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Old 01-05-2010, 12:46 PM
 
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In regards to thoughts on future generations -it scares me to think about my adult kids retirement future.they know every sports player, position, and stats but won't spend five minutes reading about investing or saving for their future.with job and incomes looking bleaker i don't see a good outcome. They won't be inheriting alot of old money and worse yet when they get in financial trouble and want to move back in it's going to cost me more.
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Old 01-05-2010, 12:55 PM
 
29,782 posts, read 34,871,258 times
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Quote:
Originally Posted by triciajeanne View Post
Hindsight2020 "good-pointed" Dave's line of questioning and then added some very thought-provoking considerations.

"Houston, we DO have a problem."

There are many many boomernistas out here that do not have anywhere near 300K put aside, nor are we packing 2800. a month pensions and owning multiple homes that provide shelter and likely have some residual value. If some of you think Dave is in trouble, I echo Hindsight with the "uh oh" but I don't think it's 30 years in the offing. I had an excellent nest-egg which was shattered by the housing collapse, stock market debacle, job loss, marital disruption and health issues. And somehow, I don't think my situation is extraordinary. I often thank God that I actually still have SOMETHING put away (far short of 300k), that I have simplistic needs and desires and that I have approximately 2000.00 a month to live on. And while I no longer have a mortgage, I have its sister called "rent". Equity is a faint memory buried in the ever-eroding sands of southwest florida.

If one can't make it on 40K plus in the future with a sizable nest egg, then those of us anticipating approximately 1/2 of that with so-so or no nest-eggs are completely screwed. I suppose I'm too much the optimist - I'm not worrying about it. I played the game - I did the right things - I achieved the American Dream in all senses of the word. If this is what is the result, this country is in far more serious trouble than any of us ever imagined. Something is seriously wrong with the evolving picture.
As with most things in life it is also location, location location.
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Old 01-05-2010, 07:41 PM
 
Location: zippidy doo dah
895 posts, read 1,331,660 times
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Default adult children's futures

seriously, our adult children probably look at their parents and wonder "what's the point?" I don't mean to be jaded but listen to financial forecasters, economists etc - they even admit most of what they say is a crapshoot so who is going to trust the advice?

Our kids have witnessed the breakdown of the system - they have seen that company loyalty is no guarantee of anything - they have watched many employers change the rules mid-stream on benefits and the like - they, like us, have read reports about the future of health care costs, long-term insurance costs and independent/assisted and memory care costs. What kid wants to devote their life to saving for what is being advertised as "senior years"? Perhaps the continuing longevity aspects that increase with each generation will simply assure that we'll have 3 or 4 generations of seniors in the same families trying to figure out someway to survive together.

I suppose my common-good/activist self is becoming more and more concerned about the general population of all ages. The imbalance of wealth could be more and more a problem for many - capitalism does not thrive when there are too many "have-nots". ok, back to reading my subversive literature.................................


Quote:
Originally Posted by dave w View Post
In regards to thoughts on future generations -it scares me to think about my adult kids retirement future.they know every sports player, position, and stats but won't spend five minutes reading about investing or saving for their future.with job and incomes looking bleaker i don't see a good outcome. They won't be inheriting alot of old money and worse yet when they get in financial trouble and want to move back in it's going to cost me more.
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Old 01-05-2010, 07:57 PM
 
1,749 posts, read 3,987,774 times
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Quote:
Originally Posted by TuborgP View Post
As with most things in life it is also location, location location.
I wish it was that simple. I don't think "location" as a generality is a fundamental determinant in a whole generation's ability to retire. Sure, people can chase low cost of living, but realize population shifts and population density affect the very cost of living these people are chasing by so-called "downshifting" into low costs of living areas. Cost of living is a moving target. By the time people chasing low cost of living settle in the area, said cost of living has eluded them as a marginal increase, by their very presence ironically. Is it a contributing factor? Certainly. Is it a "requisite" factor? Not even close.

I look at my parents and their two 75% high three pensions. Yeah I could live out the rest of my days on 75% of my high three. They never had a single exposure to the stock market, and their real estate, as mortgage leveraged as they are for a couple in their early 60s (i.e. they shouldn't have any), is largely self-liquidating at death, and they know it, which is why they sleep like babies at night. Their kid, no pension, is somehow supposed to replicate their lifetime benefit on a de facto casino table and 30% of what I take home? It's just not possible, clicking my heels won't change that.

I just want an honest assessment for those of you retiring on pensions today about the notion of not having that option [pensions] accessible to you and what position that would put you in today when juxtaposed to your proverbial pensionless children.

Lastly, coming back to the question of location, I do agree that expatriate "retirements" will become commonplace for the pensionless generation, for the very cost of living angle that was suggested above. However, this poses a question of "the chicken or the egg" in so far as raising the argument of what is the value of toiling in a country where you vest your life, values, culture, family and bloodline for the harvest of NOT being able to afford to live out your non-productive years in the very environment you invested your human capital in. This is in my book, a callous moral hazard, and certainly a disadvantageous opportunity cost. If I wanted to retire in Costa Rica, I'd vest my life work, children and values in Costa Rica. Being the generational equivalent of the cop that cannot afford to live in the very community he gets shot at for a living should be troubling hazard for all of us. You can already look at manifestations of this in places like New England.

Just some observations looking forward.
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Old 01-05-2010, 08:11 PM
 
617 posts, read 1,301,169 times
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Quote:
Originally Posted by hindsight2020 View Post
I wish it was that simple. I don't think "location" as a generality is a fundamental determinant in a whole generation's ability to retire. Sure, people can chase low cost of living, but realize population shifts and population density affect the very cost of living these people are chasing by so-called "downshifting" into low costs of living areas. Cost of living is a moving target. By the time people chasing low cost of living settle in the area, said cost of living has eluded them as a marginal increase, by their very presence ironically. Is it a contributing factor? Certainly. Is it a "requisite" factor? Not even close.

I look at my parents and their two 75% high three pensions. Yeah I could live out the rest of my days on 75% of my high three. They never had a single exposure to the stock market, and their real estate, as mortgage leveraged as they are for a couple in their early 60s (i.e. they shouldn't have any), is largely self-liquidating at death, and they know it, which is why they sleep like babies at night. Their kid, no pension, is somehow supposed to replicate their lifetime benefit on a de facto casino table and 30% of what I take home? It's just not possible, clicking my heels won't change that.

I just want an honest assessment for those of you retiring on pensions today about the notion of not having that option [pensions] accessible to you and what position that would put you in today when juxtaposed to your proverbial pensionless children.

Lastly, coming back to the question of location, I do agree that expatriate "retirements" will become commonplace for the pensionless generation, for the very cost of living angle that was suggested above. However, this poses a question of "the chicken or the egg" in so far as raising the argument of what is the value of toiling in a country where you vest your life, values, culture, family and bloodline for the harvest of NOT being able to afford to live out your non-productive years in the very environment you invested your human capital in. This is in my book, a callous moral hazard, and certainly a disadvantageous opportunity cost. If I wanted to retire in Costa Rica, I'd vest my life work, children and values in Costa Rica. Being the generational equivalent of the cop that cannot afford to live in the very community he gets shot at for a living should be troubling hazard for all of us. You can already look at manifestations of this in places like New England.

Just some observations looking forward.

It would be very different. I was told I had to be in the pension system as a teacher in NJ. so for about 30 years I gave 5% a year of my salary to the system. along with the rest of the teachers. I get a pension now. That was the agreement that i signed every year. If pensions were not there, HOPEFULLY I would have been smart enough to have saved 20% of my takehome all the time. That would be the only way to make it work in retirement. Americans have been cheated . Pensions should be standard.
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Old 01-05-2010, 08:26 PM
 
29,782 posts, read 34,871,258 times
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Quote:
Originally Posted by hindsight2020 View Post
I wish it was that simple. I don't think "location" as a generality is a fundamental determinant in a whole generation's ability to retire. Sure, people can chase low cost of living, but realize population shifts and population density affect the very cost of living these people are chasing by so-called "downshifting" into low costs of living areas. Cost of living is a moving target. By the time people chasing low cost of living settle in the area, said cost of living has eluded them as a marginal increase, by their very presence ironically. Is it a contributing factor? Certainly. Is it a "requisite" factor? Not even close.

I look at my parents and their two 75% high three pensions. Yeah I could live out the rest of my days on 75% of my high three. They never had a single exposure to the stock market, and their real estate, as mortgage leveraged as they are for a couple in their early 60s (i.e. they shouldn't have any), is largely self-liquidating at death, and they know it, which is why they sleep like babies at night. Their kid, no pension, is somehow supposed to replicate their lifetime benefit on a de facto casino table and 30% of what I take home? It's just not possible, clicking my heels won't change that.

I just want an honest assessment for those of you retiring on pensions today about the notion of not having that option [pensions] accessible to you and what position that would put you in today when juxtaposed to your proverbial pensionless children.

Lastly, coming back to the question of location, I do agree that expatriate "retirements" will become commonplace for the pensionless generation, for the very cost of living angle that was suggested above. However, this poses a question of "the chicken or the egg" in so far as raising the argument of what is the value of toiling in a country where you vest your life, values, culture, family and bloodline for the harvest of NOT being able to afford to live out your non-productive years in the very environment you invested your human capital in. This is in my book, a callous moral hazard, and certainly a disadvantageous opportunity cost. If I wanted to retire in Costa Rica, I'd vest my life work, children and values in Costa Rica. Being the generational equivalent of the cop that cannot afford to live in the very community he gets shot at for a living should be troubling hazard for all of us. You can already look at manifestations of this in places like New England.

Just some observations looking forward.
that was a reference to a whole generation but to how much can any one person live comfortably off of in retirement. So much of that determination is location, location, location. $2,500 a month in one location can bring very different results in another. Thus our comments are often clouded by our location and experiences and are not with universal application. If I were 25 today the one thing I would know with a fair degree of certainty is what the future will bring. The market/government will all try to create vehicles for future generations to build a retirement on. Do we know what they will be? Not with certainty but their are thoughts out there. One of the issues is how to spread the risk of a market downturn over a broad number of people without undue government/corporate burden. Perhaps we will one day embrace tax free retirement wealth transfer ( my idea) under this thought you could transfer your own retirement investments tax free to a tax free retirement account that your children could access at their full retirement age. Wouldn't help all but would help some. It is inter generational retirement wealth transfer with out big government snatching part of it for wealth redistribution.
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Old 01-05-2010, 09:02 PM
 
Location: Boca Raton, FL
5,174 posts, read 8,696,248 times
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Smile 401k

It is no secret that my husband and I have had to help my family financially and so much has gone there. Family is important, however, and we would do it again. What goes around comes around.

We are both self employed, work long hours and try to be there for our families and personal commitments.

We are nowhere near the amount the OP has and will most likely not have any pensions. However, we look at my husband's parents. His mom was only 42 when he left home; his dad was 48. They had about 25 years to really sock it away.

When my husband grew up, he had nothing. They lived very modestly (their choice). When we got married, they were 55 and 61. I think it was about then that they really ramped up the savings. He worked until 72 and would have worked much longer if his employer would have let him. (We think the state had a big pension increase if you got to 40 years - he "retired at 39 years 10 months 5 days. He has a great pension (which is more than he made as an employee) and SS - my sweet MIL had Alzheimers at 66 and passed away when she was 74.

We still have a child in college but we are starting to see where our expenses have gone down some. Our goal for the next 18 months is to work off debt and then start saving.

We're looking at another 20 years but a couple of years ago thought it would be less. Now, when we're in our 70's, I hope our clients still will want us around! At least where we live is where a lot of people retire to so we're here already!!

I try to look at the less fortunate and count my blessings every day.

I do think of my MIL depriving herself of so many things (basic even) and she didn't even get to enjoy the fruits of her labors. That makes me very sad.

Last edited by Bette; 01-05-2010 at 09:05 PM.. Reason: Added words
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Old 01-06-2010, 03:52 AM
 
8,197 posts, read 11,915,499 times
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Quote:
Originally Posted by hindsight2020 View Post
I look at my parents and their two 75% high three pensions. Yeah I could live out the rest of my days on 75% of my high three. They never had a single exposure to the stock market, and their real estate, as mortgage leveraged as they are for a couple in their early 60s (i.e. they shouldn't have any), is largely self-liquidating at death, and they know it, which is why they sleep like babies at night. Their kid, no pension, is somehow supposed to replicate their lifetime benefit on a de facto casino table and 30% of what I take home? It's just not possible, clicking my heels won't change that.

I just want an honest assessment for those of you retiring on pensions today about the notion of not having that option [pensions] accessible to you and what position that would put you in today when juxtaposed to your proverbial pensionless children.
First of all, public service employers are still offering defined benefit pensions. So if the "proverbial pensionless children" want one, all they have to do is go to work in the public sector as opposed to the private sector. Now granted, that would probably result in a lower salary for the same job, but that is a trade-off to be considered. And one that some of us made 30 years ago. It is a little disengenious to go to work for a private firm or multiple private firms during the course of a 30-year working career and then contemplate retirement options at the end.

Secondly, and contrary to your premise, we're not going from a nation with 100% of workers on defined benefit pensions to 0%. Even going back 30 years ago, only 51% of workers were covered by such pensions (either stand-alone or in conjunction with defined contribution plans). In 2004, that figure was 34%. Here are some stats from DOL and the CBO:

"Since the enactment of ERISA, the percentage of active workers covered by defined-benefit plans has declined substantially, whereas coverage under defined contribution plans has risen. On the basis of forms filed each year by employers, the Department of Labor estimated that in 1980, about 40 percent of all private wage and salary workers participated in a defined-benefit plan, 19 percent were in some type of defined-contribution plan, and 11 percent participated in both kinds of plans. By 2004, the Bureau of Labor Statistics reports, 21 percent of all workers in private industry were participating in a defined-benefit plan, 42 percent were participating in defined-contribution plans, and 13 percent were participating in both."

http://www.cbo.gov/ftpdocs/64xx/doc6414/06-07-PBGC.pdf
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Old 01-06-2010, 06:18 AM
 
Location: Great State of Texas
86,093 posts, read 72,515,954 times
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But how many people can go do government work ? There will be a great majority of young people working in the private sector. All they will have is the 401K for retirement. And SS ? That's another system in trouble for future generations.

Slowly the burden of retirement finances is being pushed solely on the individual to provide for themselves. IMHO future retirees will be poorer than our parents or current crop of retirees.
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Old 01-06-2010, 08:11 AM
 
Location: zippidy doo dah
895 posts, read 1,331,660 times
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Default public service employers offering defined benefit pensions???

I choose to differ with this comment - that WAS the case in the past perhaps but it is rapidly changing and has been for some time. That WAS the arena I was in as a baby boomer. For my father, a member of the "greatest generation" and a long-time federal employee on the legislative side, his retirement package was incredible. Of course, the trade off was no social security and the frightening prospectof that is that his pension will be cut in half upon his death, which begs the question as to how my mother is supposed to cut her expenses as a an older woman in half at the same time.

But back to the statement that the public service sector offers defined benefit pensions. Au contraire. In recent years, the public service sector has crashed and burned and it will worsen. Counties/Cities that offered public servants great benefit packages including excellent retirement options have tossed the old caveat that you can take less pay by going into public service in exchange for stability in the present and in your senior years. Benefit packages have been grandfathered for some that worked consistently for the same county or city for 25 years plus, again protecting mostly those who have already retired or who will retire very shortly. The newer employees coming in , or those who were courted to come to new localities are not so fortunate. And as more and more municipalities experience a reduction in property tax revenues and the like, they are cutting staff more and more - check out the exodus from Florida of public servants - staff, senior/junior - people who never figured they would be "let go" are being "let go".

Public service is about as secure as the private sector now, and actually that's been happening over the past 10 years, maybe more. Maybe the federal government is a bit more secure than that which we at the more local levels experienced. I have first hand seen the cutbacks in both jobs and benefits at the state and the local level. I have seen the resultant economic devastation it causes for so many people. In time, the further decrease in revenues and the impossibility of providing the level of services with reduced staff, reduced revenues etc will more and more cut into that "high-quality of life/low cost of living" that all the retirees are seeking. It's almost a perfect storm.



Quote:
Originally Posted by MadManofBethesda View Post
First of all, public service employers are still offering defined benefit pensions. So if the "proverbial pensionless children" want one, all they have to do is go to work in the public sector as opposed to the private sector. Now granted, that would probably result in a lower salary for the same job, but that is a trade-off to be considered. And one that some of us made 30 years ago. It is a little disengenious to go to work for a private firm or multiple private firms during the course of a 30-year working career and then contemplate retirement options at the end.

Secondly, and contrary to your premise, we're not going from a nation with 100% of workers on defined benefit pensions to 0%. Even going back 30 years ago, only 51% of workers were covered by such pensions (either stand-alone or in conjunction with defined contribution plans). In 2004, that figure was 34%. Here are some stats from DOL and the CBO:

"Since the enactment of ERISA, the percentage of active workers covered by defined-benefit plans has declined substantially, whereas coverage under defined contribution plans has risen. On the basis of forms filed each year by employers, the Department of Labor estimated that in 1980, about 40 percent of all private wage and salary workers participated in a defined-benefit plan, 19 percent were in some type of defined-contribution plan, and 11 percent participated in both kinds of plans. By 2004, the Bureau of Labor Statistics reports, 21 percent of all workers in private industry were participating in a defined-benefit plan, 42 percent were participating in defined-contribution plans, and 13 percent were participating in both."

http://www.cbo.gov/ftpdocs/64xx/doc6414/06-07-PBGC.pdf
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