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Rich Retirees Are Hoarding Cash Out of Fear

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Re: Rich Retirees Are Hoarding Cash Out of Fear

#141

Post by incompatible »

cylinder wrote: post #136
drblast wrote: post #85

This is a really good argument for subsidized medical care. This fear of not having enough for medical expenses is perfectly reasonable, and I wouldn't fault sometime for hoarding cash for a second. Solve the inherited inequality problem with inheritance taxes or guarantee medical care. Otherwise of course people will save for medical expenses. And they should, it's prudent.

Retirees do have Medicare though, but with any socialized medical system you won't be covered for everything

Where I live, you still have to pay for opticians and dentists, and perhaps other medical treatments if you don't want to stay in a queue for a year or so.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#142

Post by ams6110 »

cvwright wrote: post #131
ransom1538 wrote: post #81

Earlier quoted context omitted.

Whatever you save with your blood, sweat and tears (if you are lucky) will be blown on medical expenses. The trick is to convert to cash (literal), then give it to your wife, convert medical expenses to debt and die.

That's not necessarily the only option. Long-term care insurance claims to address this problem. (Whether it actually does or not, I'm not qualified to answer.)

Based on first hand experience... They will find a reason to not pay. Don't waste your money on LTC insurance.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#143

Post by zanny »

djsumdog wrote: post #43
bamboozled wrote: post #33

Earlier quoted context omitted.

Assuming you're a US citizen? If so vote for politicians who support better welfare systems and free healthcare (if you don't already), it would help take the edge of this stress.

I agree, if America had real health care, people would be less apprehensive in taking time off and caring for their mental health. Unfortunately voting in America doesn't really do squat. We're first past the post and the corruption runs so deep no politician can stand against the health care industry. Elections here are a joke.

It isn't just first past the post, either.

* It is gerrymandered districts, setup over decades to guarantee seats go to one or the other party. The number of actually competitive elections is at historic lows every cycle.

* Representation per person is at historic lows. The population rises, but the seats in state and federal houses doesn't change. Even in the best case scenario, Wyoming still has over 250k people per senator. Nobody can actually represent the interests of that many people (albeit, given the original intent of senators they shouldn't, but that is a different can of worms). House seats are no better.

The information era has siloed people into ideological extremes. Coupled with the fptp disaster you pointed out, the corrupt media owned by centralized interests keep the poor at war with themselves.

* The obvious loopholes and exploitation of the constitution is blatant and apparent. Either anti-corruption clarification amendments are required, or a modernized rewrite maintaining the principles of separation of power and explicit rights and liberties but updated to insure things like freedom of privacy are necessary.

It is a chicken and egg problem to fix, of course. Regular people cannot rewrite laws or constitutions without the ample resources to wage a revolutionary war. However, the powers that be won't either, because the current rules set them up for power and give them their legitimacy. They are a product of the system as it exists and will fight to protect it, not change it.

Historically the best answer was to sail or caravan to the unsettled and unclaimed lands and try it over again, but we have run short on those options.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#144

Post by CydeWeys »

Gustomaximus wrote: post #139

I feel this is another down-stream effect of weak social support. If a country offers reasonable basic pension and healthcare, retirees will spend because they know if they run out of cash they have their basics covered. Without this support of course they will hoard money. I saw this living in Norway where people in general tend to save less aggressively because they know if things go bad they are covered. And it wo…

Healthcare is still so terrifying that I feel like I have to have millions of dollars saved up just in case. And the insufficient coverage we have now might not make it through the next two years unscathed.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#145

Post by redahs »

incompatible wrote: post #121
oppositelock wrote: post #68

Earlier quoted context omitted.

Keyne's paradox of thrift is hogwash. If the occasional person is thrifty, there's no problem. If everyone is collectively "too thrifty", then we've got a problem, but this isn't the cause of the problem, it's a symptom. What does it mean when everyone is saving? It means that there is some kind of uncertainty or fear which is making people forego current consumption in favor of future consumption. This isn't a natur…

If people are thrifty, so need less money and work less, the economy will be smaller. That's a choice though, not a problem.

If people are overly-thrify, it simply means that there is an under-supply of profitable investment opportunities for them to allocate their savings and labor toward. It is possible to increase the supply of real investment opportunities (investment opportunities which do not depend upon the extraction of "rent" from other investors) through the use of public inducement prize contests. It is possible for government to subsidize the creation of real investment opportunites by raising the nominal value of public inducement prize contest prize pools.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#146

Post by gutnor »

acover wrote: post #37
chc wrote: post #17

Earlier quoted context omitted.

One way to frame this is "corporations want to suck that money away." Another way to frame it is "most participants in the economy are non-rich and would appreciate that money more, so it's unfortunate if it's sitting around making nobody happy and not adding much in the way of security to an already-wealthy person."

Most money isn't just sitting around. It's in a bank or an investment. Other people are using this money.

That's not exactly true. Money in the bank is invested and is different than consumption money.

One drive the offer, the second one drive the demand. The economy is basically the flow from one pot to the other.

With interest rate at historical low, large business with trillion hoarded, money is already plentiful on the investment side. This article is just claiming that there is portion of that investment money could be reallocated on the consumption side which would indeed allow the economy to run.

The article is very optimistic that this money is really what is missing. Personally not quite sure about that as the economy already relies on historically high level of debt on the consumer side (i.e. consumer spend today and tomorrow money), adding fresh money in the system is at best a short term "solution", adding memory to a memory leaking system.

The problem is that there is simply not enough money flowing from the investment pot into the consumer pot. i.e. salaries are too low, tax on profit are too low, ... something isn't balanced and we are all playing economic musical chair, with people hoarding money to avoid being without once the system breaks.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#147

Post by zanny »

stupidhn wrote: post #58
Artlav wrote: post #13

Why is it painted as a problem? Why should you spend more than you need? Why is "enjoying a retirement" supposed to only be achieved by spending more money? I don't get the point of the article.

Why should you save more than you need? What good does it do?

Ask the question of why every person who has a net worth over 10 million dollars has that much money, and why they need any more.

Once you are 10s of millions-aire you aren't seeking money for survival or even happiness. You are also probably well beyond money for the sake of security - you could probably lose 90% of your fortune at that point and live comfortably. Why do these people keep seeking and amassing more money then, with limited exception?

Its the same reason why anyone who could, would.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#148

Post by curun1r »

incompatible wrote: post #134
reustle wrote: post #101

Earlier quoted context omitted.

The trick is to move to a country with proper healthcare

Most countries with decent healthcare are reluctant to accept retirees. They'll likely have to fund their own health insurance, at least. If you can gain citizenship of such a country, well in advance of retirement, it could be well worth it though.

You can go to developing countries. The health care I received in Southeast Asia was quite good and the full cost was significantly less than just the co-pays on my plan in the US. Thailand has a retirement visa that allows for 6-month stays and you can live quite comfortably there for under $20k/yr.

Re: Rich Retirees Are Hoarding Cash Out of Fear

#149

Post by beambot »

eveningcoffee wrote: post #118
beambot wrote: post #20

Earlier quoted context omitted.

What about peace of mind & financial stability? Those don't decline over time... (Also: Estate tax as a way to fund basic income?)

Taxing property means that owner must have cash to pay for it or is forced to sell it (with all the consequences of forced selling probably). It may sound interesting and promising but is most likely the most unjust way of taxing as it will force people are retired or about to retire out of their homes (that they are not paid for using funds from the basic income).

Estate tax refers to taxing your assets after you're deceased (i.e. inheritance), not realestate (i.e. property): https://en.wikipedia.org/wiki/Estate_tax_in_the_United_State...

(I'm afraid this confusion makes your comments about retirement and forced property sales make very little sense... unless I'm missing something?)

Re: Rich Retirees Are Hoarding Cash Out of Fear

#150

Post by was_boring »

ransom1538 wrote: post #81
dsmithatx wrote: post #61

My grandfather worked at Exxon Mobile for 60 years and retired around 1988 with a few million dollars in stock. I remember my dad saying he had about 3 Million in stock he purchased as his retirement plan. He built a house and bought a couple of nice cars living on about 100,000 a year. About 12 years ago he had a heart attack and stroke and was bed ridden. 12 years of doctor bills and hospice ate through almost ever…

Whatever you save with your blood, sweat and tears (if you are lucky) will be blown on medical expenses. The trick is to convert to cash (literal), then give it to your wife, convert medical expenses to debt and die.

I'm currently in a similar situation about what to do with an elderly relative with dementia who is currently in limbo after the last relative taking care of him died. The best moral option is to take guardianship and look after him. The best financial decision is to "divorce" from the situation and let the state take care of him so I have a chance of my wife and I being able to retire and saving for the kid's education expenses.

It's a crazy system the U.S. has.

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