece on the high cost of higher education and loans that today's students are saddling themselves with about a year or two ago... I recall they profiled a student that was going to graduate with $75k of college loans with an obscure degree that had no prospects for her getting a good paying job... she was screwed and just starting to become aware that she was screwed.

[timo2]

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Originally Posted by pb4uski It is one thing to be idealistic, but it is another to be impractical. NPR had a piece on the high cost of higher education and loans that today's students are saddling themselves with about a year or two ago... I recall they profiled a student that was going to graduate with $75k of college loans with an obscure degree that had no prospects for her getting a good paying job... she was screwed and just starting to become aware that she was screwed.

IIRC, current medical analysis is that the frontal lobes don't really kick in until age 25 or 27, depends upon the study. From what I understand the frontal lobe helps with anticipating the consequences of actions and helps in future planning. I'm not making excuses for anyone, but I think it is folly expect teenagers to be cognizant of all the future ramifications of their student loans or choices of majors. Some adult guidance is probably needed for them, but apparently adults don't like to do that any more.

[JustCurious]

Most people who were born or raised in the United States since World War II are lucky by accident of birth.