Friday, October 24, 2014

America's Middle Class Knows it Faces a Grim Retirement


Per yesterday's post, I guess it isn't just the young'uns who know they're screwed. From the L.A. Times:
More than a third of middle-class families aren't saving anything in a 401(k), IRA or other vehicle, the survey found. For those 50 to 59 years old, it's 41%.

"Nearly a third (31%) of all respondents say they will not have enough money to 'survive' on in retirement," the bank says. "This increases to nearly half (48%) of middle-class Americans in their 50s."
Ahh...that younger segment of the Baby Boomer generation. Guess it really is better to die before you get old.

There was another quote from this article that I found particularly horrifying:
There's little new in these findings. They echo the findings of last year's installment in the Wells Fargo series, when more than a third of respondents said they expected to work at least until 80 to have enough to retire on.
Yikes! That's not "retiring," that's called "dying in the saddle."

I had a discussion recently with my brother-in-law. He hasn't made the best decisions in life. He failed to use his bachelor's degree to get a good paying white collar job despite residing in the high cost of living New York City area. After having four kids he dumped his wife for a fellow divorcee who has a young child of her own, and then they had yet another child before the two of them even got married. Now his oldest are reaching college age and are enlisting in the military partly to escape what has become a depressing family situation, but also for the tuition benefits. BIL was reflecting on the fact that I was able to take early retirement (due in large part to the cancer) because, among other things, my wife and I lived frugally and paid off our house even before I got sick.

"I'll retire on the day I die," he stated to me rather matter-of-factly. Problem is, he works a blue collar job that takes a fair bit of physical effort, so I wonder if he won't begin to physically break down long before it is time for him to shuffle off this mortal coil.

As for me, even if I hadn't gotten sick the idea of working until I'm 80 fills me with horror and dread. It's not that there aren't plenty of things that I could do until I'm that old (especially writing), it's just that none of those I enjoy doing are likely to pay me anything resembling a living wage. I'm very grateful to have been able to leave the rat race at a relatively young age, but in my case it remains to be seen if the hangover effects of my cancer battle will prevent me from doing many of the things I had hoped to do in retirement.

But enough about me. Let's finish the discussion of this article with another interesting tidbit:
All this points ever more strongly to an inescapable solution to Americans' retirement quandary: expanding Social Security. The program is immune from market influences, operates with rock-bottom administrative costs, and forces workers to place saving for retirement front and center.

Those who claim that increasing benefits is unnecessary because America's retirees are secretly rich -- a notion recently bandied about by independent benefits consultant Sylvester Schieber and Andrew Biggs of the American Enterprise Institute -- may need to get out and meet middle-class workers more. They would learn very quickly that middle-class Americans aren't laboring under the same misconceptions about their retirement prospects.
Forgetting for a moment that the Social Security program has its own long term financing problems, note the sheer fucking arrogance of these two assholes from the American Enterprise Institute. Do YOU know anyone in your social circle who is "secretly rich?" No, I don't either despite having a number of friends and acquaintances who are solidly upper middle class. The fact that these these two billionaire mouthpieces can get away with publicly saying such utter shit and not be tarred, feathered and run out of town on a rail is a big part of the problem in this country.


Bonus: "All your hope is gone...and it's not that funny, is it?"

11 comments:

  1. Perhaps i don't have a lot of faith that the infrastructure can support the population no matter how much one might wish to retire but i can understand the sentiment. While we have no debt and retirement somewhat sorted out.... it isn't a major player in our lives.. i suspect that things will fall apart from in the inside out sooner rather than later.. people are just struggling to survive as a rule. A harsh country this "America Land of the Free". The secretly rich comment is a huge insult to all. Some people's dna needs to be wiped out sooner than later.

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    1. "Some people's dna needs to be wiped out sooner than later."

      Indeed!

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  2. Good Morning, Bill, we both have the "hangover effects" of cancer! Fun Club!
    I did pretty much what you did: paid off the house first, if I had a house payment I would be living in a tent. I am "retired" in the sense that I pick and choose my jobs.
    I do need to supplement my SS and this works for now. I like it, the concept of "having to do something". A reason to get out of bed. Both of my daughters (in their 30's) are renters and I have told them a million times that they have to buy a house before they reach 40 so they at least have some security.
    Like your x brother in law, I was "blue collar" all my life and made lower wages but managed to never want a lot of "stuff". Living within one's means is important.

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    1. "Living within one's means is important."

      It should one of the very first things they teach kids in school as soon as they are old enough to understand (because their parent's obviously aren't). Alas.

      And is indeed a very "fun" club.

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  3. The cops have been militarized because even the myopic terminally greedy zomboids who run the 'nation' and pull Paddy O'Bama's strings expect there to be major urban uprisings when large swathes of people with zero, nothing, nada finally snap and look for retribution against those who stole, parceled up and sold off the American Dream. But of course they're looking in the wrong direction, assuming that the home-grown 'terrorists' will be the well-muscled young. It's the middle aged and elderly dispossessed who are burning with indignity. Will the NYPD and LAPD Stormtroopers et al open fire on frothing at the mouth Moms and Dads marching in the street? Especially when their own parents could be part of the mob? We shall see, we shall see...

    I predict 2018, give or take a couple of years.

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    1. I'd like to hope that you're right, but I haven't much evidence of it yet. But, four years is a long time...

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  4. My wife and I are in our mid-fifties and have worked hard and saved what we could for retirement. Our home is nearly paid for and we are fairly frugal. Having said all that, we both fear that we won't have enough for a comfortable retirement. If we had saved nothing to this point we would be absolutely terrified. Don't know how or if these people sleep at night.

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    1. Me either. I hope all that crap they bought is giving them a lot of comfort.

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  5. Even if you have a frugal lifestyle, even if you have some money saved, how do you know it's enough? The "system" has become so unstable and unpredictable you can't with any reasonable certainty assume that what is sufficient to retire on today will be so tomorrow. Your pension cut be cut. Your retiree health coverage could be eliminated. They could raise the age at which you can collect Social Security, You might own your own home but they might eliminate your property tax deduction. These are not just remote possibilities, they're things that have happened to many people or have been seriously discussed at the level of national politics. In my mid 50's I suppose I'm in a position that many people would consider safe to retire in. As much as I hate what I'm doing I'm going to continue it for the foreseeable future just because I don't have faith in the stability of the institutions we must depend on in retirement. I'm sure I'm not alone in feeling that way.

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    1. I hear you, anon. I feel exactly the same way. I have a "comfortable" pension given my lifestyle and the fact that my wife is still working, but there's no guarantee that pension won't go away at some point. I also need my health insurance to be there for the hangover effects of my cancer and any other issues that may arise until I become eligible for medicare--which also might not be there when I get to that age.

      At least we have the advantage of knowing about the uncertainty, when so many still suffer the delusion that those institutions will always be there for them.

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  6. It's a hard reality, but maybe we should consider that retirement as a concept was always dependent on the oil age. Unless we invent another just as cheap and powerful energy source, it's hard to see how the trends in savings, Social Security, and income inequality reverse themselves.

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