Author Topic: 76% of Americans are living paycheck to paycheck  (Read 10692 times)

No Name Guy

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76% of Americans are living paycheck to paycheck
« on: June 24, 2013, 12:31:18 PM »
Lots of face punching needs to be going on.

http://money.cnn.com/2013/06/24/pf/emergency-savings/index.html?iid=Lead

Quote
Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all.

One of the reasons why this is, is the top comment:
Quote
I started paying my employees bonuses quarterly based on performance and an annual Profit sharing bonus to help them get ahead. Most of them go out and buy Harley's or Rims and tires with it. Then still have the nerve to ask for payday loans to make a house payment. People's priorities are all jacked up these days...
 
You can lead a horse to water, but can't make it drink.......

mpbaker22

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Re: 76% of Americans are living paycheck to paycheck
« Reply #1 on: June 24, 2013, 01:53:56 PM »
A lot of people are wrongly arguing - Now I have proof that the Average American Citizens Wages have not kept up with inflation since the 1970's.

Assuming this data is correct, it has increased nearly 20% since 1967.  It HAS decreased since 2000 though.
http://www.davemanuel.com/median-household-income.php

Eric

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Re: 76% of Americans are living paycheck to paycheck
« Reply #2 on: June 24, 2013, 02:04:05 PM »
It's hard to draw any actual conclusions from that study.  I certainly don't have 6 months of expenses in a savings account.  I barely have one month.  But that doesn't mean I can't cover 6 months (or more) worth of expenses.

Although 27% with no savings at all is pretty scary.
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avonlea

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Re: 76% of Americans are living paycheck to paycheck
« Reply #3 on: June 24, 2013, 02:20:07 PM »
A lot of people are wrongly arguing - Now I have proof that the Average American Citizens Wages have not kept up with inflation since the 1970's.

Assuming this data is correct, it has increased nearly 20% since 1967.  It HAS decreased since 2000 though.
http://www.davemanuel.com/median-household-income.php

From what I understand, this is their argument: Most families now have two wage earners.  In the 1970s, they had only one.  So even though median household income has increased over time, individual wages have not.  (I don't have any graphs or websites to share, but that's what I understood their point to be.)

NYD3030

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Re: 76% of Americans are living paycheck to paycheck
« Reply #4 on: June 24, 2013, 03:36:30 PM »
I can't help but think about all the things that are done to make saving as unappealing as possible - like the low low interest rates we've seen since the 1980s, and the increasingly (until 07, and coming back again) easy time people with middle and low incomes have getting financing.

Don't get me wrong, I think these people are stupid stupid stupid.  But the tools to be an idiot seem to be proliferating all the time.  Sometimes I think we need to make it harder to act on one's stupidity.

No Name Guy

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Re: 76% of Americans are living paycheck to paycheck
« Reply #5 on: June 24, 2013, 05:09:03 PM »
Eric - I have to expect that for MOST folks, they don't have other liquid investments, like most folks here, hence that top comment on the article that was quoted. 

NYD3030:  Yup. 

Anecdote on this very subject:  Former neighbor commented how he uses his tax refund / withholding as a form of savings account.  I mentioned that he might want to collect some interest on it by saving it in a bank instead and his comment that it would just be blown on little shit if he tried doing it that way.  Instead, he blows it on big shit in April, or to dig himself out of the hole, as the case may be.  Another neighbor more or less agreed that's they way he does it as well. 

footenote

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Re: 76% of Americans are living paycheck to paycheck
« Reply #6 on: June 24, 2013, 05:30:05 PM »
Former neighbor commented how he uses his tax refund / withholding as a form of savings account.  I mentioned that he might want to collect some interest on it by saving it in a bank instead and his comment that it would just be blown on little shit if he tried doing it that way.  Instead, he blows it on big shit in April, or to dig himself out of the hole, as the case may be.  Another neighbor more or less agreed that's they way he does it as well.
Arrrrgggh... this of *all* the various Antimustachian nonsense drives me the craziest. I always ask people why they would be pleased to be giving the government an interest-free loan. I should start "YrRefund!": sign up for automatic withdrawal January 2 and you get your investment with a little bit of interest in a lump in April of the following calendar year.  : P
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Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #7 on: June 24, 2013, 05:55:56 PM »
I certainly don't have 6 months of expenses in a savings account.  I barely have one month.  But that doesn't mean I can't cover 6 months (or more) worth of expenses.

Me either.  Anything over a month or two gets shoved into investments.  And most "emergencies" could be handled by putting them on the zero-interest-for-12-months-or-more credit card, if I didn't want to sell something right then.


pom

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Re: 76% of Americans are living paycheck to paycheck
« Reply #8 on: June 25, 2013, 10:03:34 AM »
Look at the Mustachian Survey:

http://www.mrmoneymustache.com/forum/welcome-to-the-forum/emergency-funds-what-do-you-do/

According to the article's definition of living paycheck to paycheck, 2/3rd of the people here are doing so.

There are plenty of reasons why someone does not need to have 6 months pay in a saving account earning 0.75% a year.

I personally think that people that are financially prudent don't need that much because:

- They get a decent portion of their spending covered from diversified investment income.
- They can easily cover the remainder of spending from unemployment or working a minimum salary job.
- They have a totally empty credit card
- They have been good to friends and family over the years, accumulating a lot of IOU.

I qualify for all four of these reasons, yet I would be counted a living paycheck to paycheck according to that study.

mpbaker22

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Re: 76% of Americans are living paycheck to paycheck
« Reply #9 on: June 25, 2013, 10:13:35 AM »
pom - this is true, and I would also be living paycheck to paycheck despite having a net worth ~60 times my monthly expenses.  However, most people surveyed have a net worth less than 5x monthly expenses.  It would be interesting to see a survey of net worth/monthly expenses.

hybrid

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Re: 76% of Americans are living paycheck to paycheck
« Reply #10 on: June 25, 2013, 11:06:47 AM »
Former neighbor commented how he uses his tax refund / withholding as a form of savings account.  I mentioned that he might want to collect some interest on it by saving it in a bank instead and his comment that it would just be blown on little shit if he tried doing it that way.  Instead, he blows it on big shit in April, or to dig himself out of the hole, as the case may be.  Another neighbor more or less agreed that's they way he does it as well.
Arrrrgggh... this of *all* the various Antimustachian nonsense drives me the craziest. I always ask people why they would be pleased to be giving the government an interest-free loan. I should start "YrRefund!": sign up for automatic withdrawal January 2 and you get your investment with a little bit of interest in a lump in April of the following calendar year.  : P

To offer a contrary opinion, let me offer this.  I am currently getting less than 1% in my savings account, just like most folks.  So if your neighbor gets a tax refund of oh, say, $600 and his current interest rate is about 0.005% at the bank he has pissed away....... three whole bucks.

Lots of people lack discipline when it comes to saving and spending money.  Overpaying on taxes and then getting a refund check may be inefficient, but for a lot of people it is a lot more efficient than having that money in a savings account earning next to nothing in interest while the little voices inside their head are constantly whispering "spend that cash, spend that cash..."

If you are immune to those voices then I say Good for you!  But a lot of people aren't, and if that is how they avoid pissing away a portion of their money then I don't think it's entirely fair to knock it.   
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Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #11 on: June 25, 2013, 12:17:52 PM »
To offer a contrary opinion, let me offer this.  I am currently getting less than 1% in my savings account, just like most folks.  So if your neighbor gets a tax refund of oh, say, $600 and his current interest rate is about 0.005% at the bank he has pissed away....... three whole bucks.

Sure, but some of us here can remember when savings accounts (and similar things like CDs) paid 5% or more, and the same people were still getting the same big tax refunds.

footenote

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Re: 76% of Americans are living paycheck to paycheck
« Reply #12 on: June 25, 2013, 01:01:04 PM »
Former neighbor commented how he uses his tax refund / withholding as a form of savings account.  I mentioned that he might want to collect some interest on it by saving it in a bank instead and his comment that it would just be blown on little shit if he tried doing it that way.  Instead, he blows it on big shit in April, or to dig himself out of the hole, as the case may be.  Another neighbor more or less agreed that's they way he does it as well.
Arrrrgggh... this of *all* the various Antimustachian nonsense drives me the craziest. I always ask people why they would be pleased to be giving the government an interest-free loan. I should start "YrRefund!": sign up for automatic withdrawal January 2 and you get your investment with a little bit of interest in a lump in April of the following calendar year.  : P

To offer a contrary opinion, let me offer this.  I am currently getting less than 1% in my savings account, just like most folks.  So if your neighbor gets a tax refund of oh, say, $600 and his current interest rate is about 0.005% at the bank he has pissed away....... three whole bucks.

Lots of people lack discipline when it comes to saving and spending money.  Overpaying on taxes and then getting a refund check may be inefficient, but for a lot of people it is a lot more efficient than having that money in a savings account earning next to nothing in interest while the little voices inside their head are constantly whispering "spend that cash, spend that cash..."

If you are immune to those voices then I say Good for you!  But a lot of people aren't, and if that is how they avoid pissing away a portion of their money then I don't think it's entirely fair to knock it.
I would agree with you in the case (similar to how people used to view a mortgage) it was an enforced savings which at refund time was shunted off to the emergency fund, invested, whatever. However, most people use it like winning the lottery and "blow it all on hats." They are the ones I'm citing.
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gecko10x

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Re: 76% of Americans are living paycheck to paycheck
« Reply #13 on: June 25, 2013, 01:37:49 PM »
pom - this is true, and I would also be living paycheck to paycheck despite having a net worth ~60 times my monthly expenses.  However, most people surveyed have a net worth less than 5x monthly expenses.  It would be interesting to see a survey of net worth/monthly expenses.

As would I, despite the fact that I budget based off last month's income. That's a terrible definition.

No Name Guy

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Re: 76% of Americans are living paycheck to paycheck
« Reply #14 on: June 25, 2013, 05:34:24 PM »
Hybrid:  The point is that they're getting zero.  Something, anything, is better than nothing. 

My take is:  Single dollars add up to tens.  Tens add up to hundreds.  Hundreds add up to thousands........and thousands add up to ER / FI / IW.

Back to the neighbor:  Were they disciplined enough (the root of the problem in his case) they'd be getting something.  My local credit union, for example, also pays paltry savings rates, except the first $500, which is at 6%, so it's actually not a horrible place to park what this guy's typical refund would be, a grand or two.  Plus, he's still WITHOUT any savings, for any expense that crops up beyond typical stuff.  Even at zero earnings, having a wad of cash under the mattress provides a cushion for those "oh shit" one time expense financial moments.

That my neighbors can't, nay, WON'T even set aside a couple grand is indicative of the of the correctness of the original linked article - that the vast majority of this nation chooses not to save and / or invest.

sheepstache

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Re: 76% of Americans are living paycheck to paycheck
« Reply #15 on: June 25, 2013, 10:49:12 PM »
One thing I bear in mind when I read things like this is that some portion of the population is living below poverty level at any given time.  Varies from 13% to 50% depending on the source, but even if it's only 13%, that's nearly half of the group without savings.  You can say what you will about poor people, but you can certainly see how someone without enough to eat for the night might find it difficult to build up some emergency savings. 

Now, reading the article I see those people are probably not included here because it's just a survey of 1000 people by bankrate.com and I doubt it included the homeless, etc.

1000 people.

Hardly a large enough pool to say anything significant about the country.  But large enough to write an article on, apparently!

The article doesn't say anything about how the respondents were selected.  Was it people answering a poll on bankrate.com's site?  Another business with a survey cited was an online lender, so, is it their pre-selected customer base they're surveying?  Unclear.  In either case you'd expect the pool selected from to have some effect on the answers.

renbutler

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Re: 76% of Americans are living paycheck to paycheck
« Reply #16 on: June 26, 2013, 07:41:09 AM »
1000 people is a common statistical sample for a national poll. It's well established that a sample that small can yield accuracy within 5%, assuming that the sample includes an appropriate cross-section of the population, and the questions are worded with appropriate neutrality.

I found some poll reports from bankrate.com (not for this one, though). They appear to use a random-dialing methodology.
« Last Edit: June 26, 2013, 07:44:41 AM by renbutler »

mpbaker22

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Re: 76% of Americans are living paycheck to paycheck
« Reply #17 on: June 26, 2013, 07:43:21 AM »
One thing I bear in mind when I read things like this is that some portion of the population is living below poverty level at any given time.  Varies from 13% to 50% depending on the source, but even if it's only 13%, that's nearly half of the group without savings.  You can say what you will about poor people, but you can certainly see how someone without enough to eat for the night might find it difficult to build up some emergency savings. 

Now, reading the article I see those people are probably not included here because it's just a survey of 1000 people by bankrate.com and I doubt it included the homeless, etc.

1000 people.

Hardly a large enough pool to say anything significant about the country.  But large enough to write an article on, apparently!

The article doesn't say anything about how the respondents were selected.  Was it people answering a poll on bankrate.com's site?  Another business with a survey cited was an online lender, so, is it their pre-selected customer base they're surveying?  Unclear.  In either case you'd expect the pool selected from to have some effect on the answers.

Using statistics you can infer a lot, but I doubt it was randomly selected.  Agree about the poverty line, but I have a hard time feeling sorry for those "poor" people making ~11000/year which is roughly what I spend.  It just means their living paycheck to paycheck out of necessity, not out of choice, like most US citizens.

I struggle using the phrase "feel sorry" but I'm not sure how to properly articulate what I mean.  The phrase doesn't exactly capture my feeling as I do feel these people should be helped, but I don't think giving them money will do that.

renbutler

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Re: 76% of Americans are living paycheck to paycheck
« Reply #18 on: June 26, 2013, 07:51:25 AM »
Agree about the poverty line, but I have a hard time feeling sorry for those "poor" people making ~11000/year which is roughly what I spend.  It just means their living paycheck to paycheck out of necessity, not out of choice, like most US citizens.

I struggle using the phrase "feel sorry" but I'm not sure how to properly articulate what I mean.  The phrase doesn't exactly capture my feeling as I do feel these people should be helped, but I don't think giving them money will do that.

Agreed, at least partially. Unfortunately, that will get you responses of "you hate poor people" from some people around here.

I really feel sympathy for people forced out of their jobs, who don't have money for ANY of the basic needs of survival (basic food, shelter, and clothing).

I don't have much sympathy for people who won't sell their kids' video game system or stop smoking or drive a beater or take on job perceived to be beneath them.

Some like to wrongly assume that all impoverished are like the former. Of course, some also wrongly assume that they are all like the latter. In reality, there is a mix, and I wish that any help we gave would go to the genuinely struggling.

When I was a litte kid, my mom worked for our church's St. Vincent de Paul Society. She would take me on house calls to determine the needs of people seeking assistance. It had a great effect on me. I remember one family in a tiny apartment with completely empty cupboards, and a single mattress on the floor. An emaciated child my age who couldn't speak was lying on that mattress, but he still managed a smile for us.

Those are the people I want to help the most. But from the stories she told me, most people weren't struggling anything like that.

sheepstache

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Re: 76% of Americans are living paycheck to paycheck
« Reply #19 on: June 26, 2013, 12:13:43 PM »

Using statistics you can infer a lot, but I doubt it was randomly selected.  Agree about the poverty line, but I have a hard time feeling sorry for those "poor" people making ~11000/year which is roughly what I spend.  It just means their living paycheck to paycheck out of necessity, not out of choice, like most US citizens.

I struggle using the phrase "feel sorry" but I'm not sure how to properly articulate what I mean.  The phrase doesn't exactly capture my feeling as I do feel these people should be helped, but I don't think giving them money will do that.

Right.  I'm not trying to drum up sympathy.  My point is more that when we hear these statistics we think of them reflecting on people a lot like ourselves.  Therefore living paycheck to paycheck = choice.  Therefore people = idiots. 

Whether and for how many people living paycheck to paycheck is a necessity is a different debate but I usually assume I can cut some chunk off the bottom if they don't specify a certain income range.

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Re: 76% of Americans are living paycheck to paycheck
« Reply #20 on: June 26, 2013, 12:31:52 PM »
Back to the original topic...  I heard exactly that on the news today.  It went something like this:

<story about 76% of Americans living paycheck to paycheck>
<some other unrelated story>
<story about how US consumer confidence is the highest in 5 years>

Hmmm... ironic.
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Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #21 on: June 26, 2013, 12:49:17 PM »
Whether and for how many people living paycheck to paycheck is a necessity is a different debate...

Even when I was working as field labor, I managed to accumulate some savings.  In fact I had to, because I always knew that there eventually would be weeks without paychecks in the future.

mpbaker22

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Re: 76% of Americans are living paycheck to paycheck
« Reply #22 on: June 26, 2013, 12:56:44 PM »
Whether and for how many people living paycheck to paycheck is a necessity is a different debate...

Even when I was working as field labor, I managed to accumulate some savings.  In fact I had to, because I always knew that there eventually would be weeks without paychecks in the future.

This is true.  How do you categorize people who live nearly autonomously and only need a few $$ a year to survive.  They don't even need the paycheck!

Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #23 on: June 26, 2013, 04:31:34 PM »
I don't think it's down to being able to live on a few dollars a year.  (People like that are special cases.)  Rather, it's the psychological difference between believing that the paycheck will always arrive each week, so you can spend it all, and knowing in your gut that it won't.

If I had to guess, I'd say that there are probably as many middle to upper income salary earners living paycheck to paycheck as there are poor working folks, if not more.

odput

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Re: 76% of Americans are living paycheck to paycheck
« Reply #24 on: June 27, 2013, 05:47:16 AM »
I don't think it's down to being able to live on a few dollars a year.  (People like that are special cases.)  Rather, it's the psychological difference between believing that the paycheck will always arrive each week, so you can spend it all, and knowing in your gut that it won't.

If I had to guess, I'd say that there are probably as many middle to upper income salary earners living paycheck to paycheck as there are poor working folks, if not more.

That my neighbors can't, nay, WON'T even set aside a couple grand is indicative of the of the correctness of the original linked article - that the vast majority of this nation chooses not to save and / or invest.

I think this sums up that point pretty well...it's all those middle class households that refuse to help themselves by setting aside just a little bit of cash that really piss me off

mpbaker22

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Re: 76% of Americans are living paycheck to paycheck
« Reply #25 on: June 27, 2013, 08:30:39 AM »
If I had to guess, I'd say that there are probably as many middle to upper income salary earners living paycheck to paycheck as there are poor working folks, if not more.

And this becomes a huge problem when those people lose their jobs, even for a month, and start collecting food stamps.  Maybe they should have lived a little less in filthy wealth when they were working.

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Re: 76% of Americans are living paycheck to paycheck
« Reply #26 on: June 27, 2013, 10:30:31 AM »
If I had to guess, I'd say that there are probably as many middle to upper income salary earners living paycheck to paycheck as there are poor working folks, if not more.

And this becomes a huge problem when those people lose their jobs, even for a month, and start collecting food stamps.  Maybe they should have lived a little less in filthy wealth when they were working.

I'm not sure I have a problem with people who paid taxes collecting the benefits of those taxes. 

No Name Guy

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Re: 76% of Americans are living paycheck to paycheck
« Reply #27 on: June 27, 2013, 12:54:58 PM »

I'm not sure I have a problem with people who paid taxes collecting the benefits of those taxes.

Except for the massive skim & overhead that happens to fuel the bureaucracy.  They'd be far, FAR better off setting aside the money themselves, since they'd be earning from the self provided security blanket (or at worst, in the case of cash under the mattress, not paying).

A cash, savings account and / or liquid investments, etc are the best forms of unemployment insurance, food stamps, etc.


Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #28 on: June 27, 2013, 01:10:23 PM »
I'm not sure I have a problem with people who paid taxes collecting the benefits of those taxes.

Except that those of us who organize our life so as to have a low probability of needing those benefits pay exactly the same taxes as those who use them a lot.  Indeed, in at least some cases, we won't get the benefits because we have lots of savings, and therefore don't need them.  That is, if I became unable to work today, it'd be 20+ years before my savings were depleted so I could qualify for benefits, while Mr. Grasshopper, who's been making twice as much but spending every dime, could get benefits next month.

Spudd

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Re: 76% of Americans are living paycheck to paycheck
« Reply #29 on: June 27, 2013, 01:27:31 PM »
The stats in this story don't even make sense:

Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses
50% of those surveyed have less than a three-month cushion
27% had no savings at all

How does this make sense in any way?

matchewed

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Re: 76% of Americans are living paycheck to paycheck
« Reply #30 on: June 27, 2013, 01:33:04 PM »
Because those 27% with none also fit into that < 3 months worth. 0 is less than 3.

Spudd

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Re: 76% of Americans are living paycheck to paycheck
« Reply #31 on: June 27, 2013, 01:37:27 PM »
I feel like a moron. :) I was thinking the first line meant that 25% of people had less than 6 months, but it's 75% having less than 6 months. That makes it all make sense.

matchewed

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Re: 76% of Americans are living paycheck to paycheck
« Reply #32 on: June 27, 2013, 01:42:56 PM »
It's not 100% your fault - see this thread http://www.mrmoneymustache.com/forum/antimustachian-wall-of-shame-and-comedy/97-3-of-statistics-are-totally-made-up/

Specifically the point about news articles trying to communicate studies. They're shitty at it.

Eric

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Re: 76% of Americans are living paycheck to paycheck
« Reply #33 on: June 27, 2013, 01:54:54 PM »
I'm not sure I have a problem with people who paid taxes collecting the benefits of those taxes.

Except that those of us who organize our life so as to have a low probability of needing those benefits pay exactly the same taxes as those who use them a lot.  Indeed, in at least some cases, we won't get the benefits because we have lots of savings, and therefore don't need them.  That is, if I became unable to work today, it'd be 20+ years before my savings were depleted so I could qualify for benefits, while Mr. Grasshopper, who's been making twice as much but spending every dime, could get benefits next month.

And Mr. Grasshopper is paying more in taxes and not getting the deferred tax advantages of the retirement accounts that you've been using like a 401k.  It's not like you don't get any benefits.  They're just different.
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Eric

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Re: 76% of Americans are living paycheck to paycheck
« Reply #34 on: June 27, 2013, 01:59:41 PM »

I'm not sure I have a problem with people who paid taxes collecting the benefits of those taxes.

Except for the massive skim & overhead that happens to fuel the bureaucracy.  They'd be far, FAR better off setting aside the money themselves, since they'd be earning from the self provided security blanket (or at worst, in the case of cash under the mattress, not paying).

A cash, savings account and / or liquid investments, etc are the best forms of unemployment insurance, food stamps, etc.

Yep, it would be far better if everyone was financially literate and responsible.  It'd also be great if no one ever broke the law and everyone was at their ideal weight.  If you can figure out how to do these things, you'll be a very rich man.  Good luck to you!
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mpbaker22

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Re: 76% of Americans are living paycheck to paycheck
« Reply #35 on: June 27, 2013, 02:19:58 PM »
I'm not sure I have a problem with people who paid taxes collecting the benefits of those taxes.

Except that those of us who organize our life so as to have a low probability of needing those benefits pay exactly the same taxes as those who use them a lot.  Indeed, in at least some cases, we won't get the benefits because we have lots of savings, and therefore don't need them.  That is, if I became unable to work today, it'd be 20+ years before my savings were depleted so I could qualify for benefits, while Mr. Grasshopper, who's been making twice as much but spending every dime, could get benefits next month.

It's sort of a game theory type problem involving incentives.  To some extent, you might as well live it up while you can, because Mr. Government will have your back when you need him.  Of course, this results in every individual deciding to rely on Mr. Government, to the detriment of the society.  Luckily, most people don't live their lives based on the maximization of government benefits.  I do wonder if people would be more responsible if there wasn't a safety net though.

Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #36 on: June 27, 2013, 06:08:21 PM »
And Mr. Grasshopper is paying more in taxes and not getting the deferred tax advantages of the retirement accounts that you've been using like a 401k.  It's not like you don't get any benefits.  They're just different.

Nope, because you could easily find a bunch of Mr & Ms Grasshoppers out there who paid exactly as much in taxes as I do, yet will get far more benefits.

Yep, it would be far better if everyone was financially literate and responsible.  It'd also be great if no one ever broke the law and everyone was at their ideal weight.

Missing the point.  It doesn't really matter to me if people choose to be overweight, or indulge in victimless crimes.  I just don't see why I should be expected to be happy about having to pick up the tab for their medical care, or for keeping them in prison.


Eric

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Re: 76% of Americans are living paycheck to paycheck
« Reply #37 on: June 28, 2013, 10:09:46 AM »
And Mr. Grasshopper is paying more in taxes and not getting the deferred tax advantages of the retirement accounts that you've been using like a 401k.  It's not like you don't get any benefits.  They're just different.

Nope, because you could easily find a bunch of Mr & Ms Grasshoppers out there who paid exactly as much in taxes as I do, yet will get far more benefits.


I think you're missing my point.  If you both have the same gross income, you'll pay less in taxes because you use tax deferred savings like 401k.  So you get a guaranteed benefit every paycheck because you're saving money, versus a possible benefit if something goes wrong for the Grasshoppers. 

I'm not claiming I like paying for others financial irresponsibility, I'm just saying you can't complain that someone else gets all the benefits while ignoring your own.  Well, I guess you can, but then I'd have to direct you here: http://en.wikipedia.org/wiki/Cognitive_dissonance
« Last Edit: June 28, 2013, 10:17:19 AM by Eric »
"Compound interest is the most powerful force in the universe."  -- Einstein

Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #38 on: June 28, 2013, 12:07:07 PM »
I think you're missing my point.  If you both have the same gross income, you'll pay less in taxes because you use tax deferred savings like 401k.  So you get a guaranteed benefit every paycheck because you're saving money, versus a possible benefit if something goes wrong for the Grasshoppers.

But your point is wrong, because the Grasshoppers could take advantage of that same tax break, if they wanted to.  And by the same token, they could be getting a far larger mortgage interest deduction on the McMansion (and the HEL they took out to spend on lifestyle) than I am on my comparatively modest place.

My point still stands: if we adjust incomes so that the Grasshoppers and I pay the same amount in taxes, they can expect to receive more benefits per dollar than I.

Eric

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Re: 76% of Americans are living paycheck to paycheck
« Reply #39 on: June 28, 2013, 12:17:18 PM »
My point still stands: if we adjust incomes so that the Grasshoppers and I pay the same amount in taxes, they can expect to receive more benefits per dollar than I.

So your point is that not everyone receives exactly the same benefits?  Hey, that's my point too! 
"Compound interest is the most powerful force in the universe."  -- Einstein

Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #40 on: June 28, 2013, 05:29:20 PM »
So your point is that not everyone receives exactly the same benefits?

No, my point is that it's pretty unreasonable for you to expect me to be happy about the fact that I have a much lower benefit expectation per tax dollar.

Eric

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Re: 76% of Americans are living paycheck to paycheck
« Reply #41 on: June 28, 2013, 05:35:53 PM »
So your point is that not everyone receives exactly the same benefits?

No, my point is that it's pretty unreasonable for you to expect me to be happy about the fact that I have a much lower benefit expectation per tax dollar.

I'm not sure why you think you have a lower benefit expectation.  Are you talking only short term, or long term?  Because if you retire early while Mr Grasshopper works until he dies, wouldn't you actually be the one receiving the greater benefits as your tax payments drop dramatically in retirement?  Even if Mr Grasshopper needs to use the safety net a couple of times, he's still coming out way behind compared to someone who retires early, no?
"Compound interest is the most powerful force in the universe."  -- Einstein

Jamesqf

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Re: 76% of Americans are living paycheck to paycheck
« Reply #42 on: June 29, 2013, 12:15:44 PM »
Even if Mr Grasshopper needs to use the safety net a couple of times, he's still coming out way behind compared to someone who retires early, no?

But you're assuming I intend to retire early.  I'm not.  Even if it wasn't already too late for a really early retirement, I like working.  So with luck I'll still be paying SS taxes at 90...