Author Topic: Concerns re: the Overheard at Work thread  (Read 13018 times)

elysianfields

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Concerns re: the Overheard at Work thread
« on: April 23, 2015, 04:56:44 AM »
Hi everybody,

Am I the only one reading the "Overheard at Work" thread and feeling concerned about the long-term political and fiscal implications?

As the workforce has evolved from taking one job with the same employer for 40 years and retiring on a pension / defined benefit plan to job and career-changers depending on their 401(k)-type defined contribution plan, the investment risks have completely shifted from employers to employees.

Meanwhile, uneducated and spendthrift employees for the most part don't save enough for retirement (whether within their DCPs or their own IRAs or taxable investment accounts), take loans against their DCPs, don't know how to invest or manage their investment risk, and live paycheck to paycheck.

That takes away two of the legs on the old retirement tripod of pension - Social Security - one's own savings.

Furthermore Social Security as currently funded cannot fully pay its bills going forward - either payroll (or other) taxes must increase, benefits must drop, or some combination of the two.  I doubt the US Government would simply pay SS benefits out of general revenues without tax increases or benefit cuts.

I could certainly foresee sob stories from the grasshoppers who didn't save anything for retirement complaining "I can't live on Social Security" (which, by the by, was never intended to serve as the full source of retirement income) and convincing the Congress to impose higher taxes on us mustachian ants to keep the grasshoppers going.

What does the community think?

Sorry if this is too US-focused; what do our non-USian members see in their own countries?

I'm not trying to start a political fight here, and would prefer if the thread remained in the Antimustachian Wall of Shame category, given its proximity to the "Overheard at Work" thread.  However, if our Mods disagree and decide to move the thread, so be it.

Cheers,

Elysian

KungfuRabbit

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Re: Concerns re: the Overheard at Work thread
« Reply #1 on: April 23, 2015, 05:50:38 AM »
The US is screwed because people spend too much and expect handouts to bail them out.  it's an extremely hot topic between politicians however none of them are willing to do anything about it because if you say you are going to cut SS benefits you won't get a single vote from anyone in any political party from someone over the age of 50.  So realistically the program is going to keep floundering along and more and more people are going to be living in "poverty"  because that is their only income, and the government will bail them out. 

You realize though the funny thing when people complain about big spenders and people that don't save, is if everyone was mustachian the whole mustachian thing wouldn't work.  The stock market would crash so hard so fast if people stopped spending.  When consumer spending drops 1% the stock market dips, what if consumer spending dropped 50%?  The whole 4% growth rule wouldn't work out too hot for ya. 

zephyr911

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Re: Concerns re: the Overheard at Work thread
« Reply #2 on: April 23, 2015, 06:54:59 AM »
The US is screwed because people spend too much and expect handouts to bail them out.  it's an extremely hot topic between politicians however none of them are willing to do anything about it because if you say you are going to cut SS benefits you won't get a single vote from anyone in any political party from someone over the age of 50.  So realistically the program is going to keep floundering along and more and more people are going to be living in "poverty"  because that is their only income, and the government will bail them out. 

You realize though the funny thing when people complain about big spenders and people that don't save, is if everyone was mustachian the whole mustachian thing wouldn't work.  The stock market would crash so hard so fast if people stopped spending.  When consumer spending drops 1% the stock market dips, what if consumer spending dropped 50%?  The whole 4% growth rule wouldn't work out too hot for ya.
Mustachianism is not solely defined by investment returns. Yes, the FIRE aspect of MMM is a sly financial hack whose effectiveness is inversely proportional to its popularity; however, fixating on that one aspect is missing the big picture. If we all consumed less needless shit, and focused on building happy low-maintenance lives, we'd still each have more abundant lives relative to quantity of work performed, and humanity would do a vastly better job of not screwing over future generations. The lower our investment returns ran, the more we'd all have to truly insource everything, even basic things like food production, which would reduce the available payoffs for big savers and smart investors - but society as a whole would be growing more sustainable, resilient, and stress-free.
Long before I found MMM I was ruminating upon how to design a future society with the perfect fusion of high- and low-technology approaches, where we still have modern medicine and long-haul transport if we need it, but we don't go around mindlessly burning off priceless resources as part of our daily treadmill of mediocrity. MMM is as close to that fusion as I've ever seen - subject to future refinement and reformation, maybe, but a really great direction for now.

Yossarian33

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Re: Concerns re: the Overheard at Work thread
« Reply #3 on: April 23, 2015, 07:33:25 AM »

Long before I found MMM I was ruminating upon how to design a future society with the perfect fusion of high- and low-technology approaches, where we still have modern medicine and long-haul transport if we need it, but we don't go around mindlessly burning off priceless resources as part of our daily treadmill of mediocrity. MMM is as close to that fusion as I've ever seen - subject to future refinement and reformation, maybe, but a really great direction for now.

You sound like someone who has read The Ecotechnic Future by John Micheal Greer. If not, well you probably won't enjoy reading it since you'll just nod and agree to most parts of the book.

I personally believe increasing costs of energy will cause a very slow but permanent market contraction by itself and it's likely to never recover. We're gonna have to figure out how to live with less, and that means fewer investments too. Stoicism is a good place to start.

Argyle

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Re: Concerns re: the Overheard at Work thread
« Reply #4 on: April 23, 2015, 07:44:53 AM »
The "uneducated and spendthrift employees" I don't see going away any time soon.  I know there's a school of thought that says "If they can't act responsibly, then let 'em hang, it'll serve 'em right."  But that's going to be a significant segment of the population.  Do we really want our elderly parents eating dog food out of cans and trying to manage with the electricity turned off, because they were bad with money?  Obviously we want to educate people as best we can.  But the human race is just contrary, easily misled, and has trouble planning ahead.

I think that's why we need to have a lot of "nudges" for instance, making 401(k)s opt-out instead of opt-in.  And why we also need Social Security.  Because do we really want the elderly and the infirm to starve and die?  I know a lot of people think that's fine.  But I hope as a society we will care enough to straighten out the system and provide for them.  Financial imprudence is unwise, but it shouldn't carry the death penalty.

zephyr911

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Re: Concerns re: the Overheard at Work thread
« Reply #5 on: April 23, 2015, 08:16:35 AM »
You sound like someone who has read The Ecotechnic Future by John Micheal Greer. If not, well you probably won't enjoy reading it since you'll just nod and agree to most parts of the book.
It's in my wishlist along with some of his related works.

Quote
I personally believe increasing costs of energy will cause a very slow but permanent market contraction by itself and it's likely to never recover. We're gonna have to figure out how to live with less, and that means fewer investments too. Stoicism is a good place to start.
You sound like a guy who's read Peak Everything (Richard Heinberg). Related: we may be surprised how quickly energy ceases to be the near-universal limfac in economic growth, superceded variously by rare earth metals, water, and other resources.
I may be Pollyanna but I have more in common, at least in the sense of hope and striving, with Thomas Friedman. I have no illusions about renewables being a panacea, but they do have great potential. And there are synergistic solutions to the non-energy issues - for example, covering irrigation ditches with solar panels potentially mitigates drought, pollution, and energy scarcity in one fell swoop, using mostly commonplace materials.

Davids

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Re: Concerns re: the Overheard at Work thread
« Reply #6 on: April 23, 2015, 08:26:26 AM »
I would agree to increasing the income cap on social security taxes to $200k. That will greatly increase a good chunk available. I would not however agree on increasing the tax rate. Also the government needs to be more aggressive in their investment of funds. If the government had invested the ss funds then we would never have had the discussions about how lacking the ss funds are and that includes the 2000 and 2008 recessions.

Drifterrider

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Re: Concerns re: the Overheard at Work thread
« Reply #7 on: April 23, 2015, 08:31:53 AM »
I would agree to increasing the income cap on social security taxes to $200k. That will greatly increase a good chunk available. I would not however agree on increasing the tax rate. Also the government needs to be more aggressive in their investment of funds. If the government had invested the ss funds then we would never have had the discussions about how lacking the ss funds are and that includes the 2000 and 2008 recessions.

So, are you suggesting the US Congress is smart enough to "invest" tax revenue with privately owned companies?  Are you a lobbyist with a financial firm?

jinga nation

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Re: Concerns re: the Overheard at Work thread
« Reply #8 on: April 23, 2015, 09:03:43 AM »
Yin-Yang. For every saver, there must be 1+n spenders. For every millionaire there are a million poor. [The flattening of the world is a theory I don't accept (Friedman). I believe in Darwinism and survival of the fittest/savviest.]

I'm 35. I was raised to spend only what I have, in cash. (Only loan we carry is the home mortgage.) Sadly, 95% of all I know in the 30-44 age bracket don't think of saving, not even moderately. Many don't subscribe to the company 401K match, which has quite a good mix of low-ish expense ratio funds. Don't even get me started on entitled millennials, aka little princes and princesses.

I'm not expecting SS to be around for when I retire. I enjoy work so I don't know if I'd actually retire, but maybe give up the daily grind and move to an alternative schedule. The general public is too reliant on SS. It should be renamed to Supplemental Income to emphasize that it is an addition to one's savings for living in retirement. If most of the jobs being created are low-skill, low-income, this means less input to the SS coffers, which means a slow death for that.

I don't think taxes will go up for the savers, or for anyone. That's a no-no or else that party won't have a POTUS for a while. Plus the current consensus in Congress is to lower taxes. Bailouts for housing loans was just the start of misuse of public monies. Next will be education loans, then vehicle loans. For multiple generations there's no incentive to save as everyone wants their bailout.

We're fusked. We save today to live tomorrow. They live today to save tomorrow.

fartface

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Re: Concerns re: the Overheard at Work thread
« Reply #9 on: April 23, 2015, 09:12:49 AM »
Education is part of the answer; however, most people KNOW they should be saving...they KNOW they really shouldn't buy that...they just can't help themselves.

Similar to the obesity epidemic in this country. People KNOW they should follow a good diet and exercise often, but millions simply choose not to...

So...where do we go from here? I don't know, sorry I couldn't help w/a solution and apologies for bringing up another even bigger problem facing our current/future generations...

Financial.Velociraptor

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Re: Concerns re: the Overheard at Work thread
« Reply #10 on: April 23, 2015, 09:23:40 AM »
[...] the investment risks have completely shifted from employers to employees.



Elysian,

This is by design.  I remember doing some research for a Labor Economics class in undergrad and pulling a dusty old Labor Economics textbook from the late 70s off the library shelf for reference.  There was a genuine fear in the late 70s and early 80s (I confirmed with professors with tenure there were tons of peer reviewed articles on this at the time) that the US would become a de facto socialist society as labor would soon own the majority of industry via their pension and retirement benefits.  The right wing of Congress was appalled and 1) created section 401 to begin moving everyone from fixed benefit to fixed contribution plans 2) strip employer held plans of their voting rights.  This coincided with a sharp decline in both unionism and employee bargaining power that further led to less generous retirement benefits.  Later, changes in US GAAP accounting rules caused defined contribution plans to be heavily favored over defined benefit plans.  It's basically only the old dinosaurs of industry that still have defined benefit plans and only to the extent they benefit entrenched senior management.

American's income security fell prey to the Big Red Fear.  Good or bad?  We are still far less socialist than Europe or Canada: [again; good or bad?]

boarder42

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Re: Concerns re: the Overheard at Work thread
« Reply #11 on: April 23, 2015, 12:11:05 PM »
Education is part of the answer; however, most people KNOW they should be saving...they KNOW they really shouldn't buy that...they just can't help themselves.

Similar to the obesity epidemic in this country. People KNOW they should follow a good diet and exercise often, but millions simply choose not to...

So...where do we go from here? I don't know, sorry I couldn't help w/a solution and apologies for bringing up another even bigger problem facing our current/future generations...

Social darwinism solves both of these issues. 

WildJager

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Re: Concerns re: the Overheard at Work thread
« Reply #12 on: April 23, 2015, 12:26:37 PM »
The US is screwed because people spend too much and expect handouts to bail them out.  it's an extremely hot topic between politicians however none of them are willing to do anything about it because if you say you are going to cut SS benefits you won't get a single vote from anyone in any political party from someone over the age of 50.  So realistically the program is going to keep floundering along and more and more people are going to be living in "poverty"  because that is their only income, and the government will bail them out. 

You realize though the funny thing when people complain about big spenders and people that don't save, is if everyone was mustachian the whole mustachian thing wouldn't work.  The stock market would crash so hard so fast if people stopped spending.  When consumer spending drops 1% the stock market dips, what if consumer spending dropped 50%?  The whole 4% growth rule wouldn't work out too hot for ya.
Mustachianism is not solely defined by investment returns. Yes, the FIRE aspect of MMM is a sly financial hack whose effectiveness is inversely proportional to its popularity; however, fixating on that one aspect is missing the big picture. If we all consumed less needless shit, and focused on building happy low-maintenance lives, we'd still each have more abundant lives relative to quantity of work performed, and humanity would do a vastly better job of not screwing over future generations. The lower our investment returns ran, the more we'd all have to truly insource everything, even basic things like food production, which would reduce the available payoffs for big savers and smart investors - but society as a whole would be growing more sustainable, resilient, and stress-free.
Long before I found MMM I was ruminating upon how to design a future society with the perfect fusion of high- and low-technology approaches, where we still have modern medicine and long-haul transport if we need it, but we don't go around mindlessly burning off priceless resources as part of our daily treadmill of mediocrity. MMM is as close to that fusion as I've ever seen - subject to future refinement and reformation, maybe, but a really great direction for now.

+1.  Check out the book Ishmael for a fun philosophical read on that topic.

Josiecat

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Re: Concerns re: the Overheard at Work thread
« Reply #13 on: April 23, 2015, 12:35:03 PM »
No matter what, there will always be throngs of people who WILL NOT save a penny.  That is why there is SS.  Since it is a 'forced' savings account people cannot opt out of, it needs to be there.  Otherwise we're going to have a run of Medicaid, TANF, Food Stamps in the future for those people who refused to save.  It's a pay now or pay later thing.  You either give them SS or welfare.  Either way, we will all pay.

Financial.Velociraptor

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Re: Concerns re: the Overheard at Work thread
« Reply #14 on: April 23, 2015, 12:43:42 PM »
Somewhat related is the uneven playing field that traps many in poverty at the expense of those who already have enough.  Yahoo! Finance has this timely article up: http://finance.yahoo.com/news/nobel-prize-winner-stiglitz---three-steps-to-solving-income-inequality-153834471.html

Syonyk

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Re: Concerns re: the Overheard at Work thread
« Reply #15 on: April 23, 2015, 05:10:10 PM »
You sound like someone who has read The Ecotechnic Future by John Micheal Greer. If not, well you probably won't enjoy reading it since you'll just nod and agree to most parts of the book.

That's not a name I see around this forum terribly often...

His books are excellent.  So is his blog.

gimp

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Re: Concerns re: the Overheard at Work thread
« Reply #16 on: April 23, 2015, 07:29:07 PM »
It is a nuanced and complicated issue. I wouldn't be too quick to assume everyone who ends up broke deserved it. Neither would I be too quick to help everyone who ends up broke, since ya know, many (a few? some? most?) did deserve it.

But at the end of the day, monkey sphere, man. Take care of yourselves and your family first, and fuck everyone else unless you're comfortable enough to help.

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Re: Concerns re: the Overheard at Work thread
« Reply #17 on: April 23, 2015, 08:02:48 PM »
No matter what, there will always be throngs of people who WILL NOT save a penny.  That is why there is SS.  Since it is a 'forced' savings account people cannot opt out of, it needs to be there.  Otherwise we're going to have a run of Medicaid, TANF, Food Stamps in the future for those people who refused to save.  It's a pay now or pay later thing.  You either give them SS or welfare.  Either way, we will all pay.

Some of it is not an unwillingness to save, so much as the fact people are surviving to adulthood without learning key skills, such as how to manage money. It's socially acceptable to be in debt, or to be unable to balance a checkbook.

gooki

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Re: Concerns re: the Overheard at Work thread
« Reply #18 on: April 24, 2015, 02:20:52 AM »
The government could subsidise euthanasia so it's free for those over 65.

Can't afford to live? At least you can afford to die.

theadvicist

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Re: Concerns re: the Overheard at Work thread
« Reply #19 on: April 24, 2015, 02:50:26 AM »
I just take the 'circles of control' approach. Laugh at them... and make sure I do right by me and my future. I can't control anything else.

elysianfields

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Re: Concerns re: the Overheard at Work thread
« Reply #20 on: April 24, 2015, 04:14:10 AM »
I just take the 'circles of control' approach. Laugh at them... and make sure I do right by me and my future. I can't control anything else.

That's probably the correct answer.

Davids

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Re: Concerns re: the Overheard at Work thread
« Reply #21 on: April 24, 2015, 08:15:20 AM »
I would agree to increasing the income cap on social security taxes to $200k. That will greatly increase a good chunk available. I would not however agree on increasing the tax rate. Also the government needs to be more aggressive in their investment of funds. If the government had invested the ss funds then we would never have had the discussions about how lacking the ss funds are and that includes the 2000 and 2008 recessions.

So, are you suggesting the US Congress is smart enough to "invest" tax revenue with privately owned companies?  Are you a lobbyist with a financial firm?
I wish then my FIRE date would be a few years earlier...

Beaker

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Re: Concerns re: the Overheard at Work thread
« Reply #22 on: April 24, 2015, 09:01:14 AM »
I would agree to increasing the income cap on social security taxes to $200k. That will greatly increase a good chunk available. I would not however agree on increasing the tax rate. Also the government needs to be more aggressive in their investment of funds. If the government had invested the ss funds then we would never have had the discussions about how lacking the ss funds are and that includes the 2000 and 2008 recessions.

So, are you suggesting the US Congress is smart enough to "invest" tax revenue with privately owned companies?  Are you a lobbyist with a financial firm?
I wish then my FIRE date would be a few years earlier...

Yep, what we really need is the government having a financial interest in individual companies. No way that could lead to a conflict of interest, sweetheart regulation, or really anything bad at all...

trailrated

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Re: Concerns re: the Overheard at Work thread
« Reply #23 on: April 24, 2015, 09:43:01 AM »
The government could subsidise euthanasia so it's free for those over 65.

Can't afford to live? At least you can afford to die.

Reminds me of a hilarious book, Boomsday by Christopher Buckley who also wrote Thank You for Smoking

Quick synopsis from Wikipedia: Cassandra Devine, "a morally superior twenty-nine-year-old PR chick" and moonlit angry blogger, incites generational warfare when she proposes that the financially nonviable Baby Boomers be given incentives (free Botox, no estate tax) to kill themselves at 70. The proposal, meant only as a catalyst for debate on the issue, catches the approval of millions of citizens, chief among them an ambitious presidential candidate, Senator Randolph Jepperson.

With the aide of public relations guru Terry Tucker, Devine and Jepperson attempt to ride "Voluntary Transitioning" all the way to the White House, over the objections of the Religious Right and the Baby Boomers, deeply offended by the demonstrations taking place on the golf courses of their retirement resorts.

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Re: Concerns re: the Overheard at Work thread
« Reply #24 on: April 24, 2015, 10:01:00 AM »
Don't even get me started on entitled millennials, aka little princes and princesses.

OH JESUS CHRIST

I just take the 'circles of control' approach. Laugh at them... and make sure I do right by me and my future. I can't control anything else.

That's probably the correct answer.

Yeah I like this one :)

Scandium

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Re: Concerns re: the Overheard at Work thread
« Reply #25 on: April 24, 2015, 11:26:54 AM »
It seems to be taken as truth than anyone retiring on SS alone will shortly die destitute, but what are the numbers? Everyone has forced SS, most have forced savings through mortgage payments. So say a couple making the median $50,000/year per household with a paid off house. What would their after tax SS payments be, and could they live on that?

Beaker

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Re: Concerns re: the Overheard at Work thread
« Reply #26 on: April 24, 2015, 01:13:02 PM »
It seems to be taken as truth than anyone retiring on SS alone will shortly die destitute, but what are the numbers? Everyone has forced SS, most have forced savings through mortgage payments. So say a couple making the median $50,000/year per household with a paid off house. What would their after tax SS payments be, and could they live on that?

There's a calculator for that.

Back of the envelope, if you made 50k every single year since 1975 (not very plausible...) and retired today, you'd get $2163/month. You could definitely live off of that in a low COLA area. I believe that's more than a lot of people around here live on.

On the other hand, if you had a mortgage, other debt, medical bills, etc, it may not be enough. Certainly it's low enough that you'll see plenty of people complaining about how it's poverty level and unsurvivable.

Argyle

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Re: Concerns re: the Overheard at Work thread
« Reply #27 on: April 24, 2015, 01:24:00 PM »
And medical bills are not likely to go down as you age.  There are also plenty high-cost-of-living areas in the country.  Sure, folks could move to the low-cost ones, but that also comes with a price: loss of support network, for one.  Cities tend to be better for older folks, because they have more public transport, more walkability, and more density.  But cities cost more to live in.  The Rust Belt is cheaper on the whole, but you can have pretty bad heating bills in the winter, this past winter being a great example.  So it's not simple.

Lanthiriel

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Re: Concerns re: the Overheard at Work thread
« Reply #28 on: April 24, 2015, 01:29:45 PM »
Don't even get me started on entitled millennials, aka little princes and princesses.

OH JESUS CHRIST


Seriously. We have to deal with this shit even on MMM? How about we all just decide to stop making sweeping generalizations about entire generations of very diverse people.

Scandium

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Re: Concerns re: the Overheard at Work thread
« Reply #29 on: April 24, 2015, 01:35:55 PM »
It seems to be taken as truth than anyone retiring on SS alone will shortly die destitute, but what are the numbers? Everyone has forced SS, most have forced savings through mortgage payments. So say a couple making the median $50,000/year per household with a paid off house. What would their after tax SS payments be, and could they live on that?

There's a calculator for that.

Back of the envelope, if you made 50k every single year since 1975 (not very plausible...) and retired today, you'd get $2163/month. You could definitely live off of that in a low COLA area. I believe that's more than a lot of people around here live on.

On the other hand, if you had a mortgage, other debt, medical bills, etc, it may not be enough. Certainly it's low enough that you'll see plenty of people complaining about how it's poverty level and unsurvivable.

Interesting. I'm not exactly hardcore frugal so I'd probably think that would be a little rough (although not that much less what what we spend sans mortgage, and we're in one of the highest COLAs..)

Say this couple took the standard advice and saved 10% of their salary, or 5% with a 5% match. Not much I'd say. So $5,000/year at 6% for 35 years is $600k. At 4% that's another $2,000 per month. Suddenly that doesn't sound like a terrible retirement, even to a spendypants like me! And if you start work early 20s you'd have even more then 35 years.

Saving 5-10% is pathetic by MMM standards, but even that will more than double your retirement "paycheck"! At least half the people (those making $50k and up) should (must be?) doing at least this so they should be ok, right? I knew nothing about investing and was pretty unfrugal, but when I got my first 401k I at least did "well I'll do 5%, that's something, but not much so whatever". Even had I done nothing more I would have been ok at 67.

thd7t

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Re: Concerns re: the Overheard at Work thread
« Reply #30 on: April 24, 2015, 02:43:40 PM »
Don't even get me started on entitled millennials, aka little princes and princesses.

OH JESUS CHRIST


Seriously. We have to deal with this shit even on MMM? How about we all just decide to stop making sweeping generalizations about entire generations of very diverse people.
The beauty part is that the poster is 35 (as am I).  Most lists start the Millenials in either 1980 (a third of 35 year olds) or 1982.  I was born in '79, but it would be ridiculous to say that that means I'm definitely "Gen X".  Anyhow, I do agree about the sweeping generalizations about generations, but people will always do this with the younger generation at any given time.

gimp

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Re: Concerns re: the Overheard at Work thread
« Reply #31 on: April 24, 2015, 02:48:18 PM »
If you enjoy whining about the younger generations, just do us all a favor and make sure your kids are properly educated we can't whine about them (and, by extension, you) as they grow older.

Murse

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Re: Concerns re: the Overheard at Work thread
« Reply #32 on: April 24, 2015, 07:19:40 PM »
The only solution is for it to be forced. There are always going to be people who only think about "now."

scottish

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Re: Concerns re: the Overheard at Work thread
« Reply #33 on: April 24, 2015, 07:40:02 PM »
I think there will be equalization payments made one way or another.

However those of our who manage our wealth carefully will still be much better off than those who squander it.

Josiecat

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Re: Concerns re: the Overheard at Work thread
« Reply #34 on: April 24, 2015, 08:09:26 PM »
The only solution is for it to be forced. There are always going to be people who only think about "now."

THIS is exactly what SS is.  It is a 'forced' retirement savings plan. 

Logic_Lady

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Re: Concerns re: the Overheard at Work thread
« Reply #35 on: April 24, 2015, 10:35:06 PM »

Am I the only one reading the "Overheard at Work" thread and feeling concerned about the long-term political and fiscal implications?


Keep in mind it's not a representative sample of workers. You can't draw any conclusions about political or fiscal implications from a bunch of anecdotes, especially because the whole point of the thread is to pick out the most egregious financial incompetence and waste.

Try reading the Anti-anti-mustachian edition to remind yourself there are still some people with sense in the world!

Zamboni

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Re: Concerns re: the Overheard at Work thread
« Reply #36 on: April 25, 2015, 12:22:05 PM »
It seems to be taken as truth than anyone retiring on SS alone will shortly die destitute, but what are the numbers? Everyone has forced SS, most have forced savings through mortgage payments. So say a couple making the median $50,000/year per household with a paid off house. What would their after tax SS payments be, and could they live on that?

There's a calculator for that.

Back of the envelope, if you made 50k every single year since 1975 (not very plausible...) and retired today, you'd get $2163/month. You could definitely live off of that in a low COLA area. I believe that's more than a lot of people around here live on.

On the other hand, if you had a mortgage, other debt, medical bills, etc, it may not be enough. Certainly it's low enough that you'll see plenty of people complaining about how it's poverty level and unsurvivable.

Much of the difference between a high COL area and a low COL area, at least within mainland US, is the price of housing.  Since this couple has paid off housing, and we now have a medical safety net with Medicaid and the affordable care act, they'd have to be morons to not be able to live comfortably off of that amount.

Many retired people live just fine on their SS checks. Hopefully at some point in age the banks won't loan to you anymore so you are forced to keep spending within earnings. Yes people do currently b*tch that $2000/month is not enough to live on (I actually heard this from a retired guy on the radio), but those people do not have my sympathy. 

What do you really need to live?  Food, shelter (only paying tax/insurance/maintenance at this point), clothes/towels/bedding you certainly should have covered already at this age. Since US is the lap of luxury, let's throw in home power, running water including hot water, basic medicines and soap, enough climate control to keep from dying, a cheap phone for emergencies. I'm probably forgetting something but you get my point.

Argyle

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Re: Concerns re: the Overheard at Work thread
« Reply #37 on: April 25, 2015, 12:27:22 PM »
Zamboni, my guess is that you have not dealt with expensive and longterm medical conditions, such as auto-immune conditions or diabetes.  Or longterm cancer. Of course these things are more prevalent in old age.    And they can be devastatingly expensive.  There's a reason such a high percentage of bankruptcies are related to medical expenses.  We do not yet have a safety net in place that really covers these.  I have friends in their 70s who have three or four of these conditions at the same time friends who have always taken good care of themselves, and who have done everything "right" and their inability to afford their medicines, co-pays, scans and procedures does not make them morons.

Zamboni

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Re: Concerns re: the Overheard at Work thread
« Reply #38 on: April 25, 2015, 12:55:16 PM »
^Well, your guess would not be correct.  Which is okay. 

I get that people say they are bankrupt because of medical expenses, and it really does happen to some people. In the past it could have been due to a weird unavoidable gap in insurance. It still does happen regularly in parts of the world with no social safety net programs. One of my friends actually studies this phenomenon in India as his academic area of interest.

In the US it shouldn't be happening any more if people get the insurance they should have. People can, of course, be idiotic and not sign up for that insurance. It's a free country, after all.  But my point is that there are govt programs right now to prevent this from wiping people out. Those programs even cover things like home health visits for people with major ongoing medical problems. I fully support this type of program.

I also have a close relative who tells everyone her bankruptcy was due to medical expenses.  It really wasn't in her case; it was due to their excessive spending (and unfortunately associated hoarding) which led to huge debts. Then cancer struck her husband, which was tragic. Couldn't work, couldn't pay those gigantic bills from all of that prior spending, interest kept building.  Eventually bankruptcy was declared.  But I was close enough to the situation to know that the root of the bankruptcy wasn't the illness or the medical bills. The illness was just the catalyst that pushed a sinking ship all the way under.  But it's much more face-saving for her to tell people that it was his cancer that caused the bankruptcy. At least she learned her lesson and seems to be more responsible now with incurring unsecured debt.

I can also tell you from experience that some hospitals have programs to forgive your debt if you or your children need unusual life-saving treatments that you can't afford if it isn't covered under insurance.  It's an amazing thing that we have here in this country.

Bob W

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Re: Concerns re: the Overheard at Work thread
« Reply #39 on: April 25, 2015, 01:08:26 PM »
Pretty obvious the US and US workers are screwed in the relatively near future.   I wouldn't count on the immigrant population saving our butts either.   The math is pretty simple.   70% of people dependent on the government will very quickly notice their neighbors pile of investments and simply vote to redistribute.  They will not care how hard you worked and saved.    Then there is the problem of most every job being exported.   The mid term future is an acceleration of our current tragectory.  That is why the SWR is just wishful thinking.  It is also why one should become familiar with other options for residency.   

Zamboni

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Re: Concerns re: the Overheard at Work thread
« Reply #40 on: April 25, 2015, 01:16:14 PM »
^Will rich politicians who actually make the laws and the even richer people who back them allow this to happen any time soon?  Only time will tell . . .

sol

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Re: Concerns re: the Overheard at Work thread
« Reply #41 on: April 25, 2015, 02:01:14 PM »
Don't even get me started on entitled millennials, aka little princes and princesses.

OH JESUS CHRIST


Seriously. We have to deal with this shit even on MMM? How about we all just decide to stop making sweeping generalizations about entire generations of very diverse people.

OH JESUS CHRIST doe we really have to deal with people making sweeping generalizations about people making sweeping generalizations about entire generations of diverse people?  Not everyone who makes sweeping generalizations should be painted with the same brush, you know.

Scandium

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Re: Concerns re: the Overheard at Work thread
« Reply #42 on: April 25, 2015, 02:21:22 PM »
Zamboni, my guess is that you have not dealt with expensive and longterm medical conditions, such as auto-immune conditions or diabetes.  Or longterm cancer. Of course these things are more prevalent in old age.    And they can be devastatingly expensive.  There's a reason such a high percentage of bankruptcies are related to medical expenses.  We do not yet have a safety net in place that really covers these.  I have friends in their 70s who have three or four of these conditions at the same time friends who have always taken good care of themselves, and who have done everything "right" and their inability to afford their medicines, co-pays, scans and procedures does not make them morons.
Are these things not a covered by Medicare, medicaid or aca insurance? I have no  idea what the copays are.