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I do worry somewhat, but I'm only 23 and have very little debt. I'll be writing a check to pay off my student loans this year after I pay the tax man. Other than that, my only debt will be my truly 0% interest loan on my car.
I'm contributing about 15% to retirement accounts and aim to sock away at least $500/month to a savings account for bills, and eventually a home or wedding. Or vacation.
I think my boyfriend and I will have a pretty stable life when we get married (or I will be fine alone if we don't), but I do worry about the future. Everything is so uncertain. It seems like the more technology is taking over, the more certain career paths can be almost destroyed.
Meh. I'll enjoy it while I can. If not, I'm pretty scrappy. I've never been a girl of abundance.
Somewhat, regarding the 10 year future. But I'm optimistic about the economcy in the far future.
The economy cycles itself on an 80 year cycle. There was a period of economic prosperity in the early 1800s after the Revolutionary War, the late 1800s with the Civil War and in the early 1940s to the late 1960s. Many similarities can be seen between today's economic conditions and the economic conditions 80 years ago in the early 1930s.
So you are saying that the US is about to get involved in another cataclysmic war?
Are there any eonomists that back up this "80 year cycle" idea or is that just something you made up?
Yes, but she's trying. I love her and I can't blame her for her situation. If tables were turned I wouldn't want her to leave because of this. We make it work and we have together. I know that once some of the bills drop off and she does get a job, that part will become easier. I'm more depressed about what the poster above said - I also have people retiring at 50-55 from my company with full pension and full medical. We are not going to get anything near that. I had one co-worker who is about 50 and retiring in 2 years tell me that in a way we are lucky. Since they are kind of tied to the 25 year pension they have to put up with being at the same company that long whereas we can just transfer our 401K and get another job. Yeah right!! In 2 years she will be sitting on 75% of her salary FOR LIFE and full medical FOR LIFE, add to that SS that she'll get in a bit and then tell me we're luckly.
I'm afraid all of our savings and retirement accounts will get errorded, or the numbers we end up with won't be enough in 40 years. Or I'll just be dead from all this crap. I think they need to readjust the retirement age to like 60 for those of us born in 1980 and further...we're not going to live as long as they think we will.
You work in finance and believe that the folks retiring now will draw SS and pensions for life??
By 2016 or so we will see things blow up financially... social security is already running at a deficit each month. There are 34 million drawing social security, 88 million not in the workforce/or working, 50 million on food stamps, and all of that being paid for by a shrinking group of people still surviving.
Did you ever get those paypal tax issues settled up?
You work in finance and believe that the folks retiring now will draw SS and pensions for life??
By 2016 or so we will see things blow up financially... social security is already running at a deficit each month. There are 34 million drawing social security, 88 million not in the workforce/or working, 50 million on food stamps, and all of that being paid for by a shrinking group of people still surviving.
Did you ever get those paypal tax issues settled up?
I don't know what to believe. I understand how the numbers work, but take this: my GF's mother retired in August 2010. She has no savings, no property, no inheritances nothing except her $1277 SS check and $320 pension check. She has tried to get a job (min wage type) but has had no luck, age I'm guessing. She took SS early at 62 because, her words "she thought she would die if she worked another day." She just turned 64, waiting 10 more months for Medicare to kick in. By my math she gave up $500 a month by taking SS early? Give or take...
So you're saying her benefits will be cut or completely taken away at some point? I'm sure she's not alone, so you're saying a few million seniors will be on the street soon?
Yes I believe she will collect her benefits until she dies. They will just tax us and then cut our benefits. That's what I honestly think and that's what's frustrating.
Personally, I think the future is going to be quite bleak for my fellow Millenials. Here are a few things I believe we're running into.
1) The "average" salary is not keeping up with "average" cost of living, especially for younger people who may not have gotten their careers off the ground before the recession hit. People who got in after the bust or have been laid off and then rehired find salaries are far lower than they otherwise would have been. People who have kept their jobs or started before the recession are doing far better in the main. Many folks' earnings are in a trough and they are going to have a difficult time raising their incomes, even when/if things turn around. This is especially true for younger people.
Costs for the basics of life - food, rent, gasoline, etc - are rising. Salaries are stagnant to declining. Taxes are likely to increase overall as time goes on as the boomer entitlement expenditures go up exponentially, further deteriorating purchasing power.
2) Servicing high debt loads, combined with point 1 about low salaries and escalating costs of living, diverts funding that would otherwise be used to stimulate the economy - buying homes, autos, durable goods, etc, that would employ people and create real recovery. Many young people have high student loan and other debt and are not making enough income to pay it off at a reasonable rate. Many of these people are likely going to be caught in a cycle of debt for life, limiting their ability to engage in other economic activity.
3) There is a huge mismatch between needed job skills and what young people are actually trained in. Jobs today are demanding hyperspecialization in practical matters - specific tools, software, and processes, and are requiring applicants to be productive from day one, while the training we receive in academia is of a general and theoretical nature, necessitating much on-the-job training. Not only are the paradigms diametrically opposed, many fields that academia trains for are dead/dying with few employment opportunities, and there are jobs available in fields where traditional training is limited or does not exist.
4) Something I haven't seen discussed is the huge imbalance between rural areas and major metros in job opportunities. I'm from a small town in Tennessee and there is very little work available in my field (IT) in this town. The job market in general is very poor. What work there is in my hometown pays far, far less than a place like Nashville, even after adjusting for the cost of living differences. Most of my professionally minded classmates have had to leave the area and move to major metros unless they are in health care, largely due to a large population of snowbirds and retirees. Many small towns are essentially running off their native sons as they are entering the time of their lives where they are purchasing homes, having kids, etc, because no job opportunities are available.
I don't know what to believe. I understand how the numbers work, but take this: my GF's mother retired in August 2010. She has no savings, no property, no inheritances nothing except her $1277 SS check and $320 pension check. She has tried to get a job (min wage type) but has had no luck, age I'm guessing. She took SS early at 62 because, her words "she thought she would die if she worked another day." She just turned 64, waiting 10 more months for Medicare to kick in. By my math she gave up $500 a month by taking SS early? Give or take...
So you're saying her benefits will be cut or completely taken away at some point? I'm sure she's not alone, so you're saying a few million seniors will be on the street soon?
Yes I believe she will collect her benefits until she dies. They will just tax us and then cut our benefits. That's what I honestly think and that's what's frustrating.
Social security is self funding. Current projections show SS payments being more than SS taxes collected by 2033. At that point, the SS payments have to be reduced by 25%, so that the SS taxes can cover the checks. SS doesn't go bankrupt though, since the payments are reduced to the breakeven point. There is no debt accrued.
She has 20 years to plan for it. It's not a big issue, if she expects to pass way earlier.
The Trust Fund expiration date in this year's Trustees' Report means that for the first time since this collapse began, significant numbers of current Social Security recipients are expected to see their payments slashed.
So you're saying her benefits will be cut or completely taken away at some point? I'm sure she's not alone, so you're saying a few million seniors will be on the street soon?
Yes I believe she will collect her benefits until she dies. They will just tax us and then cut our benefits. That's what I honestly think and that's what's frustrating.
Unfortunately there is almost zero chance that people our age (I'm 31) will ever see any social security from the current system. As other posters have pointed out, the social security system is already running deficits. There is a 2 trillion dollar trust for the social security system but it doesn't hold cash, it holds treasury bonds. As more baby boomers retire the government will be forced to liquidate these bonds at an increased rate. Either they'll need to sell the bonds on the open market or they will be transferred onto the balance sheet of the Federal Reserve. They probably won't sell them on the open market because that could cause interest rates to go up which means that more of the government's revenue would need to go toward paying the interest. The bonds will almost assuredly be absorbed by the Fed which will cause inflation that eats away at your retirement savings. Alan Greenspan told congress that the social security system needed to be reformed because all it does is move cash around, and that the Fed could guarantee cash payments as far out and in whatever quantity was needed, but that they couldn't guarantee the purchasing power. Depending on how long your mom lives, she could see this happen in her lifetime but no, her payments will probably not be cut, they just won't be worth anything.
You don't need to be depressed about the future - you just need to prepare accordingly. Unbacked paper currency systems have a 100% failure rate over the last 6,000 years. In order to preserve wealth as we shift into a new monetary system, you'll need to invest in tangible and productive assets that have limited counter-party risk. First invest in yourself by learning a useful skill - if you are in finance don't count on your industry remaining the same for your entire career.. We are entering a period of history in which only things with real value will be regarded as valuable. If you own a business that brings value to people you'll be able to thrive. If you are in a sector that lives off of other people like government or modern finance you may not survive. Once you've made the changes in your life that will allow you to trade value for value, you can start preserving your resources through productive assets like equity in businesses or commercial real estate. Your portfolio should also have tangible assets such as gold and silver to provide liquidity as we go through the coming paradigm shift. Once we've made it through the worst of what this shift will bring, there will probably be new opportunities in areas that are overvalued right now and people who were prepared will be able to profit from their foresight.
So in regards to SS, lets say in the case of my GFs mother. In 2033, she will be 85 years old - her mother lived until 88, so lets say she makes it to 88. So she'll have to live in 25% of what she was getting for those 3 years? How do they expect seniors will do that? What about seniors who are say 70 in 2033?
And then for us (I'm 31), the federal government can take 6.2% of our pay and then say too bad? I guess I just don't understand this, isn't that basically stealing? Or will the argument be that we paid for the seniors at the time and no one said that anyone would pay for you?
So in regards to SS, lets say in the case of my GFs mother. In 2033, she will be 85 years old - her mother lived until 88, so lets say she makes it to 88. So she'll have to live in 25% of what she was getting for those 3 years? How do they expect seniors will do that? What about seniors who are say 70 in 2033?
And then for us (I'm 31), the federal government can take 6.2% of our pay and then say too bad? I guess I just don't understand this, isn't that basically stealing? Or will the argument be that we paid for the seniors at the time and no one said that anyone would pay for you?
Dont listen to these people... They think the world is ending and are stocking up on space food. Social security will be there for everyone that has paid into it, albeit I believe they will eventually have to lower the payout, however I dont believe that would ever affect current retirees or folks close to retirement.
If the government stopped paying SS benefits that were due the entire country would fall apart and the dollar would be useless anyways
1) Cut out any non-essentials in your budget. Rent the cheapest place you can stand to live in. Health insurance is an essential. New clothes, eating out, organic food, cars (if public transportation is reasonable), gym memberships, cable, nice apartment, etc. are NOT essentials.
2) So you're in Finance and want a decent shot at a better paying job with minimal money invested? Consider the CFA program.
3) You could also consider starting a business. Read "the 4 Hour Work Week" for some basic ideas how to get started. It's gonna take a while to figure out but also read the 80/20 rule and rework your life so you focus your attention on the 20% of the things that bring you 80% of the money and pleasure.
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