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If right now $100/mo is deducted from your paycheck to go towards SS and suddenly SS goes away and you are paid $100/mo more, it takes nothing but a little self-discipline to invest that $100 instead of blowing it on something.
If $100/mo invested conservatively results in a $5000/mo SWR in retirement, taxable at 17%, with FPL of $8000/mo, then no, it take much more than discipline.
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Originally Posted by hnsq
Please actually take time to read before responding in the future.
Sorry for my confusion about who you were directing those comments. The points still stands: He's irrelevant. And spending money to study at night to find a better job is no longer guaranteed to be a good investment. And expecting other people to up and leave where they have roots, where they may have people they can lean on for at least moral support in tough times, is offensive.
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Originally Posted by hnsq
Who in their right mind uses a savings account to grow money?
I thought you said all it takes is discipline!
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Originally Posted by hnsq
It absolutely is a lack of discipline.
There! You did it again!
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Originally Posted by hnsq
The middle class has made the choice to live it up instead of saving any extra money.
Too bad society doesn't feel the same as you claim to. Again, I'm irrelevant. Regardless, spending money to study at night to find a better job is no longer guaranteed to be a good investment. I wouldn't be surprised if some research looking back at the 2010s reveals that a college education was a bad financial investment.
Depends on how much you spend. The average salary for a college grad is $46K. Some majors aren't and have never been worthwhile choices.
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Originally Posted by bUU
Yet again, I'm irrelevant. But expecting other people to up and leave where they have roots, where they may have people they can lean on for at least moral support in tough times, is offensive. Your idea would seem to create a permanent underclass of Americans, migrants, scraping by from place to place to try to find a little bit of work, a few scraps falling from the table of their "betters". It's offensive to suggest that society should regress back to how it was after the Great Depression.
Wake up. Things have changed.
People have to analyze their own situation and make the best call. If you are in Detroit then it would be worthwhile to move somewhere else. If you are in a bad job market then sometimes it pays to move to a better job market. This has always been true and sometimes people switch countries (Irish potato famine), but with the internet it is easier to stay in one spot and work from or find work from your hometown.
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Originally Posted by GregW
Hnsg and his cohort expect everyone to arrange their life around making ever more money. He cannot understand why many of us chose not to live that way. Not all of us worship Mammon.
Where does a disciplined risk adverse person save his money at a higher rate than inflation? Just putting your money in an insured savings account does not yield any effective compound interest gains due to the devaluation due to inflation. What about the people that invested their 401 savings into the stock market as they were supposed to and lost much of the gain in the inevitable collapse? How are they compensated for being good little savers?
The lack of individual savings in this country is the result of economic policy not lack of disciplined savers.
The market recovered already. Aside from oversea investments (which naturally carry more risk) stocks and bonds recovered. Actually bonds never really took more than a temporary hit. Diversified portfolios and risk managed portfolios have fared well for your average investor (or even less than average investor) I have no idea how, but my bond fund is returning around 10% so even the least risky funds generate returns.
It absolutely is a lack of discipline. The average size of a home for the middle class has increased by 240% over the last 60 years. The number of cars owned by the middle class has doubled in the last 50 years, and the amount of money spent on entertainment as a % of income has tripled since 1950.
That's true and you can blame the middle class collectively for those issues, but an individual has no control over the lot or house size. Where you live dictates the school quality and if there are no small houses available then there are no small houses available. Education, housing, and health expenses have risen after adjusting for inflation. Car expenses have gone down, but needing two cars brings them back up and you do need two cars if both spouses work.
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Originally Posted by bUU
It absolutely involves far more than discipline!
If $100/mo invested conservatively results in a $5000/mo SWR in retirement, taxable at 17%, with FPL of $8000/mo, then no, it take much more than discipline.
I'm not sure what SWR and FPL (federal poverty line?) mean, but $100/month saved for 40 years at 6% results in $186,742.93. Is it alot? No it isn't. Is it more than nothing? Yes it is. Will you still have SS? Yes you will.
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Originally Posted by bUU
But the working poor haven't.
The working poor are generally in a better position than where they started from or simply made poor choices in life. An illegal immigrant might be working poor, but he is in a better position than he otherwise would have been. Then you have people than never made good decisions. Very few people are going to make the right decisions and be working poor all their life.
Being forced to save is the key. Left on their own, too many would have nothing.
SS Payroll taxes were invested in U.S. Savings Bonds backed by government IOUs.
As an aside, bonds are callable, meaning the issuer ( Treasury in this case) pays off the debt early when interest rates decline.
The problem is the interest on the savings Bonds BELONGS to the gov't. the tax payer OWNS NOTHING but a "trust me, you will get your money". The gov't ISN'T even REQUIRED to pay back 1 single penny.
IF Savings Bonds were purchased BY the investor, THEY would have the Bond PLUS the interest.
In 2010 the SSA started paying OUT MORE then they take in. The fed is redeeming the special, they are NOT U.S. Saving Bonds. special issues of the Treasury.
"Every penny of the $2.7 trillion in surplus revenue, generated by the 1983 payroll tax hike, was spent on wars and other government programs, as it came in. The government took the money and replaced it with non-marketable government IOUs. These IOUs, called “special issues of the Treasury,†are held only by the trust funds, and they have no marketable value. They could not be sold to anyone, even for a penny on the dollar. "
When so many people are unprepared for retirement, it's not the fault of individuals. It's a systemic problem. Not to mention that we are slowly emerging from the worst recession since the Great Depression.
"it's not the fault of individuals." You don't have clue, and NEVER will.
I'm not sure what SWR and FPL (federal poverty line?) mean,
To some extent making my point...
SWR = Safe Withdrawal Rate
You got FPL correct.
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Originally Posted by lycos679
but $100/month saved for 40 years at 6% results in $186,742.93.
I assure you that I didn't intend the numbers to be taken literally. The point is that take much more than discipline to successfully save for retirement.
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Originally Posted by lycos679
Will you still have SS?
It may depend on how old you are. Like I said before, I'm irrelevant. The next generation; they're still facing these issues.
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Originally Posted by lycos679
The working poor are generally in a better position than where they started from or simply made poor choices in life.
Or are victims of changes in society that has resulted in a doubling of economic inequality in a generation. The latter is a major contributor that I suppose people like you want to just ignore, preferring to scapegoat the less fortunate for their own problems.
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Originally Posted by lycos679
Very few people are going to make the right decisions and be working poor all their life.
More and more every year. "Hurrah!" says those who benefit from the changes.
you said you work for them...am I to read your mind that it was 1980 (back when those bery same companies offered PENSIONS)
1980 was 33 years ago , bub...and some did offer contribution plans back then...thats 33 years of savings...even at $20 a week that would be how much??? hhmmm 33 years is how many weeks???hmmm 1716 weeks...times $20 is what??? hmmmm nearly 35k...
so if you had saved only $20 a week (less than the cost of a carton of cigs) you would have had at least 35k...
We learned something rather interesting this past week about my spouse's 401(k) plan. They vest 0% of the company match for the first two years. And the company is a contract house; most of their employees cycle in and out of the company within a year, eighteen months at the max.
My own employer has not elected to provide a company match, despite calling the plan a "profit sharing plan". They also have elected to allow the plan to be directed toward the highest ER funds possible, while still remaining ERISA compliant, so that the custodian charges them the lowest administration fee.
The old adage says, "Pay yourself first". If you don't like what the employer is offering, nothing is stopping you from having an IRA.
you said you work for them...am I to read your mind that it was 1980 (back when those bery same companies offered PENSIONS)
1980 was 33 years ago , bub...and some did offer contribution plans back then...thats 33 years of savings...even at $20 a week that would be how much??? hhmmm 33 years is how many weeks???hmmm 1716 weeks...times $20 is what??? hmmmm nearly 35k...
so if you had saved only $20 a week (less than the cost of a carton of cigs) you would have had at least 35k...
you really do have an excuses for everything
??? WTF? I applied for the jobs, I was hired...there was never any discussion of benefits either with management or with other employees. Was there some pension/retirement plan we didn't know about?
Low wages, high rents and student loan payments got in the way of saving it's not as if I went on a spending spree.
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It's offensive to suggest that society should regress back to how it was after the Great Depression.
