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I could buy at least three homes with the money I saved by renting and investing the difference. Freemkt's problemSSSSSSSS have zero to do with not being able to buy a home. Nice try though.
You are an outlier (not to be confused with an outliar), median renter income is HALF median homeowner income. The median renter has a net worth in the neighborhood of $5,000, which is nowhere near the amount you would need to invest in order to be able to buy three homes.
Depends on where one lives. Given that retirees generally don't derive their income from the local economy, the logical solution is to move somewhere with lower housing cost.
As someone who derives 100% of their retirement income from a couple of federal based pensions and SS, my financial security has never been determined by the strength or weakness of the annual COLA.
I really don't understand the "pain" element some express in not getting one. At either end of the income spectrum, a COLA, or lack thereof, isn't likely to make much difference in one's quality of life.
Do I like getting COLA's? Sure, but I'm not heading to the poorhouse of pain if I don't get one.
What is there to "mentally prepare for"? We know that the COLA will be either small or zero. So we all will just keep on living like we've been living. Even if the COLA were to be some miraculous amount, say, five percent, that's not enough money in the average SS check to make any real difference. For example, five percent of $2,000 is $100 per month. What is a person going to do with $100 per month? Why even have a discussion about it?
First, to be clear, most retirees do not get $2,000/mth in Social Security retirement benefits. (Nor do most receive pensions, BTW).
According to the BLS statistics, the "all items" CPI-U rose 1.5% over the past year, not 0.3%. For the average Joe, that means his cost of living actually increased 1.5%.
But seniors are not the average Joe. Using the same BLS source, over the past year, shelter costs rose 3.4%, medical care rose 4.9%, medical commodities 5.2%, dental care 2.9% and prescription drugs a whopping 7%.
Even an additional $50/month would be helpful for many retirees. It could help pay for prescriptions, groceries, rent, utilities and perhaps a routine visit to the dentist.
As someone who derives 100% of their retirement income from a couple of federal based pensions and SS, my financial security has never been determined by the strength or weakness of the annual COLA.
I really don't understand the "pain" element some express in not getting one. At either end of the income spectrum, a COLA, or lack thereof, isn't likely to make much difference in one's quality of life.
Do I like getting COLA's? Sure, but I'm not heading to the poorhouse of pain if I don't get one.
When rent consumes half your income, any piddling marginal dollars are welcome.
First, to be clear, most retirees do not get $2,000/mth in Social Security retirement benefits. (Nor do most receive pensions, BTW).
According to the BLS statistics, the "all items" CPI-U rose 1.5% over the past year, not 0.3%. For the average Joe, that means his cost of living actually increased 1.5%.
But seniors are not the average Joe. Using the same BLS source, over the past year, shelter costs rose 3.4%, medical care rose 4.9%, medical commodities 5.2%, dental care 2.9% and prescription drugs a whopping 7%.
Even an additional $50/month would be helpful for many retirees. It could help pay for prescriptions, groceries, rent, utilities and perhaps a routine visit to the dentist.
ss uses the cpi-w as it's index. cpi-u is not used . cpi-u tends to be used with pensions not ss .
the CPI-W generally overstates inflation because it looks only at price changes for a small sample of goods and does not account for how consumers substitute similar products based on relative prices but there are times it may reflect lower since many retirees no longer commute to work so a heavy weighting on gas prices does not help them as much .
on the other hand being home every day has us driving much more than we did while working . my commute was 10 miles each way and my wife walked to work .
inflation also does not effect all retirees the same . as we age we tend to cut back on a lot of discretionary spending . the things we no longer buy and do helps pay for the things we still buy and do .
some of that will be offset by higher healthcare costs .
healthcare costs are one of the things that came down for the general public . we were running 7% and now we fell to 5.50% . in fact fidelity recently reduced it's healthcare inflation amount from 7 to 5.50% in the fidelity retirement calculator .
Last edited by mathjak107; 10-19-2016 at 03:03 AM..
You are an outlier (not to be confused with an outliar), median renter income is HALF median homeowner income. The median renter has a net worth in the neighborhood of $5,000, which is nowhere near the amount you would need to invest in order to be able to buy three homes.
Once again, you are confusing the topic. I'm not talking about a renter not being able to afford a home. I'm talking about the difference between someone who rents and someone who owns. I'm just trying to shed light on your argument that home ownership is nirvana if you could only own a home (which you could if you wanted to, but you don't want to take the necessary steps suggested by many here). Because it isn't.
I was also talking about investing the difference and earning even significantly less than a broad market index with that investment over 30 years. People, also forget to figure in all the interest they pay over the life of their mortgage. Not to mention, of course, the considerable expenses involved in maintenance, taxes, realtor fees, and the fact that they illiquidity due to owning can be a big negative.
But if you are renting and can't or don't save, it doesn't really matter. Just pick Buddhism or something that gives you meaning in life (seriously) because it's not going to come from the freedom you have through financial security. Just a fact.
??? ??? ??? I make enough money to pay a tiny amount of federal income tax, but there is also a larger amount of payroll taxes.
And why should I have to pay multiple percentage times more than you in taxes just because I worked hard enough and made the right choices to earn more? It takes money away from what I could use to create jobs or stimulate the economy by spending or even giving money to Freemkt if I so choose.
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