Author Topic: What will happen to these people?  (Read 23807 times)

somebody8198

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What will happen to these people?
« on: June 03, 2017, 09:17:07 PM »
If statistics and anecdata are to be believed, the majority of Americans today don't save anything for retirement, spend way beyond their means, etc. There are lots of causes here but I will speak mainly to my concern for people coming from a middle or upper middle class background who have good educations but do not have many practical experience living independently, earning money, saving, and investing.

Among my own friends, many are following this trend. They don't invest or understand money. They distrust banks and talk about "the market" like it's all Wall Street manipulations. They have spent a lot of time in school, living like college students, mostly living off support of parents or credit cards. They seem to expect that politicians will come to their rescue to help with their student loans. Some are chasing after impossible unicorn jobs in academia and are continuing to sign up for more and more education assuming it will pay off eventually. Some still live with family members and don't seem motivated to be independent. As we have grown up and begun entering our 30s the differences between the people who went to work in real jobs and started saving vs. those who did not are increasingly obvious. It's actually gotten kind of uncomfortable because I get guilted for having money to travel.. money which I worked and saved for!

Now here is my question. I keep trying to envision what will happen to these people in the future, when their health begins to fail, or they cannot work anymore, or the support they get from family comes to an end. Not only are they dependent on the money, but they also lack practical skills. I am talking about people who are smart and educated but have little actual work experience and very large amount of student debt.

I imagine that a large portion of whatever they earn in the future will automatically be deducted for the loans. Whatever remains, they will not know to save for retirement, since saving money period is a foreign concept to them.

Where will they live? Section 8 housing? What kind of social safety net is there for people who are not yet at the official retirement age, nor are they impoverished or disabled or unable to work, but still do not have the means to support themselves?

aceyou

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Re: What will happen to these people?
« Reply #1 on: June 03, 2017, 09:50:16 PM »
They'll get a job doing something.  They will service debt for a LONG time.  They will work for a long time. 

For most people and times in history, retirement wasn't even a thing.  You work until you can't, then you die.  So, your friends/acquaintances will do what most people have done forever. 

Retirement is a very new concept.  Early retirement, for people who aren't a member of an elite ruling class, is an insanely new concept. 

AnnaGrowsAMustache

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Re: What will happen to these people?
« Reply #2 on: June 03, 2017, 10:20:38 PM »
What you're talking about is just a snapshot of society right now. It's never too late to start and achieve SOMETHING, even if it's a small advantage. There seem to be lots of people on this forum who came to this whole idea of FIRE quite late, myself included. It's entirely possible to make financial mistakes, pay for them and then move onward and upwards no matter what your stage of life.

SwordGuy

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Re: What will happen to these people?
« Reply #3 on: June 03, 2017, 10:35:56 PM »
They will die poor and in need.  That's what will happen to them.

Unless enough of them do it and whine about the results.   

Then they will tax those of us who were responsible to pay for their care and upkeep.



Syonyk

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Re: What will happen to these people?
« Reply #4 on: June 03, 2017, 11:18:58 PM »
They'll vote for politicians who make good sounding claims about taxing the Evil Rich (you) to pay for their Needs.

Paul der Krake

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Re: What will happen to these people?
« Reply #5 on: June 03, 2017, 11:45:41 PM »
They will go on a variety of income-based repayment and never really amass any wealth over their working careers. Then they will do what millions of seniors already do: live off their social security checks. Then they will die.

The last part we all have in common.

Alternatively, you could have a period of high inflation that greatly reduces the burden of debt servicing.

CanuckExpat

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Re: What will happen to these people?
« Reply #6 on: June 03, 2017, 11:56:26 PM »
If statistics and anecdata are to be believed, the majority of Americans today don't save anything for retirement, spend way beyond their means, etc.

A fair bit of wealth is locked up in housing equity for many affluent americans, even though it shows up as little to no retirement savings. There will be inheritances along the way, they will bump up their savings in the 50 - 65 age range (maybe), and they will rely on social security *shrugs*

surfhb

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Re: What will happen to these people?
« Reply #7 on: June 04, 2017, 12:01:05 AM »
Most people live with no retirement savings! 

Take my parents for example.   They are 75/85 and live on SS with only $25k in the bank. 


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skip207

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Re: What will happen to these people?
« Reply #8 on: June 04, 2017, 04:21:48 AM »
(often) Its a generational thing within each family.   There will be one generation that will live off their parents until middle age, then their parents will die and they will inherit their estate and then live off that till they die having still not really worked, perhaps passing a small inheritance to their children.  At that point the chain stops and those kids will get jobs and move on to work for a living. 

I have seen it happen.  In a way the parents are not helping when they think they are helping.  In the UK a lot of people use their 25% tax free lump sum from their pension as a gift to their kids to give them a deposit for a house.  They see it as doing the right thing for them, however in a lot of cases they are setting them up for failure as they cant afford the house in the first place.  I think we will see this come to the front in the next 5-10 years as rates go back to 4,5,6%.  They wont be able to service the debt.  The parents will be much further into retirement and wont be able to help.  I am not saying that will happen to everyone but there are a large portion of people who live off the bank of mum and dad.

Salim

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Re: What will happen to these people?
« Reply #9 on: June 04, 2017, 07:19:46 AM »
Some people will get motivated. One motivator for me was a visit to a nursing home years ago to donate some overflow books. Seniors were in wheel chairs with attached tables stacked three deep along the walls. I've heard this is a very good nursing home, but it's not appealing to me.

Another motivator was when DH was laid off and it looked like we would lose our house. I started looking for options. My research brought me to MMM. Praised be.
« Last Edit: June 04, 2017, 07:22:38 AM by mara »

jim555

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Re: What will happen to these people?
« Reply #10 on: June 04, 2017, 07:25:58 AM »
I know of a lady who relies on her son and gets about $800 in SS.  She needs to do housecleaning and babysitting until she drops.  That is how most will get by.

Linea_Norway

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Re: What will happen to these people?
« Reply #11 on: June 04, 2017, 07:37:26 AM »
I know of a lady who relies on her son and gets about $800 in SS.  She needs to do housecleaning and babysitting until she drops.  That is how most will get by.

This is what I think will happen. Work for the rest of your life and rely on some money in the form of either government minimal survival pension or their own children helping. If too many people do this, I expect that taxes need to raise so that the others can provide for them.

the_fixer

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Re: What will happen to these people?
« Reply #12 on: June 04, 2017, 07:39:17 AM »
I come from a really poor family and really most of them are just going along living happy lives, they have food, shelter, modes of transportation, healthcare and pretty much everything they want / need.

In a way I think you are better off dirt poor or filthy rich

jim555

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Re: What will happen to these people?
« Reply #13 on: June 04, 2017, 07:49:19 AM »
Dirt poor is not a fun existence at all.

the_fixer

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Re: What will happen to these people?
« Reply #14 on: June 04, 2017, 08:25:52 AM »
I grew up that way until my late 20's and do not think it was that bad, if you do not know anything different it is just life.

There were times I went hungry, I had to go to the free clinic to get care and slept in my car but I did not know anything different and I had very few worries in life.

Most of my family is still in that situation or slightly better off and they just go about life.

Would it be hard to go back to living that life?  Yes but even dirt poor in the US is better than many other people have it across the world.
« Last Edit: June 04, 2017, 08:27:49 AM by the_fixer »

scantee

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Re: What will happen to these people?
« Reply #15 on: June 04, 2017, 08:26:22 AM »
They just get by in whatever way they can. One side of my family is like this: terrible with money, in loads of debt, no savings. They live together, work odds jobs, are flexible about where they'll live. Combining a few of these they are able to live fairly decent, enjoyable, if not lavish, lives.

I think it's important to remember that saving a lot of money doesn't make someone a good person. There is no shortage of people who are great with money or frugal or high earners who are also mean and petty and selfish. But there's this tendency in FI crowds to get self righteous and believe that because we're good with money, that means we're better people. But really, no, that's just not true. Certainly it's possible to be both smart with money and a good person, but the former is not a precondition of the latter.

So most people don't have a ton of money but they make it work and mostly they find happiness in other parts of their lives. Across the entire population, I think it would be good if people were thriftier,  less consumerist, better savers, but tsk-tsking individuals who are bad with money doesn't do a ton of good.

Rife

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Re: What will happen to these people?
« Reply #16 on: June 04, 2017, 08:32:24 AM »
It is fairly common for people to get serious about career/money as you get older. I worked hard and lived frugally but has very low paying jobs until my mid 30s. If you get serious you can turn it around very quickly. I have a friend who was a full time hippy in his 20s after dropping out of college and is now a Real Estate agent in his 40s.

Roothy

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Re: What will happen to these people?
« Reply #17 on: June 04, 2017, 10:07:54 AM »
I think it's important to remember that saving a lot of money doesn't make someone a good person. There is no shortage of people who are great with money or frugal or high earners who are also mean and petty and selfish. But there's this tendency in FI crowds to get self righteous and believe that because we're good with money, that means we're better people. But really, no, that's just not true. Certainly it's possible to be both smart with money and a good person, but the former is not a precondition of the latter.

So most people don't have a ton of money but they make it work and mostly they find happiness in other parts of their lives. Across the entire population, I think it would be good if people were thriftier,  less consumerist, better savers, but tsk-tsking individuals who are bad with money doesn't do a ton of good.

Amen.  We all know plenty of seniors who are getting by on a minimal SS payment, yet going to religious services, interacting with family, puttering around, and being just fine.  I don't want to live my life that way, but if anything I think it makes me less of a good person, not more!  :)

Syonyk

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Re: What will happen to these people?
« Reply #18 on: June 04, 2017, 10:29:17 AM »
It is fairly common for people to get serious about career/money as you get older. I worked hard and lived frugally but has very low paying jobs until my mid 30s. If you get serious you can turn it around very quickly. I have a friend who was a full time hippy in his 20s after dropping out of college and is now a Real Estate agent in his 40s.

I mean, an entire generation did that. :)

Hippy in the 60s, lawyer or investment banker in the 80s.

Johnez

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Re: What will happen to these people?
« Reply #19 on: June 04, 2017, 11:16:50 AM »
They just get by in whatever way they can. One side of my family is like this: terrible with money, in loads of debt, no savings. They live together, work odds jobs, are flexible about where they'll live. Combining a few of these they are able to live fairly decent, enjoyable, if not lavish, lives.

I think it's important to remember that saving a lot of money doesn't make someone a good person. There is no shortage of people who are great with money or frugal or high earners who are also mean and petty and selfish. But there's this tendency in FI crowds to get self righteous and believe that because we're good with money, that means we're better people. But really, no, that's just not true. Certainly it's possible to be both smart with money and a good person, but the former is not a precondition of the latter.

So most people don't have a ton of money but they make it work and mostly they find happiness in other parts of their lives. Across the entire population, I think it would be good if people were thriftier,  less consumerist, better savers, but tsk-tsking individuals who are bad with money doesn't do a ton of good.

What a great post.


TartanTallulah

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Re: What will happen to these people?
« Reply #20 on: June 04, 2017, 02:43:26 PM »

I think it's important to remember that saving a lot of money doesn't make someone a good person. There is no shortage of people who are great with money or frugal or high earners who are also mean and petty and selfish. But there's this tendency in FI crowds to get self righteous and believe that because we're good with money, that means we're better people. But really, no, that's just not true. Certainly it's possible to be both smart with money and a good person, but the former is not a precondition of the latter.

So most people don't have a ton of money but they make it work and mostly they find happiness in other parts of their lives. Across the entire population, I think it would be good if people were thriftier,  less consumerist, better savers, but tsk-tsking individuals who are bad with money doesn't do a ton of good.

Very much this.

I also come across many genuinely good and contented - and generous - people who have never had much and have let everything they've earned slip straight through their fingers, and who consider themselves wealthy on the state retirement pension and are grateful for the other little bonuses to which their age entitles them and for pleasures that really do cost nothing.

fuzzy math

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Re: What will happen to these people?
« Reply #21 on: June 04, 2017, 02:59:48 PM »
I have to wonder if the job market will finally open up for these people once most of the baby boomers retire? My parents were born in 1950 (middle of the boomer generation) and turned 66 - 67 recently, full retirement age. Wiki says boomer generation ends in 1964, and Gen X is the smallest generation so there's got to be more opportunities out there. If we are talking about the "poor life choices" crowd only, it's harder to say... But for those with promise perhaps they will get it together.

little_brown_dog

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Re: What will happen to these people?
« Reply #22 on: June 04, 2017, 06:48:37 PM »
My family members are like this. What will happen is that they will work until 65-70 and will end up with modest to decent savings for retirement (not enough to get them through a full 20-30 years without running out). The upper middle class or higher income ones will invest at least to some extent, while those with less money or a very low risk tolerance will buy a whole life policy or annuity because they think its a "sure bet" compared to investing. Both are relying heavily on SS to keep them from becoming destitute should they make it into their 80s or 90s, and they are all completely relying on themselves and/or their spouses working for income until age 65. Unlike the poor, these people will not be relying solely on SS, nor will they even rely that heavily on it in the first few years. But as time goes by and funds run down, SS will make up a greater and greater share of their income until it's all they have. Some are 100% okay with this and see it as inevitable (the lower income ones). Others are angry and feel like they somehow got "screwed" by someone because they didn't save more for their own retirement (the higher income ones). All are really good, loving people...they just aren't really that great with money management, delayed gratification, or long term planning.
« Last Edit: June 04, 2017, 06:50:40 PM by little_brown_dog »

anonymouscow

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Re: What will happen to these people?
« Reply #23 on: June 04, 2017, 06:58:33 PM »
Rely on SS, food stamps, meals on wheels, help from family, odd jobs. Go back to work as a walmart greeter or grocery bagged. I know some people with no savings, but they have a paid off house at least.

rdaneel0

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Re: What will happen to these people?
« Reply #24 on: June 04, 2017, 07:30:07 PM »
I think they'll either work forever and then die or continue to rely on family money indefinitely, who knows, if the family is rich enough they might never have to get their shit together. I know a bunch of people in their 30s who are exactly like you described. They have masters degrees, sometimes multiple, undergrad degrees in something humanities related, but from a super expensive school, they do unpaid internships instead of working at a job during college. It's insane, they're like late 20s by the time they have their first adult job. Half the people in my office are in this category. Sometimes it almost feels like I'm working with kids, but we're all the same age. It's bizarre peter pan-ism.

It's really strange to me but they don't even know basic finance. One girl I know, who is probably 34ish, and knows I'm into personal finance asked me for advice...she asked if I thought she should be putting money into her 401k, she had never contributed to it before because "investing". She was leaving the employer match on the table for YEARS. At the same time she lives in a more expensive neighborhood than I do, has an expensive car, more degrees, and as a result a ton of student loan debt.

I feel really badly for people like this, I have a few friends like this and there's just no talking to them about money in a logical way. They don't even know how taxes work and don't fully grasp what debt (and interest on debt) actually means. Maybe this is stereotyping but the people I know like this seem like they came from really coddling families. Like they were always told they were the greatest thing ever in the history of humanity, and they believed it. They don't seem to mind relying on their parents as adults, and just sort of expect things to come to them. Meanwhile I would have felt like a total failure if I asked my parents for money at 19. I don't know, it's just a totally different world. I remember encountering some of these folks in college too...mostly because I had to teach them how to do laundry in the laundry room. 

Smokystache

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Re: What will happen to these people?
« Reply #25 on: June 04, 2017, 07:37:38 PM »

Noodle

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Re: What will happen to these people?
« Reply #26 on: June 05, 2017, 10:08:39 AM »
I have no idea about the current generation, but I have a couple of relatives who are in that situation now. They have paid-off housing with low property taxes (rural area) and older paid-off cars. One is on Social Security (there may also be a pension) and the other gets disability. They have casual part-time jobs (one is actually a side-hustle that has been going on many years which he started doing for fun, but the money is more important these days). They don't travel. They stay close to home and enjoy family time and various low-key community activities. One has a son who lives with him and has various casual jobs also. I assume that son will probably inherit the house (since his sister would rather cede her inheritance than house her brother) so the question then will be if he comes up with enough income to keep it up.

My side of the family sighs a lot, but they all seem perfectly happy. As far as I know, none of them have ever asked for financial assistance.

Malloy

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Re: What will happen to these people?
« Reply #27 on: June 05, 2017, 10:37:19 AM »
My family members are like this. What will happen is that they will work until 65-70 and will end up with modest to decent savings for retirement (not enough to get them through a full 20-30 years without running out). The upper middle class or higher income ones will invest at least to some extent, while those with less money or a very low risk tolerance will buy a whole life policy or annuity because they think its a "sure bet" compared to investing. Both are relying heavily on SS to keep them from becoming destitute should they make it into their 80s or 90s, and they are all completely relying on themselves and/or their spouses working for income until age 65. Unlike the poor, these people will not be relying solely on SS, nor will they even rely that heavily on it in the first few years. But as time goes by and funds run down, SS will make up a greater and greater share of their income until it's all they have. Some are 100% okay with this and see it as inevitable (the lower income ones). Others are angry and feel like they somehow got "screwed" by someone because they didn't save more for their own retirement (the higher income ones). All are really good, loving people...they just aren't really that great with money management, delayed gratification, or long term planning.

This feels true for me. Honestly, every generation is mostly made up of people like this.  Older people are just in a better position in aggregate because a higher percentage of them have government pensions (teacher, fire, state employee, etc.) that won't be available to the younger set.  But they are just as bad with money even with those pensions.  If you live month-to-month at 70k/year, you're screwed if you retire on a pension that pays out 50% of your income. I mean-it's your own fault, but it will be a big change in lifestyle. I bet that explains some of the anger.

little_brown_dog

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Re: What will happen to these people?
« Reply #28 on: June 05, 2017, 11:47:11 AM »
If you live month-to-month at 70k/year, you're screwed if you retire on a pension that pays out 50% of your income. I mean-it's your own fault, but it will be a big change in lifestyle. I bet that explains some of the anger.

Yes, you are spot on with this. My high income family members are resentful because they are now only a few years out from retirement (in their mid 60s) and they are realizing that they will not have enough money to retire while also continuing to fund the lifestyle they want (read: expensive!!!). They think it’s unfair that they worked all these years, and saved up a good amount, but still need to make some hard decisions. Then they look around at others who are millionaires or were lucky enough to be born rich and the resentment just festers (“why do they get to be secure AND have all these nice things? That’s so unfair! I worked hard too! People like us are getting screwed!”).  I think it really comes down to a human flaw that we all have to some extent, which is difficulty with delayed gratification. It is really hard, even for smart adults, to delay getting something they want and can afford now, in order to protect and preserve something very abstract (potential financial savings) that is 20 or 30 years down the road. Mustachians and other personal finance buffs are unique in that they seem to be particularly adept at long term delayed gratification, but most people are not like this.

My upper middle class family members chose to finance new vehicles, splurge on luxury vacations, and live very expensive lifestyles for years. At the time these decisions seemed reasonable because they had money in the bank and a growing retirement account. They made a grave miscalculation and thought they didn’t need to save more. I think it is quite scary for them to see that they don’t have nearly as much money as they know they should, especially now that time is almost up. Realizing that they don’t have enough money AND that they need to really rethink their lifestyle and money management philosophy is even worse. Resentment follows.

Salim

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Re: What will happen to these people?
« Reply #29 on: June 05, 2017, 12:07:13 PM »
I think they'll either work forever and then die or continue to rely on family money indefinitely, who knows, if the family is rich enough they might never have to get their shit together. I know a bunch of people in their 30s who are exactly like you described. They have masters degrees, sometimes multiple, undergrad degrees in something humanities related, but from a super expensive school, they do unpaid internships instead of working at a job during college. It's insane, they're like late 20s by the time they have their first adult job. Half the people in my office are in this category. Sometimes it almost feels like I'm working with kids, but we're all the same age. It's bizarre peter pan-ism.

It's really strange to me but they don't even know basic finance. One girl I know, who is probably 34ish, and knows I'm into personal finance asked me for advice...she asked if I thought she should be putting money into her 401k, she had never contributed to it before because "investing". She was leaving the employer match on the table for YEARS. At the same time she lives in a more expensive neighborhood than I do, has an expensive car, more degrees, and as a result a ton of student loan debt.

Without education or coaching about finances, most Americans don't stand a chance. After WW2, our government hired Signmund Freud's nephew, Edward Bernays, to create a public relations campaign that would influence citizens to become big "consumers", ostensibly to keep them in line when the soldiers returned from war. The goal was to create desires that would direct people's energy into working, saving, and buying, to keep up with their neighbors. We were literally brainwashed by our own government… and it worked. If you have the time, below is a link to an excellent documentary about it. I was stunned to learn the truth. I saw this in a previous post from another person on this forum, but I am sorry I don't remember who posted it:

https://www.youtube.com/watch?v=eJ3RzGoQC4s

AnswerIs42

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Re: What will happen to these people?
« Reply #30 on: June 05, 2017, 01:34:50 PM »
It is really hard, even for smart adults, to delay getting something they want and can afford now, in order to protect and preserve something very abstract (potential financial savings) that is 20 or 30 years down the road.

That's one of the most appealing things about Mustachianism to me - the fact that it doesn't *have* to be 20 or 30 years down the road, it can be 10 or 15. But the people we're talking about would never believe that's even possible...

mm1970

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Re: What will happen to these people?
« Reply #31 on: June 05, 2017, 02:29:10 PM »
They will die poor and in need.  That's what will happen to them.

Unless enough of them do it and whine about the results.   

Then they will tax those of us who were responsible to pay for their care and upkeep.
Disability?

I read an interesting article about the cycle of disability in families.  Oy.

BTDretire

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Re: What will happen to these people?
« Reply #32 on: June 06, 2017, 09:01:41 AM »


I need some context for that chart.
Percent Increase In Emplyement by Age and Sex. 1977 to 2017.
Take the yellow line age 'Age 65 and Over', ahh, after some google research
I find the population of 65 and over has only increased about 5%.
(I got my context, I am a little suprised it's only 5%)
So a 101% increase is workers is a big number.
 The next thing to know is what percentage of people over 65 are still working.

trollwithamustache

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Re: What will happen to these people?
« Reply #33 on: June 06, 2017, 09:59:20 AM »
you can live on social security although not like a baller. You likely will have to move to some cheap place.  Oh and you'll have a crappy doctor that takes medicare. 

depending on how much you want to drink will set your hours at walmart.

Larsg

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Re: What will happen to these people?
« Reply #34 on: June 16, 2017, 11:14:50 PM »
Great question. We lived in a "Rich Mom/Poor Mom area for a while and it was eye opening. The lady across the street from us - Rich Retired Mom. You would never know from the street that she had multi-millions. She (now a widow) lived in a models house that looked like a track house from the street. When her garage door would open, she would pull out in the nicest jag - she claimed was her and her late husbands one luxury (today's Tesla for me ;). She was a school teacher, grew up very poor and always had the mind set to be extremely frugal. She married an engineer, they had 1 child. The saved and invested every free dime. Went on 1 vacation every year with dividends but that was their only big spend pants besides owning one nice car at a time, bought used, paid in cash, took great care of it and owned it for many years. They bought a fixer upper in cash, renovated it themselves with the help of some contractors. They lived a no-nonsense life that allowed them to retire together, she at 48, he at 50. They had many years together until he died. She is still living a wonderful and full life and still very frugal.

Then there was another widow the lived on the same street. She had her own successful flowershop - featured in "Instyle" magazine at one time, so my wife tells me. She married a well to do trust fund husband. Together, they went on lavish vacations, bought overpriced houses, saved very very little, and kept borrowing against the assets they did have. Then he got Cancer, burned through the remainder of his money. She had to sell the business to pay off final debts and then he died. There was nothing left in the will for her to live on. He had let the life insurance lapse and the house they had was mortgaged to the gills. She lost the house, no longer had the business, and learned the hard way that as a business owner, she had not paid into SS enough to collect any more than 600 per month at age 65. This is one  of the saddest stories I have ever witnessed for poor planning. She had to go back to work, looking for any retail shop that would take her, now in failing health and scrambling month to month to live. She gets her food from a food bank but there is no other help...no family, nothing. Share this story with all your friends.


Alim Nassor

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Re: What will happen to these people?
« Reply #35 on: June 16, 2017, 11:31:16 PM »
Then there was another widow the lived on the same street. She had her own successful flowershop - featured in "Instyle" magazine at one time, so my wife tells me. She married a well to do trust fund husband. Together, they went on lavish vacations, bought overpriced houses, saved very very little, and kept borrowing against the assets they did have. Then he got Cancer, burned through the remainder of his money. She had to sell the business to pay off final debts and then he died. There was nothing left in the will for her to live on. He had let the life insurance lapse and the house they had was mortgaged to the gills. She lost the house, no longer had the business, and learned the hard way that as a business owner, she had not paid into SS enough to collect any more than 600 per month at age 65. This is one  of the saddest stories I have ever witnessed for poor planning. She had to go back to work, looking for any retail shop that would take her, now in failing health and scrambling month to month to live. She gets her food from a food bank but there is no other help...no family, nothing. Share this story with all your friends.

That is sad.   I know several people in business where it's fairly easy to report very little income, and they don't realize that the SS is going to be affected.


ChrisLansing

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Re: What will happen to these people?
« Reply #36 on: June 17, 2017, 07:21:39 AM »
What will happen?   Reality will bite them in the ass.    They'll have to deal with the loans sooner or later.   Money from the parents will eventually run out.   For many this will come well before they are nearing retirement so they'll have a chance to get their financial house in order before they can't work.   They'll realize that they've missed saving/investing opportunities for the better part of their adult lives.      They'll pay off their loans, pay off their house, then plan to get through the "golden years" on some combo of SS and 401K.    They won't retire early, and many won't really ever fully retire.   

I expect minimalism to become a much bigger "thing".   Not the phoney expensive minimalism for sale at better stores everywhere, but genuine frugality.   It will become an "in" thing because what choice is there?   

ttadae

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Re: What will happen to these people?
« Reply #37 on: June 17, 2017, 08:34:29 AM »
Those who had lower incomes all along will mostly be okay, because (for most) social security will replace a high enough % of what they're used to bringing in that they will make due.

Some will make drastic adjustments later in their careers.  Maybe not enough to FIRE early, but enough that they can make a reasonable transition.

Some will get lucky and inherit enough that they won't have to face the consequences of their own poor choices.

It's those that lived stretching to upper-middle and higher class lifestyles their entire career, all doing it on leverage and debt, who will be hit with hard realities.

Some will just downsize to a very frugal lifestyle living on social security, other subsides, and perhaps the generosity of families.  Many will work much longer than they want.  Some will complain they were screwed by the system.  The choices will get harder and harder as they get older, and those who live into their 80's and later are often facing an increasing series of less appealing options.  I won't go so far to say that those who die earlier are lucky, but if being poor at 30 is tough, I can only imagine poor at 90...

RedmondStash

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Re: What will happen to these people?
« Reply #38 on: June 17, 2017, 11:39:48 AM »
This is definitely a worry of mine for a couple of friends, one of whom was raised in wealth and one of whom was raised in poverty. The one raised in wealth is terrified of money and has panic attacks even thinking about trying to plan; I hope her dad leaves her enough to live on, because she really has nothing else. She is a generous, kind, extremely hard-working person who just can't deal with math or money, even regarding negotiating salaries.

The other friend has been dealing with chronic illnesses for decades, knows how to manage on very little money, but has very little earning power and a lot of life stress. She's been living a frugal life much longer than I have, but frugality only takes you so far when you can't earn even enough to live on.

I've wondered whether I can sock enough away to help both of them in later life, but I'm dealing with my own work-curtailing health issues, so it seems unlikely. If I can help them, I will.

But yeah, there are lots of people in that boat, where they'll never be able to retire, even after they're no longer able to work. It's a sobering, even horrifying thought. Of such things are revolutions born.

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Re: What will happen to these people?
« Reply #39 on: June 17, 2017, 12:33:50 PM »
This is definitely a worry of mine for a couple of friends, one of whom was raised in wealth and one of whom was raised in poverty. The one raised in wealth is terrified of money and has panic attacks even thinking about trying to plan; I hope her dad leaves her enough to live on, because she really has nothing else. She is a generous, kind, extremely hard-working person who just can't deal with math or money, even regarding negotiating salaries.

The other friend has been dealing with chronic illnesses for decades, knows how to manage on very little money, but has very little earning power and a lot of life stress. She's been living a frugal life much longer than I have, but frugality only takes you so far when you can't earn even enough to live on.

I've wondered whether I can sock enough away to help both of them in later life, but I'm dealing with my own work-curtailing health issues, so it seems unlikely. If I can help them, I will.

But yeah, there are lots of people in that boat, where they'll never be able to retire, even after they're no longer able to work. It's a sobering, even horrifying thought. Of such things are revolutions born.

What about helping your wealthy-raised friend with financial planning already now? If the friend is receivable for that of course.

MrsPete

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Re: What will happen to these people?
« Reply #40 on: June 17, 2017, 04:31:53 PM »
What'll happen to these people? 

Those who've been poor all along will work until they're able to collect SS (or disability).  Likely they've been paying on a small house for years, so with two spouses both drawing a check, they're okay.  The crisis will occur when one spouse dies, cutting the family's income in half.  Perhaps an adult child or grandchild will move into the paid-for house, or perhaps grandma will go live with one of her children.  And they'll have little ... but will get by.  People who live this lifestyle also tend not to care for their health, so they're probably on the low end of age expectancy. 

On the other hand, those who've worked at higher-paying jobs (but have failed to save) will similarly work 'til they can collect SS ... but they'll be less satisfied because they've been accustomed to more ... and they'll likely live longer. 

RedmondStash

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Re: What will happen to these people?
« Reply #41 on: June 19, 2017, 11:48:31 AM »
This is definitely a worry of mine for a couple of friends, one of whom was raised in wealth and one of whom was raised in poverty. The one raised in wealth is terrified of money and has panic attacks even thinking about trying to plan; I hope her dad leaves her enough to live on, because she really has nothing else. She is a generous, kind, extremely hard-working person who just can't deal with math or money, even regarding negotiating salaries.

The other friend has been dealing with chronic illnesses for decades, knows how to manage on very little money, but has very little earning power and a lot of life stress. She's been living a frugal life much longer than I have, but frugality only takes you so far when you can't earn even enough to live on.

I've wondered whether I can sock enough away to help both of them in later life, but I'm dealing with my own work-curtailing health issues, so it seems unlikely. If I can help them, I will.

But yeah, there are lots of people in that boat, where they'll never be able to retire, even after they're no longer able to work. It's a sobering, even horrifying thought. Of such things are revolutions born.

What about helping your wealthy-raised friend with financial planning already now? If the friend is receivable for that of course.

I've tried. Oh, how I've tried. But even trying to talk to her about money sends her into a panic attack. She just can't deal with it. I'm sure she's not the only one; I'd bet severe anxiety is part of why a lot of people can't handle planning for their financial futures.

marty998

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Re: What will happen to these people?
« Reply #42 on: June 22, 2017, 03:49:32 AM »
This is definitely a worry of mine for a couple of friends, one of whom was raised in wealth and one of whom was raised in poverty. The one raised in wealth is terrified of money and has panic attacks even thinking about trying to plan; I hope her dad leaves her enough to live on, because she really has nothing else. She is a generous, kind, extremely hard-working person who just can't deal with math or money, even regarding negotiating salaries.

The other friend has been dealing with chronic illnesses for decades, knows how to manage on very little money, but has very little earning power and a lot of life stress. She's been living a frugal life much longer than I have, but frugality only takes you so far when you can't earn even enough to live on.

I've wondered whether I can sock enough away to help both of them in later life, but I'm dealing with my own work-curtailing health issues, so it seems unlikely. If I can help them, I will.

But yeah, there are lots of people in that boat, where they'll never be able to retire, even after they're no longer able to work. It's a sobering, even horrifying thought. Of such things are revolutions born.

What about helping your wealthy-raised friend with financial planning already now? If the friend is receivable for that of course.

I've tried. Oh, how I've tried. But even trying to talk to her about money sends her into a panic attack. She just can't deal with it. I'm sure she's not the only one; I'd bet severe anxiety is part of why a lot of people can't handle planning for their financial futures.


Always been curious as to the psychology of this. Insensitive of me to say this but it's not like money bites back or anything.

Does it need to be de-mystified? Is it a lack of education?

I don't meet many people at all who are anxious. Shy maybe, nervous perhaps.

Googled it and it said PTSD and OCD are also wrapped up in the definition.

Again it's insensitive of me but having trouble understanding how it relates to money, and just experiencing ordinary stress if funds are tight.

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Re: What will happen to these people?
« Reply #43 on: June 22, 2017, 04:45:04 AM »
I am personally surprised at the number of older folks out there with no money smarts.  My grandparents generation (born and raised during and just post the Great Depression) we're very frugal, mortgage paid off early, retirement savings, they operated on a cash basis if they didn't have the money, they didn't buy it.

My parents generation however is quiet the opposite - I guess they were the 1960's-70's Hippie generation.  They ended up with decent jobs but no savings.  Most of my older family members in their 60's and 70's still have a mortgage and are still working.

I guess growing up and living with my grandparents most of the time rubbed off on me !! :)   Thankfully !!

meatface

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Re: What will happen to these people?
« Reply #44 on: June 22, 2017, 07:11:25 AM »
My dad is an example. He is 68 and retired. I believe the most he ever made in a year at a job was around $45k. All other years were less than that, or temporarily unemployed. He has always been frugal, I guess by necessity. He retired, I think because he really hated his job, at around age 62 and started taking SS as early as possible. He doesn't get very much per month, but between SS, his retirement savings account that he contributed to, and a tiny government pension (Army + VA work), he pulls in maybe $1500-1800/month. He lives on $1000/month, so he makes it work. He is in excellent health (is a bit of a health nut), takes no meds (probably never will), and only has Medicare Part A. He scouted the country and managed to find subsidized housing that is quite nice. Unfortunately it's in the boonies and on the other side of the country, so he never sees family.

RedmondStash

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Re: What will happen to these people?
« Reply #45 on: June 22, 2017, 11:25:46 PM »
This is definitely a worry of mine for a couple of friends, one of whom was raised in wealth and one of whom was raised in poverty. The one raised in wealth is terrified of money and has panic attacks even thinking about trying to plan; I hope her dad leaves her enough to live on, because she really has nothing else. She is a generous, kind, extremely hard-working person who just can't deal with math or money, even regarding negotiating salaries.

The other friend has been dealing with chronic illnesses for decades, knows how to manage on very little money, but has very little earning power and a lot of life stress. She's been living a frugal life much longer than I have, but frugality only takes you so far when you can't earn even enough to live on.

I've wondered whether I can sock enough away to help both of them in later life, but I'm dealing with my own work-curtailing health issues, so it seems unlikely. If I can help them, I will.

But yeah, there are lots of people in that boat, where they'll never be able to retire, even after they're no longer able to work. It's a sobering, even horrifying thought. Of such things are revolutions born.

What about helping your wealthy-raised friend with financial planning already now? If the friend is receivable for that of course.

I've tried. Oh, how I've tried. But even trying to talk to her about money sends her into a panic attack. She just can't deal with it. I'm sure she's not the only one; I'd bet severe anxiety is part of why a lot of people can't handle planning for their financial futures.


Always been curious as to the psychology of this. Insensitive of me to say this but it's not like money bites back or anything.

Does it need to be de-mystified? Is it a lack of education?

I don't meet many people at all who are anxious. Shy maybe, nervous perhaps.

Googled it and it said PTSD and OCD are also wrapped up in the definition.

Again it's insensitive of me but having trouble understanding how it relates to money, and just experiencing ordinary stress if funds are tight.

I understand the perplexity. My friend suffers from severe anxiety. Basically she has a conditioned aversive response to math in general, and money in particular, because it bewilders her. She has a college education, and further education in medical fields; she's not stupid or uneducated.

Think about how most people hate tax time and multiply that times a thousand, and that's basically how she feels about money, finances, etc. I actually kind of get it -- the wilds of finance are complex and mysterious, and can leave you feeling hopeless and stupid -- but I finally figured out that I don't have to understand them all to make good, simple decisions. But it can be overwhelming. She's actually not my only friend who freaks out about money, math, investments, mortgages, refinancing, etc. Spouse & I used a financial planner for many years before I sucked it up and dove into self-education about investments, and then took over managing our money myself. In the years before that, I trusted our financial planner because all the terminology left me glassy-eyed and with a ringing in my ears. I swear I never understood more than a third of what our financial planner said, even when she was explaining things.

So the simple answer is that anxiety is a vicious, controlling bitch, especially when applied to something as necessary for survival as money. And unfortunately, anxiety at that level is not always something that can be well-managed.

chrisgermany

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Re: What will happen to these people?
« Reply #46 on: June 23, 2017, 02:54:31 AM »
Some will be 'saved' by their parents or parents' estate.
Some will complain forever about how unfair the world is.
Some will make do when they have to.

dude

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Re: What will happen to these people?
« Reply #47 on: June 23, 2017, 06:55:22 AM »
Most will work until they are 65, collect Social Security and live decent enough lives.  My mom gets SS and a very small pension, and she says it's more than she needs.  She lives a very simple life -- takes long walks every day, plays Solitaire on her computer, goes to the beach occasionally, hangs out at the pool with friends, socializes with friends some evenings at each others' homes.  And she really couldn't be happier because she just LOVES where she is (Sarasota, FL). I think in general most people will be just fine.  They'll adapt -- it's what we humans do best.

mbl

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Re: What will happen to these people?
« Reply #48 on: June 23, 2017, 07:32:52 AM »
I am personally surprised at the number of older folks out there with no money smarts.  My grandparents generation (born and raised during and just post the Great Depression) we're very frugal, mortgage paid off early, retirement savings, they operated on a cash basis if they didn't have the money, they didn't buy it.

My parents generation however is quiet the opposite - I guess they were the 1960's-70's Hippie generation.  They ended up with decent jobs but no savings.  Most of my older family members in their 60's and 70's still have a mortgage and are still working.

I find this comment so very ignorant.    Do you realize that you're speaking of the baby boomers who at this point in time account for 65 million people across every strata of society.   And you're saying, that from a frugality/savings perspective, that they are opposite to the Greatest generation.     Generalizing your statement to account for 65 million people.    They who range in age from 53 to 71 years old.   And that none of them? None of them,  have any success at being effective savers/investers or some measure of fiscally responsible people by what I guess are your standards.     

I assure you that they run the gamut as does the Greatest Generation, the Millennials, and any other demographic group you might name.

CanuckExpat

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Re: What will happen to these people?
« Reply #49 on: June 23, 2017, 07:46:52 AM »
Some will be 'saved' by their parents or parents' estate.
Some will complain forever about how unfair the world is.
Some will make do when they have to.

Granted, there is a bit of "unfairness" in the situation you described, where only the people with the right parents get "saved".

(Of course it's an unfair world and we all have the unfair advantage of living in the rich world)

For those reasons, if given the choice I would tax the hell out of estates and inheritance, you could lower the taxes on earned income in return if you want. I have no problem reducing unearned and generational inequality through the tax system, and prefer it to taxing earned income when possible.