another gloomy retirement article

[growing_older]

more than most will end up like those in the article.

That's just not true. This is ongoing propaganda from Teresa Ghilarducci who is actively campaigning to end IRA/401k and similar plans in favor of a government controlled retirement for everyone. The figures in the article show 89.4% of seniors were not working 30 years ago and now it's 81.4% of seniors not working. A decrease, but hardly a crisis.

No mention of increased health and longer life in the last 30 years making longer working lives more desirable for some, including some who work by choice for any number of reasons, not just destitute need. Instead it's just some anecdotes to make it seem like there must be legions of unfortunate old people trapped in dead end jobs. Impoverished by cruel fate and poorly designed 401k plans.

There have always been people who didn't plan for or save for their future. Pensions were never as ubiquitous as these articles seem to imply. My own grandmother, and many of her friends, were content as seniors with very minimal incomes and adjusted their lifestyles to match. If you want to argue that the safety net needs to be bigger to provide more for people who find themselves too old to work with no resources of their own, then please argue for that. But don't imply that only a small number of rich fat cats and unworthy heirs are the only ones who can have a quality retirement unless radical changes are made.

 

[JoeWras]

This quote struck me:

well-to-do retirees come ashore from luxury cruise ships to dine on $30 lobsters and $13 glasses of sauvignon blanc — leaving tips for other senior citizens waiting on oceanfront tables, driving Ollie’s Trolley buses or taking tickets for whale-watching tours.

And then I stopped reading. Why? Well, when I was in my mid 20s, I was busting my hump to work and SAVE. I went to Bar Harbor and ate an incredible lobster roll at a small shop, and washed it down with a coke. I spent the rest of the time exploring Acaida N.P. for FREE. It was an amazing experience! And it was LBYM. Meanwhile, my friends, needed to have the whole -- you know -- experience with the lobster, wine and shopping of useless junk.

That's the difference now, 30 years later. I have empathy, but it only goes so far. 30 or 40 years of continuous bad choices add up.

So I'll end it with What Freedom56 Said below:

This is a free country. People have a right to live beyond they means and not save anything for retirement. That was their choice. Those that lived responsibly and saved for a comfortable retirement should not feel any sympathy for them. Sure there are cases where some have health issues early in life that prevent them from working and saving. However, the vast majority are living well beyond their means. Just look at the cars that some people drive and the clothes they wear. If they want to spend money on image rather than a safety net, that is their choice. They don't deserve sympathy as they approach retirement age.

 

[athena53]

Why? Well, when I was in my mid 20s, I was busting my hump to work and SAVE. I went to Bar Harbor and ate an incredible lobster roll at a small shop, and washed it down with a coke. I spent the rest of the time exploring Acaida N.P. for FREE. It was an amazing experience! And it was LBYM. Meanwhile, my friends, needed to have the whole -- you know -- experience with the lobster, wine and shopping of useless junk.

Oh, I know. I LOVE travel- always have, still do- but I sometimes wonder when looking at pictures of the hordes at Disney World and seeing signature lines on Cruisecritic that show 2-3 cruises a year over 10 years- do these people have anything saved for retirement or their kids' educations? Some do, I'm sure- DH and I had one or two international trips a year and still put DS through college and saved enough for a comfortable retirement. Loyalty points from my business travel helped a lot, and so did our modest tastes in many other areas.

The ones who spent it as soon as they got it on cruises, Disney Word and new cars are the ones for whom I have little sympathy.

 

[marko]

That's just not true. This is ongoing propaganda from Teresa Ghilarducci who is actively campaigning to end IRA/401k and similar plans in favor of a government controlled retirement for everyone. The figures in the article show 89.4% of seniors were not working 30 years ago and now it's 81.4% of seniors not working. A decrease, but hardly a crisis.

No mention of increased health and longer life in the last 30 years making longer working lives more desirable for some, including some who work by choice for any number of reasons, not just destitute need. Instead it's just some anecdotes to make it seem like there must be legions of unfortunate old people trapped in dead end jobs. Impoverished by cruel fate and poorly designed 401k plans.

There have always been people who didn't plan for or save for their future. Pensions were never as ubiquitous as these articles seem to imply. My own grandmother, and many of her friends, were content as seniors with very minimal incomes and adjusted their lifestyles to match. If you want to argue that the safety net needs to be bigger to provide more for people who find themselves too old to work with no resources of their own, then please argue for that. But don't imply that only a small number of rich fat cats and unworthy heirs are the only ones who can have a quality retirement unless radical changes are made.

+1
But we now live in a world where everyone is a victim and it's always someone else's fault; where having wealth is a zero sum game.

Just read an article the other day about how a high school wants to change their school mascot name from "The Millionaires" because it has a negative connotation and is 'offensive'. I grew up admiring millionaires.

 

[Chuckanut]

Do I have to choose between eating lobster while drinking expensive vs. having to drive my camper nearly 2000 mikes to make $10 an hour?

 

[JoeWras]

Oh, I know. I LOVE travel- always have, still do- but I sometimes wonder when looking at pictures of the hordes at Disney World and seeing signature lines on Cruisecritic that show 2-3 cruises a year over 10 years- do these people have anything saved for retirement or their kids' educations? Some do, I'm sure- DH and I had one or two international trips a year and still put DS through college and saved enough for a comfortable retirement. Loyalty points from my business travel helped a lot, and so did our modest tastes in many other areas.

The ones who spent it as soon as they got it on cruises, Disney Word and new cars are the ones for whom I have little sympathy.

And that's the thing. LBYM doesn't necessarily mean deprivation. Oh yes, you will be deprived of the finest resorts, the finest wines, and the farthest destinations. But there is so much more you can do.

Do you need the Porsche Boxster? No, how about a Miata?
Do you need the 5 star resort? No, how about the Hampton Inn?
Do you need to stay inside the Disney resort? No, you don't, despite what people say.
Do you need Wagyu or Kobe? No you do not. A nice heartland raised age Choice is awesome.
Do you need the latest iPhone 10? No you do not. Wait a while, or get a 6S. Better yet (horrors!) try a full featured android at 1/3 the price.

My point being LBYM doesn't mean you go with NOTHING.

The phone thing blows my mind. Kids today are not much into cars. But the parallel is the same. Blow money now that you don't have to. Cars were the Achilles heal of my generation. I bought the $9k sedan, my friends got the $17k sports car (prices sound funny now). That $8k I "sacrificed for" in 1985 is now $19k in my account. How hard is this to understand? Complicated? Really?

 

[Nemo2]

LBYM doesn't necessarily mean deprivation. Oh yes, you will be deprived of the finest resorts, the finest wines, and the farthest destinations. But there is so much more you can do.

You must be reciting our "Travel on under $12k a Year" mantra.

 

[Nemo2]

Oh, I know. I LOVE travel- always have, still do- but I sometimes wonder when looking at pictures of the hordes at Disney World and seeing signature lines on Cruisecritic that show 2-3 cruises a year over 10 years- do these people have anything saved for retirement or their kids' educations? Some do, I'm sure- .

And it's not just the cruises, it's the 'private transportation' from a major centre to a port city, when you can get a train for €5 and walk maybe 1/2 mile from the station.......or 'guided tours' around an eminently walkable port when the ship docks almost downtown....and, and, and.....we figure some of these folks run up bills 10X what we pay, and yet, and yet....we're on the same ship.


And the ironic part is that they brag about it.

 

[donheff]

Wow, this article seemed to poke a stick in the ER.org community's sense of self righteousness. Forced me to skim the article and even the comments. OK, it is ground thoroughly plowed. And, OK, some of the aging baby boomers made poor choices. But the article is probably in the ballpark of accuracy when it points out that 20% (and that includes most of the intellectual and self disciplined elite here abouts) are doing very well in retirement and the other 80% struggle. The decline of defined benefit pension probably impacted a small minority of them - former industrial, unionized workers and a few white collar megacorp workers who may merit a bit of the forum disdain for ignoring the developing need to fund their 401Ks and LBYM. But 50-60% are just your standard low wage workers with lousy benefits, struggling to raise their kids. They rely on Social Security, Medicare, and Medicaid to eke out a marginal old age. I have a lot of sympathy for them. I suspect that if I was born a standard deviation down the IQ range I would be in the same boat. We are the richest country in the world. Rather than talk about the need to cut SS benefits by 30% and reign in Medicare, we can afford to maintain the existing social safety net so these folks can squeak by in old age even if that lets a few undeserving free riders slip by.

 

[JoeWras]

Wow, this article seemed to poke a stick in the ER.org community's sense of self righteousness. .

Yes it did.

I'm not without empathy.

But these writers need to dig a bit deeper, and we as a society need to educate better. Why don't high schools have basic financial education about such things as credit card debt?

 

[Senator]

Half of the U.S. Population has an Intelligence Quotient of 100 or below.

And therein lies much of what translates into net worth. When you are smarter, life is easier. I won't go into detail of this forum, or myself, but it just makes sense.

Someone that has a lower Intelligence Quotient will absolutely have to work harder, and be more diligent, than someone that has a higher Intelligence Quotient.

And when scientists talk about how tall/short your parents are, and you will be tall/short, it makes sense. Or color of hair and eyes of your parents translates directly to the children. Or even other different genetic traits.

But no one talks about the Intelligence Quotient being inherited...

 

[Danmar]

A couple of thoughts after reading the article:
- It strongly implies that any retirees who are well off either inherited their money, or obtained it through magic ("I don't know where they got the money").
- The article implies that 401Ks are "too complicated or most people", and make it seem like the villain... instead of going to the root cause of what type of education is available about 401ks and do people has access to it.

I have lots of empathy for these folks, and in real life I see this up close and personal with relatives. But I get concerned that articles like these feed the notion that "if you are doing well, it is because you took something away from someone who is not doing well, and you took it in far greater proportion than you need".

Agree. Well said. A little surprised we still debate these issues here. There must have been 20 threads discussing articles like this. There will always be people who are unlucky or foolish or both. Thank goodness we are so much smarter/luckier here.

 

[JoeWras]

For sure, there are people unlucky or who need extra coaching.

My favorite organizations to volunteer for are Habitat For Humanity, and a local organization that gives donated cars back to people who need them to get to their jobs. Both require some "buy in" by the participants. Habitat has a unique mortgage and sweat equity requirement, and the car program charges $500 for the car. What I really like is that both coach the participants on finances. It really helps change lives.

Another organization I haven't volunteered for yet, but want to, involves people who hit a rough patch and live in a shelter for a while while they get back on their feet. Again, a lot of coaching is involved.

I know I'm blessed with a > 100 IQ. Yet, many people can still learn the basics. They just don't get that opportunity.

Some day I can tell you about BIL1 and BIL2. Both have IQs undoubtedly above 110. I think one is probably above 130. Both would make great subjects for this article. They both just "blew it." BIL1 blew it by "under the table" jobs, with no FICA being paid. BIL2 (always drove a new Cadillac) blew it by gambling it away. BIL2 had chest pains for 2 months and waited until his 65th birthday (literally) to stumble into an ER and have 5-tuple bypass. Long stories they are...

 

[growing_older]

We are the richest country in the world. Rather than talk about the need to cut SS benefits by 30% and reign in Medicare, we can afford to maintain the existing social safety net so these folks can squeak by in old age even if that lets a few undeserving free riders slip by.

This is a reasonable approach and I happen to agree with it. I'd even like to see these programs strengthened. But this article and many like it are an organized campaign to demonize existing 401k/IRA rules and substitute a radical all government run plan for retirement. Teresa Ghilarducci wants to generate a great enough level of fear to push through big changes that move to government run retirement. To do this, they are propagating selected stories of individuals, glossing over any bad choices to make them seem like victims, and implying it will happen to all of us if we don't act as they suggest.

Younger workers at my megacorp are talking more freely about saving enough for their old age, but lots of older workers are still consuming freely, taking home equity loans and enjoying their expensive lifestyles. It's not that these people aren't smart enough to manage their affairs in the modern world, it's their own choice; but I'm leery of the possibility that people who did save become the next target for funds when the profligate decide to retire.

 

[Senator]

I hear similar sob stories all the time, but mostly with credit scores. I refuse to rent to someone in my apartments if they have a low score. I do not care of they have a large deposit, or a high income. Sub-625 score, you can keep looking. That goes for everyone 18+ that will be living there, even your 18 year old kid.

And a 625 credit score is low anyway. I don't care if it was your ex's fault, you got laid off, medical bills or the dog gave you a low score.

I just talked to a guy that was living in a motel (big red flag), his score was low because of student loans. He quit paying them because he could not afford the payments. He also said he had five kids.

 

[daylatedollarshort]

There are many homeless in our area and I am personally in favor of ideas like increasing SS and universal income to help out the needy. However since that isn't going to happen any time soon, one thing that strikes me in these articles is that many people do not seem to know how to live well on low incomes or find easier ways than hard, physical labor of making some supplemental income. At $22K SS and some part-time work each (maybe something online) it would not be hard to get to $30K a year household. We have many members here in who have all the basics of life and a few frills covered well on that kind of household income or less. For households 75 and older, $33.2K is the mean income, according to the Consumer Expenditure Survey.

 

[Blue Collar Guy]

I just talked to a guy that was living in a motel (big red flag),,,.....

I am not in the landlord/rental business. Even I knew this was a bad sign

 

[Senator]

When I read articles like this, I always think that if I ever gave to a charity, it would likely go to someone who frittered away their earnings and life.

So, I only give to organizations I personally benefit from.

 

[travelover]

I think many of the down and outers are mentally ill and, unfortunately, our current culture is not too sympathetic to that. From outward appearances, they just need to snap out of it and get a good job. And, as always, there are people with marginal ethics that will take advance of programs to help the down and outers, so that provides push back to doing more because there are anecdotes of freeloading.

Even when I worked for Habitat, I saw hard working people getting a helping hand up and freeloaders working the system to get an inexpensive home that they could actually afford if they included the income of the boyfriend who planned to live there, but somehow was never included on the financial disclosure.

 

[UnrealizedPotential]

Some people just are not good at saving money. Some don't want to. Others see the writing on the wall and coupled with a decent income and good saving habits are able to have a nice retirement. Some people see how hard it is to save enough to quit working and just never seem to start.

I never had a great income, but always worked hard at saving and investing. I am a better investor now than I was 10 years ago. You have to want it really bad and then work hard at it. You have to constantly be learning. I have been investing since 1993 and I feel I still know so very little yet I have already learned so much since I started.

Charlie Munger once said the game is to keep learning.

 

[nvestysly]

snip...

I have lots of empathy for these folks, and in real life I see this up close and personal with relatives. But I get concerned that articles like these feed the notion that "if you are doing well, it is because you took something away from someone who is not doing well, and you took it in far greater proportion than you need".

I too feel empathy for those described in this article but having empathy doesn't mean I don't want to wag my finger in front of them and ask what the he!! they were thinking? As jollystomper said, I see these situations in my own family - I'm the youngest of nine children and have MANY, MANY nieces/nephews, cousins, and a similarly large number of great nieces/nephews and a significant number of them are likely working paycheck to paycheck or at best wondering why they "can't get ahead." Blaming your financial problems on somebody else is too easy and that's what I think the OP meant when referring to retirement porn. Those who are not saving/investing will read an article like this and say... See, the system is rigged for the rich - the regular guy just can't win!

I've taken time to work with several individuals (mostly family) to organize their retirement income. One of the most difficult discussions in the process is getting people to come to grips with how much they spend and determine which lifestyle adjustments they will need to make in order to match their retirement income and expenses. One of people I helped (who had the most amount of money saved/invested) easily achieved retirement because their day-to-day expenses were very modest compared to income and never made more than $30k per year. So whether you make $30k or $300k retirement is possible. It's all about choices - needs versus wants.

Blame your financial failings on complexity of the 401-k system, blame it on your employer, blame it on rich people, blame it on the government... then go look in the mirror.

The future looks reasonably bright from my soapbox.

 

[RobbieB]

I feel for them too, but I ain't giving them any dough either.

Yeah, families. My wife was a LBYM saver who worked for a living and her sister quit her cushy government job to become a heroin addict who scammed everyone she met and stole thousands from her own mother.

 

[rayinpenn]

I guess I didn't realize that many on this site lack empathy. I had good friends that even with health insurance died broke. That was because she had 8 bouts with cancer and he had 4. They sold everything before dying and paid off all their debt. Most of their $ was gone by then from all the medical bills left after insurance paid. She ended up in a nursing home and after a year on Medicaid until she died. Not exactly golden years.

I think you are off point here.. The number 1 way people go bankrupt is in fact medical bills and I think all appreciate how cancer/illness can ruin even a well heeled family. When you read about the statistics about how much the average American saves... it does come down to personal responsibility... it's also about learning the difference between needs and wants...

God willing RayinPenn and the Mrs, like millions of other boomers will retire and unceremoniously live on their savings; there's no story there. There are too many who spent every dime on the bling. Suffering always makes for good copy.

 

[timo2]

+1
Just read an article the other day about how a high school wants to change their school mascot name from "The Millionaires" because it has a negative connotation and is 'offensive'. I grew up admiring millionaires.

So I assume they are changing the name to 'The Billionaires'? Of course it is offensive to just be a 'millionaire'

 

[Luck_Club]

Half of the U.S. Population has an Intelligence Quotient of 100 or below.

And therein lies much of what translates into net worth. When you are smarter, life is easier. I won't go into detail of this forum, or myself, but it just makes sense.

Someone that has a lower Intelligence Quotient will absolutely have to work harder, and be more diligent, than someone that has a higher Intelligence Quotient.

+1

Intelligence is never discussed or debated as being a part of how you fair in life. Even the SAT/ACT have little to no correlation to intelligence. They are much more reflective to past schooling, then the ability to "handle the rigors of higher education".

I would be willing to bet there is a inverted correlation between early financial independence and academic performance. And to a lesser extend the same inverted correlation could be found in the 1 standard deviation of the mean IQ. People with a chip on their shoulder work harder.

ELDERLY HAVING TO WORK IN THERE 70'S DUE TO POOR CHOICES IN LIFE is probably