Here’s What Retirement With Less Than $1 Million Looks Like in America
March 25, 2023 1:07 PM Subscribe
The stock market downturn wiped away 20% of her nest egg, which is now worth about $240,000. To save on gas, she and Mr. Le Blanc drive to the grocery store only on days when they pick up their mail nearby. “There’s no frivolous driving around,” she said.
Mr. Modell is using his retirement to pursue his long-held dream of being a landlord to low-income tenants.
Really should try hiking the Appalachian trail or pottery or something.
posted by skewed at 1:19 PM on March 25, 2023 [63 favorites]
Really should try hiking the Appalachian trail or pottery or something.
posted by skewed at 1:19 PM on March 25, 2023 [63 favorites]
do you need more than $1M in retirement funds to disengage the "sad beige filter"
posted by lalochezia at 1:20 PM on March 25, 2023 [12 favorites]
posted by lalochezia at 1:20 PM on March 25, 2023 [12 favorites]
Personally I can only dream of owning a home and being able to afford retiring ever at all.
posted by Greg_Ace at 1:34 PM on March 25, 2023 [40 favorites]
posted by Greg_Ace at 1:34 PM on March 25, 2023 [40 favorites]
WSJ doing the lord's work reporting on poverty in the USA by profiling a couple that owns a 13-bedroom Victorian and have a retirement income of about $80,000/year.
posted by entropone at 1:39 PM on March 25, 2023 [101 favorites]
posted by entropone at 1:39 PM on March 25, 2023 [101 favorites]
I don’t think the article’s framing was meant to say these folks are destitute. Just a snapshot at this level of saved wealth.
posted by creiszhanson at 1:42 PM on March 25, 2023 [12 favorites]
posted by creiszhanson at 1:42 PM on March 25, 2023 [12 favorites]
... just have to cut back ... truffle shaving rather than truffle grating on the foie gras....
posted by seanmpuckett at 1:48 PM on March 25, 2023 [7 favorites]
posted by seanmpuckett at 1:48 PM on March 25, 2023 [7 favorites]
“It’s a community that is like a family,” said Ms. Jones, 75, a former billing clerk at a local power and water company, who used to phone neighbors when she saw their water bills spike to suggest checking for leaks. “Some find that overwhelming or nosy, but that is just the way life is in a small town,” she said.
In a decent world it wouldn't require neighborly privacy invasion to subvert a capitalist supplier of a fundamental need from exploiting infrastructure failures for profit but here we are. So we have informal radical action networks with inside agents looking after their own while others, less connected, probably to this day continue have their leaks exploited. I've always enjoyed the way the WSJ either accidentally reveals or casually revels in the awfulness of their core philosophy. There is a kind of a devil you know to it even in the stories and anecdotes they think are folksy and heartwarming.
posted by srboisvert at 1:50 PM on March 25, 2023 [35 favorites]
In a decent world it wouldn't require neighborly privacy invasion to subvert a capitalist supplier of a fundamental need from exploiting infrastructure failures for profit but here we are. So we have informal radical action networks with inside agents looking after their own while others, less connected, probably to this day continue have their leaks exploited. I've always enjoyed the way the WSJ either accidentally reveals or casually revels in the awfulness of their core philosophy. There is a kind of a devil you know to it even in the stories and anecdotes they think are folksy and heartwarming.
posted by srboisvert at 1:50 PM on March 25, 2023 [35 favorites]
If one million is a dream for most, why use it as a marker?
posted by Selena777 at 2:19 PM on March 25, 2023 [11 favorites]
posted by Selena777 at 2:19 PM on March 25, 2023 [11 favorites]
Thanks for posting, craniac. I thought this was an interesting snapshot of people, all or most with more money than most of their age cohort, and the challenges and worries that may come for everyone in old age, from cancer to memory loss to money running out. As has been discussed in countless threads on the blue and green, it takes just one bad day or piece of bad luck to drain even the deepest of pockets, and something that really jumped out at me here was how many of these people appeared to lack the strong nearby social ties that can help people weather bad times.
posted by cupcakeninja at 2:25 PM on March 25, 2023 [18 favorites]
posted by cupcakeninja at 2:25 PM on March 25, 2023 [18 favorites]
Oh, man, the article is so, so WSJ. his long-held dream of being a landlord to low-income tenants which has an excellent Return on Investment, and the housing has likely gained value.
Younger people are being squeezed out of housing quite efficiently. Geezers with houses are able to do better, even if they have mortgages. But health care, even with Medicare, looms.
If wealth hadn't been, wasn't being, aggregated by the very, very wealthy, there would be enough. If taxation was fair, we could all have health care. Rich people pay 15% and no FICA on Capital Gains, because blah blah, the Economy. Active income from work is subject to FICA, then income taxes. There is plenty or money for everybody to live reasonably, have good health care, food, homes. It's a distribution problem, but it's fixable.
posted by theora55 at 2:28 PM on March 25, 2023 [39 favorites]
Younger people are being squeezed out of housing quite efficiently. Geezers with houses are able to do better, even if they have mortgages. But health care, even with Medicare, looms.
If wealth hadn't been, wasn't being, aggregated by the very, very wealthy, there would be enough. If taxation was fair, we could all have health care. Rich people pay 15% and no FICA on Capital Gains, because blah blah, the Economy. Active income from work is subject to FICA, then income taxes. There is plenty or money for everybody to live reasonably, have good health care, food, homes. It's a distribution problem, but it's fixable.
posted by theora55 at 2:28 PM on March 25, 2023 [39 favorites]
If one million is a dream for most, why use it as a marker?
It's actually way worse than the article suggests, since it gives the average retirement savings (which gets pushed up by people like Bill Gates), rather than the median retirement savings which is more reflective of most people's lives. Here is a page with both average and median retirement savings by age (though using data that is about four years old), which shows median savings for people between 65 to 74 as just $165,000.
posted by Dip Flash at 2:28 PM on March 25, 2023 [18 favorites]
It's actually way worse than the article suggests, since it gives the average retirement savings (which gets pushed up by people like Bill Gates), rather than the median retirement savings which is more reflective of most people's lives. Here is a page with both average and median retirement savings by age (though using data that is about four years old), which shows median savings for people between 65 to 74 as just $165,000.
posted by Dip Flash at 2:28 PM on March 25, 2023 [18 favorites]
Less than 1 million? I will say, having grown up poor, that it is hard for me to relate at all to the mindset of the middle class.
posted by dances_with_sneetches at 2:40 PM on March 25, 2023 [8 favorites]
posted by dances_with_sneetches at 2:40 PM on March 25, 2023 [8 favorites]
You can work about 35-40 years in this economy if you are lucky and privledged you can live to 70-80 years if you are lucky and privledged.
If you can't find a way to build up credits in those 35-40 years at twice the rate you use them, then you will live on less or for less time.
You will have to support your aging parents, and your kids, and in turn you got support from your parents and might get support from your kids, so at best that is a wash.
2:1 lifespan vs productivity. but people don't want to or can't live on half their salary and save half, and so they overshoot.
The traditional solution has been a pyramid scheme of wealth transfer from young people to old enabled by a growing population.
That is ending, because we've made the world so expensive and busy and bad for young people that they can't or won't punish another generation with being subjected to modern life. thus the pyramid scheme is falling short too.
Its all moot anyway, because in the hey-day of growth-at-all-costs we ignored the scientific warnings about the effects of our pollution. So a changing climate will ravage agriculture, and famine and climate disasters will ravage the economy and hunger/poverty/climate chaos will ravage society and humans jn social breakdown, hunger, poverty and climate disasters will ravage the earths life support systems, strip its ecosystems for food and to get at marketable minerals and hopefully, while the fires burn and the pandemics rage and the famines kill.... those brave hungry souls actively managing the spent nuclear waste pools will never faulter and release their world spanning deadly plumes of invisible, millenia long radioactive death clouds.
So cancel your subscription to the WSJ and make some avocado toast before you don your gas-masks. "Who killed the world". To end your slavery, end the masters.
posted by anecdotal_grand_theory at 2:48 PM on March 25, 2023 [24 favorites]
If you can't find a way to build up credits in those 35-40 years at twice the rate you use them, then you will live on less or for less time.
You will have to support your aging parents, and your kids, and in turn you got support from your parents and might get support from your kids, so at best that is a wash.
2:1 lifespan vs productivity. but people don't want to or can't live on half their salary and save half, and so they overshoot.
The traditional solution has been a pyramid scheme of wealth transfer from young people to old enabled by a growing population.
That is ending, because we've made the world so expensive and busy and bad for young people that they can't or won't punish another generation with being subjected to modern life. thus the pyramid scheme is falling short too.
Its all moot anyway, because in the hey-day of growth-at-all-costs we ignored the scientific warnings about the effects of our pollution. So a changing climate will ravage agriculture, and famine and climate disasters will ravage the economy and hunger/poverty/climate chaos will ravage society and humans jn social breakdown, hunger, poverty and climate disasters will ravage the earths life support systems, strip its ecosystems for food and to get at marketable minerals and hopefully, while the fires burn and the pandemics rage and the famines kill.... those brave hungry souls actively managing the spent nuclear waste pools will never faulter and release their world spanning deadly plumes of invisible, millenia long radioactive death clouds.
So cancel your subscription to the WSJ and make some avocado toast before you don your gas-masks. "Who killed the world". To end your slavery, end the masters.
posted by anecdotal_grand_theory at 2:48 PM on March 25, 2023 [24 favorites]
An actual retiree here. Assume a mostly fixed income. One that can be easily eroded by inflation. Live, save and spend accordingly. Never touch the corpus of any investment except in an absolute emergency. Force your lifestyle to always spend less than your income. Become close friends with WalMart house brands and free internet entertainment. Enjoy...
posted by jim in austin at 3:45 PM on March 25, 2023 [19 favorites]
posted by jim in austin at 3:45 PM on March 25, 2023 [19 favorites]
I turn 65 this year and I have no savings. I can have retirement at half my wages and SS at about $1000 per month, because I got lucky, and fell backwards into a job that offered retirement, something which I hadn't had before. I know a lot of folks think I'm supposed to be waving a Trump flag and calling people Libtards, but I've been unlucky that I live in reality. I've no idea how I'm going to survive if I'm forced to retire. Kids, take it from old man evildoug, set fire to the wealthy. All of them. Landlords too, regardless of their professed wealth. I fucking hate this country.
posted by evilDoug at 4:12 PM on March 25, 2023 [53 favorites]
posted by evilDoug at 4:12 PM on March 25, 2023 [53 favorites]
Never touch the corpus of any investment
An inwhatment, now?? I was never able to afford a vest.
posted by Greg_Ace at 4:31 PM on March 25, 2023 [9 favorites]
An inwhatment, now?? I was never able to afford a vest.
posted by Greg_Ace at 4:31 PM on March 25, 2023 [9 favorites]
It's a distribution problem, but it's fixable.
It absolutely is fixable, but not in the US. You're dealing with an electorate that is entirely willing to cut off its own nose in order to spite some nebulous "other" that doesn't actually even exist in the first place.
...and, rest assured, the US hates you just as much (or more) than you hate it. This outcome? Yeah, that's what The People demanded, loudly, repeatedly, for decades.
That guy driving the V48 QuadHemi SuperMax MegaKingCab (now with UltraThrust PowerStroking action!) would be perfectly happy if you died tomorrow just as long as it doesn't slow him down at the traffic light, and he's pretty sure that he'll retire in comfort as long as brown people are getting blown up somewhere far away (he's wrong, of course, but that doesn't matter in the here-and-now so by the time he's affected someone else will be happy to let him die quietly).
posted by aramaic at 4:41 PM on March 25, 2023 [13 favorites]
It absolutely is fixable, but not in the US. You're dealing with an electorate that is entirely willing to cut off its own nose in order to spite some nebulous "other" that doesn't actually even exist in the first place.
...and, rest assured, the US hates you just as much (or more) than you hate it. This outcome? Yeah, that's what The People demanded, loudly, repeatedly, for decades.
That guy driving the V48 QuadHemi SuperMax MegaKingCab (now with UltraThrust PowerStroking action!) would be perfectly happy if you died tomorrow just as long as it doesn't slow him down at the traffic light, and he's pretty sure that he'll retire in comfort as long as brown people are getting blown up somewhere far away (he's wrong, of course, but that doesn't matter in the here-and-now so by the time he's affected someone else will be happy to let him die quietly).
posted by aramaic at 4:41 PM on March 25, 2023 [13 favorites]
I live in a less expensive area of California with summer A/C being a main cost hit and last year I was able to put up rooftop solar that will be paid off when I now plan on retiring, hopefully covering one major life expense (assuming power costs keep escalating as they have been...)
Now that I'm in my 50s, what my 60s is going to look like is coming into ever-sharpening focus. Grandpa retired on his federal pension in the mid 1970s, died in '89, and I look to be following that life arc on a 60-year delay . . .
posted by Heywood Mogroot III at 4:56 PM on March 25, 2023 [1 favorite]
Now that I'm in my 50s, what my 60s is going to look like is coming into ever-sharpening focus. Grandpa retired on his federal pension in the mid 1970s, died in '89, and I look to be following that life arc on a 60-year delay . . .
posted by Heywood Mogroot III at 4:56 PM on March 25, 2023 [1 favorite]
They included a retired person who owns five rental properties, but could not find a single retired person who rents?
posted by splitpeasoup at 5:00 PM on March 25, 2023 [42 favorites]
posted by splitpeasoup at 5:00 PM on March 25, 2023 [42 favorites]
Mr. Ravenna, the last profile, almost reads as a poster boy for a "bogleheads" approach to saving and investing toward retirement:
> Chris Ravenna started working around age 17, and spent most of his career as a tool-and-die maker. He expected to keep at it until age 65, but changed his mind a few years ago and retired at 60 from his factory job. [...] He earned about $50,000 a year from his factory job and always aimed to save at least 20% of his income, largely by keeping his expenses low. [...] He spends about $20,000 a year with the bulk of the money going to car and home insurance. He mostly cooks at home, doesn’t travel and has no debt. [...] Mr. Ravenna saved about $800,000, mostly in a 401(k), which is invested in the stock market with a 60% stock, 40% bond allocation.
It reads as if Mr Ravenna's financial situation in retirement benefited from sound spending, saving and investment behaviour: living below your means, consistent saving, consistent investing of savings into a reliable and simple 60 / 40 stock bond portfolio, and keeping on investing year after year even after major stock market crashes that spooked some of the other retirees profiled. There's also a dollop or two of luck contributing to the outcome - at least - the absence of catastrophically bad luck. Maybe another modest splash of luck in being able to find and hold down a median wage job. And maybe not raising children allowed retirement some years earlier than otherwise, for better or worse.
see also: William J. Bernstein's free booklet If You Can - How Millennials Can Get Rich Slowly (PDF)
posted by are-coral-made at 5:03 PM on March 25, 2023 [9 favorites]
> Chris Ravenna started working around age 17, and spent most of his career as a tool-and-die maker. He expected to keep at it until age 65, but changed his mind a few years ago and retired at 60 from his factory job. [...] He earned about $50,000 a year from his factory job and always aimed to save at least 20% of his income, largely by keeping his expenses low. [...] He spends about $20,000 a year with the bulk of the money going to car and home insurance. He mostly cooks at home, doesn’t travel and has no debt. [...] Mr. Ravenna saved about $800,000, mostly in a 401(k), which is invested in the stock market with a 60% stock, 40% bond allocation.
It reads as if Mr Ravenna's financial situation in retirement benefited from sound spending, saving and investment behaviour: living below your means, consistent saving, consistent investing of savings into a reliable and simple 60 / 40 stock bond portfolio, and keeping on investing year after year even after major stock market crashes that spooked some of the other retirees profiled. There's also a dollop or two of luck contributing to the outcome - at least - the absence of catastrophically bad luck. Maybe another modest splash of luck in being able to find and hold down a median wage job. And maybe not raising children allowed retirement some years earlier than otherwise, for better or worse.
see also: William J. Bernstein's free booklet If You Can - How Millennials Can Get Rich Slowly (PDF)
posted by are-coral-made at 5:03 PM on March 25, 2023 [9 favorites]
If WSJ is looking for a retired renter living off only Social Security cheques in the Deep South, dm me because I think that's more relatable than this
posted by Kitteh at 5:39 PM on March 25, 2023 [11 favorites]
posted by Kitteh at 5:39 PM on March 25, 2023 [11 favorites]
You also have to continue to not do all of that stuff, Rock 'em Sock 'em, no thinking you can save it for the end.
posted by Selena777 at 5:50 PM on March 25, 2023 [1 favorite]
posted by Selena777 at 5:50 PM on March 25, 2023 [1 favorite]
Less than 1 million? I will say, having grown up poor, that it is hard for me to relate at all to the mindset of the middle class.
If it helps conceptualize what a million dollars gets you: the commonly accepted financial planning wisdom is that you can safely withdraw 4% of your retirement fund for expenses every year. So a one million dollar retirement savings nets you $40,000 in annual income. Not the kind of cash that lets you wreck a Lambo every year. Enough to live on but probably not enough to See The World without shortchanging your future self.
posted by pwnguin at 5:57 PM on March 25, 2023 [12 favorites]
If it helps conceptualize what a million dollars gets you: the commonly accepted financial planning wisdom is that you can safely withdraw 4% of your retirement fund for expenses every year. So a one million dollar retirement savings nets you $40,000 in annual income. Not the kind of cash that lets you wreck a Lambo every year. Enough to live on but probably not enough to See The World without shortchanging your future self.
posted by pwnguin at 5:57 PM on March 25, 2023 [12 favorites]
> They included a retired person who owns five rental properties, but could not find a single retired person who rents?
Ms. Sailian, the Canadian / American dual citizen, rents. She rents an apartment when she's in Toronto for half the year, and pays her partner for housing when she's staying with him.
posted by The corpse in the library at 6:03 PM on March 25, 2023
Ms. Sailian, the Canadian / American dual citizen, rents. She rents an apartment when she's in Toronto for half the year, and pays her partner for housing when she's staying with him.
posted by The corpse in the library at 6:03 PM on March 25, 2023
Really should try hiking the Appalachian trail
Canoodling with your mistress in Buenos Aires, or actually hiking?
posted by kirkaracha at 6:10 PM on March 25, 2023 [5 favorites]
Canoodling with your mistress in Buenos Aires, or actually hiking?
posted by kirkaracha at 6:10 PM on March 25, 2023 [5 favorites]
If it helps conceptualize what a million dollars gets you: the commonly accepted financial planning wisdom is that you can safely withdraw 4% of your retirement fund for expenses every year. So a one million dollar retirement savings nets you $40,000 in annual income. Not the kind of cash that lets you wreck a Lambo every year. Enough to live on but probably not enough to See The World without shortchanging your future self.
This is a good point, in that a million dollars doesn't go as far as it once did. Though, presumably that person would be getting social security, which (per google) averages to about $21,600 per year. So a solo person with that nest egg plus SS would be theoretically able to spend ~$60k/year. If you owned your house outright and weren't, say, supporting other family members, that would be pretty comfortable and allow travel and eating out. If you still have a mortgage or rent, or caretaking responsibilities (again, like most people), it's a lot tighter.
But to reiterate the point, most people have far, far less, and are going to be primarily reliant on social security and/or working as long as they physically can. I appreciate that the WSJ chose to profile people with much lower assets than many of their similar articles, but these are still very fortunate people compared to the average.
Never touch the corpus of any investment
This makes no sense to me. What is the purpose of a retirement investment other than to help support you in retirement?
posted by Dip Flash at 6:43 PM on March 25, 2023 [6 favorites]
This is a good point, in that a million dollars doesn't go as far as it once did. Though, presumably that person would be getting social security, which (per google) averages to about $21,600 per year. So a solo person with that nest egg plus SS would be theoretically able to spend ~$60k/year. If you owned your house outright and weren't, say, supporting other family members, that would be pretty comfortable and allow travel and eating out. If you still have a mortgage or rent, or caretaking responsibilities (again, like most people), it's a lot tighter.
But to reiterate the point, most people have far, far less, and are going to be primarily reliant on social security and/or working as long as they physically can. I appreciate that the WSJ chose to profile people with much lower assets than many of their similar articles, but these are still very fortunate people compared to the average.
Never touch the corpus of any investment
This makes no sense to me. What is the purpose of a retirement investment other than to help support you in retirement?
posted by Dip Flash at 6:43 PM on March 25, 2023 [6 favorites]
15% of USians in a pension system
15% of USians ina 401k
Social security is a promise boomers are itching to cancel for their children and grandchildren, you can see how excited they get explaining how the age has to increase, the benefit decrease and be phased out/privatized.
And of course, more people don't qualify for SSI than have pensions or 401ks. Not farm workers, not landacapers, bus-boys, not housemakers and many doing the labor of home building.
In texas you only get 1/2 as much social security for your contributions and having a state pension gets taxed as double dipping.
you are not going to be able to work until you die as the genXers joke because age and disability and employment bias will leave you unemployed. Your experience alone will scare managers.
posted by anecdotal_grand_theory at 7:30 PM on March 25, 2023 [11 favorites]
15% of USians ina 401k
Social security is a promise boomers are itching to cancel for their children and grandchildren, you can see how excited they get explaining how the age has to increase, the benefit decrease and be phased out/privatized.
And of course, more people don't qualify for SSI than have pensions or 401ks. Not farm workers, not landacapers, bus-boys, not housemakers and many doing the labor of home building.
In texas you only get 1/2 as much social security for your contributions and having a state pension gets taxed as double dipping.
you are not going to be able to work until you die as the genXers joke because age and disability and employment bias will leave you unemployed. Your experience alone will scare managers.
posted by anecdotal_grand_theory at 7:30 PM on March 25, 2023 [11 favorites]
This makes no sense to me. What is the purpose of a retirement investment other than to help support you in retirement?
Assume you have $250k in a tax free municipal bond fund. That is your corpus. Don't touch it. Assume the fund averages a 3.5% to 4% tax free return. That you can spend if you must. Just don't forget inflation is constantly eating away at the value of your corpus, so don't spend it all...
posted by jim in austin at 7:41 PM on March 25, 2023 [4 favorites]
Assume you have $250k in a tax free municipal bond fund. That is your corpus. Don't touch it. Assume the fund averages a 3.5% to 4% tax free return. That you can spend if you must. Just don't forget inflation is constantly eating away at the value of your corpus, so don't spend it all...
posted by jim in austin at 7:41 PM on March 25, 2023 [4 favorites]
This was a fascinating article. Thank you for sharing! I'm sad to see the lack of compassion in some of these comments. Yes, a lot of people have it way worse but it's scary to see how even these people who should be solidly middle class are struggling in retirement. And it's not just the US: friends in France talk about the similar concerns even though their social safety net is stronger.
On a personal note, seeing how the last person interviewed, the single man with no kids, seemed to have the best financial situation gave me hope. I've got a similar strategy to his and tbh staying single, as in not getting married or having kids, feels like a much safer financial choice for me as I age. Clearly we need better options for all but I worry about all of this as I enter middle age and try to thrive in the present and survive in the future.
posted by smorgasbord at 8:14 PM on March 25, 2023 [8 favorites]
On a personal note, seeing how the last person interviewed, the single man with no kids, seemed to have the best financial situation gave me hope. I've got a similar strategy to his and tbh staying single, as in not getting married or having kids, feels like a much safer financial choice for me as I age. Clearly we need better options for all but I worry about all of this as I enter middle age and try to thrive in the present and survive in the future.
posted by smorgasbord at 8:14 PM on March 25, 2023 [8 favorites]
I'm not sure I get all the hate either. I don't think this is meant to be an example of everyone in the US - it's a select group of (probably) WSJ readers and it's interesting to see what they are doing. I liked the guy who travels a week every month - that's an interesting life! His budget seemed low for that, but maybe a frugal traveler? The last guy was a bit "wow" because yes, living frugal, but his life seemed really boring.
posted by Toddles at 8:33 PM on March 25, 2023 [8 favorites]
posted by Toddles at 8:33 PM on March 25, 2023 [8 favorites]
"Spooked by the S&P 500’s 38.49% decline in 2008, he sold his stocks and invested in a stable value fund that earned about 1% a year"
yeah that'll do it . . . stocks are up ~400% from the 1Q09 bottom . . .
"Each month, they earn $2,500 in Social Security, plus Ms. Jones’s $1,877 pension, the current value of which is about $300,000."
That's a weird PV calc; using 5% rate of return, 20 year lifetime, $4400/mo gets me a ~$650k PV.
"he withdrew about $600,000 from his portfolio and bought five houses in lower-income areas of New Jersey. The Section 8 rentals generate about $80,000 a year after taxes in income."
Hooked a $1300/mo rent tap on each family, paid by the government. Must be nice.
"the heightened political climate at work during the pandemic made it seem time"
wat
posted by Heywood Mogroot III at 8:38 PM on March 25, 2023 [9 favorites]
yeah that'll do it . . . stocks are up ~400% from the 1Q09 bottom . . .
"Each month, they earn $2,500 in Social Security, plus Ms. Jones’s $1,877 pension, the current value of which is about $300,000."
That's a weird PV calc; using 5% rate of return, 20 year lifetime, $4400/mo gets me a ~$650k PV.
"he withdrew about $600,000 from his portfolio and bought five houses in lower-income areas of New Jersey. The Section 8 rentals generate about $80,000 a year after taxes in income."
Hooked a $1300/mo rent tap on each family, paid by the government. Must be nice.
"the heightened political climate at work during the pandemic made it seem time"
wat
posted by Heywood Mogroot III at 8:38 PM on March 25, 2023 [9 favorites]
median savings for people between 65 to 74 as just $165,000.
"Just?" Dear God, not feeling better here (age 53 and nowhere near that)
posted by Miko at 8:39 PM on March 25, 2023 [12 favorites]
"Just?" Dear God, not feeling better here (age 53 and nowhere near that)
posted by Miko at 8:39 PM on March 25, 2023 [12 favorites]
you are not going to be able to work until you die as the genXers joke because age and disability and employment bias will leave you unemployed. Your experience alone will scare managers.
Thank you, anecdotal_grand_theory, for summing up my life right now in a short sentence.
The society I've helped build my whole life kinda sucks, huh?
posted by MrVisible at 8:41 PM on March 25, 2023 [13 favorites]
Thank you, anecdotal_grand_theory, for summing up my life right now in a short sentence.
The society I've helped build my whole life kinda sucks, huh?
posted by MrVisible at 8:41 PM on March 25, 2023 [13 favorites]
I liked the guy who travels a week every month - that's an interesting life! His budget seemed low for that, but maybe a frugal traveler? The last guy was a bit "wow" because yes, living frugal, but his life seemed really boring.
my plan is to shuffle these two retirements with an electric RV camper, putting 200kWh from my aforementioned rooftop solar panels then take off on a 300 - 2000 mile roadtrip to live/hopefully enjoy the #vanlife thing . . . 1 trip/mo to the coast or SF, 1 trip/mo down to LA, plus another trip/mo for 1 - 3 weeks just heading out and seeing what's out there.
If this were a regular truck camper, getting 15mpg (pretty good) on this 19,000 miles/year would cost over $400/mo in gas alone, vs. maybe $100/mo for the electric truck operating costs (electric will only be free for first 400 miles, alas).
posted by Heywood Mogroot III at 9:01 PM on March 25, 2023 [2 favorites]
my plan is to shuffle these two retirements with an electric RV camper, putting 200kWh from my aforementioned rooftop solar panels then take off on a 300 - 2000 mile roadtrip to live/hopefully enjoy the #vanlife thing . . . 1 trip/mo to the coast or SF, 1 trip/mo down to LA, plus another trip/mo for 1 - 3 weeks just heading out and seeing what's out there.
If this were a regular truck camper, getting 15mpg (pretty good) on this 19,000 miles/year would cost over $400/mo in gas alone, vs. maybe $100/mo for the electric truck operating costs (electric will only be free for first 400 miles, alas).
posted by Heywood Mogroot III at 9:01 PM on March 25, 2023 [2 favorites]
you are not going to be able to work until you die as the genXers joke because age and disability and employment bias will leave you unemployed. Your experience alone will scare managers.
Did you think people were talking about working as something other than a Wal-Mart greeter?
posted by Miko at 9:01 PM on March 25, 2023 [4 favorites]
Did you think people were talking about working as something other than a Wal-Mart greeter?
posted by Miko at 9:01 PM on March 25, 2023 [4 favorites]
I think the WSJ has done these articles for various slices of retirement income, but I don't recommend anyone commenting here to read them, lest they die of aneurysm.
posted by praemunire at 9:31 PM on March 25, 2023 [8 favorites]
posted by praemunire at 9:31 PM on March 25, 2023 [8 favorites]
better than slowly dying of capitalism
posted by Greg_Ace at 9:37 PM on March 25, 2023 [10 favorites]
posted by Greg_Ace at 9:37 PM on March 25, 2023 [10 favorites]
Assume you have $250k in a tax free municipal bond fund...
Is that a reasonable assumption for the US, even for those lucky enough to be employed and earning enough to save for retirement? 401k and 403b plans are tax-deferred, and only 50 percent of those who qualify for a 401k (assuming similar rate for 403b earners) actually save. Whatever one earns from those plans is potentially taxed twice: one on withdrawal, and then again if used for earning, say, interest or investment returns. I think another part of it is that saving to a tax-free option is already limited to those who make under a certain income, which in turn limits what one can save, on average.
posted by They sucked his brains out! at 9:55 PM on March 25, 2023
Is that a reasonable assumption for the US, even for those lucky enough to be employed and earning enough to save for retirement? 401k and 403b plans are tax-deferred, and only 50 percent of those who qualify for a 401k (assuming similar rate for 403b earners) actually save. Whatever one earns from those plans is potentially taxed twice: one on withdrawal, and then again if used for earning, say, interest or investment returns. I think another part of it is that saving to a tax-free option is already limited to those who make under a certain income, which in turn limits what one can save, on average.
posted by They sucked his brains out! at 9:55 PM on March 25, 2023
Become close friends with ... free internet entertainment.
If there's one aspect of retirement I'm not worried about, it's being bored. I may not have even close to the money to fund a retirement for more than about ...*does math*... a month - but I sure as hell have the backlog of unplayed Steam/Epic/GOG games to keep me occupied for a good 20 or 30 years.
posted by mstokes650 at 10:06 PM on March 25, 2023 [13 favorites]
If there's one aspect of retirement I'm not worried about, it's being bored. I may not have even close to the money to fund a retirement for more than about ...*does math*... a month - but I sure as hell have the backlog of unplayed Steam/Epic/GOG games to keep me occupied for a good 20 or 30 years.
posted by mstokes650 at 10:06 PM on March 25, 2023 [13 favorites]
Of all the things in the world to dream...
posted by oldnumberseven at 11:46 PM on March 25, 2023 [1 favorite]
posted by oldnumberseven at 11:46 PM on March 25, 2023 [1 favorite]
This makes no sense to me. What is the purpose of a retirement investment other than to help support you in retirement?
Midwestern frugality is a serious thing, sometimes to the point of being too much. I was raised with it and still agonize about throwing out worn out $15 jeans than I can easily replace.
He's probably waiting until 70 to file for social security so as to maximize what he gets, so for the time being is keeping his costs down.
But beyond that, he doesn't have a family for support so has to budget for higher costs of surviving once his health starts going. (Yes, family support of the elderly typically ends up being unpaid labor by women, but that's a different discussion.) Having a nest egg left for the last few years of life if you have something that kills you slower than a heart attack can make a huge difference in quality of life.
WSJ doing the lord's work reporting on poverty in the USA by profiling a couple that owns a 13-bedroom Victorian and have a retirement income of about $80,000/year.
Rooms, not bedrooms, and what counts as a room from that era can be quite small and unuseful. And if you've never owned a Victorian house, they're kind of like owning a boat for people who can't swim. The operational and repair costs are vastly worse than a modern construction. If they got it for $35K (even two decades ago), that means it needs a ton of work.
What type of high life do you think they'd be living with 13 bedrooms in an obscure little town of 6,000 people where the per capita income is $28,593? Once you've slept in a different bedroom each night of the week for a few months, the novelty gets old.
posted by Candleman at 12:55 AM on March 26, 2023 [15 favorites]
Midwestern frugality is a serious thing, sometimes to the point of being too much. I was raised with it and still agonize about throwing out worn out $15 jeans than I can easily replace.
He's probably waiting until 70 to file for social security so as to maximize what he gets, so for the time being is keeping his costs down.
But beyond that, he doesn't have a family for support so has to budget for higher costs of surviving once his health starts going. (Yes, family support of the elderly typically ends up being unpaid labor by women, but that's a different discussion.) Having a nest egg left for the last few years of life if you have something that kills you slower than a heart attack can make a huge difference in quality of life.
WSJ doing the lord's work reporting on poverty in the USA by profiling a couple that owns a 13-bedroom Victorian and have a retirement income of about $80,000/year.
Rooms, not bedrooms, and what counts as a room from that era can be quite small and unuseful. And if you've never owned a Victorian house, they're kind of like owning a boat for people who can't swim. The operational and repair costs are vastly worse than a modern construction. If they got it for $35K (even two decades ago), that means it needs a ton of work.
What type of high life do you think they'd be living with 13 bedrooms in an obscure little town of 6,000 people where the per capita income is $28,593? Once you've slept in a different bedroom each night of the week for a few months, the novelty gets old.
posted by Candleman at 12:55 AM on March 26, 2023 [15 favorites]
This makes no sense to me. What is the purpose of a retirement investment other than to help support you in retirement?
Inflation is eating away at the real value of your capital every year, if you re-invest most or all of the income it might keep pace indefinitely, by spending it you are definitely in drawdown mode even though it might not feel like it with the capital number remaining the same.
posted by Lanark at 1:01 AM on March 26, 2023 [5 favorites]
Inflation is eating away at the real value of your capital every year, if you re-invest most or all of the income it might keep pace indefinitely, by spending it you are definitely in drawdown mode even though it might not feel like it with the capital number remaining the same.
posted by Lanark at 1:01 AM on March 26, 2023 [5 favorites]
Is that a reasonable assumption for the US, even for those lucky enough to be employed and earning enough to save for retirement? 401k and 403b plans are tax-deferred, and only 50 percent of those who qualify for a 401k (assuming similar rate for 403b earners) actually save.
Well, there's no huge reason to but you could hold tax exempt muni funds in a retirement account. $250k isn't that much to have saved up by age 67, considering what it gets you. Its worth considering that the average includes young people who don't make much yet, and people over the age of 55 who get to make "catch up" payments.
Whatever one earns from those plans is potentially taxed twice: one on withdrawal, and then again if used for earning, say, interest or investment returns.
Normally one would either pay custodian fees or roll the 403b over into an individual retirement account, where it remains tax privileged. If you withdraw and spend it, its taxed once. But muni bonds in particular are triple tax exempt meaning the interest payments are not taxed, so you could theoretically hold them in a taxable brokerage account and not pay tax.
A quick googling suggests munis return less than US treasuries (scroll down to "Portfolio Growth"), so in a sense, you are being taxed either way.
posted by pwnguin at 2:21 AM on March 26, 2023 [2 favorites]
Well, there's no huge reason to but you could hold tax exempt muni funds in a retirement account. $250k isn't that much to have saved up by age 67, considering what it gets you. Its worth considering that the average includes young people who don't make much yet, and people over the age of 55 who get to make "catch up" payments.
Whatever one earns from those plans is potentially taxed twice: one on withdrawal, and then again if used for earning, say, interest or investment returns.
Normally one would either pay custodian fees or roll the 403b over into an individual retirement account, where it remains tax privileged. If you withdraw and spend it, its taxed once. But muni bonds in particular are triple tax exempt meaning the interest payments are not taxed, so you could theoretically hold them in a taxable brokerage account and not pay tax.
A quick googling suggests munis return less than US treasuries (scroll down to "Portfolio Growth"), so in a sense, you are being taxed either way.
posted by pwnguin at 2:21 AM on March 26, 2023 [2 favorites]
the maoist uprising against the landlords was the largest and most comprehensive proletarian revolution in history, and led to almost totally-equal redistribution of land among the peasantry
posted by hobo gitano de queretaro at 4:04 AM on March 26, 2023 [6 favorites]
posted by hobo gitano de queretaro at 4:04 AM on March 26, 2023 [6 favorites]
the guy who decided retirement was time to both become a slumlord and study philosophy is a special kind of evil to me. funding the pursuit of otium and the understanding of truth, beauty and virtue by exploiting the poor is really something else.
posted by dis_integration at 5:04 AM on March 26, 2023 [6 favorites]
posted by dis_integration at 5:04 AM on March 26, 2023 [6 favorites]
Curious, I went back through some of the old posts on the "money" tag, and it is of course full of hate reads about the suffering of the Upper Middle/Lower Upper types, the same axes repeatedly brought out for grinding, etc. Another thread that comes up is the observation from MeFites at all points on the income or wealth scale who talk about what people just don't know outside of either their own current bracket or whatever bracket they were raised in. It's useful, and another reason to <3 MetaFilter.
posted by cupcakeninja at 5:21 AM on March 26, 2023 [3 favorites]
posted by cupcakeninja at 5:21 AM on March 26, 2023 [3 favorites]
>>"the heightened political climate at work during the pandemic made it seem time"
>wat
It leaves it vague as to which side he was on, but Iread that as him deciding that working in a place with a lot of angry people during the pandemic wasn't to his liking so he bailed.
>>median savings for people between 65 to 74 as just $165,000.
>"Just?" Dear God, not feeling better here (age 53 and nowhere near that)
Exactly! I used the word "just" to highlight of the huge difference between "average" and "median" savings. Wealth (including retirement savings) is so skewed by the 1% and the 0.1% that it is useless and dispiriting to ever compare yourself to average numbers. Looking at median numbers at least lets you know that fully half the country has less than that number, so it's not like you (general "you," not you specifically) are a failure for not meeting these arbitrary targets like having a million dollars saved.
Most people have the zero chance of saving a million dollars regardless of "good" or "bad" decisions. The retired tool and die maker profiled almost got there and probably would have if he had kept working to 65 rather than stopping at 60. But that is predicated on him never having dependents, never eating out, and leading a very constrained life (that hopefully he finds perfectly satisfying).
I like reading these WSJ profiles when I encounter them, including for people with far, far more money. We all don't talk about money very openly, so it is interesting to have at least a very small window into people's lives and how they live.
posted by Dip Flash at 7:24 AM on March 26, 2023 [16 favorites]
>wat
It leaves it vague as to which side he was on, but Iread that as him deciding that working in a place with a lot of angry people during the pandemic wasn't to his liking so he bailed.
>>median savings for people between 65 to 74 as just $165,000.
>"Just?" Dear God, not feeling better here (age 53 and nowhere near that)
Exactly! I used the word "just" to highlight of the huge difference between "average" and "median" savings. Wealth (including retirement savings) is so skewed by the 1% and the 0.1% that it is useless and dispiriting to ever compare yourself to average numbers. Looking at median numbers at least lets you know that fully half the country has less than that number, so it's not like you (general "you," not you specifically) are a failure for not meeting these arbitrary targets like having a million dollars saved.
Most people have the zero chance of saving a million dollars regardless of "good" or "bad" decisions. The retired tool and die maker profiled almost got there and probably would have if he had kept working to 65 rather than stopping at 60. But that is predicated on him never having dependents, never eating out, and leading a very constrained life (that hopefully he finds perfectly satisfying).
I like reading these WSJ profiles when I encounter them, including for people with far, far more money. We all don't talk about money very openly, so it is interesting to have at least a very small window into people's lives and how they live.
posted by Dip Flash at 7:24 AM on March 26, 2023 [16 favorites]
Whatever one earns from those plans is potentially taxed twice: one on withdrawal, and then again if used for earning, say, interest or investment returns.
That's not quite accurate. You get taxed on your withdrawal from a non-Roth tax sheltered plan and if you invest that money, you get taxed on those gains, but your initial investment does not get taxed twice. Just like if I take my standard income and invest it. The tax deferred accounts just let you increase your returns before you take it out after retirement.
The "good" news is that the median person won't have to worry much about this, as they won't have enough left over after taking distributions from their tax sheltered accounts to reinvest it.
posted by Candleman at 7:38 AM on March 26, 2023 [5 favorites]
That's not quite accurate. You get taxed on your withdrawal from a non-Roth tax sheltered plan and if you invest that money, you get taxed on those gains, but your initial investment does not get taxed twice. Just like if I take my standard income and invest it. The tax deferred accounts just let you increase your returns before you take it out after retirement.
The "good" news is that the median person won't have to worry much about this, as they won't have enough left over after taking distributions from their tax sheltered accounts to reinvest it.
posted by Candleman at 7:38 AM on March 26, 2023 [5 favorites]
yes, let's all take a great leap forward...
posted by dum spiro spero at 10:06 AM on March 26, 2023 [1 favorite]
posted by dum spiro spero at 10:06 AM on March 26, 2023 [1 favorite]
the guy who decided retirement was time to both become a slumlord and study philosophy is a special kind of evil to me
There is...a small possibility he is a decent landlord, I guess? In general, because landlords with more choices discriminate (illegally) against voucher holders, section 8 housing is a sector full of landlord vultures, the subprime lenders of the rental world. Ideally, all section 8 housing would be nonprofits or just cut out the middleman and go back to decent public housing, but a person who rented to section 8 tenants and maintained the buildings well would be, I think, in the lesser category of evil for landlords.
posted by praemunire at 10:24 AM on March 26, 2023 [7 favorites]
There is...a small possibility he is a decent landlord, I guess? In general, because landlords with more choices discriminate (illegally) against voucher holders, section 8 housing is a sector full of landlord vultures, the subprime lenders of the rental world. Ideally, all section 8 housing would be nonprofits or just cut out the middleman and go back to decent public housing, but a person who rented to section 8 tenants and maintained the buildings well would be, I think, in the lesser category of evil for landlords.
posted by praemunire at 10:24 AM on March 26, 2023 [7 favorites]
An interesting contrast to this article:
Growing old without much money in Boston is an everyday stress test
posted by praemunire at 10:25 AM on March 26, 2023 [3 favorites]
Growing old without much money in Boston is an everyday stress test
posted by praemunire at 10:25 AM on March 26, 2023 [3 favorites]
Also, most retirement plans assume you will be gradually drawing down your principal as you age. The goal is not to outlive the money while still having a decent quality of life in your older age. Since I don't have any dependents, I hope I spend my last penny the day I die.
posted by praemunire at 10:29 AM on March 26, 2023 [4 favorites]
posted by praemunire at 10:29 AM on March 26, 2023 [4 favorites]
I think what this reveals is the absolute bullshit of the lie the American public was sold that 401Ks were 'better' than pensions, because you had more control, etc. A pension keeps paying out as long as you live, whereas the likelihood of people saving enough in their 401K to be able to do the same, judging by these numbers, appears laughable.
posted by corb at 10:39 AM on March 26, 2023 [30 favorites]
posted by corb at 10:39 AM on March 26, 2023 [30 favorites]
I think what this reveals is the absolute bullshit of the lie the American public was sold that 401Ks were 'better' than pensions, because you had more control, etc.
Yeah, I think that's pretty well established at this point.
posted by praemunire at 10:49 AM on March 26, 2023 [6 favorites]
Yeah, I think that's pretty well established at this point.
posted by praemunire at 10:49 AM on March 26, 2023 [6 favorites]
Statistically much worse off but with the illusion of control: the USian Way!
posted by clew at 11:11 AM on March 26, 2023 [15 favorites]
posted by clew at 11:11 AM on March 26, 2023 [15 favorites]
> Midwestern frugality is a serious thing, sometimes to the point of being too much. I was raised with it and still agonize about throwing out worn out $15 jeans than I can easily replace.
I've been trying to wrap my mind around the impact of personal frugality on savings in 2023 USA.
I'm sort of an inherently frugal person (I rarely buy anything and try to waste nothing). But it feels like I am living in two worlds: on the one hand I save a few dollars by accumulating very little and by thrifting what I do; on the other, the things that actually make a difference to my bank balance are housing, healthcare, therapeutic services for my disabled kiddo. We don't have a choice in these expenses. I earn a large salary too - larger than most Americans. It feels like massive waves are sloshing back and forth around me, and my buying pots and pans at Goodwill or repairing busted clothing doesn't really do much materially.
I don't mind frugality - in fact I kind of enjoy it. But it seems pretty much disconnected from my bottomline. Perhaps this is my privilege and folks closer to the edge really *do* see a difference from repairing their jeans. Curious to hear how old-fashioned frugality works for others in the modern era, especially those with healthcare issues.
posted by splitpeasoup at 11:36 AM on March 26, 2023 [10 favorites]
I've been trying to wrap my mind around the impact of personal frugality on savings in 2023 USA.
I'm sort of an inherently frugal person (I rarely buy anything and try to waste nothing). But it feels like I am living in two worlds: on the one hand I save a few dollars by accumulating very little and by thrifting what I do; on the other, the things that actually make a difference to my bank balance are housing, healthcare, therapeutic services for my disabled kiddo. We don't have a choice in these expenses. I earn a large salary too - larger than most Americans. It feels like massive waves are sloshing back and forth around me, and my buying pots and pans at Goodwill or repairing busted clothing doesn't really do much materially.
I don't mind frugality - in fact I kind of enjoy it. But it seems pretty much disconnected from my bottomline. Perhaps this is my privilege and folks closer to the edge really *do* see a difference from repairing their jeans. Curious to hear how old-fashioned frugality works for others in the modern era, especially those with healthcare issues.
posted by splitpeasoup at 11:36 AM on March 26, 2023 [10 favorites]
"They live in a 13-room Victorian house"
Not 13 bedrooms
posted by etherist at 12:16 PM on March 26, 2023 [2 favorites]
Not 13 bedrooms
posted by etherist at 12:16 PM on March 26, 2023 [2 favorites]
splitpeasoup, I try to ignore both current world stress and U.S. politics when it comes to frugality. The narrative around both has been warped into Bizarro-land, if in different ways. I do regularly repair clothing, work to reduce waste, and use consumer goods until they die, are truly obsolete, etc. It does have an impact on my overall financial picture, not least in that I think carefully (if not agonizing) over major expenses.
I do feel you on the “waves” thing. At a certain point I realized that I had major lifetime expenses, and that no one was coming to save me… so I went frugal. Does it help when the oven dies or whatever? It feels like “maybe” or “no,” but the data/books are clear: yes, it does. While there is such a thing as “too frugal,” by far the majority of people I know are in no danger of succumbing to it. Can’t speak for how much intergenerational wealth or inequitable benefits were behind the scenes in these profiles, but clearly frugality is part of the picture for some of them.
posted by cupcakeninja at 12:25 PM on March 26, 2023 [2 favorites]
I do feel you on the “waves” thing. At a certain point I realized that I had major lifetime expenses, and that no one was coming to save me… so I went frugal. Does it help when the oven dies or whatever? It feels like “maybe” or “no,” but the data/books are clear: yes, it does. While there is such a thing as “too frugal,” by far the majority of people I know are in no danger of succumbing to it. Can’t speak for how much intergenerational wealth or inequitable benefits were behind the scenes in these profiles, but clearly frugality is part of the picture for some of them.
posted by cupcakeninja at 12:25 PM on March 26, 2023 [2 favorites]
I've been trying to wrap my mind around the impact of personal frugality on savings in 2023 USA.
In the US of A look around you. The roads and buildings - how many were made and made in the location due to the low-energy cost of post WWII to the peak of normal production oil?
That low-cost energy is gone. That build out is unique in human history, same with the artificial production and demands post WWII. That past uniqueness is not treated by most as unique.
Your elected leaders and business models are tied to the memories of the cheap energy and the production of post WWII. That cheap energy and then the cheap food policy of Earl Butts of the Nixon admin is why people stopped having a large garden and home canned the things from that garden.
The oil energy return on energy invested was over 100 to 1 at the start of the oil age. The EROEI on solar and wind is 10:1 or less.
The ideas of retirement and housing come from that 100:1 low cost energy. And none of us alive will see that kind of world in the future without the low cost abundant energy to drive things in the future.
Watch how food production is impacted in the world with the lack of industrial produced NPK. Watch how housing patterns will change with wages not changing much from the 1990's VS the inflation of items like cars and homes.
Not worried/hopeful yet? Go listen to Peter Zeihan on the demographic and production of goods issues he sees. There is hope, but not of the 'return to the glory of an imagined past' type.
posted by rough ashlar at 12:34 PM on March 26, 2023 [12 favorites]
In the US of A look around you. The roads and buildings - how many were made and made in the location due to the low-energy cost of post WWII to the peak of normal production oil?
That low-cost energy is gone. That build out is unique in human history, same with the artificial production and demands post WWII. That past uniqueness is not treated by most as unique.
Your elected leaders and business models are tied to the memories of the cheap energy and the production of post WWII. That cheap energy and then the cheap food policy of Earl Butts of the Nixon admin is why people stopped having a large garden and home canned the things from that garden.
The oil energy return on energy invested was over 100 to 1 at the start of the oil age. The EROEI on solar and wind is 10:1 or less.
The ideas of retirement and housing come from that 100:1 low cost energy. And none of us alive will see that kind of world in the future without the low cost abundant energy to drive things in the future.
Watch how food production is impacted in the world with the lack of industrial produced NPK. Watch how housing patterns will change with wages not changing much from the 1990's VS the inflation of items like cars and homes.
Not worried/hopeful yet? Go listen to Peter Zeihan on the demographic and production of goods issues he sees. There is hope, but not of the 'return to the glory of an imagined past' type.
posted by rough ashlar at 12:34 PM on March 26, 2023 [12 favorites]
47% of the world lives on less than $6.85 per day.
84% live on less than $30 per day.
Only 5% of the world's population has ever been on an aeroplane.
To make it into the richest 1% globally, all you need is an income of around $34,000.
posted by dum spiro spero at 12:37 PM on March 26, 2023 [6 favorites]
84% live on less than $30 per day.
Only 5% of the world's population has ever been on an aeroplane.
To make it into the richest 1% globally, all you need is an income of around $34,000.
posted by dum spiro spero at 12:37 PM on March 26, 2023 [6 favorites]
And then we get to the "become an elderly expat" strategy.
posted by Selena777 at 12:45 PM on March 26, 2023 [4 favorites]
posted by Selena777 at 12:45 PM on March 26, 2023 [4 favorites]
uS minimum wage is less than the cost of living everywhere. The median wage for many jobs and locations is less tha the cost if living, that is why you cant buy honey or maple syrup, you buy cornsyrup with flavor, that is why you cant buy things made of wood or metal, but glued sawdust and plastic. Being frugal.has advantages for early adopters and outliers, same.with living in cars etc. When everyone does it, the rachet becomes a tourniquette.
Remember when Romney's wife said she doesn't feel rich. Yeah, the people who have more than 40k income and $1500 in the bank don't realize they are well off and they don't real8ze how screwed they are.
Its all unsustainable. The party is over.
posted by anecdotal_grand_theory at 1:12 PM on March 26, 2023 [5 favorites]
Remember when Romney's wife said she doesn't feel rich. Yeah, the people who have more than 40k income and $1500 in the bank don't realize they are well off and they don't real8ze how screwed they are.
Its all unsustainable. The party is over.
posted by anecdotal_grand_theory at 1:12 PM on March 26, 2023 [5 favorites]
So what should new retirees do in your opinion, anecdotal_grand_theory?
posted by Selena777 at 1:19 PM on March 26, 2023 [3 favorites]
posted by Selena777 at 1:19 PM on March 26, 2023 [3 favorites]
Only 5% of the world's population has ever been on an aeroplane.
Statistics on that are very 'back of the envelope' but I think it is reasonable to believe that around 5-10% of the world's population fly each year.
Might not be the same 5% every year tho.
posted by Lanark at 1:31 PM on March 26, 2023 [1 favorite]
Statistics on that are very 'back of the envelope' but I think it is reasonable to believe that around 5-10% of the world's population fly each year.
Might not be the same 5% every year tho.
posted by Lanark at 1:31 PM on March 26, 2023 [1 favorite]
> 84% live on less than $30 per day.
Those "X dollars a day" metrics are confounded by informal transactions and self-sufficiency. In the US its kind of accurate, but the global south has fewer visible transactions and more unpaid household production. At the extreme low end, think of it just as much a measure of how visible the economy is to the government as it is a measure of poverty.
> To make it into the richest 1% globally, all you need is an income of around $34,000.
These statistics are complicated by what is known as purchasing power parity. As an example, the big Mac Index covers the price of McDonald's flagship sandwich across the globe. It's made from basically the same thing everywhere*, so it makes a decent proxy for this concept. PPP effectively means people in different countries can consume the same but one can earn and spend less money doing so.
Not that this really moves the US down much on the leaderboard. But it does help put this $34,000 figure in local contexts. You would struggle on that in many parts of the US, but it's about 50% higher than global PPP adjusted GDP per capita of ~$21,000.
And this makes sense, right? There's no reason someone earning $34,000 in NYC should pay someone in Malaysia making $20,000 to lessen income inequality. The world is just more complicated than the comparison you are inviting.
posted by pwnguin at 1:40 PM on March 26, 2023 [7 favorites]
Those "X dollars a day" metrics are confounded by informal transactions and self-sufficiency. In the US its kind of accurate, but the global south has fewer visible transactions and more unpaid household production. At the extreme low end, think of it just as much a measure of how visible the economy is to the government as it is a measure of poverty.
> To make it into the richest 1% globally, all you need is an income of around $34,000.
These statistics are complicated by what is known as purchasing power parity. As an example, the big Mac Index covers the price of McDonald's flagship sandwich across the globe. It's made from basically the same thing everywhere*, so it makes a decent proxy for this concept. PPP effectively means people in different countries can consume the same but one can earn and spend less money doing so.
Not that this really moves the US down much on the leaderboard. But it does help put this $34,000 figure in local contexts. You would struggle on that in many parts of the US, but it's about 50% higher than global PPP adjusted GDP per capita of ~$21,000.
And this makes sense, right? There's no reason someone earning $34,000 in NYC should pay someone in Malaysia making $20,000 to lessen income inequality. The world is just more complicated than the comparison you are inviting.
posted by pwnguin at 1:40 PM on March 26, 2023 [7 favorites]
I wonder if some of us doomed older people here in this thread should just band together, find a relatively cheap house somewhere with low cost of living, and just move in together, sharing costs? That seems like just about my only hope, it seems.
posted by JHarris at 2:02 PM on March 26, 2023 [8 favorites]
posted by JHarris at 2:02 PM on March 26, 2023 [8 favorites]
I wonder if some of us doomed older people here in this thread should just band together, find a relatively cheap house somewhere with low cost of living, and just move in together
The idea of a "Crone Island" has been mentioned more than once before on Metafilter, although these days habitable islands go for a pretty penny. If there's a Crone House, I think there should be a corresponding Old Fart House as well, close enough to Crone House to allow interaction when wanted, but far enough away for each group to be its own separate thing. Thing is, finding people I'd want to be "stuck" in a house with - and, to be fair, they with me - could be tricky.
posted by Greg_Ace at 3:12 PM on March 26, 2023 [3 favorites]
The idea of a "Crone Island" has been mentioned more than once before on Metafilter, although these days habitable islands go for a pretty penny. If there's a Crone House, I think there should be a corresponding Old Fart House as well, close enough to Crone House to allow interaction when wanted, but far enough away for each group to be its own separate thing. Thing is, finding people I'd want to be "stuck" in a house with - and, to be fair, they with me - could be tricky.
posted by Greg_Ace at 3:12 PM on March 26, 2023 [3 favorites]
A house full of MeFites, imagine the elections.
posted by ActingTheGoat at 3:28 PM on March 26, 2023 [8 favorites]
posted by ActingTheGoat at 3:28 PM on March 26, 2023 [8 favorites]
Imagine the political discussions!
posted by Greg_Ace at 4:59 PM on March 26, 2023 [1 favorite]
posted by Greg_Ace at 4:59 PM on March 26, 2023 [1 favorite]
A house full of MeFites: cameras and beans though
posted by dangerousdan at 5:00 PM on March 26, 2023
posted by dangerousdan at 5:00 PM on March 26, 2023
I think there should be a corresponding Old Fart House as well
I'm old and doing more than my share of farting, so sign me up.
posted by kirkaracha at 6:51 PM on March 26, 2023 [1 favorite]
I'm old and doing more than my share of farting, so sign me up.
posted by kirkaracha at 6:51 PM on March 26, 2023 [1 favorite]
I’m 52 and single. I have under $25K in my retirement account. Everyone in this article can go pound sand.
posted by bendy at 11:28 PM on March 26, 2023 [4 favorites]
posted by bendy at 11:28 PM on March 26, 2023 [4 favorites]
Growing old without much money in Boston is an everyday stress test (ungated version).
posted by virago at 3:42 AM on March 27, 2023 [2 favorites]
posted by virago at 3:42 AM on March 27, 2023 [2 favorites]
Is there a specific dollar amount under which I am allowed to express worry about my old age, and over which I must instead go pound sand?
posted by JanetLand at 6:41 AM on March 27, 2023 [11 favorites]
posted by JanetLand at 6:41 AM on March 27, 2023 [11 favorites]
WSJ doing the lord's work reporting on poverty in the USA by profiling a couple that owns a 13-bedroom Victorian and have a retirement income of about $80,000/year.
I see a lot of people didn't read the article. The article never mentioned poverty at all, the house is 13 rooms, not bedrooms, and was bought for $37,000, so not exactly a mansion, and their listed retirement income is 50,000$, not $80,000 (with most of that coming from social security and the rest from a fairly modest pension). They have slightly over 100,000$ in retirement savings aside from the pension, which is more than some people, sure, but hardly an extravagant amount for two people who could easily live 20 more years in a house that certainly will need expensive repairs in that time. And again, it's quite clearly intended to be a snapshot of "what it's like to retire on X amount", not "this is the most poverty-stricken couple in the country".
The crab bucket mentality sure is strong here, sheesh. Maybe direct some of that righteous anger at the people who actually have way too much money and power, instead of being angry at the couple retiring with an income well below the median household income in the US because they're apparently too rich for your liking.
posted by randomnity at 7:16 AM on March 27, 2023 [13 favorites]
I see a lot of people didn't read the article. The article never mentioned poverty at all, the house is 13 rooms, not bedrooms, and was bought for $37,000, so not exactly a mansion, and their listed retirement income is 50,000$, not $80,000 (with most of that coming from social security and the rest from a fairly modest pension). They have slightly over 100,000$ in retirement savings aside from the pension, which is more than some people, sure, but hardly an extravagant amount for two people who could easily live 20 more years in a house that certainly will need expensive repairs in that time. And again, it's quite clearly intended to be a snapshot of "what it's like to retire on X amount", not "this is the most poverty-stricken couple in the country".
The crab bucket mentality sure is strong here, sheesh. Maybe direct some of that righteous anger at the people who actually have way too much money and power, instead of being angry at the couple retiring with an income well below the median household income in the US because they're apparently too rich for your liking.
posted by randomnity at 7:16 AM on March 27, 2023 [13 favorites]
I actually found that article kind of hopeful. I'm 56 and if all goes well (I maintain my income level for another 9 years and the stock market averages 7-8% annually over those years) I might just hit the magic $1 million dollar number in my 401K at retirement. 4 or 5% of that annually, plus social security, should leave us in a position to be okay for retirement. So many what-ifs in that scenario though. So many ways it could not work out well.
I'll go cancel my recurring Metafilter donation now. I'm sure that paragraph above makes me about as popular as Scott Adams around here.
posted by COD at 7:30 AM on March 27, 2023 [2 favorites]
I'll go cancel my recurring Metafilter donation now. I'm sure that paragraph above makes me about as popular as Scott Adams around here.
posted by COD at 7:30 AM on March 27, 2023 [2 favorites]
Not that paragraph, but the one after it where you pretend to be a victim is borderline.
posted by Nothing at 7:36 AM on March 27, 2023 [1 favorite]
posted by Nothing at 7:36 AM on March 27, 2023 [1 favorite]
I feel like we need to add retirement planning to the List Of Things MeFi Does Not Do Well.
Which is a bit on the nose, really.
posted by Not A Thing at 8:06 AM on March 27, 2023 [6 favorites]
Which is a bit on the nose, really.
posted by Not A Thing at 8:06 AM on March 27, 2023 [6 favorites]
Some people really want, in fact need change to happen. Whenever these people see something that harms the possibility for that change they're going to react harshly, and one of those things is frequently the Wall Street Journal, and its owner, who also owns Fox News and the Times in the UK.
When people notice this and moan, it's important to see the desperation behind it. If you're doing well financially then that's great! I'm really happy for you, but I'm simultaneously looking at the future and wondering how I'm not going to starve homelessly wiped out by medical bills.
I'll go cancel my recurring Metafilter donation now. I'm sure that paragraph above makes me about as popular as Scott Adams around here.
Speaking as someone who worked on the fundraiser, could I ask people not to say things like this? It sends me into an even greater level of dark despair. At least, a person commenting on Metafilter is not Metafilter itself. Our site here contains multitudes, but itself is just a site, a place to talk.
Some of the above may sound a bit carpy. I'm not trying to make it sound that way. I think people on the internet should have more consideration in general, and that includes me. I think if we want Metafilter to survive we should try to be kinder to each other. I know, if I am to survive, that I'm going to need people to be kinder to me, heh.
posted by JHarris at 8:08 AM on March 27, 2023 [10 favorites]
When people notice this and moan, it's important to see the desperation behind it. If you're doing well financially then that's great! I'm really happy for you, but I'm simultaneously looking at the future and wondering how I'm not going to starve homelessly wiped out by medical bills.
I'll go cancel my recurring Metafilter donation now. I'm sure that paragraph above makes me about as popular as Scott Adams around here.
Speaking as someone who worked on the fundraiser, could I ask people not to say things like this? It sends me into an even greater level of dark despair. At least, a person commenting on Metafilter is not Metafilter itself. Our site here contains multitudes, but itself is just a site, a place to talk.
Some of the above may sound a bit carpy. I'm not trying to make it sound that way. I think people on the internet should have more consideration in general, and that includes me. I think if we want Metafilter to survive we should try to be kinder to each other. I know, if I am to survive, that I'm going to need people to be kinder to me, heh.
posted by JHarris at 8:08 AM on March 27, 2023 [10 favorites]
Sorry @jharris - that was a joke that clearly did not land.
posted by COD at 8:18 AM on March 27, 2023 [2 favorites]
posted by COD at 8:18 AM on March 27, 2023 [2 favorites]
Yeah, I think that's pretty well established at this point.
So what is stopping people from forming strong unions and demanding pensions, I guess, if everyone acknowledges this?
posted by corb at 8:20 AM on March 27, 2023 [1 favorite]
So what is stopping people from forming strong unions and demanding pensions, I guess, if everyone acknowledges this?
posted by corb at 8:20 AM on March 27, 2023 [1 favorite]
Poorly-titled WSJ article; it implies that the subjects aren't well set-up, when they pretty much are. They all have some assets to sell if they needed to. (If we were sick, we wouldn't hang onto a 13 rm Victorian.)
I of course sympathize with the folks who now struggle with illness, and no I wouldn't want to be a single guy with an almost monastic life, but the remaining anecdotes are almost aspirational. Lotsa travel? Bouncing between Ft Myers and Toronto? Doing a degree? Where do we sign?
The WSJ article didn't seem talk much about principal residence as a significant asset, to be tapped later. Is that not a US thing?
We have just started full retirement, and we're pretty fortunate. Like good little middle class Canadians of our generation, we had to have a house, and we could only afford something really run-down, but it's in a nice spot in an in-demand city. So now, after 33 years, it's a pretty nice little house in an increasingly popular area, and that represents about 66% of our current net worth. We also have an investment nest-egg, from a pension fund and some savings. And of course Canada's CPP and OAS payments, and (for the moment) a dependable single-payer health system. And we're healthy and no dependents. Like I said - we're fortunate, and financially, we're set.
We're still reluctant, post-pandemic, to travel much. We don't expect to be snowbirds, but we hope to be able to get 2 to 4 weeks near the Gulf every winter. Hasn't yet come to pass. And inflation plus global goings-on have made our annual income look a bit less plush. We're not dining out as much. I don't know if our planned draw will ever again look as generous as it promised to be.
As late boomers, our path was pretty rosy. We stuck to the script, and we had some pretty good luck with jobs etc. I have no idea how modern families that don't have two six-figure incomes will ever achieve the same in a big city.
posted by Artful Codger at 8:24 AM on March 27, 2023
I of course sympathize with the folks who now struggle with illness, and no I wouldn't want to be a single guy with an almost monastic life, but the remaining anecdotes are almost aspirational. Lotsa travel? Bouncing between Ft Myers and Toronto? Doing a degree? Where do we sign?
The WSJ article didn't seem talk much about principal residence as a significant asset, to be tapped later. Is that not a US thing?
We have just started full retirement, and we're pretty fortunate. Like good little middle class Canadians of our generation, we had to have a house, and we could only afford something really run-down, but it's in a nice spot in an in-demand city. So now, after 33 years, it's a pretty nice little house in an increasingly popular area, and that represents about 66% of our current net worth. We also have an investment nest-egg, from a pension fund and some savings. And of course Canada's CPP and OAS payments, and (for the moment) a dependable single-payer health system. And we're healthy and no dependents. Like I said - we're fortunate, and financially, we're set.
We're still reluctant, post-pandemic, to travel much. We don't expect to be snowbirds, but we hope to be able to get 2 to 4 weeks near the Gulf every winter. Hasn't yet come to pass. And inflation plus global goings-on have made our annual income look a bit less plush. We're not dining out as much. I don't know if our planned draw will ever again look as generous as it promised to be.
As late boomers, our path was pretty rosy. We stuck to the script, and we had some pretty good luck with jobs etc. I have no idea how modern families that don't have two six-figure incomes will ever achieve the same in a big city.
posted by Artful Codger at 8:24 AM on March 27, 2023
Aww don't worry about it COD. I have a long history of missing jokes here, hah.
posted by JHarris at 8:24 AM on March 27, 2023 [1 favorite]
posted by JHarris at 8:24 AM on March 27, 2023 [1 favorite]
So what is stopping people from forming strong unions and demanding pensions
One morning at the place I work we received a short email that the office in [city] had been closed. Only months later did the information leak out that the employees there had attempted to start a union, at which point they were immediately fired.
So my guess at an answer to the above question is "fear and job uncertainty".
posted by Greg_Ace at 8:25 AM on March 27, 2023 [12 favorites]
One morning at the place I work we received a short email that the office in [city] had been closed. Only months later did the information leak out that the employees there had attempted to start a union, at which point they were immediately fired.
So my guess at an answer to the above question is "fear and job uncertainty".
posted by Greg_Ace at 8:25 AM on March 27, 2023 [12 favorites]
> So what is stopping people from forming strong unions and demanding pensions, I guess, if everyone acknowledges this?
Having worked to form a union and won the election: 100 years of antiunion propaganda, legislation and did i mention propaganda. Even very intelligent people (this was a union for adjunct profs) believe some very strange things about what unions are, what they do, and about their own individual magical power to "negotiate" with management to their own advantage. People look at their fellow laborers being exploited and think: well I'm too smart for that to happen to *me* (until it does). It's very very very hard to win unions in the united states. We have brain worms. And a supreme court, congress, presidency that loves capital and hates workers.
posted by dis_integration at 8:26 AM on March 27, 2023 [12 favorites]
Having worked to form a union and won the election: 100 years of antiunion propaganda, legislation and did i mention propaganda. Even very intelligent people (this was a union for adjunct profs) believe some very strange things about what unions are, what they do, and about their own individual magical power to "negotiate" with management to their own advantage. People look at their fellow laborers being exploited and think: well I'm too smart for that to happen to *me* (until it does). It's very very very hard to win unions in the united states. We have brain worms. And a supreme court, congress, presidency that loves capital and hates workers.
posted by dis_integration at 8:26 AM on March 27, 2023 [12 favorites]
So what is stopping people from forming strong unions and demanding pensions, I guess, if everyone acknowledges this?
It's my impression that the US is the land of opportunity, not of equality, social justice, or compassion. Sort of like Vegas.
posted by Artful Codger at 8:27 AM on March 27, 2023 [3 favorites]
It's my impression that the US is the land of opportunity, not of equality, social justice, or compassion. Sort of like Vegas.
posted by Artful Codger at 8:27 AM on March 27, 2023 [3 favorites]
The WSJ article didn't seem talk much about principal residence as a significant asset, to be tapped later. Is that not a US thing
I was just talking about this with a Canadian friend, about the different concepts of houses. I'm not sure if it's US-wide, but at least personally, as someone with a child, because houses are so hard to acquire right now, I would rather die than sell a house that would otherwise, if I died, go to said child. It would feel to me like robbing their future in order to fund my present.
posted by corb at 8:32 AM on March 27, 2023 [3 favorites]
I was just talking about this with a Canadian friend, about the different concepts of houses. I'm not sure if it's US-wide, but at least personally, as someone with a child, because houses are so hard to acquire right now, I would rather die than sell a house that would otherwise, if I died, go to said child. It would feel to me like robbing their future in order to fund my present.
posted by corb at 8:32 AM on March 27, 2023 [3 favorites]
Thanks corb. That's certainly a noble goal.
posted by Artful Codger at 8:37 AM on March 27, 2023
posted by Artful Codger at 8:37 AM on March 27, 2023
The WSJ article didn't seem talk much about principal residence as a significant asset, to be tapped later. Is that not a US thing
That was a thing in the US - retiring in your paid-off house was something Boomers could expect to do. GenX probably has a 2nd mortgage to pay their kid's crazy expensive college bills. It's probably not going to be a thing in the future as our housing stock gets bought by corporations that see real estate as a better long term investment than the stock market.
posted by COD at 8:44 AM on March 27, 2023 [2 favorites]
That was a thing in the US - retiring in your paid-off house was something Boomers could expect to do. GenX probably has a 2nd mortgage to pay their kid's crazy expensive college bills. It's probably not going to be a thing in the future as our housing stock gets bought by corporations that see real estate as a better long term investment than the stock market.
posted by COD at 8:44 AM on March 27, 2023 [2 favorites]
So what is stopping people from forming strong unions and demanding pensions, I guess, if everyone acknowledges this?
The WSJ article didn't seem talk much about principal residence as a significant asset, to be tapped later. Is that not a US thing
These two comments together help explain each other. First off about 1 in 8 or 9 households (on the high end) in the US are millionaires including their home value. It falls to like 1/15 if you take out home values. So 1/8 means there are actually a lot of millionaires in the US, they are just clustered together and the vast majority of their wealth is based on a purchase they probably made a really long time ago, and now defend with a serious tenacity. That number is even high enough to dampen union interest among the top percent in the US.
Secondly, if you take it up to $2m, the number drops off a cliff. So people still consider $1m a max achievable goal before moving on to more immediate assets, as in a nicer car, boat, vacations, etc. They are also plenty of home values cruising in on $1m, but move up to $2m, and it's also pretty small a number.
Also, due to the clustering, there are areas where lots of people are millionaires, and areas where no-one is. And of course, the numbers are even more dire if you are not white, but are black or hispanic.
posted by The_Vegetables at 9:05 AM on March 27, 2023 [1 favorite]
The WSJ article didn't seem talk much about principal residence as a significant asset, to be tapped later. Is that not a US thing
These two comments together help explain each other. First off about 1 in 8 or 9 households (on the high end) in the US are millionaires including their home value. It falls to like 1/15 if you take out home values. So 1/8 means there are actually a lot of millionaires in the US, they are just clustered together and the vast majority of their wealth is based on a purchase they probably made a really long time ago, and now defend with a serious tenacity. That number is even high enough to dampen union interest among the top percent in the US.
Secondly, if you take it up to $2m, the number drops off a cliff. So people still consider $1m a max achievable goal before moving on to more immediate assets, as in a nicer car, boat, vacations, etc. They are also plenty of home values cruising in on $1m, but move up to $2m, and it's also pretty small a number.
Also, due to the clustering, there are areas where lots of people are millionaires, and areas where no-one is. And of course, the numbers are even more dire if you are not white, but are black or hispanic.
posted by The_Vegetables at 9:05 AM on March 27, 2023 [1 favorite]
That cheap energy and then the cheap food policy of Earl Butts of the Nixon admin is why people stopped having a large garden and home canned the things from that garden.
Food used to be a significant portion of people's budgets. Gas too. Like in the 1/3 range.
Gas is like 3% of people's budgets now, dwarfed by the purchase price of multiple automobiles. Food is much less now, even with inflation.
So sure policy, but also industrialization, which people now spend a low enough percentage of their income to fight against (ie: they purposely buy more expensive food and a more expensive car) is reality. Will that change? Maybe, but there is a lot of leeway.
posted by The_Vegetables at 9:09 AM on March 27, 2023 [1 favorite]
Food used to be a significant portion of people's budgets. Gas too. Like in the 1/3 range.
Gas is like 3% of people's budgets now, dwarfed by the purchase price of multiple automobiles. Food is much less now, even with inflation.
So sure policy, but also industrialization, which people now spend a low enough percentage of their income to fight against (ie: they purposely buy more expensive food and a more expensive car) is reality. Will that change? Maybe, but there is a lot of leeway.
posted by The_Vegetables at 9:09 AM on March 27, 2023 [1 favorite]
So sure policy, but also industrialization, which people now spend a low enough percentage of their income to fight against (ie: they purposely buy more expensive food and a more expensive car) is reality.
Also, if you think about it, and you think the US was designed and built in a way that US citizens could still live like pre-boomers did if they wanted to, the amount of wealth that each household would have is astronomical. Far from creating wealth, the way the US was designed over that period- expensive single family homes, lots of property but not anything useful done with it - are serious drags on GDP, not multipliers.
posted by The_Vegetables at 9:26 AM on March 27, 2023
Also, if you think about it, and you think the US was designed and built in a way that US citizens could still live like pre-boomers did if they wanted to, the amount of wealth that each household would have is astronomical. Far from creating wealth, the way the US was designed over that period- expensive single family homes, lots of property but not anything useful done with it - are serious drags on GDP, not multipliers.
posted by The_Vegetables at 9:26 AM on March 27, 2023
Gas is 6.66% of my monthly budget, which seems apropos, somehow. Food is 20% and rising and that's with other people contributing. The WSJ is not in any hurry to interview me about my retirement plans, which mostly involve holding onto my house and my job like grim death.
posted by mygothlaundry at 9:37 AM on March 27, 2023 [6 favorites]
posted by mygothlaundry at 9:37 AM on March 27, 2023 [6 favorites]
It's my impression that the US is the land of opportunity, not of equality, social justice, or compassion. Sort of like Vegas.
I sometimes think there are two Americas: normal America and crass, vulgar, materialistic Vegas America. IMPOTUSx2 is a natural president of Vegas America but there was a glitch in the timeline and he ended up the president of normal America.
posted by kirkaracha at 10:06 AM on March 27, 2023 [2 favorites]
I sometimes think there are two Americas: normal America and crass, vulgar, materialistic Vegas America. IMPOTUSx2 is a natural president of Vegas America but there was a glitch in the timeline and he ended up the president of normal America.
posted by kirkaracha at 10:06 AM on March 27, 2023 [2 favorites]
So what is stopping people from forming strong unions and demanding pensions, I guess, if everyone acknowledges this?
Predictably worse off but with the illusion of individual control!
It’s like the particular individualism we get as an ideology is a divide-and-conquer tactic. THOUGH it is also, in at least some nonhuman species, a common evolved strategic response to abundant resources, just as coöperation is strategic in conditions of sparse or especially patchy resources. So the US in particular started as a high-trust society, figured out how to exploit finite resources, became individualistic while wealthy, and is now facing declining or at best steady state resources as an uncooperative society. (Another view of kirkaracha’s two USs.)
posted by clew at 10:19 AM on March 27, 2023 [3 favorites]
Predictably worse off but with the illusion of individual control!
It’s like the particular individualism we get as an ideology is a divide-and-conquer tactic. THOUGH it is also, in at least some nonhuman species, a common evolved strategic response to abundant resources, just as coöperation is strategic in conditions of sparse or especially patchy resources. So the US in particular started as a high-trust society, figured out how to exploit finite resources, became individualistic while wealthy, and is now facing declining or at best steady state resources as an uncooperative society. (Another view of kirkaracha’s two USs.)
posted by clew at 10:19 AM on March 27, 2023 [3 favorites]
I sometimes think there are two Americas: normal America and crass, vulgar, materialistic Vegas America
I wasn't so much going for that as the apparently wider US belief that, given all this "opportunity" in the US, it's mainly in the hands of the individual as to whether they succeed or fail. Which is a fig leaf for the selfishness that explains why there isn't more tax support for assistance for the marginalized or disadvantaged, universal healthcare, govt-funded pension plans etc
posted by Artful Codger at 11:22 AM on March 27, 2023 [4 favorites]
I wasn't so much going for that as the apparently wider US belief that, given all this "opportunity" in the US, it's mainly in the hands of the individual as to whether they succeed or fail. Which is a fig leaf for the selfishness that explains why there isn't more tax support for assistance for the marginalized or disadvantaged, universal healthcare, govt-funded pension plans etc
posted by Artful Codger at 11:22 AM on March 27, 2023 [4 favorites]
I was just talking about this with a Canadian friend, about the different concepts of houses. I'm not sure if it's US-wide, but at least personally, as someone with a child, because houses are so hard to acquire right now, I would rather die than sell a house that would otherwise, if I died, go to said child. It would feel to me like robbing their future in order to fund my present.
If you follow a typical life trajectory your "child" won't be robbed of their inheritance. It'll be your late middle-aged to almost retired offspring.
posted by srboisvert at 11:50 AM on March 27, 2023 [2 favorites]
If you follow a typical life trajectory your "child" won't be robbed of their inheritance. It'll be your late middle-aged to almost retired offspring.
posted by srboisvert at 11:50 AM on March 27, 2023 [2 favorites]
LOL brb texting my mother that she is now to refer to me exclusively as her Late Middle-Aged to Almost-Retired Offspring. I'm sure she'll be more than amenable.
posted by We put our faith in Blast Hardcheese at 2:20 PM on March 27, 2023 [4 favorites]
posted by We put our faith in Blast Hardcheese at 2:20 PM on March 27, 2023 [4 favorites]
Late Middle-Aged Offspring who lost a lot of retirement savings while looking after Agèd Parent and possibly even grandkids is a pretty common life course too.
Nb, leaving a house to someone you love is good when thinking of houses for their use-value not just their speculative value.
posted by clew at 2:41 PM on March 27, 2023 [6 favorites]
Nb, leaving a house to someone you love is good when thinking of houses for their use-value not just their speculative value.
posted by clew at 2:41 PM on March 27, 2023 [6 favorites]
I think what this reveals is the absolute bullshit of the lie the American public was sold that 401Ks were 'better' than pensions, because you had more control, etc. A pension keeps paying out as long as you live, whereas the likelihood of people saving enough in their 401K to be able to do the same, judging by these numbers, appears laughable.
Three big differences:
First, the government forces scheme administrators of DB pensions to calculate how much money to put away for each qualifying period. So if you've just earned another 1/35th of your career average salary this year, they have to calculate how much it will cost them to pay a typical "you" from retirement until death, discount it back to today, and add it to the fund. Some regulators (i.e. the US) will tolerate scheme deficits for quite a while, some will not but all require the calculation.
Defined contribution schemes have nobody telling you, "hey buddy, if you save only 4% and have that matched for your whole career, your retirement income will be way too low". So the existence of DB schemes is an effective form of enforced savings.
Second, the scheme sponsor, as long as they exist, can be required to make additional contributions. How valuable this is, depends on how robust that sponsor is though.
Third, a collective scheme only has to account for averages and distributions. It doesn't matter that one of you former employees lives to 105 because your scheme uses the lifetime distribution to calculate funding amounts. As a result, a rational person funding their own retirement either "over saves" because of the risk of running out of money or more likely just accepts the risk of a few years of very dire poverty at end of life. Not good!
I've been trying to wrap my mind around the impact of personal frugality on savings in 2023 USA.
I'm sort of an inherently frugal person (I rarely buy anything and try to waste nothing). But it feels like I am living in two worlds: on the one hand I save a few dollars by accumulating very little and by thrifting what I do; on the other, the things that actually make a difference to my bank balance are housing, healthcare, therapeutic services for my disabled kiddo.
First, "frugality" has a much bigger effect on people on upper-middle class incomes for the obvious reason that they have more "trimmable" spending. If you already live in the cheapest decent (or even the outright cheapest) housing in your area, then there's a lot less to economise on than if you live in an expensive place. Nobody seemingly wants to talk about that but if you have loads of dosh then it's easy to play the early retirement game by cutting out frivolities.
Second, in descending order, the big areas to make frugal savings in 2023 are in housing and transportation but housing costs in areas with low transportation costs tend to be higher.
Third, healthcare costs loom so massively over people as to make everything else a joke. Sure, do all that and then still get wiped out paying the out of pocket for necessary medical care for your kids.
The relative cost of material goods like clothes is just much lower so the gains from darning socks are a bit irrelevant compared to the big ones.
posted by atrazine at 7:12 AM on March 28, 2023 [5 favorites]
Three big differences:
First, the government forces scheme administrators of DB pensions to calculate how much money to put away for each qualifying period. So if you've just earned another 1/35th of your career average salary this year, they have to calculate how much it will cost them to pay a typical "you" from retirement until death, discount it back to today, and add it to the fund. Some regulators (i.e. the US) will tolerate scheme deficits for quite a while, some will not but all require the calculation.
Defined contribution schemes have nobody telling you, "hey buddy, if you save only 4% and have that matched for your whole career, your retirement income will be way too low". So the existence of DB schemes is an effective form of enforced savings.
Second, the scheme sponsor, as long as they exist, can be required to make additional contributions. How valuable this is, depends on how robust that sponsor is though.
Third, a collective scheme only has to account for averages and distributions. It doesn't matter that one of you former employees lives to 105 because your scheme uses the lifetime distribution to calculate funding amounts. As a result, a rational person funding their own retirement either "over saves" because of the risk of running out of money or more likely just accepts the risk of a few years of very dire poverty at end of life. Not good!
I've been trying to wrap my mind around the impact of personal frugality on savings in 2023 USA.
I'm sort of an inherently frugal person (I rarely buy anything and try to waste nothing). But it feels like I am living in two worlds: on the one hand I save a few dollars by accumulating very little and by thrifting what I do; on the other, the things that actually make a difference to my bank balance are housing, healthcare, therapeutic services for my disabled kiddo.
First, "frugality" has a much bigger effect on people on upper-middle class incomes for the obvious reason that they have more "trimmable" spending. If you already live in the cheapest decent (or even the outright cheapest) housing in your area, then there's a lot less to economise on than if you live in an expensive place. Nobody seemingly wants to talk about that but if you have loads of dosh then it's easy to play the early retirement game by cutting out frivolities.
Second, in descending order, the big areas to make frugal savings in 2023 are in housing and transportation but housing costs in areas with low transportation costs tend to be higher.
Third, healthcare costs loom so massively over people as to make everything else a joke. Sure, do all that and then still get wiped out paying the out of pocket for necessary medical care for your kids.
The relative cost of material goods like clothes is just much lower so the gains from darning socks are a bit irrelevant compared to the big ones.
posted by atrazine at 7:12 AM on March 28, 2023 [5 favorites]
If you already live in the cheapest decent (or even the outright cheapest) housing in your area,
Housing also has an extremely high 'floor' in terms of price, because repairs are made using current dollars, not past dollars. Housing that can't meet the floor is abandoned and quickly falls apart.
I think what this reveals is the absolute bullshit of the lie the American public was sold that 401Ks were 'better' than pensions, because you had more control, etc.
The other advantage of 401ks (even obliquely mentioned in this thread) is that you can theoretically pass it on to heirs. Also, how often do you hear about pensioners being on 'fixed income' (like everyone's income isn't fixed) being a hard negative?
Pensions, between upper middle class and higher people having plenty of money and homes to pass on didn't stand a chance.
posted by The_Vegetables at 7:20 AM on March 28, 2023
Housing also has an extremely high 'floor' in terms of price, because repairs are made using current dollars, not past dollars. Housing that can't meet the floor is abandoned and quickly falls apart.
I think what this reveals is the absolute bullshit of the lie the American public was sold that 401Ks were 'better' than pensions, because you had more control, etc.
The other advantage of 401ks (even obliquely mentioned in this thread) is that you can theoretically pass it on to heirs. Also, how often do you hear about pensioners being on 'fixed income' (like everyone's income isn't fixed) being a hard negative?
Pensions, between upper middle class and higher people having plenty of money and homes to pass on didn't stand a chance.
posted by The_Vegetables at 7:20 AM on March 28, 2023
I didn't make it past $400 donation to church, so I'll just coast the comments.
posted by lextex at 7:31 AM on March 28, 2023 [3 favorites]
posted by lextex at 7:31 AM on March 28, 2023 [3 favorites]
I think what this reveals is the absolute bullshit of the lie the American public was sold that 401Ks were 'better' than pensions, because you had more control, etc.
The other advantage of 401ks (even obliquely mentioned in this thread) is that you can theoretically pass it on to heirs. Also, how often do you hear about pensioners being on 'fixed income' (like everyone's income isn't fixed) being a hard negative?
I'm old enough to remember when a lot of people who thought they had pensions got nothing because the companies stole them so there is also that.
posted by srboisvert at 3:50 AM on March 30, 2023 [5 favorites]
The other advantage of 401ks (even obliquely mentioned in this thread) is that you can theoretically pass it on to heirs. Also, how often do you hear about pensioners being on 'fixed income' (like everyone's income isn't fixed) being a hard negative?
I'm old enough to remember when a lot of people who thought they had pensions got nothing because the companies stole them so there is also that.
posted by srboisvert at 3:50 AM on March 30, 2023 [5 favorites]
If any retirement savings can be made un-stealable then pensions could be, and vice versa, yeah? A political will problem rather than a legal one weird trick problem.
Iirc "fixed income" originally meant fixed without any reference to inflation (which most earned incomes have if only by changing jobs) and well before COLA was thought of. Had been reasonable for hundreds of years of mostly very low inflation, immiserated the old in a specific generation. I am half-remembering this from Piketty and Edith Wharton tbf.
posted by clew at 10:04 AM on March 30, 2023 [2 favorites]
Iirc "fixed income" originally meant fixed without any reference to inflation (which most earned incomes have if only by changing jobs) and well before COLA was thought of. Had been reasonable for hundreds of years of mostly very low inflation, immiserated the old in a specific generation. I am half-remembering this from Piketty and Edith Wharton tbf.
posted by clew at 10:04 AM on March 30, 2023 [2 favorites]
I'm old enough to remember when a lot of people who thought they had pensions got nothing because the companies stole them so there is also that.
Me too. I sure wish I had a pension, but I also would want some level of guarantee for it. A lot of people thought they had that guarantee and it turned out they didn't at all.
posted by Dip Flash at 8:40 PM on March 30, 2023 [1 favorite]
Me too. I sure wish I had a pension, but I also would want some level of guarantee for it. A lot of people thought they had that guarantee and it turned out they didn't at all.
posted by Dip Flash at 8:40 PM on March 30, 2023 [1 favorite]
If any retirement savings can be made un-stealable then pensions could be, and vice versa, yeah? A political will problem rather than a legal one weird trick problem.
Talk to the Brits who thought they had un-stealable pensions. Even governments will steal pensions so there really is no possible effective guarantee. The only reason why the current American retirement schemes haven't been systematically looted is because having peoples retirement savings in the market benefits the rich even more than the retirees. If that changes you almost for sure will quickly see schemes that drain people's retirement funds (worse than stealth fee changes and unpunished corporate fraud and stock manipulation already do). There is a reason why republicans want to cripple the SEC, FTC and CFPB. There is a huge pile of money sitting right there and the robber barons are slavering over it.
posted by srboisvert at 11:59 AM on March 31, 2023 [1 favorite]
Talk to the Brits who thought they had un-stealable pensions. Even governments will steal pensions so there really is no possible effective guarantee. The only reason why the current American retirement schemes haven't been systematically looted is because having peoples retirement savings in the market benefits the rich even more than the retirees. If that changes you almost for sure will quickly see schemes that drain people's retirement funds (worse than stealth fee changes and unpunished corporate fraud and stock manipulation already do). There is a reason why republicans want to cripple the SEC, FTC and CFPB. There is a huge pile of money sitting right there and the robber barons are slavering over it.
posted by srboisvert at 11:59 AM on March 31, 2023 [1 favorite]
I'm old enough to remember when a lot of people who thought they had pensions got nothing because the companies stole them so there is also that.
Skimming this history of the Studebaker-Packard collapse, it seems like pensions weren't stolen as much as never fully funded. The pension opened in 1950 and was terminated in 1958, less than 10 years into a 35 year plan to reach full funding.
The only reason why the current American retirement schemes haven't been systematically looted is because having peoples retirement savings in the market benefits the rich even more than the retirees.
I imagine 401k participation is high among CEOs and other executives, so there's at least some managers looking out for the plan's best interest.
posted by pwnguin at 1:50 AM on April 3, 2023
Skimming this history of the Studebaker-Packard collapse, it seems like pensions weren't stolen as much as never fully funded. The pension opened in 1950 and was terminated in 1958, less than 10 years into a 35 year plan to reach full funding.
The only reason why the current American retirement schemes haven't been systematically looted is because having peoples retirement savings in the market benefits the rich even more than the retirees.
I imagine 401k participation is high among CEOs and other executives, so there's at least some managers looking out for the plan's best interest.
posted by pwnguin at 1:50 AM on April 3, 2023
I imagine 401k participation is high among CEOs and other executives...
I suspect the 401K is a minor concern for most CEOs. If they are making millions per year in salary and stock options, the $22K a year they can set aside tax-free in a 401K is a rounding error in their net wealth.
posted by COD at 6:31 AM on April 3, 2023 [1 favorite]
I suspect the 401K is a minor concern for most CEOs. If they are making millions per year in salary and stock options, the $22K a year they can set aside tax-free in a 401K is a rounding error in their net wealth.
posted by COD at 6:31 AM on April 3, 2023 [1 favorite]
401K is a minor concern for most CEOs. If they are making millions per year
In much the same way that most companies are not part of the S&P 500, most are not making millions. The other top executives fare a bit worse. Better than their employees for sure, though.
the $22K a year they can set aside tax-free
It's actually $66K a year if you factor in employer and after tax contributions. More if you are eligible for catchup provisions, as many senior executives are. Even if you did make a million a year (I wish!), thats still 6% of your gross income, and 12% of after tax income. It's not the only thing, but it is something. Especially when you consider the alternatives are taxable accounts or unfunded deferred comp plans that could lose everything, especially if you tried to withdraw it all at once.
I think the point stands though that 401k plans are a bit safer from management avarice than pension plans when management participates in the same plan. And safer from termination risk, since there's no ongoing company liability. These factors are why ERISA, PBGC and such all exist now! There are many other risks 401ks introduce, but its not appropriate to point at the "start paying out the pension today and let the millennials deal with the fallout" era and ignore the lessons learned and legislation passed since then.
If you wanna know why people trust the 401k over the pension, I hear way more news about my OPERS pension in the crosshairs, while nobody thinks they can clawback my 457b or 403b. From this I presume the fight is over the actuarial hole -- money that never existed -- rather than who gets to steal my retirement.
posted by pwnguin at 1:06 PM on April 3, 2023
In much the same way that most companies are not part of the S&P 500, most are not making millions. The other top executives fare a bit worse. Better than their employees for sure, though.
the $22K a year they can set aside tax-free
It's actually $66K a year if you factor in employer and after tax contributions. More if you are eligible for catchup provisions, as many senior executives are. Even if you did make a million a year (I wish!), thats still 6% of your gross income, and 12% of after tax income. It's not the only thing, but it is something. Especially when you consider the alternatives are taxable accounts or unfunded deferred comp plans that could lose everything, especially if you tried to withdraw it all at once.
I think the point stands though that 401k plans are a bit safer from management avarice than pension plans when management participates in the same plan. And safer from termination risk, since there's no ongoing company liability. These factors are why ERISA, PBGC and such all exist now! There are many other risks 401ks introduce, but its not appropriate to point at the "start paying out the pension today and let the millennials deal with the fallout" era and ignore the lessons learned and legislation passed since then.
If you wanna know why people trust the 401k over the pension, I hear way more news about my OPERS pension in the crosshairs, while nobody thinks they can clawback my 457b or 403b. From this I presume the fight is over the actuarial hole -- money that never existed -- rather than who gets to steal my retirement.
posted by pwnguin at 1:06 PM on April 3, 2023
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