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A number of relevant factors come to mind...income, home ownership rates, longevity, age distribution come to mind. you can't build home equity when you don't own a home. your kids can't inherit a home that you don't own.
All fair points. People often don't recognize how what seem like harmless little tilts in society actualy work to perpetuate past inequality.
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Originally Posted by freemkt
compounding adds exponentially to your net worth as you live longer, so people who live to 80 are generally going to have a ton more worth than those who die at 65.
No, wealth typically peaks at around 65 and then begins a steady decline. Here is a picture. It's not the best picture, but it gets the general idea across.
Here is something else that should be old news. If a hundred people each have $1000, then their average wealth is $1000. If one person has $100,000 and 99 people have $0, their average wealth is also $1000. Average wealth equals total wealth divided by the total number of people. You can squish everything else around all you like, but unless you alter at least one of those two numbers, average wealth is going to stay the same.
I find it very surprising that wealth would be this high since no one I know has anywhere close to this. But since it's averaged, is it just that the wealthiest people skew it so high? Is it really possible for such a small percentage to skew it so high? I guess it must be, because the median wealth tells a far different story: $77,300, where half have more than this and half less.
No, wealth typically peaks at around 65 and then begins a steady decline. Here is a picture. It's not the best picture, but it gets the general idea across.
You're right. It would be more accurate to say that people who live to 80 generally COULD have a ton more wealth by compounding the assets they had at 65 for 15 more years.
Sometimes people have to spend down their assets as they age due to health issues (medical expenses long-term or nursing care, etc). Sometimes disinvesting is intentional, e.g. to distribute some of your assets to your heirs before you die, to reduce the size of your (taxable) estate, maybe even to prepare for qualifying for Medicaid when you enter a nursing home. Sometimes people spend down for travel and other leisure activities in retirement. Sometimes it's voluntary and sometimes it's not. But an extra 15 years after 65 has potential for wealth building.
Sometimes it's voluntary and sometimes it's not. But an extra 15 years after 65 has potential for wealth building.
Well, that much is certainly true, but the old notion that "He who dies with the most toys wins" is not widely accepted. People don't want to go so far as to outlive their incomes and "become a burden to the children", but the more often seen pattern is still to accumulate as fast as you can from about 35 to 65 in order to build a secure retirement, then quit and cut your income substantially, living off both the corpus and income available in the suprlus you've built up. This sort of "golden years" paradigm is of course a post-WWII manifestation, one molded significantly (but not surprisingly) by the developers of all those sun-drenched retirement communities. Still, a lot of people have bought into that dream, and it is the case that working at anything becomes physically more challenging as you get older, so the picture outlined and illustrated above has emerged. At the same time, Medicare does a very good job of keeping most medical bills under control, and almost nobody will ever have to worry about federal estate taxes, though they should check out their current state tax situation. People on their way to financial success are likely to have purchased long-term care insurance before they became too old to afford it, so the bulk of this spend-down is likely to be voluntary through maintaining and even augmenting pre-retirement lifestyles Travel is a particularly common thing, as people aren't constrained to kid-friendly trips anymore. Bucket-list travel starts to kick in. Anyway, after 30 years or so of being devoted to it, the idea of even more years of hard-core wealth-building isn't going to be an attractive one to a lot of people.
Well, that much is certainly true, but the old notion that "He who dies with the most toys wins" is not widely accepted. People don't want to go so far as to outlive their incomes and "become a burden to the children", but the more often seen pattern is still to accumulate as fast as you can from about 35 to 65 in order to build a secure retirement, then quit and cut your income substantially, living off both the corpus and income available in the suprlus you've built up. This sort of "golden years" paradigm is of course a post-WWII manifestation, one molded significantly (but not surprisingly) by the developers of all those sun-drenched retirement communities. Still, a lot of people have bought into that dream, and it is the case that working at anything becomes physically more challenging as you get older, so the picture outlined and illustrated above has emerged. At the same time, Medicare does a very good job of keeping most medical bills under control, and almost nobody will ever have to worry about federal estate taxes, though they should check out their current state tax situation. People on their way to financial success are likely to have purchased long-term care insurance before they became too old to afford it, so the bulk of this spend-down is likely to be voluntary through maintaining and even augmenting pre-retirement lifestyles Travel is a particularly common thing, as people aren't constrained to kid-friendly trips anymore. Bucket-list travel starts to kick in. Anyway, after 30 years or so of being devoted to it, the idea of even more years of hard-core wealth-building isn't going to be an attractive one to a lot of people.
Then again, there are people who believe you should enjoy it while you've got it, and the heck with your kids and grandkids.
You're right. It would be more accurate to say that people who live to 80 generally COULD have a ton more wealth by compounding the assets they had at 65 for 15 more years.
Sometimes people have to spend down their assets as they age due to health issues (medical expenses long-term or nursing care, etc). Sometimes disinvesting is intentional, e.g. to distribute some of your assets to your heirs before you die, to reduce the size of your (taxable) estate, maybe even to prepare for qualifying for Medicaid when you enter a nursing home. Sometimes people spend down for travel and other leisure activities in retirement. Sometimes it's voluntary and sometimes it's not. But an extra 15 years after 65 has potential for wealth building.
And the majority of Medicare money is spent on people in the last year of their life. No matter how much people have saved the parasites at the "healthcare industry" will bleed them dry and they will die on Medicaid. Instead of being able to leave something to family it all goes the the salaries of Healthcare Insurance CEOS who in some cases skim 1/8th of every dollar taken in for their personal salary. Single Payer!
Single-payer would be a good system alright, but the argument raised for it here is nonsense. On a systemic basis, the total of all Medicare expenditures on patients that turned out to be within the last year of their lives has been between 25 and 30 percent and has been declining. On an individual basis, keep in mind that one cannot tell when the "last year of life" begins until the person in question has in fact died.
Single-payer would be a good system alright, but the argument raised for it here is nonsense. On a systemic basis, the total of all Medicare expenditures on patients that turned out to be within the last year of their lives has been between 25 and 30 percent and has been declining. On an individual basis, keep in mind that one cannot tell when the "last year of life" begins until the person in question has in fact died.
Even second rate industrial nations provide medical care for their citizens and pensions for their elderly. Employer based Medical Care was better than nothing but it's day is long gone. Even the parasites at WALMART prefer single payer because then all they have to do ia a payroll deduction
Even second rate industrial nations provide medical care for their citizens and pensions for their elderly. Employer based Medical Care was better than nothing but it's day is long gone. Even the parasites at WALMART prefer single payer because then all they have to do ia a payroll deduction
Oh, I strongly agree that we will eventually be driven by simple necessity to a single-payer system and hope that it takes rather less time than more to make the trip. Such an option was not even remotley possible in political terms in 2009-10 however. We did get instead what is actually a pretty darned good start at comprehensive reform though.
What I was contradicting here was some nonsense about how half of all Medicare costs are incurred in the patient's last year of life. First of all, the number is off by a factor of more than two, and second of all, it offers no useful information in any individual case, as it is impossible to tell when a living patient's final year of life has begun. The whole notion is just another bunch of pointless propaganda and anti-social folderol.
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