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Old 11-06-2011, 10:25 AM
 
Location: Lexington, SC
4,281 posts, read 10,739,306 times
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Quote:
Originally Posted by markg91359 View Post
The OP's opinion seems based on a premise. That premise is that there are exactly two groups of people in society.

The first group is hard working and industrious. It got where it did purely because of effort. Matters like timing, racial discrimination, sexual discrimination, or good health played little or no role in the success or good fortune of this group. This group was able to save and supposedly now lives in fear of seeing its savings "taxed away" by a spendthrift and ruinous government.

The second group had all the advantages that the first group did, but chose to squander them. This group is composed of people who hate work, wanted to play all their lives, and made a deliberate decision to not put anything aside for retirement. Now, as old age approaches this group is trying to use both fair means and foul to take the money from the first group to subsidize their own lazy lifestyle.

This sounds more like a fable or a thirty minute t.v. show than real life.

The people coming down the pike are not in as good financial shape for retirement as your generation for a lot of reasons. Perhaps, the one that is most commonly ignored one is the lack of good jobs that include defined retirement benefit plans as part of the compensation package. These have been totally eliminated in over half the workplaces in this country during the last thirty years. This wasn't much of an issue for people sixty and older. When you were in the workforce, such jobs existed in relative abundance.

Oh you can make all the arguments: "We need to cut government spending". "These people need to learn to save". "Financial planning isn't taught in the schools".

The problem is almost all those young people look around and they see the baby boomers and those older than them retiring on nice comfortable pensions. They see the way that we have decimated Medicare by our unwillingness to raise taxes to pay for it, to ration the care that is least necessary and most expensive, and what I will call our "general irresponsibility" as a group. Its a poor example, we've set. Much of the ineptness is our own.

My wife works for local government. She is fortunate enough to have one of the few remaining defined benefit plans left in this area. That plus our social security, plus some limited savings, plus a 401K plan that has never come through as promised guarantees we'll have a decent retirement. Guess what? They have now changed the system and all the young people (the new hires) aren't going to get nearly as generous a retirement. Most of their retirement will be based on 401K and only a small percentage will be a defined benefit.

Well said.
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Old 11-06-2011, 10:28 AM
 
Location: Wisconsin
21,539 posts, read 44,018,537 times
Reputation: 15140
Quote:
Originally Posted by TuborgP View Post
One of the reasons to depress interest rates is to keep government borrowing down and to make it easier to roll over old debt.That may help government to spend but not individuals young or old to grown their retirement nest egg.
This presupposes that when interest rates are low, retirement assets suffer. Not necessarily true.

Sadly, it is almost incumbent on anyone with a bit of money to be extremely proactive in acquiring knowledge on investing for the long-term. Some US bond funds (fixed-rate) have seen an appreciation of over 18% this past year. Best to recognize that asset classes rise and fall in favor and learn to navigate this uncertainty.

The days are gone when people can buy CDs and expect to live off the interest. Better they should educate themselves on investments, and develop a near-term, mid-term and long-term strategy for their various buckets of money and proactively manage these buckets.

Read mathjak on these boards. A cradle to grave primer on how to invest during your earning years and how to make your money last once you aren't. It is never a set-it and forget-it endeavor at any time. And it certainly is not just put all your money in the bank assuming you will get a decent return. You gotta pay attention every day and put in the time to educate yourself.

When one retires, one has a whole new career and set of burdens managing one's money. There is no "retirement" anymore for those without a generous defined benefit plan or a very large nest egg. The rest of us are going to have to work on budgets, cost-cutting and asset management for the duration.

Last edited by Ariadne22; 11-06-2011 at 10:36 AM..
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Old 11-06-2011, 11:48 AM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by Ariadne22 View Post
This presupposes that when interest rates are low, retirement assets suffer. Not necessarily true.

Sadly, it is almost incumbent on anyone with a bit of money to be extremely proactive in acquiring knowledge on investing for the long-term. Some US bond funds (fixed-rate) have seen an appreciation of over 18% this past year. Best to recognize that asset classes rise and fall in favor and learn to navigate this uncertainty.

The days are gone when people can buy CDs and expect to live off the interest. Better they should educate themselves on investments, and develop a near-term, mid-term and long-term strategy for their various buckets of money and proactively manage these buckets.

Read mathjak on these boards. A cradle to grave primer on how to invest during your earning years and how to make your money last once you aren't. It is never a set-it and forget-it endeavor at any time. And it certainly is not just put all your money in the bank assuming you will get a decent return. You gotta pay attention every day and put in the time to educate yourself.

When one retires, one has a whole new career and set of burdens managing one's money. There is no "retirement" anymore for those without a generous defined benefit plan or a very large nest egg. The rest of us are going to have to work on budgets, cost-cutting and asset management for the duration.
I have read all of this including MathJak and others talking about the difficulty of this low interest rate environment. It is part of the reason I said what I said. If you haven't read the many posts by contributors in this forum complaining about low interest rates than ok. I am on your side.
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Old 11-06-2011, 11:57 AM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Near-Zero Interest Rates: Good, Bad, and Ugly - The Best Life (usnews.com)
Quote:
Retirement investments and pensions. Not surprisingly, Schnapp is among the rising number of Fed critics who view zero interest rates as reflective of a "Raid and Trade Economy." Yields on CDs and other conservative retirement investments are driven down to near zero (the raid) and these funds are effectively transferred to financial institutions (the trade), who use free money to fund assets on which they make a profit.

"My 85 year-old mother is in bad shape today in terms of her income," Schnapp says. "Unless she risks her assets right now [on stocks and other higher-yielding investments], her income on those assets is zero." In other words, the only way to generate retirement income is to go against the standard advice of retirement experts and invest in higher-risk assets. The recent plunge in market values is painful evidence of the consequences of higher-risk investing. And it's affecting pension plans as well as individuals. They face the same challenges of generating safe returns in a zero-rate environment. Not surprisingly, pension plans generally have been hammered down in value since the market began falling.
Low interest rates crack nest eggs - 1 - retirement income - MSN Money

Quote:
Retirees are most vulnerable

Yeager's struggle highlights a nagging dilemma facing Fed Chairman Ben Bernanke. The longer the central bank keeps interest rates low to stimulate the economy, the more money it pulls out of the pockets of millions of savers. Among the most vulnerable are retirees, who have few options to restore lost income on investments built up over entire lifetimes.

Growing Number of Retirees Head Abroad
View more MSN videosGo to CNBC

In 2009, according to the most recent data available from the Labor Department, average annual investment income for the 24.6 million American households headed by people 65 and older amounted to $2,564. That figure is down 34% from 2007, and is the lowest since 2003.
I guess some of you enjoy taxation and wealth transfers from you to others so enjoy on. You are on the giving side right! Continue to support the policies you like as others will support theirs and hopefully some sort of resolution will come with the next elections one way or the other. May government continue to spend and may we all divert our income/investments to help that spending. May interest rates remain low so those in debt can recover from their behavior even if Granny suffers. The reality is we as a society took a hit with the recession and the question is if government spending/taxation decisions at any level helping you to recover and build/secure YOUR retirement. How do we help those retiree's increase their return on investment so they can survive? How do we help young people build their nest eggs with a reasonably secure rate of return? How do we secure pension trust funds so their investments meet the 7-8% return model they are built on. I have shared a perspective and it is obvious that many of you are secure in the current decision making process. So I yield and let student loan paybacks be deferred and let contractual investment return rates be lowered by federal policy. May we come up with more and more ways to redistribute wealth even if it causes that wealth to flee elsewhere. May we hammer Wall Street so they lay off and thousands and who cares if NY as a state is now feeling the pinch of that and is in a major fiscal crunch. We will show them and who cares if investment firms move to Singapore we don't need them. Read not retirees being hurt in the current low rate environment as posters in C/D have assured you they are wrong. Believe not that retirees with assets are fleeing certain states to certain other states and taking their taxable wealth with them creating even greater problems in the states left behind.

Last edited by TuborgP; 11-06-2011 at 12:11 PM..
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Old 11-06-2011, 12:19 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Interesting article comparing personal debt by state with numbers given for the average amount of personal debt.
Debt in America: Most & Least Indebted States - CBS News

[quote]O
Quote:
verall, debt -- and particularly credit card debt -- is dropping appreciably as the country is swept by two complementary trends: a new commitment to fiscal responsibility and lending restrictions that are generally keeping credit out of the hands of people who aren't committed to using debt responsibly.

"There is clearly a segment of the population that can't borrow," says Kenneth Lin, president of Credit Karma, which provided the data. "But there is also a segment of the population that is just cutting back, paying down their debts and pulling out the credit cards less often."

Also talks about the states where folks are being the most successful in getting out of debt. Is this a process for the individual or should government transfer wealth from some to others to help them get out of debt? This could as we have seen with housing result in lost investments for some but hey it is for the good of people.

This is what elections are for and if that doesn't work you always have unilateral executive action. There are those who might suggest that some politicians are seeking to transfer wealth from those who can borrow to those who can't because those who can't are in trouble with no source of help and hey they might vote for them.

Last edited by TuborgP; 11-06-2011 at 12:31 PM..
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Old 11-06-2011, 12:39 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Americans Divided on Taxing the Rich to Redistribute Wealth

Quote:
PRINCETON, NJ -- Americans break into two roughly evenly matched camps on the question of whether the government should enact heavy taxes on the rich to redistribute wealth in the U.S. Forty-seven percent believe the government should redistribute wealth in this way, while 49% disagree, similar to views Gallup found four years ago.
Quote:
The question also provokes different reactions from men compared with women, whites vs. nonwhites, and upper-income vs. lower-income Americans. Consistent with their more Democratic political orientation, women, nonwhites, and lower-income adults are all more supportive than their counterparts of government redistribution of wealth via taxes.


Not sure what this means so I will only speculate. Is it suggesting that those most likely to receive the redistributed wealth are in favor of it and vote accordingly? Does it mean those most likely to provide the wealth redistribution are opposed to it and these varying views correlate with political party? Hmmmm, the next elections could be interesting and telling. I guess a lot of retirement plans for young and old might be impacted by the results. The link also discusses that when it comes to specific programs folks are more positive about higher taxes on the wealthy to help stabilize the programs. Specifically SS had 2/3 favor tax policy being used to stabilize the program. However perhaps the following from the link may say it all about how we feel on the topic.

Quote:
The fault line in these views is distinctly partisan, with most Democrats championing redistribution and most Republicans opposing it.

However, these are philosophical views. In practical terms, as government programs and budgets sink in red ink, unions and Democratic leaders at the federal level and in the states are calling for higher taxes on wealthy Americans specifically to help restore fiscal balance and stabilize entitlement programs. Gallup polling last year found two-thirds of Americans in favor of the wealthy paying higher Social Security taxes as a way to help keep that system solvent
So again I will reiterate does this mean that more affluent citizens and companies will flee tax heavy states to those with different politics and tax policies leaving behind a greater tax burden to be shared by a diminishing pool of folks able to pay. Sorta like my OP.

Last edited by TuborgP; 11-06-2011 at 12:49 PM..
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Old 11-06-2011, 03:43 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,585 posts, read 39,962,822 times
Reputation: 23724
Quote:
Originally Posted by stillkit View Post
You're right. That single Mom with 3 kids under foot should be able to get that limb hanging above her roof down ... Or, the 87 year old man on oxygen shouldn't have an trouble getting rid of those trees down in his yard...
Darn lazy bums. Just lying around waiting for someone else to do their work.
In a functional and responsible society, the single moms are few, and the typical 87 yr old is not on Oxy. Folks that are in need, (for any number of legitimate reasons), have a family / support network to meet their needs (in and out of the home).

It is not GOV agencies that are most effective in meeting the personal needs of it's citizens.

Thank goodness there are many caring folks who provide care for others on a regular basis, NO CRISIS / FEMA contract required.
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Old 11-06-2011, 04:07 PM
 
Location: Wisconsin
21,539 posts, read 44,018,537 times
Reputation: 15140
Quote:
Originally Posted by StealthRabbit View Post
In a functional and responsible society, the single moms are few,
I totally agree with this and have a very radical, unpolitically correct view on women who repeatedly and irresponsibly produce children from usually multiple partners and rely on the system for food, health care, housing.
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Old 11-06-2011, 06:16 PM
 
Location: Texas
14,078 posts, read 17,666,896 times
Reputation: 7720
Quote:
Originally Posted by TuborgP View Post
And FEMA ran out of money once this year and are we on pace for it to happen again? Money only comes in after the area is declared a disaster area etc etc etc. Preventative medicine like cutting down trees and burying lines underground are going to hit people in their bills or the can have some of the trees cut down themselves. Some body is paying and if it is FEMA it means taxation.

Of course it means taxation. One of the necessary side-effects of having a government in the first place is that it costs money.

Question: Have you cut down any trees which might reach your house? Would you like the government to come tell you that you HAVE to cut down your trees? For people who live in heavily wooded areas, cutting down trees which might be a danger to their buildings would literally mean denuding the whole property. Then, of course, there's the issue of trees which aren't on your property, but which could fall into your house. What do you about that? Property ownership rights actually mean something in this country, you know?

As for burying power lines, I once asked a disaster worker why they don't do that after a storm, when they have the option of doing so as they rebuild a power grid. His answer surprised me. First, there are property rights issues to be considered and worked through, which would substantially delay getting the power back on. But, more importantly, he said buried power lines are more expensive to maintain and far more trouble than they're worth. When a line develops an issue, they can't just drive up and spot the problem. They have to dig up everything to find where the problem is! I'd never thought of that.

The bottom line is that there really is little a person can do to prepare for disaster's if for no other reason than you can't predict what's going to happen with any degree of certainty.

It's the same with retirement money. You can plan, invest, stock pile cash or do whatever you like, but the circumstances at the time of retirement are totally out of your control and completely unknown. It's not an A+B equation, not matter how much you'd like it to be so. All you can do is play the odds and hope for the best. But, it won't always turn out like you plan. What then?

For instance, you have a guy who's 50 years old and has done all the right things. He's worked for an employer with a defined benefit plan and a 401K. He's put in what he was supposed to put in and now has a comfortable nest egg, plus his retirement benefits.

Suddenly, his employer shutters the factory and moves it to China. He's lost the income he's been used to living on, the income which pays his obligations. Without any income (no unemployment benefits because that would be "feeding" a non-producer, remember?) So, he has to tap his 401K and pay the penalty for doing so just to keep his house and put food on the table. The longer he's unemployed, the more he has to take out.

His former employer, in the meantime, has legally deferred putting money into the defined retirement plan because they didn't have to. Under a law passed during the Reagan administration, they could get away with a promissory note to their employers. Well, it's time for him to retire and the pension plan doesn't have the money, so the obligation is shifted off onto the taxpayers via the Pension Benefit Guaranty Corporation, a publicly funded entity (see: tax dollars) which MIGHT pay him 50 cents on the dollar of what he was promised. Of course, since we're not going to pay "non producers" any more, the PBGC goes by the wayside and he gets nothing.

Now, he's 52, still unemployed and still drawing down his 401K until there's little of it left. IF he hasn't lost his house and his means of transportation, he might get by and IF he gets really lucky, he might find another pretty good job and start over building his retirement nest egg. But, he only has a few more good years to do so before health issues begin to curtail his ability to work and, under your plan, Social Security Disability would not be available to him or healthcare via Medicare or Medicaid. Suddenly, he's old, disabled and broke, yet there is no help for him because he's no longer a "producer."

Sound far fetched? Guess again. That's precisely the condition many, many older people find themselves in right now. What about them? Let 'em starve on the curb, even though they played by the rules but were torpedoed by circumstances beyond their control?
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Old 11-06-2011, 06:25 PM
 
Location: Texas
14,078 posts, read 17,666,896 times
Reputation: 7720
Quote:
Originally Posted by StealthRabbit View Post
In a functional and responsible society, the single moms are few, and the typical 87 yr old is not on Oxy.
Yes, but this isn't a functional and responsible society, any more than is any other. You're dreaming of Utopia and it never has existed. Let's deal with the reality, not the ideal.

Quote:
Folks that are in need, (for any number of legitimate reasons), have a family / support network to meet their needs (in and out of the home).
Really? My wife's Aunt lived with us up until she was 89 years old. She was barely mobile, needed help getting dressed, couldn't feed herself and was incontinent. We were able to deal with all that, with assistance from tax-payer funded home nursing and rehab, BUT when she started having heart attacks about twice a week, we had to call on the taxpayers for assistance. No matter how much we wanted to care for her, it got beyond our capabilities and Medicare had to pay for her $2500 ambulance rides and time in the hospital. When we could no longer care for her, Medicaid had to pick up the tab for her nursing home care until she died.

What would you suggest we should have done if those publicly-funded helpers weren't available? Just stand there and watch her die in our bedroom? We really would have had no other option.

And, she was fortunate to even have a family which could care for her. Not everybody does. What about them? Just leave there to starve in private in their own homes?

Quote:
It is not GOV agencies that are most effective in meeting the personal needs of it's citizens.
They may not be the most efficient, but they are the ONLY option for many, many people. To deny people in need the help they require just because you don't want to pay for it is cruel and unjust.

Quote:
Thank goodness there are many caring folks who provide care for others on a regular basis, NO CRISIS / FEMA contract required.
Yes, thank goodness. However, there simply aren't enough caring people or organizations (even churches) to meet the total needs of the boomer generation as we age and become incapacitated. It would be great if there were, but there simply aren't.
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