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Why work has failed us: Because no one can afford to retire anymore

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Re: Why work has failed us: Because no one can afford to retire anymore

#51

Post by twmb »

zdragnar wrote: post #46
twmb wrote: post #26

Earlier quoted context omitted.

What is lost in the discussion of retirement ages being bumped is that life expectancy has grown by two decades since the retirement age was introduced in the USA in 1935 [0][1][2]. The retirement age was originally past the point where most people died. [0]: https://www.theatlantic.com/business/archive/2014/10/how-ret... [1]: http://www.demog.berkeley.edu/~andrew/1918/figure2.html [2]: https://fred.stlouisfed.org/se…

I know several people (i.e. 3 of my grandparents) who lived jobless that long or longer. At least half of their retirement years, they were physically and mentally incapable of holding their previous jobs, or even the most menial unskilled jobs. One had half his body paralyzed by a stroke, and you couldn't really tell how much understanding he had of the world around him when he was alert. The other two had forms of…

Agreed, I think that in health cases, there can't be an expectation for people to work. In a better world, our society as a whole would have better end of life support for when people are of ill health.

But, not everybody's mind slips. I'm hopeful that we will have better preventative measures for Alzheimer's and other mind or body crippling diseases soon. I do recall seeing some good news on the Alzheimer's front in the last year.

My first article mentions what you said: past a certain point, it may be more detrimental for some to work.

Re: Why work has failed us: Because no one can afford to retire anymore

#52

Post by bootsz »

russellbeattie wrote: post #24

My Vanguard 401k home page has this helpful notice in the dead center of the page: "We think you need $7,840 more per month." Sure... That makes two of us. I guess it's extrapolating my current salary out and how much I'll need to save to live with the same income after I retire. That's not going to happen. Here's a helpful article to see how far behind you are in your retirement: https://smartasset.com/retirement/av…

Investment companies make money off of your investments, so naturally they have every incentive to convince you to invest as much as possible.

That doesn’t discount the reality that most people don’t invest nearly enough, but still the “recommended” contributions they give are definitely over-estimated in many cases.

Re: Why work has failed us: Because no one can afford to retire anymore

#53

Post by jdavis703 »

russellbeattie wrote: post #24

My Vanguard 401k home page has this helpful notice in the dead center of the page: "We think you need $7,840 more per month." Sure... That makes two of us. I guess it's extrapolating my current salary out and how much I'll need to save to live with the same income after I retire. That's not going to happen. Here's a helpful article to see how far behind you are in your retirement: https://smartasset.com/retirement/av…

There's no way that number is correct. You're only allowed to save $18,500 in your 401(k) for 2018. You'd hit that number in less than 3 months.

I'm guessing that you must be closer to retirement age right now and probably haven't saved enough or had investments with low returns (no personal judgement here, shit happens). Thus the system is predicting how much "catching up" you need to do and not taking various parameters such as your age and the laws in to account.

Re: Why work has failed us: Because no one can afford to retire anymore

#54

Post by sokoloff »

cryoshon wrote: post #5

no millennials expect to see a dime of social security income (whether or not this is justified is another question), nor do they have any plans to retire because the prospect of having enough money to do so is simply unrealistic for them. i am not the only one that has put their income, expenses, and savings rate into one of those "financial independence" calculators ( http://mustachecalc.com/#/calcs/time-to-fi ). i…

The primary point of the mustache calculator is to reinforce the compounding benefit of reducing expenses throughout your life. That means more savings while working and less savings needed once not working to keep the same standard of living.

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...

Re: Why work has failed us: Because no one can afford to retire anymore

#55

Post by mdorazio »

the_gastropod wrote: post #33
grecy wrote: post #28

Earlier quoted context omitted.

> 1. $14 / hour? The median household (yes, I know, household, but wait) income is the highest it's been since at least 1985 [1] at $59k/year. So $14 is definitely a bit lower than "normal". If we take that household income to mean it's two earners, they're each earning $14.75/hr ... (assuming a standard 2000 work year), which is 40 hrs/wk for 50 weeks

Some households have two earners. Most do not. The average is 1.3 earners per household. https://www.bls.gov/opub/btn/volume-6/use-with-caution-inter...

Right, so that's a median per-worker wage of around $22/hour. But $14/hour is right in the middle of the 2nd and 3rd income quintiles [1], meaning a solid 40% of Americans don't even make that much. It's not a very strong argument unless you're OK with current poverty and lack of retirement ability trends for large swathes of the country.

[1] https://www.taxpolicycenter.org/statistics/household-income-...

Re: Why work has failed us: Because no one can afford to retire anymore

#56

Post by tkjef »

DoreenMichele wrote: post #44

If you turn 65 in 2040 or 2050 or 2060 Some historical perspective: My understanding is that when Social Security was created, the average life expectancy was 67. So offering it for people age 65 was intended as providing for people in extreme old age who had probably worked physically hard their entire lives and were pretty beat up. I'm not saying we don't have genuine problems here, but this article is bellyaching…

Thanks for the perspective. It does help to not feel like we're missing out on something due to us.

Re: Why work has failed us: Because no one can afford to retire anymore

#57

Post by ChuckMcM »

the_gastropod wrote: post #18

C'mooon > The IRA won’t make anyone rich. A calculator on the site estimates that if you’re 22 years old and making $14 an hour–saving around $120 a month–you could end up with around $230,000 by the time you’re 65 1. $14 / hour? The median household (yes, I know, household, but wait) income is the highest it's been since at least 1985 [1] at $59k/year. So $14 is definitely a bit lower than "normal". 2. Saving $120/m…

I think FastCompany and Forbes run a variant on this article every year. I guess that it is a way to scare more people into saving more.

For me, the question anyone should ask is this, "If I needed $2,500 right now, could I get my hands on it quickly and reliably?" That number has gone up a bit but it is the 'emergency cash' number of old which would cover "a major car repair", "bailing out of jail", "the entire medical deductible in one payment" etc. It is the equivalent of "If life throws you a curve ball can you catch it or are you going to get knocked on your butt by it." [1]

If you can't answer yes to that question then it is important to recognize that you are operating without safeguards which puts you at risk of cascading financial difficulties. And if you can't answer yes to that question to have to ask things like "am I paying for Netflix? More than a bar budget phone? Do I eat out? Do I eat pre-prepared foods rather than making my own? Am I getting the most use/wear out of the things I buy like clothes, vehicles, etc?" Basically assess each thing you spend money on and look for ways to reduce that expense or eliminate it. As a fun anecdote I talked with a young adult who felt it was too much to ask to give up Netflix/Amazon Prime (for the streaming), I showed them they could buy a DVD player for $35 and check out movies and old television shows for free from the public library. It wasn't something they had opened their mind up to. But once they looked hard at things they found a bunch of stuff that they could change and that helped them get finances into a much better order.

I like the Mr Money Mustache site for ideas on ways to cut down your 'burn rate' as well.

[1] This can also be covered by a credit card, if you don't have any credit card debt, which is to say you have a credit card with a $2,500 credit limit but it (and no other card you have) carry a balance. Basically if you pull the trigger you'll add a monthy expense for the next 'n' months to get back out of the hole you just made.

Re: Why work has failed us: Because no one can afford to retire anymore

#58

Post by twmb »

Arubis wrote: post #48
twmb wrote: post #26

Earlier quoted context omitted.

What is lost in the discussion of retirement ages being bumped is that life expectancy has grown by two decades since the retirement age was introduced in the USA in 1935 [0][1][2]. The retirement age was originally past the point where most people died. [0]: https://www.theatlantic.com/business/archive/2014/10/how-ret... [1]: http://www.demog.berkeley.edu/~andrew/1918/figure2.html [2]: https://fred.stlouisfed.org/se…

I'd buy that if not for the massive increase in year-over-year productivity that we as a society get from better technology. If that's not going toward spending less time working, where is it going? And is that where it should go?

I think it goes to the rich through systemic imbalance in companies and personal greed of those at the top. Wages should rise.

I don't mean that people should work hard until they die; people should be able to enjoy their lives while working -- hopefully at a job they enjoy, maybe more community oriented as their needs for large salaries to support families goes away.

I don't think that is happening, I think people are nearly destitute, and I see that as the problem.

Re: Why work has failed us: Because no one can afford to retire anymore

#59

Post by bdcravens »

tcbawo wrote: post #30
the_gastropod wrote: post #18

C'mooon > The IRA won’t make anyone rich. A calculator on the site estimates that if you’re 22 years old and making $14 an hour–saving around $120 a month–you could end up with around $230,000 by the time you’re 65 1. $14 / hour? The median household (yes, I know, household, but wait) income is the highest it's been since at least 1985 [1] at $59k/year. So $14 is definitely a bit lower than "normal". 2. Saving $120/m…

Fixed costs have gotten too high, and these prices are inelastic. I think the only way to fix it is wage inflation across the board.

> I think the only way to fix it is wage inflation across the board.

And to convince people to spending so much.

The new iPhones will be announced next week. How many will buy a $1000 phone yet not have $1000 saved for any kind of emergency?

Re: Why work has failed us: Because no one can afford to retire anymore

#60

Post by L_Rahman »

the_gastropod wrote: post #18

C'mooon > The IRA won’t make anyone rich. A calculator on the site estimates that if you’re 22 years old and making $14 an hour–saving around $120 a month–you could end up with around $230,000 by the time you’re 65 1. $14 / hour? The median household (yes, I know, household, but wait) income is the highest it's been since at least 1985 [1] at $59k/year. So $14 is definitely a bit lower than "normal". 2. Saving $120/m…

It's staggering that this is the top voted comment.

> car loan

most of America doesn't have any way of getting to jobs without one

> eat anything but rice and beans

most people need fundamental nutrients from vegetables just to be able to survive, these vegetables tend to be more expensive than less healthy things

> a >$30 month cell phone bill

internet access gates opportunity in American and for many people their cell phone (which they cannot afford to pay for up front and therefore must lease) and its data plan is there only gateway to the rest of the world

> drink anything but water, have cable tv (or assuming Netflix)

any right to a Gatorade after shooting hoops at your dilapidated public park on a hot day, any right to 30 mins of entertainment after working your mind numbing job that drains of you all life

> You've got obvious improvements you can make to get out of that dilemma.

Why?

Why is the right to a just life gated by the requirement to surrender basic humanity? Who is this we?

A toss off link to a Wikipedia article?

The Census Bureau itself says American household income is the same since 1987 [1] while cost of housing, education and healthcare goes 2x-3x in the last decade alone [2]

How does a world view like this even get formed?

[1] https://img.washingtonpost.com/wp-apps/imrs.php?src=https://...)

[2] http://slatestarcodex.com/2017/02/09/considerations-on-cost-...

This place baffles me sometimes.

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