Millions Unprepared For Retirement

[Badger]

It is not surprising that as the flower child generation advances into old age, the “elderly” exhibit more drug use (with all its effects) than in previous generations.

I also think that heavy substance use combined with life on the streets can make a middle aged individual look far older than they are.

I'm not so sure I agree with you. According to a number of sources the percent of the population that were "hippies in the 60's was about .02 the decreased by the mid 70's. Of those people there were some that actually avoided drugs. This seems to match my experience when I was in my late teens and early 20's during my college and grad school days.
Although I enjoyed an occasional toke on some cannabis I and many others were never interested in anything else. I succeeded in eventually become a published author as an Industrial Microbiologist and Chemical Engineer then later a professor before retiring. I made sure I was well prepared for retirement. Most of my friends were also just as successful.
Previous generations had less focus on most drugs and their availability since chemically created drugs like different forms of acid either weren't created yet or weren't available. What was mainly available was a bit of cannabis, cocaine or heavy drugs like heroin to a very small group of people.
These days there is a greater use of opiates and fentanyl in the 25-39 age group so you will have to wait a while to see how that pans out.

Cheers!

 

[HawkOwl]

I'm not so sure I agree with you. According to a number of sources the percent of the population that were "hippies in the 60's was about .02 the decreased by the mid 70's. Of those people there were some that actually avoided drugs. This seems to match my experience when I was in my late teens and early 20's during my college and grad school days.
Although I enjoyed an occasional toke on some cannabis I and many others were never interested in anything else. I succeeded in eventually become a published author as an Industrial Microbiologist and Chemical Engineer then later a professor before retiring. I made sure I was well prepared for retirement. Most of my friends were also just as successful.
Previous generations had less focus on most drugs and their availability since chemically created drugs like different forms of acid either weren't created yet or weren't available. What was mainly available was a bit of cannabis, cocaine or heavy drugs like heroin to a very small group of people.
These days there is a greater use of opiates and fentanyl in the 25-39 age group so you will have to wait a while to see how that pans out.

Cheers!

It wasn’t my intention to besmirch an entire generation. Then, as today, most people avoided the worst of the excesses of the era’s drug culture. I was comparing the rise in the use of illegal drugs to previous generations, not subsequent ones.

Some chemically created drugs like LSD and amphetamines were available in the 60’s. Like you, this was outside my personal experience. However, I don’t think it is a stretch to believe that they existed, and popular media suggests that they were accepted and ubiquitous in the hippy subculture. Some users recovered, some died, and maybe some kept using and ended up on the streets in their old age.

Yes, it will be interesting to see how modern changes in the drugs of choice (meth?) will effect the homeless elderly in the future.

 

[W2R]

It wasn’t my intention to besmirch an entire generation. Then, as today, most people avoided the worst of the excesses of the era’s drug culture. I was comparing the rise in the use of illegal drugs to previous generations, not subsequent ones.

Some chemically created drugs like LSD and amphetamines were available in the 60’s. Like you, this was outside my personal experience. However, I don’t think it is a stretch to believe that they existed, and popular media suggests that they were accepted and ubiquitous in the hippy subculture. Some users recovered, some died, and maybe some kept using and ended up on the streets in their old age.

And then some (like me) tried them a couple of dozen times and was astonished to find that for me they were actually mind-numbingly boring, so never again. Seriously, my brain is my favorite "toy", so personally I thought it was very unpleasant to temporarily disable it with drugs so that I couldn't think straight or even read. Me, a long haired hippie "peace-nik" living in Berkeley and then in the Haight Ashbury back in the 1960's.

After five years of that baloney I flew home to Hawaii, got a job, and started grad school. Much better.

 

[MichealKnight]

What will be the end result of this?

The numbers don't represent a tiny niche but rather, a critical mass.

A large number of people will not be ready financially in retirement years.

So what do you feel will be the end result, or remedy, if any?

*Poverty, which is visible and mainstream. It will be quite normal for foreign tourists to discuss the poverty and beggars they see in America and how they feel sorry for them - kinda like we do now when we visit poor countries.

*Coaxed or encouraged euthanasia. Congrats on the wellness stuff buuuuuuut we're not gonna fix you to live till 90, instead take the pain pill and we'll see you on the other side.

*Wild Card - a grand, somewhat draconian redistributive edict that decides the. chicken in every pot constitutes prosperity and victory.

Frankly - I can easily see any of those being the result. Curious what others think will happen?

 

[Music Lover]

Frankly - I can easily see any of those being the result. Curious what others think will happen?

Many people will downsize and/or, move to a LCOL area and get by.

People here like to say that they can't live on SS alone. Obviously, you don't have to if you have saved enough. But don't forget that there are plenty of people on this site that can easily get by on the equivalent of SS even if they don't have to. Even those here who have annual expenses of $100k+ and somehow lost it all, most of them would make some tough decisions to move and downsize or go back to work, and they would find a way to get by even if they weren't happy about it.

 

[Aerides]

The numbers don't represent a tiny niche but rather, a critical mass.

A large number of people will not be ready financially in retirement years.

Nah. You could have done that survey 10, 20, 30 years ago, and you'd have gotten the same answer. A marginal increase in respondents each time would have had pensions, but never a majority since 1990. Most people figure it out later than sooner. Most will be ok.

 

[Sunset]

The numbers don't represent a tiny niche but rather, a critical mass.

A large number of people will not be ready financially in retirement years.

...... Curious what others think will happen?

INHERITANCE.... from all those Rich Boomers...

I bet many of those loving children/grandchildren think every now and then about the step up in life an estate will be.

 

[Music Lover]

INHERITANCE.... from all those Rich Boomers...

I bet many of those loving children/grandchildren think every now and then about the step up in life an estate will be.

Back in the day several kids used to share a modest estate. Today there are a lot of families with 4 or 5 siblings and only a couple kids between them. And they all have paid off homes.

 

[F.I.R.E User]

There was an article I read that Gen-Z is not interested in saving so they will be spending now and not later.

Americans in general are spenders so that is why they don’t have the funds in retirement. One of the reason people are poor is because of kids.

 

[Aerides]

There was an article I read that Gen-Z is not interested in saving so they will be spending now and not later.

The average Gen-Zer is about 19 so I wouldn't put too much stake in that. I'm sure if any of us had done interviews at that age we'd have been the same.

 

[F.I.R.E User]

The average Gen-Zer is about 19 so I wouldn't put too much stake in that. I'm sure if any of us had done interviews at that age we'd have been the same.

True. They will realize it few years from now.

 

[kilkoyne]

No one else I worked with saved anywhere near what I did even though they made as much or more than me. I wasn't even as frugal back then as I am now. Seems most people just spend whatever they make, my Brother is one of them. He makes more than I ever did but spends it all.

A month ago my brother was complaining how he always gets screwed over and that's why he doesn't have money..... Just 2 weeks ago we each received a small inheritance. My inheritance is going to be invested while he is going to use his money to go to Jamaica and buy a new Iphone.

 

[F.I.R.E User]

I work in service so it’s always the people who don’t have money want to spend more with poor payment history. The people who are frugal usually have minimum subscription low pay but they never miss a payment. These are the people who have money.

The poor blame the government.

 

[PandaBear]

What % of workers are under age, say 30?



If it is around 20% then the numbers make sense because that age group does not tend to save.

My three kids are 31, 29 and 26. Of course, you hope you’ve taught them well but there is never a guarantee.

My dh and I really encouraged four things:
1. Max out what you can put in retirement savings.
2. No credit card debt (in effect, live within your means)
3. Drive a safe, reasonably priced car and drive it 10 years
4. Save some money for emergencies outside your retirement fund.

We felt if the kids did this through their 20’s, they’d be in a good position when they got their 30’s and beyond. A good position for two reasons:
1. They’d have started habits that might be more likely to stay with them longer term.
2. Financially, having money put away in your 20’s gives you a nice time period to increase.

My kids are far from perfect (just like dh and myself) but they seem to have followed this advice. Our hope is that this has given them a solid foundation for the future.

 

[socca]

Back in the day several kids used to share a modest estate. Today there are a lot of families with 4 or 5 siblings and only a couple kids between them. ...

This is the situation in my family. What happens when there's substantial generational wealth but few or no next generation to collect it? What's worse is when the generational wealth is in the form of operating businesses but the next generation that did arrive is mentally incapable of running them (arguably, merely being an "average person" is enough to disqualify you from being able to successfully run a business ).

 

[Time2]

There was an article I read that Gen-Z is not interested in saving so they will be spending now and not later.

Americans in general are spenders so that is why they don’t have the funds in retirement. One of the reason people are poor is because of kids.

I agree kids having kids will often keep people poor. When your 68, a 23 year old is a kid . I'm sure us delaying kids until I was 36 and we already had $350k made a huge difference in our retirement. Also marrying a younger frugal beautiful women was a big factor.



Re: Gen Z and even younger millennials, a portion of those have an attitude of I'd rather "live now" and don't think saving has a useful purpose. My comment is, you can still be happy spending 10% less, but it doesn't go over well on most social media.

 

[Andre1969]

Without question, this is the mentality. It's like everybody has a buddy who has a pal who knew a gal where the gubment took the house like it's some kind of ghost horror legend. Drives me nuts. The gubment took care of yur parent and all youz all can think about is the dang house.

I can think of two stories along those lines. The first was my great-grandmother. I don't know how long she had been in a nursing home, but it was as long as I could remember. It was sometime in the 1970's. Great Granddad died in 1977, and Great Grandmom died in 1981, so she was one of those comparatively rare cases where someone went in for a really long time, and I'm sure that ran up some major bills.

I think the nursing home took control of the house, but Great Granddad had the right to live in it until he died. As far as other assets, I don't know what else had to be forfeited to the nursing home, but I know they didn't get the car. After Great Granddad died, my Dad got the car, a 1971 Ford Torino. The house itself was a modest townhome in a Co-op. If you're local to the Greenbelt area of Maryland, you'd know it as GHI. In those days, it wasn't worth more than $15-20,000.

The second instance was the grandmother of a friend of mine in Pennsylvania. It got to the point that she had to go into some kind of nursing home or assisted living facility. The house was sold, and the money put into an escrow account. Again, it wasn't an expensive house, maybe $90-100K, and this was in the early 2000s. She died, shortly after her 99th birthday. There was actually some money left in that escrow account, that got refunded to the family.

So, there's two anecdotes where, yeah, technically the government "took their homes." But I don't look at either instance as any kind of horror story. I imagine most instances where the big bad government takes the house, are a similar tale, just embellished by relatives who feel cheated out of an inheritance.

Now that I think about it, my great grandparents also had a cottage in North Beach, Md. Somehow, it ended up in possession of my grandparents, rather than in the hands of the big bad gov't/nursing home. However, it's possible that they signed it over to my grandparents well before Great Grandmom went into the nursing home. Maybe there wasn't even a "5 year rule" back then for transferring assets, even?

 

[jim584672]

Plenty of people have generous pensions and Social Security, no great savings pile is even needed.

 

[Andre1969]

This is the situation in my family. What happens when there's substantial generational wealth but few or no next generation to collect it? What's worse is when the generational wealth is in the form of operating businesses but the next generation that did arrive is mentally incapable of running them (arguably, merely being an "average person" is enough to disqualify you from being able to successfully run a business ).

My situation is somewhat similar to that. I'm an only child, and on Mom's side of the family, the only grandkid. Now on my Dad's side, I have two uncles, and five cousins.

Anyway, when my maternal Grandmom died, her estate was split 40% Mom, 40% my uncle, and 20% me. My uncle, since he doesn't have any kids, has me set to inherit everything. With my Mom and stepdad, it was set up to go 50% to me, and 25% each to two of his siblings. Mom passed away first, so as long as I don't piss off my stepdad, I guess that still stands.

On my Dad's side of the family, when Granddad passed, 1/3 went to each brother. But then my Dad died 6 months later, so then that 1/3 went to me, along with Dad's estate. I know that ended causing a rift with some members on my Dad's side of the family, because they thought I made out like a bandit, compared to my cousins. But then I countered with my cousins still have something I DON'T have. Their Dads!

I was already doing pretty well when Grandmom passed away, and even better by the time my Granddad and then Dad died. I can foresee a future where, after my uncle and stepdad pass away, I end up being a rich old man. I guess it's not a bad problem to have!

OF course, I'm not doing any financial planning based on it, though, as anything could happen. My uncle could easily run up some big bills, as he has a list of medical issues longer than a CVS receipt. And, I went off on my stepdad on the phone the other day, to the point I made him cry. My housemates also said it made the cat run downstairs in a panic and then flatten himself on the floor like an air blast had gone off or something. So, pissing off my stepdad to the point it does irreparable damage to our relationship, I hate to say, is a possibility.

 

[athena53]

Plenty of people have generous pensions and Social Security, no great savings pile is even needed.

Yes, the people in those categories MIGHT be doing better. The average SS check is now about $1,800/month, so not that great. I can't find a breakdown between couples and singles. The last numbers I saw (outdated) I think the average couples' check was about 150% of a single check. That in itself can be a big shock to someone who outlives their spouse. I maxed out SS contributions most of my career so I could probably live on SS alone but it would be the end of BTD on travel and DS and DDIL would likely get nothing (and they don't care- DS said anything they get will go to the kids).

Add a "generous" pension and you could do OK, but few have COLA adjustments and teachers' pensions are somewhat offset by lower SS through the Windfall Elimination Provision. The only generous ones seem to be C-suite and military and public safety officers (who deserve every dime they get).

 

[Aerides]

Plenty of people have generous pensions and Social Security, no great savings pile is even needed.

Plenty under 50? Or even 60? Not nearly as many as 20+ years ago. Non-union/gov sector pensions largely disappeared in the late 90's to early aughts.

Private sector workers, not yet retired, likely have a far lower number of pensioners in their future than a generation ago.

 

[Surewhitey]

Plenty under 50? Or even 60? Not nearly as many as 20+ years ago. Non-union/gov sector pensions largely disappeared in the late 90's to early aughts.

Private sector workers, not yet retired, likely have a far lower number of pensioners in their future than a generation ago.

I know from reading (on the internet) that pensions have declined in the private sector, but happy to report that DW was grandfather's in around 2010 from papa-insurance. They switched to a larger dollar / dollar match in the 401k @ that point. Both were great benefits but they got out of the pension biz for future peeps.

She now w*rks for a different company who gives generous bonuses, RSU's and profit sharing... We're good with that.

 

[athena53]

They switched to a larger dollar / dollar match in the 401k @ that point. Both were great benefits but they got out of the pension biz for future peeps.

My employer, a GE sub, was acquired by a very large international company that had terminated access to its pension plan for new entrants, so we didn't qualify. Anyone not in the pension plan was given 6% added to their 401(k) every year, regardless of whether they contributed to the 401(k) and in addition to the company match of 100% of the first 6%. Still, it left the longevity risk and investment risks with the employees, some of whom weren't in a position to manage them. I had a coworker who would just withdraw that 6% every year as soon as it was deposited. Since he was under 59 1/2 he owed the penalty, too. And he was an actuary.

 

[Chuckanut]

I'm thankful we have the SS system. At least these people are forced to put aside something for their retirement. Otherwise, they would end up on some sort of welfare program. At least with SS most people have to put something in to get something out.


(Yes, I understand there are children and spouses who collect SS and who never contributed. That's why I said most.)

 

[athena53]

I'm thankful we have the SS system. At least these people are forced to put aside something for their retirement. Otherwise, they would end up on some sort of welfare program. At least with SS most people have to put something in to get something out.

I agree. Sadly, the vast majority of people seem to need some sort of forced savings or they'll never manage to save at all.