Author Topic: Overheard at Work 2  (Read 739868 times)

bluebelle

  • Pencil Stache
  • ****
  • Posts: 564
  • Location: Toronto
Re: Overheard at Work 2
« Reply #2550 on: July 06, 2020, 08:59:46 AM »
Between the basic income stats reported by our gov't, the things people say and do with their money - I'm no longer surprised that a large percentage of people can't raise $400 on short notice or that median incomes are so low or that personal debt is so high. Delayed gratification is apparently a super power.

Way back at the beginning of DW and my personal finance education via MMM and other sources - we were frequently surprised. No as much lately.
I sometimes (okay, often), think questions are slanted to evoke the response desired.   If the question asked me "if you had an unexpected $400 charge, do you have enough in your chequing account to cover it", the answer is NO if I'm feeling very literal that day.   They didn't ask me if I have a metric shit ton of money somewhere else, and a very decent pay cheque ever two weeks.   Although, I do suspect that most people have to answer NO because they really don't have a spare $400 anywhere.....and that truly saddens me for society as a whole.

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 1868
Re: Overheard at Work 2
« Reply #2551 on: July 06, 2020, 09:12:35 AM »
Between the basic income stats reported by our gov't, the things people say and do with their money - I'm no longer surprised that a large percentage of people can't raise $400 on short notice or that median incomes are so low or that personal debt is so high. Delayed gratification is apparently a super power.

Way back at the beginning of DW and my personal finance education via MMM and other sources - we were frequently surprised. No as much lately.
I sometimes (okay, often), think questions are slanted to evoke the response desired.   If the question asked me "if you had an unexpected $400 charge, do you have enough in your chequing account to cover it", the answer is NO if I'm feeling very literal that day.   They didn't ask me if I have a metric shit ton of money somewhere else, and a very decent pay cheque ever two weeks.   Although, I do suspect that most people have to answer NO because they really don't have a spare $400 anywhere.....and that truly saddens me for society as a whole.

Yep, that survey has been greatly misinterpreted.

From the Cato Institute (https://www.cato.org/blog/it-true-40-americans-cant-handle-400-emergency-expense-0):

Quote
The question was about how people would choose to pay a $400 “emergency expense” — not whether or not they could pay it out of savings (or checking) if they wanted to. Respondents were also free to choose more than one way of paying the extra $400 (“please selects all that apply”), so the answers add up 143% rather than 100%. Even if 100% said they could pay an extra $400 with cash, there could still be more than 40% who would choose a different method.

It turns out that 86% would pay cash or charge it and then pay off the bill at the next statement (many consumers autopay credit card bills from checking accounts). Some (11%) said they might borrow some or all of it from a friend or family member, but that probably means a spouse or parent in most cases (respondents included full‐​time students).

From that, it looks like the actual number is 14%.

And if you're worried about source bias, Bloomberg had a similar article, but it's behind a paywall.

bluebelle

  • Pencil Stache
  • ****
  • Posts: 564
  • Location: Toronto
Re: Overheard at Work 2
« Reply #2552 on: July 06, 2020, 09:24:50 AM »

Yep, that survey has been greatly misinterpreted.

From the Cato Institute (https://www.cato.org/blog/it-true-40-americans-cant-handle-400-emergency-expense-0):

thanks for the link.....I hadn't thought of that....If I was asked how I would pay for something, credit card is my go to choice because:
1) someone else's money for a month when paid off in full
2) convenient
3) points
4) ease of expense tracking - I download it every month

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2553 on: July 06, 2020, 09:52:41 AM »
You see very similar slant any time they talk about saving's rates. I have $0 in a savings account, why would I? But I'm not poor by any stretch of the imagination.

economista

  • Pencil Stache
  • ****
  • Posts: 803
  • Age: 31
  • Location: Colorado
Re: Overheard at Work 2
« Reply #2554 on: July 06, 2020, 12:11:08 PM »
This morning in the wall street journal an article said 59% of working age people don't have any money in a retirement account, and then later on in the article they said if families have savings at all, it is most often in a retirement account. Those statements put together show how dire the situation is. It doesn't surprise me at all though because I'm from a family where savings, especially retirement savings, are unheard of. The mindset is that retirement savings = social security, and you just plan on working until you can't possible work any longer and then dying.

Here's the article but it is behind the paywall.

https://www.wsj.com/articles/states-take-aim-at-people-with-no-retirement-plan-11593945474?mod=searchresults&page=1&pos=1

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2555 on: July 06, 2020, 12:56:44 PM »
This morning in the wall street journal an article said 59% of working age people don't have any money in a retirement account, and then later on in the article they said if families have savings at all, it is most often in a retirement account. Those statements put together show how dire the situation is. It doesn't surprise me at all though because I'm from a family where savings, especially retirement savings, are unheard of. The mindset is that retirement savings = social security, and you just plan on working until you can't possible work any longer and then dying.

Here's the article but it is behind the paywall.

https://www.wsj.com/articles/states-take-aim-at-people-with-no-retirement-plan-11593945474?mod=searchresults&page=1&pos=1

I'm genuinely interested in this topic so I went looking. I couldn't find a non-paywalled version of the article, nor was the actual source data from the National Institute on Retirement Security obvious. But I did find something similar from NIRS, which maybe is the source data, which claims that 40% of over-60s only receive income from Social Security, not from pensions ("DB" or "Defined Benefit Plans") or 401k/403b/IRAs ("DC" or "Defined Contribution Plans"). Another NIRS tidbit is that among Boomers - who are approaching retirement age if not already there - the wealthiest 25% own a whopping 91% of the money, and the bottom 50% only own 2%.

If that's true then that really is devastating. Especially for the Boomers, who have no time left to "make up for it".

economista

  • Pencil Stache
  • ****
  • Posts: 803
  • Age: 31
  • Location: Colorado
Re: Overheard at Work 2
« Reply #2556 on: July 07, 2020, 06:44:55 AM »
@sherr - I’m on my iPad right now which doesn’t offer a print to pdf option, but if I remember when I’m on the laptop later I’ll try to make a pdf and send it to you. I was also able to pull up the study that value came from, but there is no way to share it on here, although the print to pdf might work there too.

rockstache

  • Walrus Stache
  • *******
  • Posts: 6858
  • Age: 2017
  • Location: Northeast
Re: Overheard at Work 2
« Reply #2557 on: July 07, 2020, 07:45:17 AM »
I’d really love to read it too, if it’s not too much trouble.

zolotiyeruki

  • Magnum Stache
  • ******
  • Posts: 4141
  • Location: State: Denial
Re: Overheard at Work 2
« Reply #2558 on: July 07, 2020, 01:44:04 PM »
I'm genuinely interested in this topic so I went looking. I couldn't find a non-paywalled version of the article, nor was the actual source data from the National Institute on Retirement Security obvious. But I did find something similar from NIRS, which maybe is the source data, which claims that 40% of over-60s only receive income from Social Security, not from pensions ("DB" or "Defined Benefit Plans") or 401k/403b/IRAs ("DC" or "Defined Contribution Plans"). Another NIRS tidbit is that among Boomers - who are approaching retirement age if not already there - the wealthiest 25% own a whopping 91% of the money, and the bottom 50% only own 2%.
I wonder if the shift is because the bottom 50%, having started out with less, have expended more of their financial assets, while those who started out with more still haven't worked through it.  E.g. if I start out with $2 and my friend starts off with $8, he has 80% of the money and I have 20%.  If we both spend $2, now he has 100% of what's left.  I guess I'm not sure if it should bother me to see that sort of shift.

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2559 on: July 07, 2020, 02:08:49 PM »
I'm genuinely interested in this topic so I went looking. I couldn't find a non-paywalled version of the article, nor was the actual source data from the National Institute on Retirement Security obvious. But I did find something similar from NIRS, which maybe is the source data, which claims that 40% of over-60s only receive income from Social Security, not from pensions ("DB" or "Defined Benefit Plans") or 401k/403b/IRAs ("DC" or "Defined Contribution Plans"). Another NIRS tidbit is that among Boomers - who are approaching retirement age if not already there - the wealthiest 25% own a whopping 91% of the money, and the bottom 50% only own 2%.
I wonder if the shift is because the bottom 50%, having started out with less, have expended more of their financial assets, while those who started out with more still haven't worked through it.  E.g. if I start out with $2 and my friend starts off with $8, he has 80% of the money and I have 20%.  If we both spend $2, now he has 100% of what's left.  I guess I'm not sure if it should bother me to see that sort of shift.

Even if that is the cause, running out of money 5 years into retirement and relying solely on SS is surely undesirable.

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2560 on: July 07, 2020, 02:12:12 PM »
This morning in the wall street journal an article said 59% of working age people don't have any money in a retirement account, and then later on in the article they said if families have savings at all, it is most often in a retirement account. Those statements put together show how dire the situation is. It doesn't surprise me at all though because I'm from a family where savings, especially retirement savings, are unheard of. The mindset is that retirement savings = social security, and you just plan on working until you can't possible work any longer and then dying.

Here's the article but it is behind the paywall.

https://www.wsj.com/articles/states-take-aim-at-people-with-no-retirement-plan-11593945474?mod=searchresults&page=1&pos=1

I'm genuinely interested in this topic so I went looking. I couldn't find a non-paywalled version of the article, nor was the actual source data from the National Institute on Retirement Security obvious.

Economista pointed out off-line that the source data is from this NIRS article, I didn't find it earlier because I didn't go back to 2018.

zolotiyeruki

  • Magnum Stache
  • ******
  • Posts: 4141
  • Location: State: Denial
Re: Overheard at Work 2
« Reply #2561 on: July 08, 2020, 09:03:37 AM »
I'm genuinely interested in this topic so I went looking. I couldn't find a non-paywalled version of the article, nor was the actual source data from the National Institute on Retirement Security obvious. But I did find something similar from NIRS, which maybe is the source data, which claims that 40% of over-60s only receive income from Social Security, not from pensions ("DB" or "Defined Benefit Plans") or 401k/403b/IRAs ("DC" or "Defined Contribution Plans"). Another NIRS tidbit is that among Boomers - who are approaching retirement age if not already there - the wealthiest 25% own a whopping 91% of the money, and the bottom 50% only own 2%.
I wonder if the shift is because the bottom 50%, having started out with less, have expended more of their financial assets, while those who started out with more still haven't worked through it.  E.g. if I start out with $2 and my friend starts off with $8, he has 80% of the money and I have 20%.  If we both spend $2, now he has 100% of what's left.  I guess I'm not sure if it should bother me to see that sort of shift.

Even if that is the cause, running out of money 5 years into retirement and relying solely on SS is surely undesirable.
Certainly it's undesirable, but it doesn't necessarily point to an injustice IMO.  As much as it has metastasized into our culture, SS was never meant to be a sole source of support in retirement.

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2562 on: July 08, 2020, 09:13:12 AM »
I'm genuinely interested in this topic so I went looking. I couldn't find a non-paywalled version of the article, nor was the actual source data from the National Institute on Retirement Security obvious. But I did find something similar from NIRS, which maybe is the source data, which claims that 40% of over-60s only receive income from Social Security, not from pensions ("DB" or "Defined Benefit Plans") or 401k/403b/IRAs ("DC" or "Defined Contribution Plans"). Another NIRS tidbit is that among Boomers - who are approaching retirement age if not already there - the wealthiest 25% own a whopping 91% of the money, and the bottom 50% only own 2%.
I wonder if the shift is because the bottom 50%, having started out with less, have expended more of their financial assets, while those who started out with more still haven't worked through it.  E.g. if I start out with $2 and my friend starts off with $8, he has 80% of the money and I have 20%.  If we both spend $2, now he has 100% of what's left.  I guess I'm not sure if it should bother me to see that sort of shift.

Even if that is the cause, running out of money 5 years into retirement and relying solely on SS is surely undesirable.
Certainly it's undesirable, but it doesn't necessarily point to an injustice IMO.  As much as it has metastasized into our culture, SS was never meant to be a sole source of support in retirement.

Yes, that's my point. SS was not meant to be the sole source of support in retirement. And if it is, for half of the people, then the current system is obviously broken and needs to be changed.

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 1868
Re: Overheard at Work 2
« Reply #2563 on: July 08, 2020, 09:37:10 AM »
I'm genuinely interested in this topic so I went looking. I couldn't find a non-paywalled version of the article, nor was the actual source data from the National Institute on Retirement Security obvious. But I did find something similar from NIRS, which maybe is the source data, which claims that 40% of over-60s only receive income from Social Security, not from pensions ("DB" or "Defined Benefit Plans") or 401k/403b/IRAs ("DC" or "Defined Contribution Plans"). Another NIRS tidbit is that among Boomers - who are approaching retirement age if not already there - the wealthiest 25% own a whopping 91% of the money, and the bottom 50% only own 2%.
I wonder if the shift is because the bottom 50%, having started out with less, have expended more of their financial assets, while those who started out with more still haven't worked through it.  E.g. if I start out with $2 and my friend starts off with $8, he has 80% of the money and I have 20%.  If we both spend $2, now he has 100% of what's left.  I guess I'm not sure if it should bother me to see that sort of shift.

Even if that is the cause, running out of money 5 years into retirement and relying solely on SS is surely undesirable.
Certainly it's undesirable, but it doesn't necessarily point to an injustice IMO.  As much as it has metastasized into our culture, SS was never meant to be a sole source of support in retirement.

Yes, that's my point. SS was not meant to be the sole source of support in retirement. And if it is, for half of the people, then the current system is obviously broken and needs to be changed.

Or a lot of people are idiots who will sacrifice their future by spending every dollar they make now. Even when confronted with hard truths, they would rather blame the system than take responsibility for their own future.

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2564 on: July 08, 2020, 09:48:41 AM »
Or a lot of people are idiots who will sacrifice their future by spending every dollar they make now. Even when confronted with hard truths, they would rather blame the system than take responsibility for their own future.

I believe that a good system provides good outcomes for the majority of people, by definition. If it does not provide good outcomes for the majority of people, only for the, say, top 10% like you and me, then it's a bad system.

You can point to individual people and say that individual people should take more responsibility for their situation etc etc etc all day long, and I'd probably agree with you. But if most people are getting screwed, then it's not an individual problem, it's a systemic problem.

zolotiyeruki

  • Magnum Stache
  • ******
  • Posts: 4141
  • Location: State: Denial
Re: Overheard at Work 2
« Reply #2565 on: July 08, 2020, 09:57:02 AM »
Even if that is the cause, running out of money 5 years into retirement and relying solely on SS is surely undesirable.
Certainly it's undesirable, but it doesn't necessarily point to an injustice IMO.  As much as it has metastasized into our culture, SS was never meant to be a sole source of support in retirement.

Yes, that's my point. SS was not meant to be the sole source of support in retirement. And if it is, for half of the people, then the current system is obviously broken and needs to be changed.
[/quote]If, by "the current system is obviously broken," you mean "decades of consumerism and well-intentioned but misguided expansions of social welfare have led half of baby boomers to abandon responsibility for their own retirement finances," then I agree.  Instead of politicians promising that Uncle Sam will take care of you, let's instead make sure that people understand that SS *isn't* meant to support you.  Sadly, that doesn't make for a very effective campaign slogan...

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2566 on: July 08, 2020, 10:04:07 AM »
If, by "the current system is obviously broken," you mean "decades of consumerism and well-intentioned but misguided expansions of social welfare have led half of baby boomers to abandon responsibility for their own retirement finances," then I agree.  Instead of politicians promising that Uncle Sam will take care of you, let's instead make sure that people understand that SS *isn't* meant to support you.  Sadly, that doesn't make for a very effective campaign slogan...

I'm legitimately curious what your actual practical suggestions are. Take SS away entirely and just tell people to "figure it out"?! Or... what exactly? There is a problem here that we both agree is a problem. What is your preferred solution?

LennStar

  • Handlebar Stache
  • *****
  • Posts: 2439
  • Location: Germany
Re: Overheard at Work 2
« Reply #2567 on: July 08, 2020, 10:54:48 AM »
Not to mention that there is the simple but important bit that the current SS system (in various form over the countries) is also a product of the 1929 economy crisis.

For example, you could have saved as much as you wanted, if you suddenly pay in billions, your savings are worth less than the paper it's printed on. As long as your "security" is money based, it is risky.

That is why I like the much insulted German system. It is based on actual production. And let's face it, underproduction was not exactly a problem in the west for the last half century.

And telling people to figure it out... to know how well this works, just look at the people enthusiastic about how good a work Trump has done and that vaccines just make you sick.

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 1868
Re: Overheard at Work 2
« Reply #2568 on: July 08, 2020, 11:29:26 AM »
The system is in place for people to succeed. The old adage, "You can lead a horse to water, but you can't make it drink," certainly applies.

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2569 on: July 08, 2020, 11:33:39 AM »
The system is in place for people to succeed. The old adage, "You can lead a horse to water, but you can't make it drink," certainly applies.

It does not apply, because there are plenty of countries that do force their citizens to save for retirement in one way or another, and do solve this problem.

So you're saying that your preferred solution really is "take away SS and tell people to 'figure it out'"? Or is it that you don't have any solution, and just shrug and say "it is what it is" when presented with the problem?

Goldielocks

  • Walrus Stache
  • *******
  • Posts: 6969
  • Location: BC
Re: Overheard at Work 2
« Reply #2570 on: July 08, 2020, 11:39:13 AM »
Think about those SS stats... They would likely include:

Spouses that worked but did not invest $$s in their own name.
People who have spent their savings, possibly by giving it away or having private care in later retirement, in order to be eligible for subsidized long term care.
People that have spent their savings because they have lived a very long time (over 85) and don't need a lot.

People that put their "savings" into a fully paid off home.  This one is pretty common, and now just pull SS.
People that put their savings into a savings account, under the mattress, etc, and therefore don't show any income.
People that spent money on kids' education, weddings, kids home down payments, and in turn, rely on the kids to support them now.  (Also more common than I had thought).

People that only ever made <$60k a year and had little left over while raising families, yet the SS amount now is more than enough.

Maximum SS is $3k a month.   If you have a spouse, you could be getting more than this.  With a paid off home, this is PLENTY.   IMO even $2k/month with a paid off home and medicare is plenty.

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 1868
Re: Overheard at Work 2
« Reply #2571 on: July 08, 2020, 11:44:48 AM »
The system is in place for people to succeed. The old adage, "You can lead a horse to water, but you can't make it drink," certainly applies.

It does not apply, because there are plenty of countries that do force their citizens to save for retirement in one way or another, and do solve this problem.

So you're saying that your preferred solution really is "take away SS and tell people to 'figure it out'"? Or is it that you don't have any solution, and just shrug and say "it is what it is" when presented with the problem?

Not everything requires a huge policy change. My solution would be to increase education. Make it required learning in high school. You can leave SS as it is, though I wouldn't complain if there were an opt-out option for people who'd rather invest that money and get a decent return on it.

ysette9

  • Walrus Stache
  • *******
  • Posts: 7546
  • Location: Bay Area at heart living in the PNW
    • The Best Is Yet To Come
Re: Overheard at Work 2
« Reply #2572 on: July 08, 2020, 12:01:28 PM »
I think “should” is a bad policy premise. Regardless of whether people should be saving money or not, the simple fact is that many don’t/ we are hardwire to do poorly at delayed gratification and prioritize Now over Later. So given that the question in my mind is how to maximize the chance of a safe financial figure for the most people in the easiest way possible. Any time you fight against human nature you are either not going to be very successful (think of abstinence-only) education, or it will be difficult and expensive. So it has to be easy.

We have seen that making the default option for 401k participation be to participate increases how many people use the plan. Similarly the auto-increase option allows people to save more each year in retirement accounts without having to do anything. Make people’s naturel laziness work for you instead of against you. In this a default opt-in system like SS is great for most people because they don’t have to do anything and can’t mess it up too badly with their own short-sighted thinking. (“Borrowing against my retirement savings to buy that sweet boat is an awesome idea!”)

Just Joe

  • Magnum Stache
  • ******
  • Posts: 4703
  • Age: 125
  • Location: Just past the red barn on the left.
  • Here to learn.
Re: Overheard at Work 2
« Reply #2573 on: July 08, 2020, 12:56:36 PM »
The system is in place for people to succeed. The old adage, "You can lead a horse to water, but you can't make it drink," certainly applies.

So what should the system do? Tax people more (European rate perhaps) and make SS a retirement solution?

I can imagine a conservative politician blowing that idea up 10 seconds later complaining about unfair higher taxes.

Ten seconds later the people that the changes are meant to help are promptly agreeing.

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 1868
Re: Overheard at Work 2
« Reply #2574 on: July 08, 2020, 01:08:24 PM »
The system is in place for people to succeed. The old adage, "You can lead a horse to water, but you can't make it drink," certainly applies.

So what should the system do? Tax people more (European rate perhaps) and make SS a retirement solution?

I can imagine a conservative politician blowing that idea up 10 seconds later complaining about unfair higher taxes.

Ten seconds later the people that the changes are meant to help are promptly agreeing.

Neither party is going to allow significant changes to SS proposed by the other. Debating what the government should do with it is wasted energy. So what can the government do instead?

Just Joe

  • Magnum Stache
  • ******
  • Posts: 4703
  • Age: 125
  • Location: Just past the red barn on the left.
  • Here to learn.
Re: Overheard at Work 2
« Reply #2575 on: July 08, 2020, 01:16:02 PM »
I think the ACA mandate has shown us what the political establishment is capable of. And what the people meant to help might feel about the help.

The ACA needs some adjustments and polish but the intention is good. Too bad its been politicized so much.

The problem with 401K is that if there is a major recession (market collapse) then a portion of the population is in a tough place and may be drawing on their principle in short order. I knew of people in 2008 in this very situation. I think the solution whatever it would be needs to be more robust than the stock market.
« Last Edit: July 08, 2020, 01:20:21 PM by Just Joe »

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 1868
Re: Overheard at Work 2
« Reply #2576 on: July 08, 2020, 01:56:02 PM »
I think the ACA mandate has shown us what the political establishment is capable of. And what the people meant to help might feel about the help.

The ACA needs some adjustments and polish but the intention is good. Too bad its been politicized so much.

The problem with 401K is that if there is a major recession (market collapse) then a portion of the population is in a tough place and may be drawing on their principle in short order. I knew of people in 2008 in this very situation. I think the solution whatever it would be needs to be more robust than the stock market.

ACA itself is evidence of the failure of Washington. We needed universal healthcare, and all we could get, even when one political party controls both houses of congress and the presidency, is the ACA.

zolotiyeruki

  • Magnum Stache
  • ******
  • Posts: 4141
  • Location: State: Denial
Re: Overheard at Work 2
« Reply #2577 on: July 08, 2020, 02:13:53 PM »
If, by "the current system is obviously broken," you mean "decades of consumerism and well-intentioned but misguided expansions of social welfare have led half of baby boomers to abandon responsibility for their own retirement finances," then I agree.  Instead of politicians promising that Uncle Sam will take care of you, let's instead make sure that people understand that SS *isn't* meant to support you.  Sadly, that doesn't make for a very effective campaign slogan...
I'm legitimately curious what your actual practical suggestions are. Take SS away entirely and just tell people to "figure it out"?! Or... what exactly? There is a problem here that we both agree is a problem. What is your preferred solution?
Can you first define what you perceive the problem to be?  I just want to make sure we're discussing the same thing.  I've participated in too many discussions where the participants were talking past each other without realizing it :)

sherr

  • Handlebar Stache
  • *****
  • Posts: 1543
  • Age: 35
  • Location: North Carolina, USA
Re: Overheard at Work 2
« Reply #2578 on: July 08, 2020, 02:21:03 PM »
If, by "the current system is obviously broken," you mean "decades of consumerism and well-intentioned but misguided expansions of social welfare have led half of baby boomers to abandon responsibility for their own retirement finances," then I agree.  Instead of politicians promising that Uncle Sam will take care of you, let's instead make sure that people understand that SS *isn't* meant to support you.  Sadly, that doesn't make for a very effective campaign slogan...
I'm legitimately curious what your actual practical suggestions are. Take SS away entirely and just tell people to "figure it out"?! Or... what exactly? There is a problem here that we both agree is a problem. What is your preferred solution?
Can you first define what you perceive the problem to be?  I just want to make sure we're discussing the same thing.  I've participated in too many discussions where the participants were talking past each other without realizing it :)

That roughly half of all Americans entering retirement apparently have no retirement savings and are completely dependent on Social Security.

SunnyDays

  • Handlebar Stache
  • *****
  • Posts: 1928
Re: Overheard at Work 2
« Reply #2579 on: July 08, 2020, 05:27:07 PM »
This morning in the wall street journal an article said 59% of working age people don't have any money in a retirement account, and then later on in the article they said if families have savings at all, it is most often in a retirement account. Those statements put together show how dire the situation is. It doesn't surprise me at all though because I'm from a family where savings, especially retirement savings, are unheard of. The mindset is that retirement savings = social security, and you just plan on working until you can't possible work any longer and then dying.

Here's the article but it is behind the paywall.

https://www.wsj.com/articles/states-take-aim-at-people-with-no-retirement-plan-11593945474?mod=searchresults&page=1&pos=1

I'm less familiar with the American SS program, but here in Canada, we have Old Age Security (OAS), which kicks in at age 65 for and pays approx $600 Cdn/month, or if that's all the income you have, then about $1200/month, including the Supplement. Try living on even 1200 a month here.  It can be done, but it's a sparse kind of life. It was implemented in 1927, when most people didn't live long enough to collect it.  I think the average life-span was about 64 then.  So it was expected that you worked until you died.  Now that life spans are much longer, the only logical step is to either have a laddered amount for deferring or mandated later starting date.

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 8001
  • Location: Fayetteville, NC
Re: Overheard at Work 2
« Reply #2580 on: July 08, 2020, 05:30:17 PM »
This morning in the wall street journal an article said 59% of working age people don't have any money in a retirement account, and then later on in the article they said if families have savings at all, it is most often in a retirement account. Those statements put together show how dire the situation is. It doesn't surprise me at all though because I'm from a family where savings, especially retirement savings, are unheard of. The mindset is that retirement savings = social security, and you just plan on working until you can't possible work any longer and then dying.

Here's the article but it is behind the paywall.

https://www.wsj.com/articles/states-take-aim-at-people-with-no-retirement-plan-11593945474?mod=searchresults&page=1&pos=1

I'm less familiar with the American SS program, but here in Canada, we have Old Age Security (OAS), which kicks in at age 65 for and pays approx $600 Cdn/month, or if that's all the income you have, then about $1200/month, including the Supplement. Try living on even 1200 a month here.  It can be done, but it's a sparse kind of life. It was implemented in 1927, when most people didn't live long enough to collect it.  I think the average life-span was about 64 then.  So it was expected that you worked until you died.  Now that life spans are much longer, the only logical step is to either have a laddered amount for deferring or mandated later starting date.

Or increase the amount that's saved into the program...

Gerard

  • Handlebar Stache
  • *****
  • Posts: 1467
  • Location: eastern canada
Re: Overheard at Work 2
« Reply #2581 on: July 08, 2020, 06:36:33 PM »
here in Canada, we have Old Age Security (OAS), which kicks in at age 65 for and pays approx $600 Cdn/month, or if that's all the income you have, then about $1200/month, including the Supplement. Try living on even 1200 a month here.  It can be done, but it's a sparse kind of life. It was implemented in 1927, when most people didn't live long enough to collect it.  I think the average life-span was about 64 then.  So it was expected that you worked until you died.  Now that life spans are much longer, the only logical step is to either have a laddered amount for deferring or mandated later starting date.

That number felt a little low, so I had a look... as far as I can tell, the minimum income a senior (65+) can get from the government is $1529 a month... see https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments/tab1-1.html.  That assumes the person has spent their entire adult life in Canada, but never worked, never contributed to the Canada Pension Plan, and never had a spouse that worked or contributed. It's still not a lot of money, but it's fairly generous for somebody who didn't put any money in!

I'm happy to be corrected on this if I'm missing something... I do know, for example, that you have to apply separately for OAS, and many seniors aren't aware of that.

Goldielocks

  • Walrus Stache
  • *******
  • Posts: 6969
  • Location: BC
Re: Overheard at Work 2
« Reply #2582 on: July 08, 2020, 08:34:39 PM »
This morning in the wall street journal an article said 59% of working age people don't have any money in a retirement account, and then later on in the article they said if families have savings at all, it is most often in a retirement account. Those statements put together show how dire the situation is. It doesn't surprise me at all though because I'm from a family where savings, especially retirement savings, are unheard of. The mindset is that retirement savings = social security, and you just plan on working until you can't possible work any longer and then dying.

Here's the article but it is behind the paywall.

https://www.wsj.com/articles/states-take-aim-at-people-with-no-retirement-plan-11593945474?mod=searchresults&page=1&pos=1

I'm less familiar with the American SS program, but here in Canada, we have Old Age Security (OAS), which kicks in at age 65 for and pays approx $600 Cdn/month, or if that's all the income you have, then about $1200/month, including the Supplement. Try living on even 1200 a month here.  It can be done, but it's a sparse kind of life. It was implemented in 1927, when most people didn't live long enough to collect it.  I think the average life-span was about 64 then.  So it was expected that you worked until you died.  Now that life spans are much longer, the only logical step is to either have a laddered amount for deferring or mandated later starting date.

Or increase the amount that's saved into the program...
OAS is a social security / welfare type program funded by general overhead  and everyone's taxes, not a "pay into it" system like Canada Pension Plan.

In other words, there is no saving into the OAS / GIS program, it comes out of general revenues fresh each year.

Someone who never worked and who has lived in Canada 40 years after age 18 can get $1200/mo to live on, as a 65 yr old senior without other income, which is a lot more than the provincial welfare system gives someone who is 55 and technically able to work.

Canada Pension plan currently requires you to work and pay into it, (like SS), and maxes out payments at $1200/mo.  The average person (due to working less or with far below average incomes) receives $900/mo.

Therefore, when combined with OAS, the average senior would get around CAD$1525/mo to live on, if no other pension plan or retirement savings.   (Their spouse could get the same amount, if they also worked the average). 

You can see why Canadians think that a SS system that pays out an average US$1500/mo, or US$2500/couple with the maximum payout double that number, seems just fine, especially if a paid off home is involved.

LennStar

  • Handlebar Stache
  • *****
  • Posts: 2439
  • Location: Germany
Re: Overheard at Work 2
« Reply #2583 on: July 09, 2020, 04:00:49 AM »
This morning in the wall street journal an article said 59% of working age people don't have any money in a retirement account, and then later on in the article they said if families have savings at all, it is most often in a retirement account. Those statements put together show how dire the situation is. It doesn't surprise me at all though because I'm from a family where savings, especially retirement savings, are unheard of. The mindset is that retirement savings = social security, and you just plan on working until you can't possible work any longer and then dying.

Here's the article but it is behind the paywall.

https://www.wsj.com/articles/states-take-aim-at-people-with-no-retirement-plan-11593945474?mod=searchresults&page=1&pos=1

I'm less familiar with the American SS program, but here in Canada, we have Old Age Security (OAS), which kicks in at age 65 for and pays approx $600 Cdn/month, or if that's all the income you have, then about $1200/month, including the Supplement. Try living on even 1200 a month here.  It can be done, but it's a sparse kind of life. It was implemented in 1927, when most people didn't live long enough to collect it.  I think the average life-span was about 64 then.  So it was expected that you worked until you died.  Now that life spans are much longer, the only logical step is to either have a laddered amount for deferring or mandated later starting date.

Or increase the amount that's saved into the program...
Remembering that the production per worker is magnitude(s) higher then it was 100 years ago, it should be no problem.
But absolute and relative are two different political beasts.

merula

  • Handlebar Stache
  • *****
  • Posts: 1445
Re: Overheard at Work 2
« Reply #2584 on: July 09, 2020, 07:55:17 AM »
Can we please move the social security discussion to another thread, as has already been requested once before?

markbike528CBX

  • Handlebar Stache
  • *****
  • Posts: 1629
  • Location: the Everbrown part of the Evergreen State (WA)
Re: Overheard at Work 2
« Reply #2585 on: July 09, 2020, 09:08:56 AM »
Can we please move the social security discussion to another thread, as has already been requested once before?

I'd suggest we put the SS discussion in a black (orange) box, pack it it foam (to the extent that it isn't already) and watch it crash.

Freedomin5

  • Magnum Stache
  • ******
  • Posts: 3870
  • Location: China
Re: Overheard at Work 2
« Reply #2586 on: July 09, 2020, 05:26:05 PM »
Let’s move this thread back on topic.

Many of our friends are expat teachers, and this year, everyone is stuck in China because you can’t get back in if you leave (due to borders being closed). The solution to teacher boredom appears to be “spend spend spend!”

One coworker (who frequently talks about not having enough money to pay basic water/electricity/gas bills, which btw are relatively inexpensive in China, went on a USD$70 street food tour. (You can get the foods for $15 if you walk 15 minutes down the street from our neighborhood.) Another one saw an ad for a USD$1500 week-long tour. They didn’t want to travel with strangers though, so they asked a travel agent to arrange a private tour. Granted, this person is not struggling financially and can well afford it. Others are enjoying a five-star beach vacation in Sanya, which, while it sounds excessive, is actually not that bad — about USD$2000 for a family of four to stay at a five-star beachfront resort, including flights.

Individually, each of these trips are not bad. It’s when you hear of the coworker who does ALL the trips that your face starts to meet your palm. 

dragoncar

  • Walrus Stache
  • *******
  • Posts: 9536
  • Registered member
Re: Overheard at Work 2
« Reply #2587 on: July 10, 2020, 12:23:04 AM »
Can we please move the social security discussion to another thread, as has already been requested once before?

I'd suggest we put the SS discussion in a black (orange) box, pack it it foam (to the extent that it isn't already) and watch it crash.

Please move discussion of moving discussion to another thread to another thread.  But keep original off-topic discussion right here.

Gerard

  • Handlebar Stache
  • *****
  • Posts: 1467
  • Location: eastern canada
Re: Overheard at Work 2
« Reply #2588 on: July 10, 2020, 08:38:19 AM »
Please move discussion of moving discussion to another thread to another thread.  But keep original off-topic discussion right here.

I will pretend the site has a "like" button and I will pretend I'm hitting it now.

Davnasty

  • Magnum Stache
  • ******
  • Posts: 2673
Re: Overheard at Work 2
« Reply #2589 on: July 10, 2020, 01:07:24 PM »
Can we please move the social security discussion to another thread, as has already been requested once before?

I'd suggest we put the SS discussion in a black (orange) box, pack it it foam (to the extent that it isn't already) and watch it crash.

Please move (discussion of (moving discussion to another thread)) to another thread.  But keep original off-topic discussion right here.

Formula checks out

Just Joe

  • Magnum Stache
  • ******
  • Posts: 4703
  • Age: 125
  • Location: Just past the red barn on the left.
  • Here to learn.
Re: Overheard at Work 2
« Reply #2590 on: July 14, 2020, 08:43:51 AM »
Oh geez! What now - math? MATH on a finance forum? Get that out of here! ;)

talltexan

  • Magnum Stache
  • ******
  • Posts: 4400
Re: Overheard at Work 2
« Reply #2591 on: July 16, 2020, 11:39:36 AM »
Instead of shockingly simple math, this is suddenly turning into a serious examination of the associative property of algebra...I'm in!

brandon4454

  • 5 O'Clock Shadow
  • *
  • Posts: 4
Re: Overheard at Work 2
« Reply #2592 on: July 16, 2020, 07:12:16 PM »
My coworker has a broken air conditioning and instead of repairing it she turns it down and blows it as hard as she can. This costs her $500 in electricity bills a month.

LennStar

  • Handlebar Stache
  • *****
  • Posts: 2439
  • Location: Germany
Re: Overheard at Work 2
« Reply #2593 on: July 17, 2020, 04:20:37 AM »
My coworker has a broken air conditioning and instead of repairing it she turns it down and blows it as hard as she can. This costs her $500 in electricity bills a month.
I don't even understand how many parts of this sentence I don't understand.

My best guess: She switched off the cooling and had the air-moving part run at max all the time, which somehow needs more electricity than the fans of a supercomputer?


PMG

  • Handlebar Stache
  • *****
  • Posts: 2267
  • Location: USA
Re: Overheard at Work 2
« Reply #2594 on: July 17, 2020, 07:11:51 AM »
I read it as, the unit is broken, not cooling well but perhaps still cooling a little, so she turns the temperature down and turns the fan up.  This makes the unit work harder which costs more.   

 
« Last Edit: July 17, 2020, 07:14:56 AM by PMG »

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 1868
Re: Overheard at Work 2
« Reply #2595 on: July 17, 2020, 07:17:47 AM »
We just had a similar issue. Evaporator coil was leaking freon. The part (still under warranty) would have been about $650 plus another $650 or so for labor (not under warranty). At the minimum, she could refill the freon. Otherwise, the AC's motor is going to burn up, and that is going to be a much more expensive bill.

LennStar

  • Handlebar Stache
  • *****
  • Posts: 2439
  • Location: Germany
Re: Overheard at Work 2
« Reply #2596 on: July 17, 2020, 08:11:15 AM »
I read it as, the unit is broken, not cooling well but perhaps still cooling a little, so she turns the temperature down and turns the fan up.  This makes the unit work harder which costs more.
Eh.... you run something that is definitely broken in some way, which not only makes it likely to completely break down, costs you a lot of money, and also might be a high health risk too (gases, fire)??

EMERGENCY FACEPUNCHES PLEASE! WITH A BARBELL!

Just Joe

  • Magnum Stache
  • ******
  • Posts: 4703
  • Age: 125
  • Location: Just past the red barn on the left.
  • Here to learn.
Re: Overheard at Work 2
« Reply #2597 on: July 20, 2020, 07:31:47 AM »
Yeah the compressor will run continuously until it wrecks itself. That is the energy hog in an a/c unit.

Same as a person who hears a serious engine or transmission noise in their car but choose to drive it to destruction ensuring the maximum cost repair bill. Might have just required something little when they first heard the noise.

zolotiyeruki

  • Magnum Stache
  • ******
  • Posts: 4141
  • Location: State: Denial
Re: Overheard at Work 2
« Reply #2598 on: July 20, 2020, 03:37:52 PM »
I have one:  the small business where I work employs a handful of engineers (expensive), and a bunch of people who assemble our products (at $10/hr).  It's interesting to note that the engineers (and management) always bring a sack lunch, or leftovers, or fruit for lunch, while fast food, takeout, or Starbucks are a common sight down in the assembly area.  The folks who can least afford it, it seems, are the ones who buy it most frequently.

It's also interesting that with the exception of one car, the owner of the business drives the least-valuable vehicle in the parking lot--an '03 Accord with >250k miles on it.  I think I'm pretty close, though, with my '95 Corolla with 234k. 

Goldielocks

  • Walrus Stache
  • *******
  • Posts: 6969
  • Location: BC
Re: Overheard at Work 2
« Reply #2599 on: July 20, 2020, 05:12:25 PM »
I have one:  the small business where I work employs a handful of engineers (expensive), and a bunch of people who assemble our products (at $10/hr).  It's interesting to note that the engineers (and management) always bring a sack lunch, or leftovers, or fruit for lunch, while fast food, takeout, or Starbucks are a common sight down in the assembly area.  The folks who can least afford it, it seems, are the ones who buy it most frequently.


Sad fact.   Some of them may be working 2 jobs (with limited time away from a job) or don't have great access to a kitchen at the room they rent, so default to buying food.

Hopefully the others are in a situation where they don't have to pay for rent and have a TON of disposable income.