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Lifelong renters will need much more than people with a paid off home at retirement. Thats true today but will be more so in the future.
People will work longer. There will be 2 phases especially for people that do physical work. One career until about 50 and then the other one until about 70.
More children may be living at home longer, maybe like the old days where they stayed until they got married, and sometimes stayed after that. Multi-generational housing will be common.
More challenging. The days of the traditional employer pension plan are nearly over. People will need to take more personal responsibility for their retirement. And Social Security may raise the age to qualify. Foresee an increasing number of retirees living on the edge.
More challenging. The days of the traditional employer pension plan are nearly over. People will need to take more personal responsibility for their retirement. And Social Security may raise the age to qualify. Foresee an increasing number of retirees living on the edge.
I used to have a comic on my desk, that showed a couple of newlyweds approaching a sign that said:
"Tunnel of Love. "
There was a hillside, and a man standing there handing them a shovel.
To be honest, I didn't even know what retirement was when I was growing up. Pretty much everyone I knew growing up worked until they were too disabled to do so. Then they depended on family. I'm a younger boomer (1959) and grew up with zero financial knowledge other than the popular phrase in our home "we can't afford it". As a young adult I never expected that I would be able to afford an apartment by myself, let alone a home. Roommates were a given. I didn't know any young adults with their own place. I couldn't afford college, and no one EVER explained to me that with my scores and GPA I could've gotten scholarships, so I joined the USAF. By 23, I was married, and thus we had 2 incomes to support us. 10 years later, after my divorce, I bought my own home. Just me, no 2nd income. I hardly had any furniture, but I had a nice home. I was 35. My divorce was the best thing that ever happened to me. It made me realize that I have to do it all for myself, retirement included. Most kids today need that wake-up call.
I don't think today is that much different than previous generations. It's just young people's expectations that are different. I think the exposure of 200 channels of TV shows has created a false expectation that everyone's going to go to college, everyone's going to have a "career", everyone's going to have an apartment all to themselves, even in NYC, and everyone's going to own a home and have 2 kids when they're 32. In reality, many people flunk out of college, many people have jobs, not careers, and many people end up with kids in their teens and 20s with no full-time partner. The fact is this has always been true, but we don't see financial struggles represented truthfully on TV, except on the news. There have always been lots of people with no retirement plan, no retirement savings, no financial CLUE. I see it even among the retirees I know today. Growing up poor made all of the siblings in my own family painfully aware of what's necessary to get by, and how to get where we wanted with hard work. Sacrificing today so we could afford to eat tomorrow was just our way of life. It was the "hard knocks school" of finance. Now we're all very comfortably retired. Financial education should be a required course in high school to at least get young people thinking realistically and understanding the concepts.
Last edited by TheShadow; 12-27-2023 at 09:40 AM..
I think it will all depend on how successful the movement of people joining unions. The new contract with the UAW is including oldfashioned penions again and/or an increase in 401k plans. I am not exactly sure which will prevail. Currently we have a worker movement that has been gaining speed.
The younger generation can not rely on getting an inheritance. The costs of eldercare are through the roof and that is even with exceptionally good planning.. The costs have gotten so outrageous that you either plan to get eldercare for yourself OR you leave an inheritance for your kids because you won't be doing both.
But three things: (1) many more people are living longer in better health than in the past, so never need any eldercare, (2) ownership of property (including heritable property) gives you more options for free eldercare provided by the family, and (3) the expansion of working from home gives more options for free care provided by the family at the home of the senior.
Example of my family: my father was independent since his last second of life at the age of 88, and did not need any eldercare at all. Mom at 88 remains independent, and the only help she uses is the cleaning lady that comes once a week. If something should happen to mom that would make her incapacitated, she has lived long enough for one of her children (me) to fully retire during mom's lifetime, so I could go to the European city where mom lives to take care of her in her home. Alternatively, my brother who works from home and his wife who works from home half of the week (both are engineers) could take care of mom in their large house. No matter what happens, the cost of my parents' eldercare will likely be zero (my father's cost of that certainly was zero).
I can see more retirees living abroad and maybe a norm. Right now it's still not a norm, but with the first wave of expats settling roots in their chosen countries, more information becoming available, and younger generations being more exposed to various nationalities, my guess is in 30 years, a third of new batch of retirees probably would retire abroad.
Not sure about one third US seniors retiring abroad in 30 years, but senior expatriation is certainly increasing. I don't have children or first-degree nieces/nephews, but I do have extended family, so if I become incapacitated (which would mean only a paralytic stroke or neurodegenerative disease with similar effects, dementia, and maybe total blindness - since I am resilient, and will remain independent with any other health problems), so, if I become fully incapacitated, my extended family will get me to a specific nursing home in Thailand, which now costs about half of my annual annuity income per year. But things can change in the next 30 years in either direction, ie, either (A) some of the now affordable countries could become unaffordable, or (B) many more countries with low cost of living and large supply of unqualified workers (who, however, can perform senior care, since changing diapers is not a rocket science) could realize that building a network of affordable senior homes could attract American seniors, and therefore the US dollars, into their country. Frankly, I don't understand why the B solution has not occurred to a variety of low-GDP countries yet.
IMO in the coming decades there are going to be way more people than there are jobs. No telling what retirement looks like after that.
You are probably right. I think the situation will require some form of UBI eventually (not just for seniors), and I also think there will be an explosion of business enterprises such as Walmart and McDonalds, that cater primarily to the low-income population. If someone can come up with a viable concept for inexpensive McHousing, he/she will end up richer than the Waltons and McDonald's Corporation and Jeff Bezos together. Same if someone can come up with a viable concept for inexpensive McNursingHome.
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