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Old 10-04-2020, 03:45 PM   #61
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Well, life is not fair. Nothing we can do about that.

Regarding "not saving enough" I am not judgemental on that. There are people on subsistence incomes, people who must support other family members (like parents) on their incomes, people with high medical expenses, ... Lots of reasons for that recent observation that 40% of Americans adults couldn't come up with $400 in an emergency. Then there are those who legitimately wasted their money, including sports stars, where I guess we could look down on them. But why? So we can feel superior? Man plans, and God laughs. Most of what DW and I have is probably more due to good luck than to wisdom, starting with being born to middle-class white families.
I agree completely. There are plenty of people that despite their best effort, just don’t earn enough money to save meaningful amounts for retirement. And you are probably more correct than not in regards to ones birth circumstances. Sad but true.
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Old 10-04-2020, 03:56 PM   #62
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Retirement is really a modern innovation. Before that most people died before they got really old - at least by current standards.

Those who lived a long life depended on their family. One reason (among many) that people strove to have a big family.

Lots of people still depend on family.

My point is that people are rarely wired to save big for retirement. Why would they? It really wasn't something people did.
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Old 10-04-2020, 04:58 PM   #63
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^ maybe not wired for saving for retirement but a lot of older people from my area lived frugal and saved. They saved for some reason and many that had just an everyday small town jobs with no 401K or pensions did very well for themselves.
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Old 10-04-2020, 09:28 PM   #64
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Retirement is really a modern innovation. Before that most people died before they got really old - at least by current standards.

Those who lived a long life depended on their family. One reason (among many) that people strove to have a big family.

Lots of people still depend on family.

My point is that people are rarely wired to save big for retirement. Why would they? It really wasn't something people did.
This is why warriors, knights, samurais were next to kings and royalty in the 12th - 18th.. they wanted to die fighting.

But before the Big Flood (Noah), people lived to 700-900 years old. .. Methusalah lived to 969 years old. Noah lived to 950. Lamech Noah's father lived to 777, and Enoch 365 years old. Not sure if they ever retired.
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Old 10-05-2020, 04:10 AM   #65
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This is why warriors, knights, samurais were next to kings and royalty in the 12th - 18th.. they wanted to die fighting.

But before the Big Flood (Noah), people lived to 700-900 years old. .. Methusalah lived to 969 years old. Noah lived to 950. Lamech Noah's father lived to 777, and Enoch 365 years old. Not sure if they ever retired.
They would have put a further strain on the SS system.
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Old 10-05-2020, 04:48 AM   #66
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I think most of us here are somewhere between frugal and cheap in many areas but probably have one area or areas where we spend the dough because we can.

I know that family and travel are our splurges but only because other costs are contained and we are in the "fat part" of retirement where inflation has not ravaged our fixed income yet and we have prepaid our future income taxes somewhat by roth conversions.

I was frugal by osmosis. Growing up in a small LCOL area I did not even realize there were even vast wealth in entire communities until I saw tv shows like Dallas.. I thought we were all yokel John Boys.. The wealthy apparently did not flash it where I lived or I was clueless on the get a good education to get a good job on the public education hamster wheel. Get a car, get a job, get a wife, get some kids, have some grandkids, retire and die. Only differences seemed to be the models of job, car, wife, house you could afford. IE how much in maintenance.. lol
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Old 10-05-2020, 09:24 AM   #67
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What we need is a huge class action lawsuit against the Fed to reclaim our lost purchasing power and lost interest. Nobody elected them, and they are actively trying to hurt savers and low income individuals by their policies.
I would sign up for that suit.
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Old 10-05-2020, 09:29 AM   #68
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That may be the effect of their policies, but I doubt it is the intent.
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Old 10-05-2020, 09:29 AM   #69
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I would sign up for that suit.
Quite funny, actually. If you guys win, where would the money come from and what would the macroeconomic effects be?
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Old 10-05-2020, 10:44 AM   #70
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I believe that the current move towards a service based economy and knowledge based economy away from a manufacturing and in some instances a natural resource based economy has had a dramatic impact on wealth at retirement age for many people

It has left many in their fifties in lower paying jobs with no pension provision or benefits. In the past these were the highest earning, highest retirement savings years.
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Old 10-05-2020, 11:00 AM   #71
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I believe that the current move towards a service based economy and knowledge based economy away from a manufacturing and in some instances a natural resource based economy has had a dramatic impact on wealth at retirement age for many people
I recall, but with no details, part of a TV documentary a number of years ago where an Ontario town/city, known for its vehicle manufacturing, was drastically reducing output.

The show interviewed a number of families, many engaged in unskilled/semi skilled production line jobs, who had all the 'bells & whistles', boats, multiple vehicles, that kind of thing, but little or no savings.

After all, it was going to sail along forever.....and then there were 'good pensions'........
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Old 10-05-2020, 11:00 AM   #72
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I believe that the current move towards a service based economy and knowledge based economy away from a manufacturing and in some instances a natural resource based economy has had a dramatic impact on wealth at retirement age for many people

It has left many in their fifties in lower paying jobs with no pension provision or benefits. In the past these were the highest earning, highest retirement savings years.
Yes, factory work for high school grads, with a Union was a plum job.
I was considered a dummy for not getting an Auto manufacture job when I was 18. My friend got one, got a new muscle car at worker discount, and lived well at the time.
Now those jobs are gone.
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Old 10-05-2020, 11:12 AM   #73
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As a senior manager one of my frustrations was trying to get employees to take advantage of the firms pension plans. DB(grandfathered) for some, DC for others

The basic DB plan was non contributory. EE's did not have to pay a dime. There was an add on for supplementary benefits. If the employee put it 3 percent, the company would match 1.5 percent. Surprising to me how very few actually subscribed.

On the DC front there was an equal match up to five or seven percent (I forget). Again, surprising how many employees failed to subscribe to this or failed to max out. I sometimes heard excuses like I do not want the firm managing my money. They did not, it was managed by an outside investment firm and the ee selected investment options that they were comfortable with.

I saw the stats of those who were in the DC program with regard to how often employees even logged into their accounts let made adjustments to their investment mix. it was in the low thirties.

Our employer did everything possible to encourage ees to save for, and have a secure financial retirement. I was told that our experience was in line with other companies. So much money left on the table by employees who did not care to know.


Finally, our HR group sponsored regular retirement savings seminars during normal business hours. They did several presentations so that they could reach as many employees as possible. The attendance was generally very, very disappointing. Often only those a few years away from retirement.
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Old 10-05-2020, 11:16 AM   #74
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I was not born to middleclass parents, I only finished high school, I'm married and I have two kids.

My luck is marrying a person that would LBYM and, getting interested in Bob Brinkers radio show in the late 80s.
We saved money and I learned how to invest it. Our life time income* was just a little above the median US income, but we retired in the 95th percentile of US networth.

* I used our SS statements and inflation adjusted the incomes to the present to find my avaerage income.
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Old 10-05-2020, 11:17 AM   #75
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It just comes down to the fact that most people live totally in the present and do not think or plan about the future. Financial planning is not taught in High School and most people do not talk about finances. They have family around and can depend on them during bad times. No need to live below their means...it's all good. For me...I left home from a dysfunctional family and soon learned that I had only me to depend on. You learn real quick when it is sink or swim. The military and beyond was my salvation. You need to be mobile if you want to get a good job...whether you have a good education or not. Most will not move out of the hole and most have a life history of the same mistakes.
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Old 10-05-2020, 12:25 PM   #76
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It's a sad development, 50% of Americans aged 55 and up will retire in poverty or near poverty.

https://www.marketwatch.com/story/ha...oor-2020-10-01

“Our data is showing that, because of the COVID recession, about 50% of workers over the age of 55 will be poor or near-poor adults when they reach 65,” she said.

How poor is that? “A person who’s 65 will be near-poor or poor if they’re living on less than $20,000 a year,” she told me. “I think we could all agree that means chronic deprivation for the rest of your life.”


And the saddest part of this, is that it is completely preventable in most cases. Consider this... if your life depended on it, could you save $200 a month? I think the vast majority of people can. And that is all it takes to retire with dignity.
That and the knowledge of what to do with that $200 a month. Tell me again why financial literacy is not just as important as reading, writing, and math in HS? It should be made a requirement for graduation...
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Old 10-05-2020, 12:26 PM   #77
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Bingo! The current "crisis" is always the problem. Not saving for the previous 20-40 years has nothing to do with it.
Add my +1 as well.

Along the same lines, there was an article in last week's WSJ that caught my attention: "No Job, Loads of Debt: Covid Upends Middle-Class Family Finances".
"[A] good year ... brought in about $175,000, the couple said—enough to cover the mortgage, two car leases, student loans, credit cards and assorted costs of raising two daughters in the New York City suburbs. ... After the coronavirus ... work dried up. Unemployment benefits have helped, Ms. Hopkins said, but the family is running low on savings and can’t keep up with $9,000 in monthly debt payments including mortgage installments. ”

**********
"Lynn Scott-White, 47, was furloughed from her job as a corporate travel agent at the end of March. Before the pandemic, she and her husband together earned roughly $150,000, she said.

The Denton, Texas, couple pay $4,400 a month on their mortgage, four car loans and leases, and student debt, Ms. Scott-White said. Minimum required monthly credit-card payments total about $700. The debt was manageable pre-pandemic, she said."

I take no pleasure in the distress these families are in, but they were already on the Titanic and covid just happened to be the iceberg they collided with. If it wasn't the pandemic that sank them, it would have been something else.
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Old 10-05-2020, 12:33 PM   #78
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Well, life is not fair. Nothing we can do about that.

Regarding "not saving enough" I am not judgemental on that. There are people on subsistence incomes, people who must support other family members (like parents) on their incomes, people with high medical expenses, ... Lots of reasons for that recent observation that 40% of Americans adults couldn't come up with $400 in an emergency. Then there are those who legitimately wasted their money, including sports stars, where I guess we could look down on them. But why? So we can feel superior? Man plans, and God laughs. Most of what DW and I have is probably more due to good luck than to wisdom, starting with being born to middle-class white families.


There is a simple premise by which I have lived my life so far. Don’t give fate a reason to come find you. Life is full of the uncontrollable, but almost everyone has some degree of control over what they do, and those actions they take are almost always stronger than luck (good or bad).

I have heard that phrase before (Man plans and God laughs). It sounds like another phrase I heard many years ago, and that one was “Who is John Galt?”. And they both pretty much mean the same thing.

“I believe in nihilism, there is no point or purpose, I have no control over my life, I am not responsible for things that happen to me. So why should I plan for the future.”
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Old 10-05-2020, 12:57 PM   #79
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As for the ones who wasted their money- annual cruises, Disney World, shiny new cars every few years, houses full of Stuff... well, no I don't look down on them but the unfortunate fact is that the taxpayers (and our children and grandchildren) end up propping them up- subsidized senior housing, property tax breaks and ultimately Medicaid nursing homes. I really don't have an answer- we can't let them starve- but for some seniors, poverty in old age would have been preventable.
Agreed. My sister in-law was the model of the above behavior. Both families had three kids, but we lived in the same house for >30 years and drove an old conversion van on family vacations. They had a townhome on the golf course and bought two new cars (one convertible) based upon their increasing home equity. At one point I had some self-doubt about my values (I grew up poor), but I persevered and it worked out well.

Tortoise beats the hare again! Or is it the Ant & grasshopper?


PS: I'm wondering if kids hear these types of fables anymore and learn the associated lessons. My three DDs are on the right path - all well employed with zero college debt.
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Old 10-05-2020, 01:09 PM   #80
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I'm the first to raise the "personal responsibility" flag, but I agree 100% with the war on savers issue.



For over a decade now, we've made it nearly impossible to begin getting the savings-fly-wheel spinning with some solid, interest bearing safe accounts. I remember getting 6.75% on a CD in 90s. Admittedly, my student loans were also a 8-10%.



But if you don't see results from your savings, its disheartening. Low rates encourage also piling up debt. And the vast majority of people are not wired to immediately learn about building an AA and leap into the market.



Personally, I believe the low rates are pushing on an economic rope at this point. Those of us who hold a bunch of assets would get clipped hard if rates went up, but I actually think it would be healthy for society.


I remember back in 1984 I had $50,000 and put it all in a 5 year CD earning 12.5% APR. I was pretty disappointed when 5 years later I had to renew it for only 9%.
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