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A paper recently wrote an article about a couple nearing retirement and losing their home. The article was sympathetic to the couple, but I saw things differently.
They bought their house 30 years ago with a $99,000 mortgage. Ten years later they refinanced for renovations and to take care of credit card debt. They then refinanced in 2002 and 2006.
Now, with the husband at age 62 and the wife 57 ( she just lost her job and took one with a $7 per hour pay cut) they wanted to refinance again.
The bank told them their house had dropped a lot in value and the value was now the same as what they owed----$140,000
Any couple who bought a house 30 years ago and put themselves in a position where nearing retirement their mortgage is 40% more than the original mortgage sure wasn't thinking.
Yup--------many people fell for those ads-"Cash out the equity in your house. Take a cruise, you deserve it"
I guess they never considered the ramifications of nearing reirement age and having a mortgage 40% higher than when they bought it 30 years ago.
It is rare that people rise above the socio-economic strata into which they are born. There are exceptions that prove the rule but it is the rule. It's clear to me that some of you are occupying a higher strata of society than the typical American working person. You see no problem because you don't have one. Let them eat cake...
A paper recently wrote an article about a couple nearing retirement and losing their home. The article was sympathetic to the couple, but I saw things differently.
They bought their house 30 years ago with a $99,000 mortgage. Ten years later they refinanced for renovations and to take care of credit card debt. They then refinanced in 2002 and 2006.
Now, with the husband at age 62 and the wife 57 ( she just lost her job and took one with a $7 per hour pay cut) they wanted to refinance again.
The bank told them their house had dropped a lot in value and the value was now the same as what they owed----$140,000
Any couple who bought a house 30 years ago and put themselves in a position where nearing retirement their mortgage is 40% more than the original mortgage sure wasn't thinking.
Yup--------many people fell for those ads-"Cash out the equity in your house. Take a cruise, you deserve it"
I guess they never considered the ramifications of nearing reirement age and having a mortgage 40% higher than when they bought it 30 years ago.
IMHO
It does seem to me that increasing debt-load, is an obvious method of sabotaging your retirement.
This is a subject where it is very hard to generalize. Bottom line is people still have to save money for their future, take advantage of savings plans that are available for them. When I worked so many younger people did not use the 401K plan, did not put money on their own in an IRA. If there is company matching that is turning away free money.
Things have changed in America and younger people (a generalization) were not saving when things were going gangbusters. Now things are slowing down, all this mortgage mess or refinancing for "free" money, etc. and people have nothing to fall back on if they have tough times. Both parents working, charging on credit cards, buying huge homes, and then one is out of a job, what then? People are living beyond their means, huge TVs, all these gadgets electronics, expensive gas guzzling cars, actually the situation is on the scarey side!
I think it is going to be hard for younger people to retire because alot of them just don't get it!
It is rare that people rise above the socio-economic strata into which they are born. There are exceptions that prove the rule but it is the rule. It's clear to me that some of you are occupying a higher strata of society than the typical American working person. You see no problem because you don't have one. Let them eat cake...
I respect your opinion, but I don't agree with it. I know plenty of people who rose above the socio-economic strata of their parents. I happen to be one of them, and that may be why I know so many other people like me.
You know, it gets a little old when people say things like "You see no problem because you don't have one. Let them eat cake...." You seem to assume everything I have accomplished in my life means nothing. You don't even know me, but you assume that I have never overcome hard times or faced financial problems. Oh no, I simply spent my life floating around "occupying a higher strata of society than the typical American working person." Let me guess, you also believe it was all handed to me by mommy and daddy. After all, in your opinion "it is the rule." Sorry, but that's a lot of baloney.
I've shared quite a bit of my life story on this forum, you can look it up if you'd like. The bottom line is I grew up in Liberty City, FL and got out of there at 17. Bummed around for years. I was making minimum wage and living the hippy lifestyle until my mid 20's. I shared a run down apartment with a bunch of roommates in Montrose, Texas--not the nicest part of Houston, let me tell you. And every night we'd sit around whining about how life was so tough and the cards were stacked against us and the only people who got a break were the rich kids from Bellaire. But we were too cool to actually do anything more productive than complain about it.
Eventually I got sick of it, decided to make something of my life, and then earned scholarships and worked my way through college. Dumped a loser husband who kept putting me down, telling me I couldn't make it and that I was "selling out to the man." Started my own business, refused to quit when times got hard. Bought property and made other investments, and I did that by saving my pennies. I didn't even have a car for years. I still don't own a cell phone. My investments mostly did well because I spent some long hours doing research. Got burned a few times, made some dumb mistakes, but kept going.
I've been around the block a few times--and been through recessions enough times to know that things right now really aren't that bad.
I don't think I'm so unusual. I know lots of people with similar stories, just like you probably know lots of people who have situations similar to yours.
It's tempting to think that if most of the people you know are a certain way, that must mean most of the people in this world are the same way. But that's a huge lie. It's also how you sabotage your own growth.
By the way... in addition to knowing plenty of people who have risen above, I also know plenty of people who have sunk far below the socio-economic strata of their parents. Parents are nice, but their achievements do not determine the achievements you are going to have. Maybe that's true in Germany, but not here. Your life is what you make of it.
This is a subject where it is very hard to generalize. Bottom line is people still have to save money for their future, take advantage of savings plans that are available for them. When I worked so many younger people did not use the 401K plan, did not put money on their own in an IRA. If there is company matching that is turning away free money.
Things have changed in America and younger people (a generalization) were not saving when things were going gangbusters. Now things are slowing down, all this mortgage mess or refinancing for "free" money, etc. and people have nothing to fall back on if they have tough times. Both parents working, charging on credit cards, buying huge homes, and then one is out of a job, what then? People are living beyond their means, huge TVs, all these gadgets electronics, expensive gas guzzling cars, actually the situation is on the scarey side!
I think it is going to be hard for younger people to retire because alot of them just don't get it!
Good points. Like you say, it's hard to generalize. But... there are some things I've noticed. Kids today spend a lot more money than I did at their age (Geez, typing that makes me feel like an old curmudgeon... oh well, I'll continue on because it's true.). It's not just that things cost more, it's that they have a different attitude. For example, when I was in my 20's I had roommates. Lots of them--we had 2 and sometimes even 3 people in each bedroom. And we usually had an extra friend crashing on the couch for a few weeks at a time.
Sometimes the grandkids or their friends tell me they want to get their own place, but they can't afford it. I tell them how I had roommates and they look at me like I'm nuts. Kids today have to have their own bedrooms--and often their own apartments. They have their own cars (I took the bus for years). They have tvs and computers and all sorts of electronic devices. Could be one reason it's hard to save money.
And while I'm on the subject of "back in the day" I can remember when the bunch of us needed to find a new apartment. When we moved we could put everything that everyone owned into 2 cars. There was one tv in the house, and 2 people owned stereos. We all had bicycles, and that was about it for the big items. Times have changed.
Good points. Like you say, it's hard to generalize. But... there are some things I've noticed. Kids today spend a lot more money than I did at their age (Geez, typing that makes me feel like an old curmudgeon... oh well, I'll continue on because it's true.). It's not just that things cost more, it's that they have a different attitude. For example, when I was in my 20's I had roommates. Lots of them--we had 2 and sometimes even 3 people in each bedroom. And we usually had an extra friend crashing on the couch for a few weeks at a time.
Sometimes the grandkids or their friends tell me they want to get their own place, but they can't afford it. I tell them how I had roommates and they look at me like I'm nuts. Kids today have to have their own bedrooms--and often their own apartments. They have their own cars (I took the bus for years). They have tvs and computers and all sorts of electronic devices. Could be one reason it's hard to save money.
And while I'm on the subject of "back in the day" I can remember when the bunch of us needed to find a new apartment. When we moved we could put everything that everyone owned into 2 cars. There was one tv in the house, and 2 people owned stereos. We all had bicycles, and that was about it for the big items. Times have changed.
Oh Normie I love your post it is soooooooooo true. Kids today they don't have a clue. Stores should go back to lay away, no credit cards that would blow their minds.
I have "risen" above my parents' way of life, and they rose about their city immigrant parents' way of life. My parents were a cab driver and occasional waitress. My father did have a taxi medallion, worked long hours and was on his way to his own company (more than one taxi) but fell into compulsive gambling and blew it all and continued to blow it for the rest of his working life. There was no concept of going to college, although I was fortunate enough that they bought a tract home in what became a booming post-war suburb. I was able to get financial aid for one college because my guidance counselor had gone to school there (my father wouldn't submit the forms). I didn't want to go to college, didn't like school despite my ability at it, and dropped out with some loans after two years.
Moved to New England and after two years of crappy jobs (can you say "frozen onion ring factory?!), got into a great job by passing skills tests. Dumped it after four years for hippie-dippy crapola, wandered around with lousy jobs, and then borrowed more money and went to RN school at a hospital, lived in a dorm and finished the two-year program.
I've used the RN to support myself while trying other things (and paying for other schools up front) and have ended up accepting that I'm working as an RN into retirement. I built my little dream house, started saving for retirement late in my 40s! and returned to a job with a good old-fashioned pension plan.
I do admit that I was fortunate not to have any tragedy befall me, either while I was adrift or when I was starting out, like an illness or terrible injury. I did have an extreme problem of depression but somehow pushed through (and honestly don't know how- don't think I could do it today).
I also remember when people like me didn't have cars, especially if they were in college, and of course had roomates. Now, it does seem that parents are buying their kids cars. I bought my first car for $200 earned waitressing. I see co-workers who are parents buying their kids cars so they can "get to their weekend job" and because so many people have moved to suburbs without other transport. I'm amazed at how young people assume car ownership, never mind newer or new cars.
How do "kids" get all these electronics and cars unless family buys it for them? Yes, I feel like a curmudgeon, too. I wish I could have had more support from family, plus some kind of upbringing with values about many things, including money. But I certainly bristle when someone assumes "You must have a daddy who's a lawyer in Wellesley" because I have a house and am well spoken (although not overly well educated).
thanks for listening.
The problem is that doctors who are enrolled in the Medicare programs are not accepting new patients in most cases, at least in my area (Colorado). This makes Medicare the same as being uninsured for most future retirees.
This is also a real problem for Universal Health Care.
I work with several Doctors now that do not accept any form of insurance...
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