For Gen Xer's, you carry much of the boomers debt burden and you don't have the promises of lifetime medical and pensions (which are frequently not being kept) which many boomers had, but you do have up front knowledge that you need to do it yourselves.
That's a good point, youbet. I hadn't really considered that aspect of it, but there's no denying that that is in fact an advantage.
My frustration stems from the attitude of a lot of older folks who see today's generation struggling with house payments and living paycheck-to-paycheck, and criticize them for their lifestyle, saying things like "
I paid off my house in 10 years, while my wife stayed home and raised 4 kids. How come
you can't do the same? You must be lazy."
This ignores the realities that
a) Houses are much more expensive nowadays, as a proportion of your income; and
b) We're taxed at a higher rate. Income taxation rates are far higher than they were in the 60's and 70's, plus we also have the GST, Ontario Health Tax (sorry, "Premium"), capital gains taxes, dividend taxes, and more (some of those may have existed back in the 70's, I'm making some assumptions here) crippling our ability to save and pay our bills.
On the other hand, you're right, and my generation
should recognize these limitations and prepare for their own future. It frightens me to look around at peers my own age and see them failing to save anything at all for their future, living paycheck to paycheck. When I ask them about their plans for retirement, they don't have any. They spout meaningless, fluffy rhetoric like, "things have a way of working out in the end." They're operating under the mistaken impression that they're currently living as their own parents did (not true, their parents never drove luxury cars or had high-def TV), and that their lives will work out like their parents' did (again, not true, their parents have corporate pensions propping up their retirement - my generation will not).
I worry about these people. They're blissfully plodding along, thinking they'll be able to retire just like their parents did, choosing to remain ignorant of the realities of the math.
My wife and I do not have kids. Frankly, I don't believe we could afford them. We both work in high-tech and make a gross family income of over $130,000. Yet I still don't believe we could have kids and still meet our retirement goals. I don't think we're alone, and I see this as a problem. Our country's birth rate is less than our death rate. The only reason Canada is not shrinking is because of immigration.
Why are people choosing not to have kids? Is it possible that many other families feel the same as my wife and I? That is, that given the absence of corporate pensions and the crippling cost of housing, couples cannot have kids and still save enough for retirement?
A couple of our close friends are pregnant. They've waited much longer than our parents did. She's 30, he's 31. That's not "young" to be having kids. Yet they are still renting their housing, having been unable to afford a down payment on a house (he works in high-tech, she worked part-time as a massage therapist, making them a essentially a single-income family, but it's a good white-collar income). Until now, their money has been going toward paying off student loans and car payments. Honestly, I think this couple is in trouble. They have virtually no savings, have not even started to pay off a house, and now they're bringing a child into their family. But they're in their early 30's, and have seemingly done everything right. What's the problem? Why has this couple been unable to properly prepare for children? Why do they have no retirement savings?
They don't drive a BMW (they drive a 6 year old Mazda). They don't take a lot of fancy trips or eat out all the time. He has a great-paying job and (until now) only had 2 mouths to feed. My own father (as I mentioned earlier) had a blue-collar job that paid far less, yet was able to have 2 kids at ages 23 and 26. By the time he was my friend's age, he only had 2 years left to finish paying off his house. Why was it so much easier for my father? Why are my friends going to have so much trouble raising a family and saving for retirement? Why do my wife and I (and thousands of other young Canadian families) believe that a 6-figure family income is insufficient to both raise a family and save for retirement?
The answer, in my opinion, is "taxes and housing." But I'd be very interested in hearing some other opinions. Pundits have long predicted that Canada's high taxes and expensive housing would eventually impact the economy. Why does nobody seem to realize that it's already happening? This is reality. My wife and I are 32. We have no kids and do not plan to have any, because we don't think we can afford them. It's too late to cut taxes, turn back the clock so we're 25 again, and have kids the second time around. The damage is done. And we're not alone. Why does nobody realize the seriousness of this problem? Why is nobody talking about how immigration is the only thing keeping our population growing, but that it's not a practical long-term solution?
There are serious financial and demographic problems brewing in my generation. There's going to be a huge wake-up call when Gen-X retires and finds it has neither pensions nor savings. Those of us who chose not to have kids will be alright, but those who chose to have a family are going to be quite upset to find their tax dollars went to pay off their parents' debt instead of supporting their own retirement.
Again, congrats to you dad for making it through with the tire company. He's one of the lucky ones, as am I and grateful for it.
He worked hard and never complained. He put in his 30 years (
all shiftwork) and walked. However, after leaving, he had some emotional issues about purpose and self-worth. Watching him go through it was painful, and it made me realize that while there is no shortage of people willing to help you
financially prepare for retirement, there's a distinct lack of a support network to help people
emotionally prepare for retirement. I think some form of counseling should be mandatory for all employees applying for retirement. I'd be very interested to see depression statistics for the "recently retired" demographic.