American workers are finding it harder to save for retirement !

[SteveR]

I think the trend to upscale our lifestyles is powerful and durable, and if you're going to ER its one of the beasts you need to wrestle with almost daily. Little things keep edging up from 'luxury/splurge' to 'norm' to 'necessity'. ... Maybe having a little extra slack in the budget is a good idea to allow for this lifestyle creep over the years ahead.

I see this in my step kids lifestyles. They are married with kids. They upgrade cars every 2-3 years (staying upside down in the loans). They both have upgraded their home in the last 2 years. Both are pinching pennies to get by each month yet have nothing saved and are not even close to thinking about college for thier kids. Retirement planning?? No way! But, they both have new phone, new Ipods, new digital cameras and new laptops.

Despite my best efforts to get them to see the 'evil of their ways' there is no change in their behavior and no end to their consumerism...even when it gets in the way of their kids educational needs. It makes me sick to see what they are doing. One couple has already been in financial problems and had to file for the big "B." It seems to have made no change in their spending. They seem driven to spend with no thought of tomorrow and then when they get into trouble to whine about having no money to pay for X or Y that their kids need (tutoring).

I see no good way out for them. They have had several 'wake-up' calls yet continue to spend like there is no tomorrow. It is looking like DW and I will be doing most of the 529 contributions to their college fund and that really pisses me off. I hate to have the grandkids hurt because of their parents lack of good judgement and self control.

They are too old to spank. What do you do? Leading by example is not working and providing council is falling on deaf ears. Sometimes you just have to watch from the sidelines and hope the damage is not too great. I see a storm brewing.

 

[uncledrz]

SR
some of my kids have a handle on money and others don't. Your post could be mine as well as to those that don't. Gentle guidance doesn't seem to work, OTOH don't want to come on so strong that it puts a strain on a good relationship.
Sometimes you just have to accept that they are adults and are living their lives how they want. UGH!
Tio z

 

[Caroline]

Of course, the 'median home' today is a lot larger and contains a lot more technology and complexity than a home built in 1967.

Mebbe so. However, I live in a 1924, 1700 sq ft. bungalow and rent out (until recently) a 1976 ranch house. There is NO comparision in the quality of these two houses. My bungalow is built completely out of HUGE redwood boards, has a basement in which you could survive a nuclear blast, and has wordwork, built-ins, oak floors with inlays, and a hand-made craftsman fireplace to DIE for. Did I mention the coved ceilings and sculpted plaster trim overhead? The chandeliers? The huge windows that let light in on every side? Every time I have a contractor in to estimate some repair they shake their head in awe at the workmanship and quality materials.

My rancher, on the other hand, is built out of paper and spit as far as I can tell -- and built badly, at that. Walls aren't square, the fixtures and cabinets are the cheapest known to man, and the flooring was crap until I replaced it. Even at that, a buddy's 1990's ranch house makes my crummy rental house look like a castle. Slab flooring, NO window casings (just pieces of wood hammered around the windows and coming loose on a regular basis), etc. etc. The size of his lot is miniscule, too.

Houses today ARE a lot bigger, more impressive looking, etc. The folks in the "good" part of my town are paying 2x to 3x the value of my house for those big boxes they live in. But as far as I can tell, all they're getting for the extra money is air.

 

[ESRBob]

Caroline,
Good point on the 20s-- it sure must have been a great time in the U.S. -- the end of a long golden age of prosperity with a hiccup during WWI, people had the values of quality, victorian lifestyles and the money to pay for it... Our town is filled with great 20s homes and estates. The quality wasn't universal, though -- one area of town was one of the first 'housing developments' all built in the 20s and it must have been done in a hurry because the homes quality haven't held up. But by and large the craftsman/Italianate/neoclassical homes, indeed the whole neighborhoods in many cases, outclass anything to come along since.

20s homes look especially good when you consider that essentially nothing was built in the 30s and 40s, 50s homes kinda small and built quickly to respond to huge demand, 60s ranch-heavy, though I have been in some amazing mid-century modern homes, 70s and 80s fugeddaboudit and not until the mid-90s did you see building take off again with any consistent size, grace, quality, and as you note, not all the 90s homes are all that good. I realize this is a totally unfair slam at about 75 years of American construction, but I really do find homes and neighborhoods built in the 20s (and in the 30 or so years prior) to be the highwater mark in our built landscape. It makes me think about values, wealth, commitment to future etc. during that time, and whether we might or might not be working our way back up to a similar golden age again. ('Course we all know how that story ended, too!)

 

[cute fuzzy bunny]

Caroline...yep, they had better materials and workmanship in the good old days. I remember my first trip into the attic of my 1950's era house down in the bay area. All redwood and it looked like someone cut the boards by hand. But then again the whole area was festooned with redwood at the time.

Still, a well made home today might be supporting about 5000lbs of concrete tile roof, have triple pane gas filled windows, built in microwave ovens, structured wiring for networks and home theater, etc. But yeah, they're made of cardboard for the most part.

If TVs were still hand-wired and cost two months' income, there wouldn't be one in every room of the house. And when cell phones & access cards are given away in cereal boxes, perhaps everyone will finally have one.

Yeah but the tv you want has cost $1000-1500 for a few years now, and the thats probably been the case for a while. And the computer you really want costs $800-1000. And you pay for that free cell phone...bundled into the contract monthly payments.

 

[Cut-Throat]

Yeah but the tv you want has cost $1000-1500 for a few years now, and the thats probably been the case for a while. And the computer you really want costs $800-1000. And you pay for that free cell phone...bundled into the contract monthly payments.

I think the big inflation discount comes in your later years. My older friends that are 70 plus - Do not even want a computer or a cell phone or a flat panel TV.

I have one older friend that lusts after tools. He buys expensive huge woodworking tools like table saws and planers over the last 5 years. He has them delivered to his basement - He hasn't built anything yet! - He's too lazy!

 

[ESRBob]

Anybody got one of these new table saws that automatically stops when it senses 'finger' instead of wood? My brother has one and swears by it. Apparently they test them out with hot dogs. Still, I haven't met anyone who's stuck their finger in one to test it...

 

[d]

table saws that automatically stops when it senses 'finger' instead of wood?

if it is sensing 'finger', isn't it already a bit late?

 

[LOL!]

Caroline...yep, they had better materials and workmanship in the good old days.

All old homes that we see around are well built. But it's not a function of the decade or era ... it's just survivorship bias. All the crappy homes built in the 20's, 30's, 40's have long since fallen down and/or been demolished. Only the well-built ones are left.

In 50 years, the same will hold true. Folks will be telepathing messages to each other about the quality of the homes built at the beginning of the century and lamenting that they don't build 'em like they used to.

 

[2B]

I see no good way out for them.

You are going to die and leave them a fortune.

 

[farmerEd]

All old homes that we see around are well built. But it's not a function of the decade or era ... it's just survivorship bias. All the crappy homes built in the 20's, 30's, 40's have long since fallen down and/or been demolished. Only the well-built ones are left.

An excellent point!


By the same token however, I have a very hard time beleiving that *any* of the houses in the huge tracts in Florida (kissimmee/orlando area for example), will be around in 75 years....the workmanship just isn't there.

Guess we are already moving towards a planned obsolence model for houses like we have already for cars...

 

[ESRBob]

All old homes that we see around are well built. But it's not a function of the decade or era ... it's just survivorship bias. All the crappy homes built in the 20's, 30's, 40's have long since fallen down and/or been demolished. Only the well-built ones are left..

LOL -- thx, I think you're on to something. Of course there must have been plenty of dumpy houses built, and like lousy mutual funds, we just don't hear about them anymore...

 

[Andre1969]

All old homes that we see around are well built. But it's not a function of the decade or era ... it's just survivorship bias. All the crappy homes built in the 20's, 30's, 40's have long since fallen down and/or been demolished. Only the well-built ones are left.

I think two very important factors here are land values and maintenance. There are plenty of old homes where I live, some dating back to the 1800's, and built in varying degrees of quality. Those that have been taken care of show it, as do those that haven't. About the only time an old house has been demolished around here, in my memory, would be to make way for a road, or if it was on a farm that got sold to developers, or something happened to make it burn down.

There are a lot of Sears & Roebuck homes in my area, built in the 1920's. They were just mass-produced kit homes, meant to be affordable, entry-level housing, but they've all seemed to have survived. I think in many cases, older homes look higher-quality because back then they didn't always have some of the money and time-saving materials of today. They didn't have sheetrock back in the old days. They used plaster. As a result, you didn't have the sloppy seams that often show up today. Of course, you had cracks and repairs in the plaster, but somehow those would often help to give the wall a nostalgic charm to it. And houses back then often had hardwood floors, and plenty of fancy wood moldings around the doors, windows, and other nooks and crannies. Not necessarily because they were better-built, but because that's what was available. Wall-to-wall carpeting wasn't fashionable yet, so at best you probably had area rugs. And other materials, such as pergo, vinyl flooring, rubber moldings, plastic by-products, etc, weren't available yet. Lumber tended to be thicker back then, simply because plywood hadn't been invented yet, and they tended to use studs, joists, and rafters that weren't dressed.

This was before I was born, but back the early 60's, Levitt and Sons put Bowie, Maryland on the map with mass-produced housing. I've heard older people carry on about how poorly those things were built, and how they were considered cheap housing at the time. A lot of it had to do with the fact that they were built on slabs and didn't have basements, and they used roof trusses, which limited the usefulness of the attic. And they just put the things up so damned fast! But fast forward to today, and people talk about how well-built they are, and how they just don't make 'em like they used to!

 

[cute fuzzy bunny]

I think the big inflation discount comes in your later years. My older friends that are 70 plus - Do not even want a computer or a cell phone or a flat panel TV.

They dont want them because they didnt have them 20 years ago.

We'll want them.

 

[Cut-Throat]

They dont want them because they didnt have them 20 years ago.

We'll want them.

That is what I mean! - They'll be cheap because they've been around for 20 years by then.

We won't want the new stuff, because we'll be old foggies by then!

 

[donheff]

That is what I mean! - They'll be cheap because they've been around for 20 years by then.

We won't want the new stuff, because we'll be old foggies by then!

Nah. Dennis Hopper has it right, we will want to try all the new stuff. Better figure it into your expense rate.

 

[Nords]

This was before I was born, but back the early 60's, Levitt and Sons put Bowie, Maryland on the map with mass-produced housing. I've heard older people carry on about how poorly those things were built, and how they were considered cheap housing at the time. A lot of it had to do with the fact that they were built on slabs and didn't have basements, and they used roof trusses, which limited the usefulness of the attic. And they just put the things up so damned fast! But fast forward to today, and people talk about how well-built they are, and how they just don't make 'em like they used to!

My FIL bought one of those on Manship Lane in 1964. He still has the mortgage contract-- a piece of 5"x8" pasteboard folded into four front&back pages. We've heard the stories hundreds of times... $17K financed at 5.5% with payments of $88.00/month!

 

[cute fuzzy bunny]

That is what I mean! - They'll be cheap because they've been around for 20 years by then.

We won't want the new stuff, because we'll be old foggies by then!

Dont be so sure. The tv I really want always costs over two grand and the computer I really want always costs more than a grand.

My dad has a big screen tv, tivo, cd and dvd players, netflix and a bunch of other similar stuff.

Roll back 20 years and ask him if he'd really be interested in any of this stuff. Answer is probably "no!"