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.
Again, there's actual data one could look to that would be far better than your "visceral guess". And believe it or don't, most "country clubs" aren't "filled" with underwater homeowners.
How do you know?—it's tough to get accurate data with all the deception in the Real Estate Industry. Anyway, I should have been more precise & included homeowner squatters in the tally. From what I gathered over the years, homes in the $350K+ range seem to be the sweet spot for squatting. ...Okay enough of that.
~~ ~~ ~~ ~~
FWIW, my bitterness/anger is pretty simple: A major reason why 401ks/other retirement plans became available to the masses was to help the WHOLE economy make the adjustment to the "new normal". Unfortunately, retirement plans have morphed into a careless/voracious monster that needs exponential ,debt-driven consumption by EVERYONE. This is not hyperbole, to me it's plainly obvious that 'portfolios' are chronically/parasitically dependent on reckless spending—especially by the younger generations.
synchronicity, I ask you to read the Jan-Fed 2013** issue of Money magazine. The theme of this double-issue focuses on the younger generations—especially the millennials. This issue instructs the millennials to stop worrying about their student/car loan debt. On top of that, it goes on to stipulate that millennials must pay into healthcare; better start thinking of owning a home (parental investment); better contribute as much as possible to their 401ks; etc, etc, etc. The tone of the message is daunting, condescending & thoughtless.
How do you know?—it's tough to get accurate data with all the deception in the Real Estate Industry. Anyway, I should have been more precise & included homeowner squatters in the tally. From what I gathered over the years, homes in the $350K+ range seem to be the sweet spot for squatting. ...Okay enough of that.
~~ ~~ ~~ ~~
FWIW, my bitterness/anger is pretty simple: A major reason why 401ks/other retirement plans became available to the masses was to help the WHOLE economy make the adjustment to the "new normal". Unfortunately, retirement plans have morphed into a careless/voracious monster that needs exponential ,debt-driven consumption by EVERYONE. This is not hyperbole, to me it's plainly obvious that 'portfolios' are chronically/parasitically dependent on reckless spending—especially by the younger generations.
synchronicity, I ask you to read the Jan-Fed 2013** issue of Money magazine. The theme of this double-issue focuses on the younger generations—especially the millennials. This issue instructs the millennials to stop worrying about their student/car loan debt. On top of that, it goes on to stipulate that millennials must pay into healthcare; better start thinking of owning a home (parental investment); better contribute as much as possible to their 401ks; etc, etc, etc. The tone of the message is daunting, condescending & thoughtless.
**I'm not 100% sure of the exact issue date.
Look, I get that you believe that this is the case with 401ks (that they came into existence to adjust to the "new normal" economy), but really, it wasn't and isn't. They have grown for the reason I stated before - it's a LOT cheaper for a company to run a defined contribution ("DC") plan, such as a 401K, where everyone puts in money and has to be their OWN money manager, than it is to run a Defined Benefit ("DB") plan, where the company (or more often someone they retain, for a fee of course) has to manage funds to meet certain guaranteed payouts. It's cheaper in two ways. First, the cost to administer a DC plan is less than administering a DB plan. Second, people tend to undervalue future benefits compared to present benefits. IOW, companies get more mileage out of X dollars now than Y dollars later even if the present value of Y dollars is considerably greater than X.
Setting aside the second issue, the first is one that bothers me likely even more than you. As you might have guessed, I'm in the financial industry. I know more than the average bear about investing and risk management and all that carp, and I know that even for people who know their stuff, there's a significant amount of time and effort one needs to put in to managing their retirement stuff. It's difficult and complicated and many people aren't particularly well suited to do it, which means either they mess it up or they have to spend money retaining someone else to do it for them (who may or may not be very good at it).
Yes, that ticks me off. It effectively is a big ol' pay cut for every single person who has had their plan changed from a DB plan to a DC plan. A large stealthy pay cut, and I don't like it ONE BIT (even if ostensibly it might benefit me).
Beyond that...no, portfolios do not require "reckless debt-driven consumption by everyone". I'm sure you feel this way, and I'm sure stats like the current savings rate, as well as the aftermath of the economic downturn, are influencing this. You feel like there's an assumption that YOU, relatively poorer youngish person, need to spend spend spend to drive up corporate earnings so that older folks will see the stock prices climb on their retirement portfolios, or something along those lines. Hearing that 70% or whatever of the economy is consumer spending doubtless just reinforces that belief.
However, the economy has been about that much consumer spending for ages, the savings rate was actually lower in the not-too-distant past, the last several years have been spent DE-leveraging (there's actually data on this as well).
I'm sure none of this will convince you, but spend some time poking around the Federal Reserve Economic Database if you want.
Regarding Money Magazine, I don't give a rat's backside what they're saying about much of anything. Their goal is to write articles that get readers, not necessarily get across accurate info. And as far as any media aimed at an older demographic sounding condescending with articles aimed at younger readers/viewers/listeners...again, so what else is new? I will take a look at what they're saying, however, just to see what it's about.. Beyond that, though, I would agree that yes, you SHOULD start saving early, period. If you don't think you should then you're going to learn the hard way that it would've been better to save early rather than late. And yes, I have my own personal experience to back that up.
And what is this "must pay into healthcare"? I mean, one pays for health insurance one way or another. I don't get that. Owning a home...well, it's often a good investment long term, but not always, and although it makes sense for many people, not for all.
OK, enough. You can have the last word, even if it's calling me a doofus. Or calling both mathjak and I doofuses. FYI, on another forum I was involved in a long discussions where it was determined that that's the correct plural, rather than "doofi". And good luck going forward in life...seriously, even when the first several years out of school suck, it does tend to improve professionally (and heck, sometimes in other arenas if applicable). Again, I could recite chapter and verse on that, even if some days my life still feels like Teh Suck.
Vera Johnson from Seattle is barely making do, let alone saving for retirement....The 45-year-old almost lost her home to foreclosure in 2010 ...She embodies the financial challenges facing America’s Generation X
And similar navel-gazing. So, take all these articles with a huge grain of salt. GenXers like reading about why their lives are so difficult, as do Millennials. Heck, we all think our problems are far worse than everyone else's and Nobody Has Ever Faced This (whatever "this" is) Before.
How do you know?—it's tough to get accurate data with all the deception in the Real Estate Industry. Anyway, I should have been more precise & included homeowner squatters in the tally. From what I gathered over the years, homes in the $350K+ range seem to be the sweet spot for squatting. ...Okay enough of that.
~~ ~~ ~~ ~~
FWIW, my bitterness/anger is pretty simple: A major reason why 401ks/other retirement plans became available to the masses was to help the WHOLE economy make the adjustment to the "new normal". Unfortunately, retirement plans have morphed into a careless/voracious monster that needs exponential ,debt-driven consumption by EVERYONE. This is not hyperbole, to me it's plainly obvious that 'portfolios' are chronically/parasitically dependent on reckless spending—especially by the younger generations.
synchronicity, I ask you to read the Jan-Fed 2013** issue of Money magazine. The theme of this double-issue focuses on the younger generations—especially the millennials. This issue instructs the millennials to stop worrying about their student/car loan debt. On top of that, it goes on to stipulate that millennials must pay into healthcare; better start thinking of owning a home (parental investment); better contribute as much as possible to their 401ks; etc, etc, etc. The tone of the message is daunting, condescending & thoughtless.
**I'm not 100% sure of the exact issue date.
just my opinion , but if one put as much effort in to learning to work with what life hands you instead of complaining about it they would be far better off.
playing the cards you are dealt are an important part of being successful financially.
you can make money and profit in any scenerio as long as you develop your skills and knowledge it needs no predicting.
but most folks rather complain about why they can't succeed and they blame everything and everyone else. in the mean time folks are doing it every day.
And what is this "must pay into healthcare"? I mean, one pays for health insurance one way or another.
There are still a lot of companies out there that pay the complete premium cost for single employees. If an employee has a spouse and/or family, they pay the difference.
I never paid for health insurance during my working years. Zip. Nada. Even when I was married, he had his own, LOL. The first year of retirement I paid nothing. Starting July 1, I'll pay less than $10 a month - the increase in the college's single premium since I retired. First time in my life I've paid for it, but I'm not complaining after hearing horror stories about cost.
You said health insurance, so I'm taking it you didn't mean co-pays or taxes that the govt' uses for others' healthcare. So I don't understand how "one pays for health insurance one way or another."
There are still a lot of companies out there that pay the complete premium cost for single employees. If an employee has a spouse and/or family, they pay the difference.
I never paid for health insurance during my working years. Zip. Nada. Even when I was married, he had his own, LOL. The first year of retirement I paid nothing. Starting July 1, I'll pay less than $10 a month - the increase in the college's single premium since I retired. First time in my life I've paid for it, but I'm not complaining after hearing horror stories about cost.
You said health insurance, so I'm taking it you didn't mean co-pays or taxes that the govt' uses for others' healthcare. So I don't understand how "one pays for health insurance one way or another."
My wife's company paid the complete cost for certain health plans up until recently, although my understanding is that this is increasingly rare, even for single employees.
That said, I should probably read the article DSO was referencing, as I'm unclear what it was stating about how millennials "must pay into healthcare", unless it was referencing either medicare taxes or how "Obamacare" effectively acts as a subsidy towards older insureds by limiting premium differentials among all classes (thus younger insureds as a group pay slightly "more" than they would otherwise relative to older insureds. That's in general terms, specifics vary by individual, yaddayaddayadda, and I'm not trying to have this turn political, just thinking of what could have been meant).
It is tough starting out for any generation. I started at an current dollar value equivalent of $148 per week gross pay for a full time job.
That works out to half of what is current minimum wage. This isn't a whine of "I had it tougher." Just a comment on entry level jobs to one person (me) with minimal skills at that time.
Each generation has to overcome that hurdle. The practical advice is to learn and adapt from your circumstances. Good luck.
I completely agree with mathjak107 on the subject posted and this past April, met with my accountant to do some tax planning around this very concept. I asked him to project any tax advantages that could be realized by simply moving long term funds out of my traditional IRA to my regular investment account.
He was very helpful and ran several scenarios that allowed me to fulfill my RMD without jeopardizing any of our other income by subjecting it to unnecessary taxation. Here is a simplified explanation:
The idea is to withdraw funds from your IRA to max out the 15% tax bracket, and transfer the money to investments in a taxable account.
As long as one stays within the 15% tax bracket, LT capital gains and dividends are tax free. The same capital gains and dividends if the funds are left in a tax-advantaged account will ultimately be taxed at ordinary tax rates.
A large RMD at 70 1/2 could push one into a higher tax bracket, and thus cause LT capital gains and dividends in non-taxable accounts to become taxable. So, I'm getting as much money out of my IRA as reasonably possible before I get hit with a high RMD. I'm just not spending it.
This is simply a tax-strategy and is well within compliance guidelines published in the IRS Tax Code.
RVcook
Last edited by RVcook; 06-11-2014 at 06:00 PM..
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.
