Class warfare and FIRE?

[SpencerM]

I see a greater conflict in the near future that will affect many here. Increasing jealously between those who prepare themselves financially, and those that do not. Those that do not will increasing seek a government solution to their lack of planning. We see that now but but it will increase as more Baby Boomers face retirement unprepared. That solution will of course involve more ways to take income and assets from those that planned and give them to those that did not. This is being talked about in a variety of ways, higher capital gains taxes, means testing Social Security based on your total assets, changing Roth rules etc. Really nothing to do with high earners, but rather targeting 'smart earners'.

Question is how do you think this trend will impact the FIRE concept? If one diligently saves and lives within his means with FIRE in mind, they will be targeted in the future by a Political figures in government looking to pacify panicked non-savers.
This adds much new uncertainty to the FIRE concept. Thoughts??

SM

 

[NYEXPAT]

I don't believe we are being targeted per se. In order for the market forces to sort this out, it is necessary for all those in the world to share the pain. The pain will be felt greatest in the developed economies and those who are in the middle classes. The FIRE concept will remain, the means/locations available to achieve it may change.

 

[justplainbll]

We're in deep do-do. People who majored in stuff like underwater basket weaving, and society's deadbeats have too much influence over the course that this country has been following. Those responsible individuals who have been moderately successful in accumulating a few bucks to support themselves in retirement are increasingly likely to be victimized for doing the right thing. I worked for the CFO of a mid sized organization who advised me how he (and I should) relieve parents of assets so that the parents could enjoy more government provided benefits.

 

[REWahoo]

We're in deep do-do.

Yep, we're doomed.

To show you how bad things have gotten, I heard that every last child born in the US this year was naked! Even the rich ones!

 

[obgyn65]

I agree with this.

I don't believe we are being targeted per se.

 

[FIREd]

Yep, we're doomed.

To show you how bad things have gotten, I heard that every last child born in the US this year was naked! Even the rich ones!

That's terrible! What is the government doing about this?

 

[Bestwifeever]

Yep, we're doomed.

To show you how bad things have gotten, I heard that every last child born in the US this year was naked! Even the rich ones!

I just heard we're ALL naked under our clothes. But what can we do about it?

 

[Tadpole]

I just recognize and accept that almost no one is paying the least bit of attention to my existence much less giving a care.

 

[W2R]

I just heard we're ALL naked under our clothes. But what can we do about it?

I don't know, but then I am one of those deadbeats who studied [-]underwater basketweaving [/-]oceanography. Spare change?

 

[pb4uski]

We're in deep do-do. ........ I worked for the CFO of a mid sized organization who advised me how he (and I should) relieve parents of assets so that the parents could enjoy more government provided benefits.

Now you know why we are in deep do-do.

The parent's assets should be used to support the parents until the assets are exhausted ... then and only then should the government support the parents. Why should the rest of us pay to support those who have means but transfer assets to their children to game the system? Luckily, the government is getting better at disallowing such scams.

 

[justplainbll]

I don't know, but then I am one of those deadbeats who studied [-]underwater basketweaving [/-]oceanography. Spare change?

Underwater basket weaving - Wikipedia, the free encyclopedia

 

[Beryl]

I just recognize and accept that almost no one is paying the least bit of attention to my existence much less giving a care.

This as it pertains to the Occupiers. ERs need to be more concerned about losing to the greedy looking for fresh opportunities and bank accounts to drain.

 

[rescueme]

The parent's assets should be used to support the parents until the assets are exhausted ... then and only then should the government support the parents.

+1

 

[nun]

Anyone who games the system for immoral gains sells a bit of their soul...I can understand people's anger at benefit fraud, what I can't understand is the blind eye people have for the larger frauds and immoral behaviour that occurs on Wall Street and with the money that influences politics. We have our priorities wrong.

 

[nphx]

I share Spencerm’s concerns. I feel like I have a target site on my back. “Sharing the pain” is too socialist for me. I am working hard to build my ER nest. AIG should have put thousands in jail and their assets garnished because of the fraud involved.

 

[John Galt III]

Now you know why we are in deep do-do.

The parent's assets should be used to support the parents until the assets are exhausted ... then and only then should the government support the parents. Why should the rest of us pay to support those who have means but transfer assets to their children to game the system? Luckily, the government is getting better at disallowing such scams.

Here in Pa, the common practice was to have Grandma sell her house to one of the children for $1, so she could then not have much in assets, and thereby qualify to go to a state-sponsored rest home for free, or at minimal cost. It was perfectly legal to do this, for a long time. Now the state has put some lookback rules into effect to curb this behavior.

 

[pb4uski]

Here in Pa, the common practice was to have Grandma sell her house to one of the children for $1, so she could then not have much in assets, and thereby qualify to go to a state-sponsored rest home for free, or at minimal cost. It was perfectly legal to do this, for a long time. Now the state has put some lookback rules into effect to curb this behavior.

I understand that it was common and legal, but it was still unethical IMHO and inconsistent with the reasons the program was established to provide state sponsored rest home care at an affordable cost to those who could not afford to pay.

The fact that the state modified the rules to prevent the behavior sort of proves that what was being done wasn't consistent with the intent of the program.

 

[Walt34]

I just heard we're ALL naked under our clothes. But what can we do about it?

Do what I do. Wear pants.

 

[nun]

“Sharing the pain” is too socialist for me.

I flip that around.....I feel that socialism shares the wealth around so that people don't feel the pain.... YMMV

 

[ERD50]

Anyone who games the system for immoral gains sells a bit of their soul...I can understand people's anger at benefit fraud, what I can't understand is the blind eye people have for the larger frauds and immoral behaviour that occurs on Wall Street and with the money that influences politics. We have our priorities wrong.

Why be so selective? We should fight fraud and immoral behavior wherever is occurs. I especialluy 'like' your wording 'the money that influences politics' - makes it sounds like the politicians are completely blameless, rather than willing/active participants. It's those big bad guys with the money, huh? What about those, who have taken an oath of office, who allow (encourage) themselves to be influenced by it?

I flip that around.....I feel that socialism shares the wealth around so that people don't feel the pain.... YMMV

[sarcasm for effect] Yes, that is such a good idea, it should be applied to other areas in life. I know someone who suffered great pain because they got bad grades in High School and flunked out. At the same time, a bunch of other kids had more A's than they knew what to do with. We really should just give out Bs and Cs in High School, and the world would be a far better place![/sarcasm]

I'm curious if your salary at work is/was based on merit, or commission or anything like that. If so, do you live by your words, and share your merit raise with others who didn't get as much? I'm guessing "that is different" - this only applies to OPM?

And before I get the 'Ebeneezer' response, I believe in safety nets and I contribute to charities.

-ERD50

 

[eytonxav]

I think the OP raises a valid concern and while REers may not have been targeted yet perse, its just a matter of time in this entitlement society. Its just like lawyers filing lawsuits, they will go after who ever has $$$s.

 

[ziggy29]

Personally I think we should be a little more careful about using loaded and incendiary terms to demonize the positions of our "political adversaries." "Class warfare", like "fascist," "socialist" and "bigoted," are cheap and easy labels which intend to belittle and discredit those who hold the positions we are describing as such.

Just because someone may see a growing gap between rich and poor -- and its corollary, a decline in the middle class -- and think we need to do something about it doesn't mean they are "waging war on the rich" any more than those who encourage welfare reform are "waging war on the poor" or those who think we need to reform Social Security are "waging war on the elderly" -- to say nothing about positions on civil rights issues, where I won't go here but you can imagine how some folks who mean well can still be vilified as evil people with a few choice labels.

Frankly the universe or public policy discourse would be far more pleasant, IMO, without using intentionally inflammatory labels like these. And maybe if we stopped demonizing the other side once in a while, maybe we'd humanize them enough to listen to them with an open mind -- and if we listen, we may find they occasionally have a good point.

Controversial issues would not be controversial unless a lot of intelligent and well-meaning people are on both sides of it. For if that weren't the case, the course of public policy would be obvious and uncontroversial, wouldn't it?

I think the OP raises a valid concern and while REers may not have been targeted yet perse, its just a matter of time in this entitlement society. Its just like lawyers filing lawsuits, they will go after who ever has $$$s.

As for this one, if there is more means testing and redistribution of wealth, it will most likely come in terms of annual income, not net worth, and as such some folks (myself included) are "engineering" a personal finance situation where one has significant (if not outlandish) assets but moderate current income -- keeping in mind that spending down already taxed assets can increase cash flow without adding to one's taxable income.

 

[ERD50]

I think the OP raises a valid concern and while REers may not have been targeted yet perse, its just a matter of time in this entitlement society. Its just like lawyers filing lawsuits, they will go after who ever has $$$s.

I'll follow your lead and get back to the OP and away from other issues -

from a pragmatic standpoint, I suspect we FIRE'd (even if not R early) will be OK if we keep our income to 'below the radar' levels, which many/most on this forum plan to do. It is tougher to tax accumulated wealth, and I think income will be the target (outside of Estate Tax).

-ERD50

 

[eridanus]

The only possible re-adjustment will be from the top .5% or top .1%. You know, the mega-wealthy who shape laws for themselves.

"[T]he top one-in-a-thousand taxpayers had average income in recent years that ranged between $5.2 million and $7.5 million annually."

That ain't you.

"The top 400 taxpayers paid a much lower rate. On an average income of $270 million each, their effective federal income tax rate was 18.1 percent in 2008, the latest year for which we have IRS data. A single worker earning less than $90,000 pays a higher rate than that."

 

[nun]

Question is how do you think this trend will impact the FIRE concept? If one diligently saves and lives within his means with FIRE in mind, they will be targeted in the future by a Political figures in government looking to pacify panicked non-savers.
This adds much new uncertainty to the FIRE concept. Thoughts??

SM

I don't think increased tax is much of an issue for those on here who are LBYM. Many of us live well on low incomes because we have eliminated the biggest budget items like mortgages and I don't see any appetite for increasing income taxes on the middle class or low income unless something like 9-9-9 actually takes off. There might be moves to increase capital gains or increase tax on big incomes ie over $250k. The capital gains might be an issue for those on here with large after tax savings, but for those with most money in retirement accounts that won't be such a big issue. Anyway there's a big lobby that against any increase to CGT.

The one area we might find some difficulty is reductions in SS and Medicare