U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-05-2008, 09:32 AM
 
478 posts, read 1,695,189 times
Reputation: 269

Advertisements

Quote:
Originally Posted by marmac View Post
I blame a lot of the problem on people falling prey to the ads of "cashing in your equity on your house" that were unheard of years ago.

When I entered the labor market sone 45 years ago, the dream was to buy a house and have it paid off before you retire so you have eliminated a huge expense ( mortgage payments) once your income drops due to retirement.

I recall some of the first home equity ads. They showed a couple going on a cruise or island vacation. The ad said---"you work hard, you deserve this"--" cash in the equity on your home"

A relative works doing mortgage closings. For many years she has noticed most are done for re-financing and she is seeing many people reaching retirement who still owe 75% + of the value of their house in mortgage.

Somehow the timetable of having ones house paid off by retirement was deemed "old fashioned" and we are about to see the fallout from the abandonment of that good fiscal practice.
On one hand I could agree.

On the other hand, cashing out of equity CAN be a lucrative practice if that cash is entirely/largely used to fund other liquid investments, and here's why:

Many people have high net worth in the form of a paid off home and not ONE DIME in the bank - because that house is worth 200k but it's worthless to the owner (financially speaking, it has value as a place to live) unless it's sold or otherwise liquidated.

So, unless your house is so cheap you can pay it off entirely with enough years left in the work force to stash away a bunch of cash, a lot of people fall into that situation.

And in my grandparents' generation, yeah, they did pay off their house but also had pensions to rely on.
Reply With Quote Quick reply to this message

 
Old 02-05-2008, 10:11 AM
 
4,791 posts, read 11,969,616 times
Reputation: 3453
Quote:
Originally Posted by Cattknap View Post
Newmover99 - There are many, many government employes (Federal, state and local) and they still provide a very nice retirement for their employees - so I have to disagree with you. Many of those employees do not rely on Social Security - I know we don't - no need, we have a nice pension from our city government - fully funded.
True, but there are MANY more people in the private sector than there are in Gov't/Public and most don't have pensions so it will be ss., private retirement plans and personal savings.
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 10:22 AM
Status: "0-0-2 start!" (set 14 days ago)
 
Location: The beautiful Rogue Valley, Oregon
7,289 posts, read 15,342,559 times
Reputation: 9463
And in lean economic times, I wouldn't particularly count on those gov't or private pensions. There are several states which have altered pension agreements, and many corporations are in the process of cutting back retiree benefits - not just for future retirees, but current ones as well.
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 10:23 AM
 
Location: Prospect, KY
5,288 posts, read 17,953,712 times
Reputation: 6544
I agree Tim - but not everyone will be in the "blood bath" that Newmover described - that was my only point....I don't like doom and gloom broad pronouncements - they usually are not completely accurate.
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 10:39 AM
 
16,092 posts, read 36,568,487 times
Reputation: 6272
Did you notice that in the 1980s shows like "Dallas" and "Dynasty" introduced all this over-the-top stuff? Most TV shows (even daytime soaps) then all went to the fanciest sets, clothes, jewelry, cars that most could never afford.

Look at the modest homes and apartments of 50s and 60s shows then compare to today. I mean Beaver had probably the nicest house, but Ward was always lecturing about 30 cents or something.
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 11:22 AM
 
Location: DC Area, for now
3,517 posts, read 12,049,244 times
Reputation: 2141
Quote:
Originally Posted by Buckhead_Broker View Post
OK folks, I've read these posts for about a year or so. Either it's the crowd that this forum attracts or somewhere along the path people didn't learn how to save for the future. So, what is it?
This statement made me go wha??? It seems to me that most of the posters on this forum are the savers who have been able to retire and its the minority who are wondering how.

According to the news, the statistical status of most of the population is very scary with the low savings rate and low participation in 401k type plans. But it looks to me that most of the posters here have bucked that trend.
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 02:58 PM
 
Location: Home is where the heart is
15,400 posts, read 25,819,531 times
Reputation: 18992
Quote:
Originally Posted by Tesaje View Post
This statement made me go wha??? It seems to me that most of the posters on this forum are the savers who have been able to retire and its the minority who are wondering how.
LOL, I totally agree. Of course, it could be because I only pay attention to the regular posters. Most of the people who regularly post here seem to have a head on their shoulders... and don't forget that the people who have time for internet chatting are often people who were able to retire because we learned how to take care of finances.

Most of the financial panic I've read on this forum comes from the "divebomb attacks"--you know, the people who stop by the forum one time because they want to try to stir up some excitement. I guess it's better than the ones who to stir up racial tension (but not much).
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 04:18 PM
 
Location: Houston, TX
1,610 posts, read 4,392,829 times
Reputation: 1459
The real answer to the question as to why we are in such bad financial shape is because we have become a society that has no concept of delayed gratification. We can't and don't save because there is precious little left after we spend. It is almost like a sense of entitlement - I want, I deserve, I will have. So what if my car still runs fine, I want a new one. My TV doesn't have a flat screen so I have to buy a big ole honkin' 50" plasma or LCD. We deserve an expensive vacation, after all, we've worked hard all year. This house isn't nearly big enough so let's move. Of course we need a pool, it is hot here in the summer. Wow, those BOSE speakers are so cool, I must have them. You get the idea. If all of us lived well BELOW our means rather than right up to the limits of them and saved/invested the extra, this conversation would be moot. To illustrate: There is a commercial running now sponsored by one of the big credit card companies. It suggests that when you go into a store like Best Buy to shop for a new TV you can access your account on the spot to see just how big a screen you can cram on your credit card. Sure you can comfortably afford a 40" but gosh, how much cooler to get the 60." There is a massive amount of consumer debt right now and some poor souls don't have a prayer of ever being able to pay off their share. Our parents/grandparents used to buy what they could afford or save up to get something bigger. Now we just get it the minute the idea crosses our minds, and worry about paying for it later.

Please don't for a minute think this is a case of "holier than thou." My husband and I have been as guilty as anyone of this excess at one time but fortunately we had that "ahah!" moment some years back and have made a noticeable reduction in our standard of living. Our house will be paid off when we retire and we have zero credit card debt. We don't drive new cars, we no longer have season tickets to the opera, we travel on the cheap, and have made numerous other conscious decisions to do without. One of the biggest decisions I made was to continue working even though I expected to have stopped several years ago. With few exceptions (i.e medical issues, job loss), most of us are responsible for our own financial situations. So unless and until Americans are willing to do with less, their bad financial situations are not likely to change.
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 04:31 PM
 
5,822 posts, read 13,312,141 times
Reputation: 9289
Quote:
Originally Posted by Cattknap View Post
Newmover99 - There are many, many government employes (Federal, state and local) and they still provide a very nice retirement for their employees - so I have to disagree with you. Many of those employees do not rely on Social Security - I know we don't - no need, we have a nice pension from our city government - fully funded.
I have to agree with Newmover99 - I read an article recently that stated 20%of corporate America provides a retirement pension. So those of us NOT working for federal, state and local government are just paying the taxes for those of you who are receiving these pensions. Corporate America will need to reply on saving in 401K plans and other options.
Reply With Quote Quick reply to this message
 
Old 02-05-2008, 05:08 PM
 
29,772 posts, read 34,856,103 times
Reputation: 11681
Quote:
Originally Posted by Cattknap View Post
Hmm, let's see...most people spend more than they earn and therefore can't or don't save much, raising a family is extremely expensive even when you live frugally and many are in denial - thinking they have lots and lots of time left to get it together, or like Ultrarunner has pointed out, they believe someone or something will take care of them - it will all work out. Another reason: People underestimate how much money they will actually need once they are retired.

Since most people haven't saved enough for retirement, many of us fall into the category of not being fully prepared financially for our older years. This problem isn't unique - actually the odd man/woman out here it is the prepared individual who has been planning and saving for retirement for years.
As other posters have said cashing out home equity has been a killer for people. Also the soaring cost of college leaves many in their 40's with the choice of college for kids or retirement for us. The blood bath in front of us are the millions who did have home equity they planned to cash in on for a retirement in a lower cost market. However that bubble has burst and with it the retirement plans of many.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top