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I am a Gen X and almost made baby boomer. I think most people will work to the grave, which isn't all that bad if you enjoy your work. Some people like to work. Maybe work part time. It is what it is in the US. The Millennial's seem to want socializm and let the government take care of them. The Gen X'ers are holding on to the old ways and working extremely hard, but in fairness the Gen X people like myself are swimming in college debt, so that is part of this puzzle. People will just do what they have to. No sense worrying about it.
While I do understand that Generation Y/ The Millennials are swimming in college debt, I don't understand how someone on the border of Gen X/ Baby Boomers still has college debt -- a person born in 1965 would be 52 this year. Not only was college much cheaper in inflation-adjusted dollars back in the 1980s, but student loan debt back then came with 10-year payoff terms.
I guess you could have deferred it a few times -- just trying to understand the statement.
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. 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.
The only way I see this crisis being handled is by the economy taking several enormous body blows, a plummeting housing market, along with plummeting cost of services, e.g. massive deflationary pressures, product/food shortages, etc.
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.
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?
I tell my kids what it will probably cost them to retire. It is up to them to make good decisions.
Realize that it does not take much to get started with a retirement account, especially when you have time on your side. A 20 year old that saves just $2,000 a year for the next 7 years and lets it ride in a 401K or IRA will more than likely have a nice portion of their retirement sitting there when they retire.
Forget what the gains are today and focus on dollar cost averaging. When prices are down you are buying more shares of something. It is the share you are buying and not the value of the share. I would hope in the early years it would be lower so that you can get more of them. So many people make the mistake of thinking that it is a bad thing to buy a share of something at a low cost. If it was a good deal at $10 it should be an even better deal at $5 and since I am still spending the $10 I will get twice as much.
Since most investment programs are made up of a basket of stocks then I don't care if they go down in value now when I don't need them. Historically they will go up and it is far in the distant future that I will be needing them to be up.
Some ad on the radio says more than 50% of americans have less than $10,000 in retirement at retirement. That's scary. One of the biggest issues to me seem to be cars. Too often I see people making $20,000-$30,000 year driving $50-$60,000 cars....tough to buy a house or save for retirement at those prices.
Maybe Uber or Self Driving cars will reduce this burden and give them more money to save.
LOL, We rented a beautiful GMC Yucon for the week, last week while we were out of town. I loved that truck. It had everything on it. I had to check what it would cost to buy and figured that no way was I ever spending $50,000 on a car ever. The Yucon starts at $49,000 and that is before Taxes and everything else. Nope, no way.
We would rather have our freedom then becomes slaves to the bank.
We do own a home though and plan on paying that off in 12 or 13 years. In 14 years we should be able to retire in our beautiful home. Not that we will retire though. I would rather be able to retire and keep working then have to keep working and wish we could retire.
While I do understand that Generation Y/ The Millennials are swimming in college debt, I don't understand how someone on the border of Gen X/ Baby Boomers still has college debt -- a person born in 1965 would be 52 this year. Not only was college much cheaper in inflation-adjusted dollars back in the 1980s, but student loan debt back then came with 10-year payoff terms.
I guess you could have deferred it a few times -- just trying to understand the statement.
They may have taken out parent loans for their kids college or co-signed the kids.
And where would they be without mommy and daddy's help?
For many of us things like this are just part of the cost of parenting which for many of us is a life long relationship which starts out with them in our arms and ending with us in their arms. Not for all but for many! In between we may enjoy many a great dance holding hands and raising the roof of life.
If she is the poorest you know, then you're living in a bubble....I mean a really isolated bubble.
Unless you mean the homeless, which I don't really know them. I don't think it's a bubble at all. These are people I know who never earned enough to rent an apartment, like my sister, but she end up with a huge 401k, almost 3/4 million. And a few houses. She got laid off often too. Sometimes she didn't earn enough she couldn't only contribute 4% max. She went without health insurance some years. And she also single, no help from a second income. She has meager pension, like $200 a month from one company.
I consider her my poorest relative, I always pay for her when we eat out.
And where would they be without mommy and daddy's help?
That really depends imo on how bad they want a house.
For myself, I worked 3 jobs for a couple of years, delayed buying the house, and bought less house than I wanted or could qualify for. I also lived cheap in a house with 5 roommates, which was not always the most pleasant thing.
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. Although some current retirees have it made financially and seemingly had an easy time of it, you might not know what they went through. Because the standard of living for the younger generations is so high today, it is easy to assume that older people grew up the same way. Many did not have a nice home with a nice car and money to go out and eat good food. Many struggled to survive but figured out how to make it.
My grandfather was of the generation that started with little money and eating ketchup sandwiches. He learned construction and made the wise choice to give up some of his salary to go to a lower paying State road job with a pension. They were big savers because that is what they learned growing up. Their ability to save was a great advantage to them in the 1970's - 90's when interest rates at banks were over 10%, and that allowed them to accumulate a great deal of secure money on a smaller salary. They found the best way to maneuver around their particular set of circumstances.
My father, on the other hand, was a farmer. At a relatively young age, he purchased one farm then a second. He and my mother lived in an old farm house on the second farm throwing every dollar into the mortgages. We didn't have a bathroom in this house until I was six, were lucky enough to get hand-me-downs to wear, but made out. I wonder how many young people today would make that kind of sacrifice to gain financial freedom. My parents were savers who paid their own health insurance and were responsible for their retirement savings. They sacrificed but did very well without a pension. Again, they found the best way to maneuver around their particular set of circumstances.
Things are reversed now. In the olden days, people started off poor and learned to grow whatever money they could lay their hands on. There was nowhere to go but up. Today, people are coming from a richer environment and struggling to maintain what they consider normal. Do some need to reconsider what is normal? Are they willing to truly sacrifice for financial independence?
We have to readjust our thinking. Things have changed, and pensions are becoming a thing of the past in the private sector. Interest rates are historically low, which has punished many savers or pushed them into less secure investments, but has made it possible for young people to own homes.
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.
That's all well and good, however, it is very discouraging to invest greater time into education (both initial and continuing), more effort into work, and more outgoing cash flow, than one's parents, only to achieve a lower standard of living in one's middle and late years. Barring an unexpected sudden career triumph or other sort of windfall, there is no way my wife and I will ever match our parents' finances or lifestyles. We are Xers from upper middle class backgrounds. We live in a house that would have been considered "ghetto" when we were kids. We do not spend more than our parents did at comparable ages and have stuff that is not as nice. We still have a set of furniture that is at least half old college furniture. We buy our cars with cash and run them until they die, normally 150K plus, ideally far beyond that. We don't have big screen TV and have no kids. Granted we live in a high COL area, but, we grew up in high COL areas, so that should not be a factor. BTW - at this point you may be thinking we are in our 30s, based on this description. Wrong. We are 50+/-.
Yep, 50 is the new 30* and that is not a good thing.
* 50 is the new 30 ... in terms of attainment of life milestones.
Unless you mean the homeless, which I don't really know them. I don't think it's a bubble at all. These are people I know who never earned enough to rent an apartment, like my sister, but she end up with a huge 401k, almost 3/4 million. And a few houses. She got laid off often too. Sometimes she didn't earn enough she couldn't only contribute 4% max. She went without health insurance some years. And she also single, no help from a second income. She has meager pension, like $200 a month from one company.
I consider her my poorest relative, I always pay for her when we eat out.
Did she inherit this money?
How did someone who "didn't earn enough to rent an apartment" end up with multiple houses and three quarters of a million in a 401k?
That doesn't make any sense.
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