Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
as much as 1/2 of all ny residents don't even have 3 months savings to pay bills according to a enterprise development and a study they did.
not that those surveyed are all poor either ,many own homes,condos and co-ops but are just cash poor and can't survive even a 3 month job loss.
it is no surprise to me, but the fact is the lack of saving is not just centered around the poor.
i will bet every one of those folks has a smart phone and thousands of dollars a year in bills associated with it too. they could have banked those bucks if they were smart .
i had just posted a warning on the retirement forum last week about how the fact americans are so liquid asset poor they are getting their estates into trouble by leaving their heirs assets that are not liquid enough to pay estate related tax bills.
for many the only savings they have is wrapped up in their 401k's or ira's and that throws heirs into a un-aware tax loop that eventually destroys alot of the inheritance with taxes.
if you can not come up with at leat 6-8 months emergency money my opinion is no way should you be owning property.
many who walked away or lost homes did so because of their own doing and just being financially ignorant.
usually i doubt data in studies as anything can be skewed but in this case i think the study was pretty accurate.
the problem of paying estate bills with tax deferred money if you are interested is you owe more tax each time you withdraw money to pay a tax.
it can never end. heirs who have to pay the bills from that money get caught up in a loop that just keeps taking more and more.
there are ways of dealing with leaving cash poor estates to heirs but things need to be structured in advance.
ny has a very low limit of only 1 million dollars before an estate is taxed. that includes real estate so it is not a large number. there are also estate income taxes and funeral bills to be paid so just leaving heirs a bunch of retirement money and non-liquid assets may be a home run for uncle sam.
with sep plans and employer contibuted 401k's having a 50k a year allowance it is far to easy to end up with a home and a whole bunch of money in a tax deferred account .
Last edited by mathjak107; 02-01-2013 at 04:02 AM..
Never fear, it's balanced by a handful of folk who have enough to live well until the entropy death of the Universe. Welcome to plutocratic Capitalism!
Nothing worse then not having alot but losing alot more then you have to by paying more taxes on what is left over. remember the article is about being cash poor not asset poor.
I agree that it isn't just the destitute who we know have no cushion, it is an epidemic with those who have decent paying jobs too. And that's not to say they can't manage their money well necessarily, but the cost to live in this city like a human being (or as close to it as possible) drains away savings.
For those who live in this city, it should come as no suprise that many people live on the edge, and any unexpected expense, job loss, death, etc leaves them 30 days from borrowing from friends and family/not paying rent and even bankruptcy/government assistance etc.
And I agree with mathjak...that if you cannot consistently maintain 6 months of living expenses (including everything), then you should definitely not be a homeowner in NYC. People stretch too far, and get caught up..it happens to the best of us.
Even those with sizeable assets are screwing up their heirs by not keeping enough liquid accessable cash .
Many have a few million in retirement money that is tax deferred and not enough outside it for heirs to not get get caught up in the tax loop because they have to pay state estate taxes , inheritance taxes if any and estate income taxes with ira money.. .
Even those with sizeable assets are screwing up their heirs by not keeping enough liquid accessable cash .
Many have a few million in retirement money that is tax deferred and not enough outside it for heirs to not get get caught up in the tax loop because they have to pay state estate taxes , inheritance taxes if any and estate income taxes with ira money.. .
Almost every time I do the math it is cheaper to rent until you save enough to buy a house outright. I think if more people could do a little math and bought when they could afford it the prices of houses would become respectable again.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
