Author Topic: GenXers Face Lean Retirement  (Read 12409 times)

odput

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GenXers Face Lean Retirement
« on: June 09, 2014, 08:28:24 AM »
http://money.msn.com/business-news/article.aspx?feed=BLOOM&date=20140609&id=17684917

While I will admit that GenX has had a rough go of it as far as timing is concerned, this article is laced with whining about why nobody can retire comfortably and how it's impossible to do better than your parents did anymore.  Nowhere in this article is there even a mention about how much stuff this woman probably has, or that it may just be possible for GenXers to still save for retirement...with 20 years still to go to traditional retirement!  It sounds to me like they're saying "if you don't have anything by 40, you're fucked, so don't bother doing anything about it now"

Too bad there aren't any comments on this article...I'm sure they also would be anti-mustachian GOLD

Travis

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Re: GenXers Face Lean Retirement
« Reply #1 on: June 09, 2014, 09:18:13 AM »
Quote
Gen-Xers were also slammed by the slump in stocks. The 35-to 44-year-old age groupís median value of financial assets, including stocks and bonds, dropped 47 percent to $14,500 in 2010 from 2007. The hit to their portfolios was more than 5 percentage points bigger than for any other age group.

Am I reading this right that 35-44 year olds only had on average $28k in the market before the recession?  Forget the downturn, what were they planning on using in retirement in good times?

Quote
Matthew Kraft, out of work for about a year, is watching fewer movies at the theater and dining out less. The 39-year-old former public relations manager in New York has filled out more than 110 applications to find something other than entry-level work.

How about not going to any movies or dining out? They're deficit spending on her income and their savings, but still have costs they can cut.

Quote
Generation X has already forfeited valuable years of interest compounding by failing to accrue savings early, said Alicia Munnell, the director of the Center for Retirement Research at Boston College and former research director at the Federal Reserve Bank of Boston.

At least the article points this out.

odput

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Re: GenXers Face Lean Retirement
« Reply #2 on: June 09, 2014, 09:20:46 AM »
Quote
Generation X has already forfeited valuable years of interest compounding by failing to accrue savings early, said Alicia Munnell, the director of the Center for Retirement Research at Boston College and former research director at the Federal Reserve Bank of Boston.

At least the article points this out.

Yes, but ironically, GenXers were given the opportunity to get back into the market and realize those gains around 2008-2009, a fact that never quite makes it into these kinds of articles...

randymarsh

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Re: GenXers Face Lean Retirement
« Reply #3 on: June 09, 2014, 10:13:24 AM »
Yes, but ironically, GenXers were given the opportunity to get back into the market and realize those gains around 2008-2009, a fact that never quite makes it into these kinds of articles...

Ha, reminds me of any post on reddit about the economy/student loans/gen. Filled with people saying stuff like "the stock market is a scam. The banks and richest .001% control everything" and "My student loans have made me an indentured servant. No one has any money due to 6 figure student loan debt!!!!" I point out that only like ~3% of borrowers owe 100K+ but I'm always down voted.

Winston

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Re: GenXers Face Lean Retirement
« Reply #4 on: June 09, 2014, 10:14:18 AM »
Quote
Gen-Xers were also slammed by the slump in stocks. The 35-to 44-year-old age groupís median value of financial assets, including stocks and bonds, dropped 47 percent to $14,500 in 2010 from 2007. The hit to their portfolios was more than 5 percentage points bigger than for any other age group.

Am I reading this right that 35-44 year olds only had on average $28k in the market before the recession?  Forget the downturn, what were they planning on using in retirement in good times?

Keep in mind that these folks were 28-37 in 2007... $28k is not terrible if you're 28 (not so swift if you're 37, though).  This is my age group, and I'll volunteer that I had $22k in my 401(k) before the markets began their crash in the fall of 2008. I was 30 that year. I was also a big spender that had only begun to really shift that mindset and start to save around the same time. The good news is that you can change your attitude toward spending and saving, and make a big impact on your future in only a few short years. This amazing bull market has certainly helped with that, but the saving/spending attitude change made it all possible.

Travis

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Re: GenXers Face Lean Retirement
« Reply #5 on: June 09, 2014, 10:19:22 AM »
Quote
Gen-Xers were also slammed by the slump in stocks. The 35-to 44-year-old age groupís median value of financial assets, including stocks and bonds, dropped 47 percent to $14,500 in 2010 from 2007. The hit to their portfolios was more than 5 percentage points bigger than for any other age group.

Am I reading this right that 35-44 year olds only had on average $28k in the market before the recession?  Forget the downturn, what were they planning on using in retirement in good times?

Keep in mind that these folks were 28-37 in 2007... $28k is not terrible if you're 28 (not so swift if you're 37, though).  This is my age group, and I'll volunteer that I had $22k in my 401(k) before the markets began their crash in the fall of 2008. I was 30 that year. I was also a big spender that had only begun to really shift that mindset and start to save around the same time. The good news is that you can change your attitude toward spending and saving, and make a big impact on your future in only a few short years. This amazing bull market has certainly helped with that, but the saving/spending attitude change made it all possible.

Got it. I misread it that they were talking about current numbers.  These people are 44 years old now and had $28k/$17k seven or eight years ago.

hybrid

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Re: GenXers Face Lean Retirement
« Reply #6 on: June 09, 2014, 11:03:13 AM »
I saw that one too this morning. I got lucky. We bought our first home in 1989, and by 2008 it had risen in market value by nearly 150%. We needed to move for all sorts of non-work related reasons and sold in July 2008, two months before Lehman Brothers tanked and the markets froze up. This was just past the top of the real estate bubble for my old neighborhood, still a great time to sell.

We rolled most of that equity into our new home, which was further off the bubble. Our new home was only 28K more than the previous one but much, much nicer. The schools were less desirable and the shopping sucked (neither mattered to us), but the neighborhood itself was rock solid.

I feel for that couple who bought our home in 2008. They barely got their loan together, and now that place is worth 40-50K than what they bought it for. It's been rented some since we moved, but never sold. Ours is 40K off what we bought for as well, but unlike that couple we have plenty of equity in it so we aren't trapped like they are. 2005-2008 was a crappy time to be a first time home buyer.

Jamesqf

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Re: GenXers Face Lean Retirement
« Reply #7 on: June 09, 2014, 11:11:11 AM »
Am I reading this right that 35-44 year olds only had on average $28k in the market before the recession?  Forget the downturn, what were they planning on using in retirement in good times?

I dunno...  At 35, I was just graduating from college, and had basically nothing, plus some student loan debt.  (Admittedly only high 4-figures, but still...)  Haven't done too badly in spite of that.

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Re: GenXers Face Lean Retirement
« Reply #8 on: June 09, 2014, 11:24:22 AM »
Yes, but ironically, GenXers were given the opportunity to get back into the market and realize those gains around 2008-2009, a fact that never quite makes it into these kinds of articles...

+1.

Not only to get back in the market, but if you had any capital at all it was a great opportunity to get into rental real estate or buy a very cheap foreclosed home. There were many ways to profit from both 2001 and 2008, you just had to be prepared.

I'm 35 (so gen x I guess), just started career in 2001 and didn't have a dime to scrape together. In 2008 I had a lot more saved, but nothing liquid to really take advantage of the depressed values. I now have more liquid capital, so I'm ready for the next big dip. So let's see....2001, 2008, 2015? Looks like a pattern. I will make sure I'm ready to pounce this time!

ruthiegirl

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Re: GenXers Face Lean Retirement
« Reply #9 on: June 09, 2014, 11:29:44 AM »

I dunno...  At 35, I was just graduating from college, and had basically nothing, plus some student loan debt.  (Admittedly only high 4-figures, but still...)  Haven't done too badly in spite of that.

I was thinking something similar.  At 35, I had three small children, dh's career was finally taking off after years of working the academic drudge, we were helping support my dying mother...there wasn't much leftover.

Today is a new day and our story is quite different.  But there were some years in there where we saved very little and still ate a lot of rice and beans. 

Not complaining, just thinking it through.  I am classic Gen-Xer.  Lived in Seattle and have the flannel to prove it.

Zamboni

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Re: GenXers Face Lean Retirement
« Reply #10 on: June 09, 2014, 11:45:13 AM »
Isn't MMM GenX? 

Hmmmm.

Travis

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Re: GenXers Face Lean Retirement
« Reply #11 on: June 09, 2014, 11:53:22 AM »

I dunno...  At 35, I was just graduating from college, and had basically nothing, plus some student loan debt.  (Admittedly only high 4-figures, but still...)  Haven't done too badly in spite of that.

I was thinking something similar.  At 35, I had three small children, dh's career was finally taking off after years of working the academic drudge, we were helping support my dying mother...there wasn't much leftover.

Today is a new day and our story is quite different.  But there were some years in there where we saved very little and still ate a lot of rice and beans. 

Not complaining, just thinking it through.  I am classic Gen-Xer.  Lived in Seattle and have the flannel to prove it.

I took the article a bit out of context thinking that age bracket was the prime of most people's earning years where you'd be making significant plans towards retirement.  I saw the 44 year at the end and was probably thinking of mid to late 40s when I wrote that.

golden1

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Re: GenXers Face Lean Retirement
« Reply #12 on: June 09, 2014, 12:06:58 PM »
GenX problems are partially due to the shift in childbearing years.  A lot of my friends are having young children and are caring for their elderly relatives at the same time. 

GenX also had some windfalls - if you started your 401K in the late 90s like I did, even with the tech boom and great recession dips, things should be doing fairly well.  Also, MMM himself was the beneficiary of the well paying tech jobs that rose up in this period.    We also didn't have a major war (like WW2 scale) that we were drafted into/had to fight in. 

I hate when people complain that their generation has it the worst - every generation has unique challenges. 

ruthiegirl

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Re: GenXers Face Lean Retirement
« Reply #13 on: June 09, 2014, 12:36:45 PM »
I took the article a bit out of context thinking that age bracket was the prime of most people's earning years where you'd be making significant plans towards retirement.  I saw the 44 year at the end and was probably thinking of mid to late 40s when I wrote that.

Oh, I am not disagreeing with you.  You are right on the money and clearly MMM made the same decision when he chose to knuckle down, work hard and stash every penny. 

We went another route and it was not the best choice for our finances.  Would I change anything?  Probably not.  We are happy with the choices we made and feel lucky to have the Mustachian principles firmly in place that will help guide our retirement planning. What worked for a young MMM seems to be working for us older folks too. 

sleepyguy

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Re: GenXers Face Lean Retirement
« Reply #14 on: June 09, 2014, 02:06:02 PM »
Agreed, each generation has it's issues.  I'm 35 and haven't experienced any of these "blips" the article is talking about, maybe more geared towards US residents.  My GF has taken 2yrs off for parental leave which lowers our income drastically (she makes 6figs) and we're still doing fine off my 'measly' salary :)

We never got the crazy RE crash here in Canada.

GenX problems are partially due to the shift in childbearing years.  A lot of my friends are having young children and are caring for their elderly relatives at the same time. 

GenX also had some windfalls - if you started your 401K in the late 90s like I did, even with the tech boom and great recession dips, things should be doing fairly well.  Also, MMM himself was the beneficiary of the well paying tech jobs that rose up in this period.    We also didn't have a major war (like WW2 scale) that we were drafted into/had to fight in. 

I hate when people complain that their generation has it the worst - every generation has unique challenges.

lisahi

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Re: GenXers Face Lean Retirement
« Reply #15 on: June 09, 2014, 02:12:24 PM »
Well, if you want laughable comments, you can always head to Gawker's version of the story:

http://gawker.com/generation-x-the-poor-old-people-of-the-future-will-1588158473

There's a few reasonable comments, but many are resigned to believe that you need luck to amass a decent retirement.

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Re: GenXers Face Lean Retirement
« Reply #16 on: June 09, 2014, 02:44:22 PM »
As a gen-Xer, my one financial regret is only settling for ~10% contribution to retirement accounts early in my working life. I'm working on upping that.

However, I'll give myself a pat on the back for not being "slammed" by any slumps in the stock market . . . because I didn't panic, but stayed invested instead. Losses aren't officially losses until one sells, right?

zolotiyeruki

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Re: GenXers Face Lean Retirement
« Reply #17 on: June 09, 2014, 06:53:40 PM »
I'm at the tail end of GenX.  At age 28 I had probably $150k of retirement savings.

I regret now not having saved more.  Back then, we wasted a lot of money eating out, although in hindsight that was about the only anti-mustachian behavior we had.  (I also had a higher-paying job, but hated it.  The 30% pay cut that I took was TOTALLY worth it, because I love my job now).

My answer to the complainy pants?  Suck it up and knuckle down.  I got good grades in high school so I could pay my own way through college.  I chose an inexpensive university, chose a career with good job prospects, and worked my tail off so I could get a good job.  My wife and I bought a house WAY below what our lender said we could afford, and had it almost paid off 6 years later.  We've never owned a new car, but we've never owed money on a car, either.

On the topic of housing, we sold our first home in 2011 for the exact same price we bought it for.  In our new area, we bought a foreclosure that was more than twice the size, for a fantastic price.  Less than six months later, a house on our same cul-de-sac with the same layout sold for 30% less than ours.  Granted, it was in far worse shape and ours has a lot more options, but I wish we had had a chance at it.

Were we lucky?  Perhaps.  But mostly in a "chance favors the prepared" sort of way.

EricL

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Re: GenXers Face Lean Retirement
« Reply #18 on: June 10, 2014, 08:52:22 AM »
What's really pathetic are the comments.  It's one thing to be paying the price for living beyond your means and wanting to blame people.  But the rank envy displayed by the commenters is unbelievable.  There are even commenters working overtime to determine whether they belong to GenX, Y, Millennial or what so they can determine who to envy. 

Every generation has it's burdens and advantages.  The so called Greatest Generation inherited a ball of crap post WW I world with unfinished ideological, environmental and economic issues they had to deal with in The Great Depression, The Dust Bowl, and WW II.  None of which were a picnic.  It was great if you walked off Omaha Beach, not so much if you got buried there.  Or RE drafted to go to Korea.  In the end they were maybe a little too enamoured of their success and neglected some issues - like racism, sexism, etc.  The Boomers got all the advantages their predecessors didn't but got shorted on a classic direct struggle like WWII.  They made up for it in the '60s protests and the Vietnam War to make much needed social improvements.  Overall they did well though they're kind of fadeing in the stretch.  History is still deliberating on what eachs' long term effects will be.  For their successor generations the jury hasn't even started deliberating. 

But that's all a bunch of garbage.  Generational trends may influence you but only you can let them define you.  Using them as an excuse as to why you're in debt and can't retire is lame.

lisahi

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Re: GenXers Face Lean Retirement
« Reply #19 on: June 10, 2014, 09:41:44 AM »
The Gawker comments are sad and hilarious. But that's par for the course over at Gawker. Whenever anybody tries to post something reasonable along the lines of, "you can prepare for your future by not spending on unnecessary things," others jump in, give worst-case-scenario type situations (what if you hand fell off and you couldn't work?? what if you had three debilitating illnesses at once?? what if you had to spend all your time and money taking care of your mother??) and then determine that financial stability is all luck.

They've basically decided to blame society for their choices. Sure, there are some people that fall into a run of very bad situations that cause them to struggle financially. But a portion of those cases could be less dire if the person had planned ahead for emergencies and only spent on necessities.  It's not going to be easy for everybody. Some are going to have it easier because their family had more money and they had more opportunities, but for most situations there is a way to make it work so that you can save, at least some.  All it takes is converting some of the things you believe are "needs" into what they really are--"wants."

infogoon

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Re: GenXers Face Lean Retirement
« Reply #20 on: June 11, 2014, 07:37:48 AM »
The Gawker comments are sad and hilarious. But that's par for the course over at Gawker.

Indeed. I think part of this is that Gawker is so NYC-centric; young people who are struggling to make ends meet because they moved to the most expensive city in the country are unlikely to realize that they could solve a lot of their problems by living somewhere else.

No Name Guy

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Re: GenXers Face Lean Retirement
« Reply #21 on: June 11, 2014, 01:07:37 PM »
Quote
Gen-Xers lost about half of their wealth between 2007 and 2010, according to ...

I don't know what kind of fucking idiots would have lost half their net worth during that time frame.  Shit, just looking at my retirement savings / investments and house, my net went UP by 8% from Jan 1, 2007 to Dec 31, 2010 (using Zillow for the house and actual values on the retirement accounts).  Then again, I kept saving aggressively.

Add to that, unless you panicked on the retirement stuff, you won it all back, and then some, since you would have been dollar cost averaging into the bottom of the market.

I'm a solid Gen Xer, age wise.  And I'm at 24x plus my desired post ER / FI / IW target income......I COULD pull the trigger soon, but my goal is to hang on until I'm at 33x to add margin.

Boganvillia

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Re: GenXers Face Lean Retirement
« Reply #22 on: June 12, 2014, 12:56:16 PM »
This article was reproduced as (very successful) clickbait in the Australian press, despite there being major differences between the two economies: Australia has compulsory retirement savings, and next to nobody is underwater.

I had the same idea as golden1 that a genuine demographic challenge is that so many Gen Xers are finding themselves looking after babies and toddlers around age 40. Our careers are in their prime yet it is a struggle to stay awake at work.

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Re: GenXers Face Lean Retirement
« Reply #23 on: June 12, 2014, 01:19:56 PM »
Quote
Gen-Xers lost about half of their wealth between 2007 and 2010, according to ...

I don't know what kind of fucking idiots would have lost half their net worth during that time frame.  Shit, just looking at my retirement savings / investments and house, my net went UP by 8% from Jan 1, 2007 to Dec 31, 2010 (using Zillow for the house and actual values on the retirement accounts).  Then again, I kept saving aggressively.

Add to that, unless you panicked on the retirement stuff, you won it all back, and then some, since you would have been dollar cost averaging into the bottom of the market.

I'm a solid Gen Xer, age wise.  And I'm at 24x plus my desired post ER / FI / IW target income......I COULD pull the trigger soon, but my goal is to hang on until I'm at 33x to add margin.

This was my first thought as well, but you're thinking like a smart, employed, rational person. I could see things going south quickly. Examples:

You bought a house in 2007 in Miami.
You started a homebuilding business in 2005 with all your life savings and all the leverage you could find.
You worked for AIG, Lehman (or whoever) and lost your job while simultaneously losing 50% of your 401K since a big chunk was in company stock. Now your reputation is tainted, it takes 3 years to find another job, and you sell another 25% of your 401K to "get by", then you have to pay the tax and penalties on that.

I can see how this might have happened to some, but for the average joe employee I guess it can be hard to understand since it seems so easy to just keep investing and let the stock funds recover.

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Re: GenXers Face Lean Retirement
« Reply #24 on: June 12, 2014, 10:01:32 PM »
Quote
Generation X has already forfeited valuable years of interest compounding by failing to accrue savings early, said Alicia Munnell, the director of the Center for Retirement Research at Boston College and former research director at the Federal Reserve Bank of Boston.

At least the article points this out.

Yes, but ironically, GenXers were given the opportunity to get back into the market and realize those gains around 2008-2009, a fact that never quite makes it into these kinds of articles...
Interesting.  I started saving RIGHT out of college (I'm an Xer), based on a recommendation from a very savvy college classmate.  Otherwise, I hadn't really thought of it.
My husband is 2 years older.  It took more than a decade for me to catch up to him, since he started investing in 1990 and I started in 1992.

Anyway, most of my cohorts out of engineering school were making $40k back in 1992.  I was saving money on a Navy Ensign's salary, so I have little sympathy.

mm1970

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Re: GenXers Face Lean Retirement
« Reply #25 on: June 12, 2014, 10:04:53 PM »
I saw that one too this morning. I got lucky. We bought our first home in 1989, and by 2008 it had risen in market value by nearly 150%. We needed to move for all sorts of non-work related reasons and sold in July 2008, two months before Lehman Brothers tanked and the markets froze up. This was just past the top of the real estate bubble for my old neighborhood, still a great time to sell.

We rolled most of that equity into our new home, which was further off the bubble. Our new home was only 28K more than the previous one but much, much nicer. The schools were less desirable and the shopping sucked (neither mattered to us), but the neighborhood itself was rock solid.

I feel for that couple who bought our home in 2008. They barely got their loan together, and now that place is worth 40-50K than what they bought it for. It's been rented some since we moved, but never sold. Ours is 40K off what we bought for as well, but unlike that couple we have plenty of equity in it so we aren't trapped like they are. 2005-2008 was a crappy time to be a first time home buyer.
2004 wasn't much better.  Our house is worth about $70k less than we paid for it.
Our neighbors bought in 2006 though.  They were foreclosed on.  At the bottom of the market, their house was worth $369k less than they paid for it.  After the foreclosure, it sold for about $300k less.

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Re: GenXers Face Lean Retirement
« Reply #26 on: June 13, 2014, 09:54:57 AM »
Here's something I don't understand from the article:
Quote
Only one-third of Generation X households have more wealth than their parents, even though most earn more, according to The Pew Charitable Trusts.

I'm solidly in the middle of GenX, and I wouldn't expect to have more wealth now at age 40 than my parents at age 70.  My dad, retiring this year, has had thirty more working years than I have.  His net worth is probably about twice mine, which I'd say actually puts me ahead.  If I were compare my net worth to the present-value of my parents' net worth when they were my age, I'd find I'm WAY ahead.  Dad was just starting to think about retirement savings at that point.

Since I, at 3-4 years from ER, am definitely not the "typical" GenX-er the article is trying to describe, and I don't have more wealth than my parents who were slow to the saving game, what is the point of the quoted sentence?

Cherry Lane

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Re: GenXers Face Lean Retirement
« Reply #27 on: June 13, 2014, 09:57:02 AM »
Quote
Gen-Xers lost about half of their wealth between 2007 and 2010, according to ...

I don't know what kind of fucking idiots would have lost half their net worth during that time frame.  Shit, just looking at my retirement savings / investments and house, my net went UP by 8% from Jan 1, 2007 to Dec 31, 2010 (using Zillow for the house and actual values on the retirement accounts).  Then again, I kept saving aggressively.

Yep, just looked at mine.  Net Worth went up almost 50% in this time frame.  Investing at the bottom helped.

arebelspy

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Re: GenXers Face Lean Retirement
« Reply #28 on: June 13, 2014, 10:05:06 AM »
Since everyone else seems to be saying their net worth shot up in that time, I'll be the one to raise my hand and admit it.

Quote
Gen-Xers lost about half of their wealth between 2007 and 2010, according to ...

I don't know what kind of fucking idiots would have lost half their net worth during that time frame.

I lost more than half, basically all of my net worth.  I was, of course, a fucking idiot.

I more than made up for it in the subsequent four years, and I expect to FIRE in mid-2016 a millionaire.

But I lost quite a lot in that time frame due to being a fucking idiot.  So there are some of us out there like that, even if I'm one of the only ones to admit it openly.  :)
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Re: GenXers Face Lean Retirement
« Reply #29 on: June 13, 2014, 10:16:46 AM »
I would happily admit it if I did, but I don't have great data before 12/31/08. I wasn't paying close attention back then.

I would guess we lost 50% of our NW from 1/1/07 to 12/31/08. But then from 1/1/09 - 12/31/10 our NW went up 300%. Sounds impressive, but it's really not. Going up 300% from a tiny number is pretty easy.

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Re: GenXers Face Lean Retirement
« Reply #30 on: June 13, 2014, 01:00:49 PM »
Let's see, between Jan 1 2007 and Dec 31 2010, I about doubled my NW.  It helps to throw in 2007 because my NW went up 60% that year.  2008 was ugly, a loss of 25% even with similarly big active income and hard-core saving contributions. 

I say all of this, because the article is totally jumping the gun and cherry picking anecdotes.  Gen X still has 20+ years before 'traditional retirement age' (SS + Medicare), and the outcome can change significantly due to the earning years ahead, the behavior of the labor market and stock market, etc.  We all may be screwed by some as-yet unforeseen event, but we certainly haven't been permanently screwed by what happened 6 years ago. And I have hope, maybe because I read too much in MMM and Boglehead Forums, but there are more sources for discussion and encouragement than ever before.   
   

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Re: GenXers Face Lean Retirement
« Reply #31 on: June 13, 2014, 03:00:30 PM »
Since everyone else seems to be saying their net worth shot up in that time, I'll be the one to raise my hand and admit it.

Quote
Gen-Xers lost about half of their wealth between 2007 and 2010, according to ...

I don't know what kind of fucking idiots would have lost half their net worth during that time frame.

I lost more than half, basically all of my net worth.  I was, of course, a fucking idiot.

I more than made up for it in the subsequent four years, and I expect to FIRE in mid-2016 a millionaire.

But I lost quite a lot in that time frame due to being a fucking idiot.  So there are some of us out there like that, even if I'm one of the only ones to admit it openly.  :)

I'm a millenial (1983) not a GenXer, but I lost far more than half my net worth from 2008-2010. I entered the workforce and bought a house in Jan. 2008. So my net worth nose-dived from approx. $0 on the day I bought my house to about -$90,000 on the day I married my wife (and her $36K in student loans) in May 2010. I don't suppose it was due to being a fucking idiot, but I was incredibly naive. 4 years later, I am closing in on +$90,000.

brewer12345

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Re: GenXers Face Lean Retirement
« Reply #32 on: June 13, 2014, 03:32:23 PM »
Since everyone else seems to be saying their net worth shot up in that time, I'll be the one to raise my hand and admit it.

Quote
Gen-Xers lost about half of their wealth between 2007 and 2010, according to ...

I don't know what kind of fucking idiots would have lost half their net worth during that time frame.

I lost more than half, basically all of my net worth.  I was, of course, a fucking idiot.

I more than made up for it in the subsequent four years, and I expect to FIRE in mid-2016 a millionaire.

But I lost quite a lot in that time frame due to being a fucking idiot.  So there are some of us out there like that, even if I'm one of the only ones to admit it openly.  :)

I saw my net worth drop by about half between early 2008 and early 2009.  Fortunately I had the sense to double down and buy aggressively into the pit of the crash, and I even bought a portfolio of crossover credit type bonds with borrowed money (50k HELOC draw that went into bonds that were on average a sloppy BBB rating and maturities out to about 5 years, with aggregate YTM at time of purchase of 11+%).

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Re: GenXers Face Lean Retirement
« Reply #33 on: June 13, 2014, 07:03:28 PM »
Yeah, you had the experience and knowledge to take advantage of it.  I, unfortunately, did not. :)

I'm so ready for another crash now though.  :)
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brewer12345

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Re: GenXers Face Lean Retirement
« Reply #34 on: June 13, 2014, 07:28:46 PM »
Yeah, you had the experience and knowledge to take advantage of it.  I, unfortunately, did not. :)

I'm so ready for another crash now though.  :)

From what I understand, you have already run the race.  Quit sprinting before you blow out an Achilles tendon.

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Re: GenXers Face Lean Retirement
« Reply #35 on: June 13, 2014, 07:33:49 PM »
Yeah, you had the experience and knowledge to take advantage of it.  I, unfortunately, did not. :)

I'm so ready for another crash now though.  :)

From what I understand, you have already run the race.  Quit sprinting before you blow out an Achilles tendon.

Indeed. One of the quotes I picked up on the ER.org forums is "When you've won the game, stop playing."  I try to repeat it to myself every so often in the hopes that it will sink in.  I just hate leaving money on the table.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
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Re: GenXers Face Lean Retirement
« Reply #36 on: June 14, 2014, 08:59:00 PM »
I was young and without any kind of funds and worked in a real estate office in the boom of the late 70;s-early 80;s. I saw houses, the same houses, double in price in 3 years. Oh boy did I want to take advantage of that! But could not.

Decades later in the run up, I was less interested in investing in real estate. And we live in a hot section of the city where we saw thing go up and up. There is only 1 property I truly regret not buying, a modest house around the corner from us that we could have rented and it came with a huge yard. At the time our liquid assets were just about 2X of our fixed assets and I wanted more liquidity, so didn't feel that we could afford it. It would have removed one of the X's in liquid.

So if we all live long enough, there are real estate boom and busts, there are bear markets, there are bull markets. Most of us will manage to ride through a couple of them.
« Last Edit: June 14, 2014, 09:01:23 PM by iris lily »

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Re: GenXers Face Lean Retirement
« Reply #37 on: June 14, 2014, 11:10:14 PM »
In 2008 we had invested assets of about 200K, now we are over 1M.   That is 6 years.  If you have 20 years until retirement, think what you might be able to sock away.

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Re: GenXers Face Lean Retirement
« Reply #38 on: June 15, 2014, 05:29:04 AM »
IRA contribution limits:

1990 - 2000 limit is $2,000
2001 - 2004 limit is $3,000
2005 - 2007 limit is $4,000

I graduated college in 1990 and these low numbers, especially in the first decade of my working life, gave me a false impression of what one should be contributing to retirement. Especially since pensions were still a possibility if you scored the right job. I didn't.

Fortunately I stopped using these as a data point for what would lead to a good retirement.

As a GenXer, I don't feel too sorry for myself. We missed the high times, buying houses at half our annual income, but education was reasonably priced if you chose well.

The hard part will be in five to ten years when getting hired gets tougher.

pachnik

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Re: GenXers Face Lean Retirement
« Reply #39 on: June 15, 2014, 07:46:47 AM »
The hard part will be in five to ten years when getting hired gets tougher.

One of the reasons why I am so grateful that I found this website, is the above line from the previous poster.  This sort of thing is right in my face.  So I had better have my financial ship in order to the best of my ability because this could easily happen to me. 

I am right on the cusp of early Gen. X or late Baby Boomer.  I won't have as much as my parents because they stayed together and worked as a team while I left a bad marriage when I was about 40.  Plus, they were immigrants with a very frugal mindset.  I got a frugal mindset a year ago when I found this website.  So I can't really blame mine on the housing market or the stock market.  Just a few decades of fairly unconscious spending. 

But having said this I am in pretty good shape due to a life-long dislike of both shopping and debt.  Plus having a habit of tucking money away for a rainy day. 


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Re: GenXers Face Lean Retirement
« Reply #40 on: June 15, 2014, 03:01:31 PM »
Our net worth fell during only 2 quarters from 12/31/2006 through 12/31/2010.   Every other quarter, our net worth increased.  In total, our net worth increased more than 60% over that period.  I know some boomers that panicked during that period and pulled money out of the market on the way down and missed out on the upside during the recovery.  It's not a GenX thing, it's a lack of investment discipline thing.

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Re: GenXers Face Lean Retirement
« Reply #41 on: June 16, 2014, 05:58:14 AM »
Every time has good and bad.  A lot of us went to grad school (that was back in 1972) because there were so few jobs.  In the 80's mortgage rates were 18%-20%.  The advantage of being older is that we have lived through the ups and downs and know that things can change, often drastically.  The advantage of being younger is that you can read about the ups and downs and anticipate them, instead of thinking that what you have now is how things will always be and learning the hard way that they can change.