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Old 01-12-2016, 04:07 PM
 
29,764 posts, read 34,851,819 times
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Quote:
Originally Posted by Serious Conversation View Post
This is exactly what I was getting to earlier in the thread - like things and people tend to self-sort themselves. People that are making $250k+ a year are not likely to live in a struggling area of town where the people are struggling and making poor decisions. They often talk investment choices and advice with each other. Iron sharpens iron.
Bada Bing! They can also create positive peer pressure to invest and save with eventual retirement expectations. Worked for a lot of folks. Great for younger folks moving in also helping to set expectations. The keeping up with the Jone's as a negative is often a myth. Investing with the Jone's can be a positive reality. Just being asked do you manage yourself or use a FA or what investment house are you with and do you believe active or passive etc etc. You can look at the newspapers in the driveway and I suspect the mailman really knows alot from the mail they deliver and the neighborhood differences.
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Old 01-12-2016, 07:07 PM
 
Location: Los Angeles area
14,018 posts, read 17,726,438 times
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Default What does "middle class" mean?

Quote:
Originally Posted by GeoffD View Post
That is because socioeconomically successful people self-segregate. They cluster together in the high cost of living economically vibrant parts of the country and then build those elaborate homes in elite towns with top school systems. If you live in one of those places, you get the false impression that everyone is like you. That isn't the case. Only 6% of tax filers max out their Social Security ($118.5k). ................. The median household income in this country is about $50k. ...................

In the Economics Forum there have been a number of threads over the years asking what income constitutes being middle class, and it has always astounded me that a large number of people who earn, say $150,000 a year claim to be barely middle class and claim to be just making do. And yes, I do get it that housing costs a lot in the major metro areas, but still!


My response to them has been a version of what you wrote above; your version above is well expressed and succinct.
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Old 01-12-2016, 09:12 PM
 
Location: Tennessee
23,541 posts, read 17,535,380 times
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Quote:
Originally Posted by TuborgP View Post
Bada Bing! They can also create positive peer pressure to invest and save with eventual retirement expectations. Worked for a lot of folks. Great for younger folks moving in also helping to set expectations. The keeping up with the Jone's as a negative is often a myth. Investing with the Jone's can be a positive reality. Just being asked do you manage yourself or use a FA or what investment house are you with and do you believe active or passive etc etc. You can look at the newspapers in the driveway and I suspect the mailman really knows alot from the mail they deliver and the neighborhood differences.
I don't know if I would go that far with it.

I live in an affluent community and have come into quite a few of these conversations over the past couple of years.

I'm a drinker and have come across most of these folks at the Sunday specials at a certain area bar. It attracts an older crowd, many regulars, and many people just cycling through. Most of these folks have unpleasant stories to tell - most are middle aged men, high income earners, divorced with children, and with far less to their name than one might imagine. Yes, they're paying for the nice home, etc., but they're neither financially solid nor did they really waste it all keeping up with Joneses.
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Old 01-12-2016, 09:25 PM
 
29,764 posts, read 34,851,819 times
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Quote:
Originally Posted by Serious Conversation View Post
I don't know if I would go that far with it.

I live in an affluent community and have come into quite a few of these conversations over the past couple of years.

I'm a drinker and have come across most of these folks at the Sunday specials at a certain area bar. It attracts an older crowd, many regulars, and many people just cycling through. Most of these folks have unpleasant stories to tell - most are middle aged men, high income earners, divorced with children, and with far less to their name than one might imagine. Yes, they're paying for the nice home, etc., but they're neither financially solid nor did they really waste it all keeping up with Joneses.
I have had good neighbors and known good people with a focus on family and future. I understand your point and wouldn't expect a bar to be fruitful discussion grounds. Most of the folks I have known on a personal level are not divorced with a strong family focus of college expectations and intergenerational wealth. You have a different level of discussions when your kids play play travel team sports which can be a significant cost. I know my immediate neighbors in the last couple of neighborhoods were financially focused and knew what retirement for them was going to cost and how to get there. May have meant working to save until 66 or so but they weren't going out earlier just to go out until they had the financial base they wanted. When you say divorced with children you are already saying behind the eight ball. Sunday afternoon for married with children can often be family time and family activities often with other families.
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Old 01-12-2016, 10:08 PM
 
2,634 posts, read 1,121,416 times
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Originally Posted by NewbieHere View Post
I've been reading lots of retirement literature and I believe only recently did I read to delay taking SS at age 70 for bigger SS check. Before that, perhaps before the crash it was recommended in most things I've read to take it at 62. Perhaps people have been brain washed by what they read.
I had an uncle that died at 66. He started SS at 62. After working all those years if he had waited to full retirement age which was 65 where would that have benefited him? Actually, he didn't even get back 10% of his work life contribution.
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Old 01-13-2016, 12:04 AM
 
6,353 posts, read 5,154,974 times
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Quote:
Originally Posted by SoloforLife View Post
I had an uncle that died at 66. He started SS at 62. After working all those years if he had waited to full retirement age which was 65 where would that have benefited him? Actually, he didn't even get back 10% of his work life contribution.
So what? Social Security is called Old Age and Survivors' INSURANCE for a reason. What he did not get makes it possible for the long-lived to have a decent standard of living. If he had lived to 105 he would have gotten a huge rate of return on his contributions. Social Security benefits are actuarially fair and the government does not make a profit on them.
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Old 01-13-2016, 12:19 AM
 
33,046 posts, read 22,039,041 times
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Quote:
Originally Posted by Larry Siegel View Post
So what? Social Security is called Old Age and Survivors' INSURANCE for a reason. What he did not get makes it possible for the long-lived to have a decent standard of living. If he had lived to 105 he would have gotten a huge rate of return on his contributions. Social Security benefits are actuarially fair and the government does not make a profit on them.

Which, in the context of income (or wealth) and longevity is classically regressive.
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Old 01-13-2016, 10:53 AM
 
7,895 posts, read 5,028,121 times
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Quote:
Originally Posted by Larry Siegel View Post
So what? Social Security is called Old Age and Survivors' INSURANCE for a reason. What he did not get makes it possible for the long-lived to have a decent standard of living. If he had lived to 105 he would have gotten a huge rate of return on his contributions. Social Security benefits are actuarially fair and the government does not make a profit on them.
That is the unfortunate (but inevitable) downside of defined-benefit pensions schemes, and of Social Security. Ultimately, they are all insurance-policies. Some people dutifully pay house-insurance for decades, but never file a claim. Taking things literally, they wasted their money. But they also bought peace of mind.

An aggressive saver and decent investor might in fact do spectacularly better with a defined-contribution pension than with a defined-benefit one. But what about peace of mind? Peace of mind is expensive. If I were asked in 1999, I'd gleefully have dismissed the utility of insurance, clamoring instead to be given the option to dispense with it. Why? The market as surging ahead, and I felt invincible, even as humdrum buy-and-hold investor. Who wouldn't feel invincible, after benefiting from 20%+ returns year after year after year? Ask me the say question now, 17 years later, and my sentiments have swung entirely in the opposite direction.
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Old 01-13-2016, 11:30 AM
 
1,842 posts, read 1,479,664 times
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Quote:
Originally Posted by ohio_peasant View Post
Look at your accounts' annual performance statements, folks – if you have the stoic fortitude. Don't focus on just one year. Look at 5, 10, 20. Now compare these cumulative returns with what's assumed by retirement planners. Notice a gap? How are you going to cover that gap? One can't save more than 100% of one's annual income.
What you are describing is the exact problem that defined pension managers face.

They get funding that assumes constant returns of 8% year, but don't achieve that kind of return. Hence, almost all of the pension plans are underfunded.

This is bad for the pensioners.

This is also bad for the taxpayers, who by-an-large aren't going to have anything like the benefits the public sector is getting. I'm talking about modest benefits of $3k and under per month, not the $10k benefits that the well-connected are getting.

Detroit was able to kick the can down the road by shafting bondholders, but eventually, the pensioners are going to feel cuts.

Many other cities are following the same track - including my home town.
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Old 01-13-2016, 11:39 AM
 
71,467 posts, read 71,652,652 times
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Quote:
Originally Posted by SoloforLife View Post
I had an uncle that died at 66. He started SS at 62. After working all those years if he had waited to full retirement age which was 65 where would that have benefited him? Actually, he didn't even get back 10% of his work life contribution.
the real issue for most folks is not what if I die . dying is easy , dead is dead .

the bigger question is what if I or my spouse live . planning around living and having enough money to last is the real problem .
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