Yet another discussion of "have Americans saved enough"...

[stoutboy]

Quote:

Originally Posted by youbet Yes you are. Read your own post. You talk about the fear of SS going under as a "right wing canard" then YOU suggest that it needs additional revenue and a higher retirement age to keep from going under........

I wrote the post, I know what it contains. A previous poster claimed that SS is 'unsustainable'; I pointed out that it is not. The origin of the current fearmongering in our society regarding social security is certainly political in nature, and it comes entirely from the right. That's just a fact.

SS is not insolvent, and is in no danger of becoming insolvent. That said, if people still wish to believe that SS is in trouble, the fix is a simple one, and I pointed out how to do so.

[stoutboy]

I think it's probably true Americans don't save enough. Every study I've seen has us at near bottom in terms of savings rates. The propensity to live beyond our means is a key reason why our country is in its current economic state.

I do wish people had more incentive to save. Why the 16.5K limit on 401k contributions? Why not 25K? Why not allow the catch-up from age 45? Why not raise IRA limits to 10K from the current 5K? I wish our legislators would increase our savings incentives. Maybe I'm missing the downside. Would the government really stand to lose so much tax revenue?

[LOL!]

Most people do NOT need to save more than $16,500 plus $5,000 a year towards retirement. The main reason is that they are not that wealthy to begin with, so it would be overkill to save more. Let's say you could shelter 20% of your pre-tax earned income. That $21,500 would cover someone with a $107.5K salary. That's plenty, don't you think?

[stoutboy]

You may be right. But I think most people can't save that amount for approximately half of their working lives (20s and 30s). They probably could, however, once in their 40s. So it would be nice if the limits were higher. I'm in a pretty fortunate spot where I could/would save a lot more in retirement accounts if I only could.

[LOL!]

Taxable accounts are rather tax efficient if you know how to use them, so there is nothing preventing anyone from saving.

[Alan]

Quote:

Originally Posted by stoutboy I think it's probably true Americans don't save enough. Every study I've seen has us at near bottom in terms of savings rates. The propensity to live beyond our means is a key reason why our country is in its current economic state. I do wish people had more incentive to save. Why the 16.5K limit on 401k contributions? Why not 25K? Why not allow the catch-up from age 45? Why not raise IRA limits to 10K from the current 5K? I wish our legislators would increase our savings incentives. Maybe I'm missing the downside. Would the government really stand to lose so much tax revenue?

Coming from England, and having lots of relatives and friends still there, I think we have far more options in the USA to save tax deferred. The UK equivalent of an IRA is an ISA which is more like a Roth-IRA (after tax deposits only) and the limit is ~$12K/year

They don't have an equivalent of a 401(k) and no FSA's or HSA's, plus mortgage interest is not deductible so no tax incentive to buy a house.

[CuppaJoe]

Quote:

Originally Posted by REWahoo <In my best John Wayne voice> Hello there, Pilgrim. Welcome to the forum. Looks to me like your post would fit nicely in this thread: http://www.early-retirement.org/foru...cks-49120.html

I second that, welcome, Pilgrim. Between your first post and your profile bio., looks to me like your posts would fit on many threads here.

[deserat]

Quote:

Originally Posted by stoutboy you're both woefully misinformed about Europe. They have a great social safety net AND they save. A good deal more than Americans, maybe not as much as Asians. It's pretty much only in the US where you see people chant "LBYM" like it's some kind of mantra. In the rest of the world, that's the norm. No maxed out credit cards, no home buying with zero money down. The mistake most Americans make is that they look on social security as their primary source of retirement income. It was never meant to be that, but only a supplement. Social Security is in no danger of going under; that's just another right wing canard. I think we should settle the question once and for all--eliminate the payroll tax cap and raise the retirement age two years. Bingo, problem solved.

Actually, I would say that it depends on what country you live in in Europe - yes, they have a generous 'safety net,' but they sacrifice other things for that. Also, the recent Greek issues are not going to borne by the Greeks, but the Germans..who are not amused by that. Portugal just had their bond rating downgraded to AA-. There is speculation that Spain and Italy may not be far behind. Also, none of these countries meet their NATO defense spending commitments, which allows funds to be diverted toward the social net.

As for Social Security - your suggestion is one way that it could become solvent, however, there are other ways available, too. To me it's not necessarily only a political issue, but a fiscal/financial one.

Additionally, I find it weird to make comparisons of the US with a European country when a European country is in many ways the size of a US state in terms of population and governance - a comparison to the EU is more appropos.

Lastly, I actually do see a LBYM mentality in Europe..perhaps it is due to my current living location of Schwabia, which has a reputation for being skinflinty in Germany. However, I just don't see the conspicuous consumption I see in the US - perhaps the 19% VAT tax has something to do with that - I don't buy too much on the economy around here anymore with the EU-$ rate and the VAT - ~20% of the price being a tax borne by the consumer. Tends to cut down extra buying---oh, and I also see a lot of stuff made in China around here, too.