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Every generation faces a different set of circumstances and challenges. The key is figuring out how best to maneuver your particular challenge and not to compare yourself to other generations...
My advice to the younger people is to make the sacrifices you need to in order to be become well off financially. You can sit around depressed because you won't have the same type of retirement as your parents or you can take it on yourself to make your own retirement. Get together $1,000 and open something like a Vanguard Target Retirement account with automatic investments every pay day. Watch your money grow and move it as necessary. Take charge of your future.
Very good post and great advice!
My husband and I are tail-end boomers and we will not have the type of retirement that our parents had, or that earlier boomers have. I don't say that with any bitterness, just the reality that times have changed. What we are doing and have done for the past 15 years or so is to live as cheap as we can while we are still working and save as much as possible! We won't retire well-off, but God willing, we will at least be able to retire before 65. Fortunately, we are not big spenders and enjoy living simply.
I don't think it's so generational. I'm a middle boomer, and my parents were working-class broke and died broke, lived on Soc. Security in a very small trailer. Their generational status had nothing to do with how they ended up. I was doing better than they were the day I left home.
Even when I retired quite some time ago, I was paying my secretary about $65K in Silicon Valley.
Again, Silicon Valley. The cost of living is so high for just routine expenses compared to the rest of the country that the $65k just goes right through - aside from higher SS amounts and more savings from fixed percentage savings, it's essentially financial diarrhea.
The "whining" in this thread comes form those in denial of the effect of recent economic upheaval on our future economic security, nationally and individually.
You're not entitled to a specific Standard of Living or Life-Style.
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Originally Posted by basehead617
Young Gen-Xers and Millennials are starting decent paying careers much later in life, making much less than their parents, and are unable to save any money at all due to high cost of living and debt, and flattening investment gains.
Their retirement will arrive and they will have likely zero or negative net worth.
That would be the case for 29% of Boomer households today. So what?
Quote:
Many retirees and workers approaching retirement have limited financial resources. About half of households age 55 and older have no retirement savings (such as in a 401(k) plan or an IRA). According to GAO’s analysis of the 2013 Survey of Consumer Finance, many older households without retirement savings have few other resources, such as a defined benefit (DB) plan or nonretirement savings, to draw on in retirement (see figure below). For example, among households age 55 and older, about 29 percent have neither retirement savings nor a DB plan, which typically provides a monthly payment for life.
Most Households Approaching Retirement Have Low Savings (May 2015)
On top of that, social security will likely be somewhat insolvent and unable to pay even the meager benefits it now provides. And medicare will hardly be in better shape.
Then increase the FICA Payroll Tax 27% to 8.5% each for employer and employee to ensure Social Security will be solvent. If the Silent Generation handled a 520% FICA tax increase and the Boomers endured a 72% FICA tax increase, then surely Generation X and Y can slog their way through a little 27% increase.
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Originally Posted by basehead617
Rich baby boomers make the political decisions in this country and the insane wealth of the baby boomer generation (and even their pension-fattened parents) is distorting the discussion here of what it means to be a retiree - even a modest retired couple of a mailman and a teacher are retiring filthy rich compared to how the young generations will.
Actually, it was the GI Generation and the Silent Generation that made the "political decisions" you decry.
Quote:
Originally Posted by basehead617
Are there any think tanks studying what it will mean for a generation to retire with virtually no money, in a country that will likely not have today's safety net?
You can read this assessment by your own government:
The previous poster presumes they generally will reach retirement age with zero or negative net worth; if true, how would they afford a higher tax rate?
Minimalism. They'll need to learn how to do less with less.
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Originally Posted by jasperhobbs
$17 an hour will not buy anyone a McMansion anywhere in the USA.
Sure it will. It's not my fault people don't understand there are wide variances in Cost-of-Living and Purchasing Power Parity in the US.
I agree with the bolded part, but feel that the blue text above is an unfair assessment/profile of "lower socio economic groups." There are some posters on here who, even if working, make very little income in comparison to the standard financially secure retiree. Yet in many cases they show more "intelligence" (and definitely a higher literacy level) than others who brag about their superior status.
As an aside:
Yes, getting a broader picture is important, but I do wonder how someone on the clock is taking so much time during (what I assume is) a standard workweek to make lengthy posts all through the day (never could have done that in my job!). But that is neither here nor there.
My point is that I agree with you on one observation, definitely not on the other.
Because of circumstances, I knew that I wasn't going to be working again. Medically, I was not doing well. And then was diagnosed as bipolar2, which was mostly how I saw the world, made me more aware of how I didn't deal well with things which didn't turn out. And I was a drugged up zombie with too much meds none of which worked. I chose to take myself off of it and felt human again. I believe we all have the power to deal with the world as we see it if we can accept that we are different. My self made 'treatment' is being able to control my own circumstances. I am very aware of changes in perception and deal with it. And I am once more myself, and able to deal with the potholes in life, including the economic part. Part of that was keeping the cost of living low, and being aware of when I need a time out. And its worked. But I've had to accept that my income isn't going to be high, and while living in a 'cheap' area makes a lot possible, its also a limitation. I moved knowing that it was meant as the last one.
There are times I'd love to just pack up and go somewhere, and enjoy myself, but it takes a lot of planning. And money... And I worry if I'm not here someone will break in. I've also thought about a roommate, maybe who drives, since I have an unused bedroom. But the good stuff about things is I don't have to please anyone here.
I think that people just assume that those in the current 'lower socio economic group' were people who never went to college, never had a professional job, just 'settled' for survival level work and didn't try to do better. Yes, some is, but when the dice gets thrown, your skill and education can become meaningless if you have a cronic illness, or you lose the job when there aren't options left. Or illness becomes a factor. Nobody knows what lays ahead. We shouldn't 'judge' based on the idea that anyone can turn things around if you really want to. If you find yourself there, you have to find a way to deal with it. And you may have to let go of assumptions. But real survivors can claim the name because they do learn to be flexable with everything, and take a joy from it too.
If I have enough to have my own space, sufficent needs met like food and a little more flexability in getting around, I'll be fine with life even maintained at the current economic level. You can be just as miserable with more if "stuff" is what you see but not which makes comfort and happiness.
What scares me is those who want to rip it all up, and change the basis of it, and if those who depend on it aren't helped by some kind of tax credit too bad. Or becoming invisible, especially as some already consider us that way.
But I do for myself what I must and give myself the power to decide how I deal with it. Nobody knows what comes next. But having less means you have to be strong and realistic.
I think at any age its about personal choice. I have a 26 y/o working in a job using her degree and she's had a 401k for about 2 years. I don't know what the future holds for her with regards to social security, so have plans via life insurance and property to help her in the future.
A big difference between our generations is my mother never worked and never planned or discussed retirement. (Their's wasnt great). And it never occured to them to even think about leaving anything for us. 0÷4= a lot of nothing
I've always worked and we talked a lot about things like 401K, IRA's etc, so DD knew what these things were and knew enough to sign up when eligible.
But I realize not all milenials have degrees or are working in their field. Knowledge comes at different times and different speeds for everyone.
These fat California pensions are about to go away. It's just a matter of how long you can pretend to have funding years after you have used up everything you have saved in the vaults. Or maybe how many government and social services you will be giving up in order to fund the pensions.
Too many people in high positions in government have ignored some basic universal laws of balance. I would hate to see the conditions of their personal checkbook accounts if they can't figure out how to balance the future needs of their state constituents with the need for ongoing fiscal responsibility. Too many folks out there either have their heads buried in the sand or they have taken up participation in the "underground booming economies" to the point where they are no longer needing to be worrying about their pensions any more.
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