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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsYou people aren't saving enough for retirement! Shame on you!
Two financial analysts were on Morning Joe today talking about how bad you people are! It seems you have been buying new cars before the old one was worn out! You're buying too much stuff. Just have your employer deduct money automatically from each of your paychecks and PROBLEM SOLVED!
Also, you aren't working long enough. Retiring at sixty-five doesn't cut it any more...work longer! You slackers...
withering
I would like to introduce to them our good friend, Bill. He worked as a plumber for 32 years. By age 62 his knees had given out (one is replaced, the other will soon be) from working on them on hard, cold bathroom floors, he shoulder was shot from carrying heavy plumbing fixtures and he is having shoulder surgery soon. Oh, and before he was a plumber, he was a welder and has scarring on his eyes as a result...but he's a REAL baddie cuz he had one of them awful unions and was a shop steward...his retirement medical benefits kicked in until he get to 65 and can take Medicare...
Erich Bloodaxe BSN
(14,733 posts)They're 'saving for retirement'.
I myself have quite the collection of seeds saved up at this point, since I doubt I'll be able to afford anything more than living in the wild and foraging and 'guerilla farming' to stay alive...
el_bryanto
(11,804 posts)or any radio program really; podcasts and audible for me.
But, isn't saving money for retirement a good idea if you are capable of it? Obviously I think we should 1) strengthen social security, 2) strengthen unions so they can get good pensions for their members, 3) get more unions, and so on. But still I think setting money aside for retirement isn't a bad idea.
Bryant
CTyankee
(63,912 posts)money aside, as I did, it often isn't enough. And oftentimes, even if you want to work longer, there is such a thing as age discrimination...after age 60 you are often deemed "too expensive" for the employer, who can find cheaper, younger workers...
The political agenda was at work here, not sensible policy recommendations such as what you listed. These analysts from Money Magazine, etc. aren't talking about strengthening SS and unions. If anything, they would probably be bad mouthing both ideas.
SoCalDem
(103,856 posts)That's about the age when medical issues crop up and start costing the companies more for health care. These companies want a young/hungry workforce that will come early/stay late/work cheap
Nye Bevan
(25,406 posts)When I buy a car I pay cash for a basic, reliable model (Honda or Toyota) and drive it for at least 10 years or so. Yes, it's fun to get in a brand new car every 2 or 3 years but you really will save less for retirement.
gollygee
(22,336 posts)I know a few people who do that, but they're pretty wealthy and won't likely have trouble at retirement. I'm in the top 5% and we don't even do that - in our 16 years of marriage we've bought one actual new car. Which we've been driving for 8 years so far and plan to continue to drive for a long time yet.
Most people I know buy used cars, and often old enough that I wonder how good a choice it is - like they spend so much keeping the car running that it might almost be cheaper to spend a bit more on the car. But most people seem to have so little money that they can't make wiser choices because it requires having more money on hand.
Granted, I'm living in a region that is more economically depressed than much of the country and still has a troubling amount of unemployment. Maybe that's why I'm seeing something so different. But I just don't see people buying new cars at all, unless they're making a really high salary - like $400k a year or something. I know a couple of people in that range who buy new cars every couple of years or so but that's it.
Nye Bevan
(25,406 posts)And I hardly know anyone who has ever bought a used vehicle.
And yes, some of these people are wealthy, but many of them are more interested in appearing to be wealthy. So yes, they lease their Lexus for 3 years because they can afford the monthly payment but would not have the money to pay cash for one, and I am driving my 6 year old Toyota. And they may impress more people than I do but my retirement savings are probably in better shape than theirs. Leasing is an auto dealer's dream as there are so many ways to scam people out of extra fees, and they know that the person is going to return in 2 or 3 years to do it all over again (I have never, ever, heard of anyone exercising the purchase option).
oldhippie
(3,249 posts)Wife gets a new car and I get a new truck about every ten years. Always pay cash that we have saved up (and earned interest or dividends on) instead of paying car payment. Haven't had a car payment since '86. And we're not rich.
haele
(12,680 posts)And even then, most of the time they buy "certified pre-owned". This is in Southern California, home of the pretentious.
The few that drive new cars every two/three years are usually leasing - which is a huge trap if you're not using the leased car strictly for occasional driving.
Frankly, if one makes under six figures, it's not affordable to get a new car every two/three years. Heck, most people can't even afford to purchase a used car every two/three years; you buy it, then drive it until it costs more to fix than it does to purchase another one.
Back in the 1980's and early 1990's, yes; I knew a few "players" who would talk about needing a new car every two/three years for their image, but their wages were relatively higher (back when your mobile phone was a "brick" and a BS in Computer Science could guarantee you $120K a year right out of college) and housing and cars were relatively cheaper.
Y'know, back when David Hasselhoff, Steve Guttenberg and Tom Selleck were superstars.
Now-a-days, the only people I know who have ever buy new every couple years are upper level executives or people making nearer to $500K a year than $100K a year. Even my very wealthy FIL of fond memory (who retired a full bird colonel and ended up one of many VPs of USAA for a while) would keep his Mercedes for at least four or five years before turning them in for new. He believed in "keep it until the warranty you're paying for runs out..."
Haele
Nye Bevan
(25,406 posts)haele
(12,680 posts)I'm pointing out that your experience may not be usual. But then again, it might be depending on your location and the fields of work in that location.
I'm sure medical professionals have different spending habits than engineers, and people in finance will purchase with a different understanding than people in skilled trades.
Perhaps it's because I work in a field where there's a high amount of frictional unemployment, and people know they can't afford bills for frivolities because they never know when they're going to be looking for the next contract or job.
Y'know, I currently make enough to be enticed to be burdened with a mortgage for a $300K house like many of my co-workers are struggling under, but I decided to live in the 'hood as a cost-saving measure because my spouse cannot work and I'm the only person in my household with any sort of income other than SSDI. Our car is a 2006 model we bought used.
I've tried to live by the old "rule of thirds" (1/3 for housing, 1/3 living expenses and bills/payments, 1/3 left to spend or save).
And even with all that, I still can't save; my 401K only has ~$40K in it, and that's even after my company match and the fact I've been putting the max I can afford to part with in it for the past 15 years I've had one.
Haele
Gormy Cuss
(30,884 posts)The economy will sputter if you don't buy enough.
How does Average Jane reconcile these two directives? Simple! Save for retirement and use credit for your consumer purchases. Debt is good, until you have too much debt so spend within your ability to pay back with interest. Win-win!
gollygee
(22,336 posts)We're either bad for not saving, or bad for saving. Take your pick. Next week it'll change.
hobbit709
(41,694 posts)Orrex
(63,225 posts)Quite a few of them are on DU, sadly.
suffragette
(12,232 posts)You're so correct, CTYankee.
They start from a faulty premise about people making more than they need to spend, then scold and as you note, present this as problem solved.
Within this, they point to stats for income and costs and recommend places to live or move to blithely, without taking into account the wild imbalance in current incomes or any other factors.
Here's a general critique about one of them that applies well to what she said today:
http://www.medscape.com/viewarticle/803809_3
Our other experts agree with Altfest, although one expressed reservations: "Jean Chatzky's basic, day-to-day advice is fine, but her overall philosophy doesn't work for everyone and she doesn't seem to account for that," says author Helaine Olen. Two of Chatzky's mantras, which appear on her Website, are "spend less than you make" and "save, then invest." Those are fine for people with means, such as doctors and other high-earners, Olen says, but "it's dubious advice if you're on unemployment and trying to get by on a few hundred dollars a week."
Then there are Chatzky's partnerships with financial companies: "Those relationships make her very unlikely to publicly criticize any of these companies and their business practices," Olen points out.
And here's an tweet from the other one that undercuts much of what she was pushing on Morning Joe. Of course, she didn't bring this up and even in the tweet seems to be more about pushing blame than acknowledging larger issues:
http://muckrack.com/donna-rosato?page=27
Older workers dominate long term unemployed. Most give up w/in a year because resources run out not due 2 bad job mkt
CTyankee
(63,912 posts)for wanting SS and Medicare. It's part of their snarky "you people just want free stuff!" By blaming the workers for their plight, they think people aren't fooled and have fallen for their overall strategy, which is aimed at getting rid of SS, Medicare, Medicaid, the minimum wage and Unemployment Insurance.
"takers"
suffragette
(12,232 posts)They blame the public, yet they are the ones connected to the financiers who created the global mess. The advice they give is right in sync with the austerity push, which is about privatizing anything in the public control, from land to services and especially social security.
Found a good interview here which blasts this out of the water (small excerpt here,well worth a full read):
http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/helaine-olen-why-your-401k-retirement-plan-is-failing-you/
But theyre basically saying, We can get you there, but its up to you to make the deposits that you need to make, to take enough out of your paycheck.
This leaves out the fact that most people simply cant do it. And as I said, they cant do it for any number of reasons. They cant do it because most of us are not financial experts. As [finance writer] Jane Bryant Quinn told me,
If they were really interested in finance, theyd be working on Wall Street.
But it also leaves out the fact that we are really asking people to perform a mathematically impossible task, and that is, in an environment where your salary is stagnating and falling relative to inflation, that you should be able to save at least 10 percent of your salary for retirement. Some people are now saying up to 20 percent, by the way; that as college costs have been going up at rates well beyond that of inflation, not for years [but] for decades, you should save up for your childrens college education; as health care costs are going up at rates well beyond inflation, again not for years but decades, that you should be able to somehow foresee your health care crisis, know how much youre going to need to save. And by the way, save for the occasional little splurge, the little trip away.
Its really not possible. And the industry is, whether deliberately or simply because this is their model, selling you on this idea that it is. Its very much part of our culture to believe that it is.
Brigid
(17,621 posts)They need to get called on this idiocracy.
CTyankee
(63,912 posts)Twitter feed. I don't tweet so I can't participate. But when they had the place you could just give them a piece of your mind, I sure did, practically every week, depending on how mad I got...
B Calm
(28,762 posts)What a load of crap!
theHandpuppet
(19,964 posts)There's no way I could save even a small fraction of that amount.
CTyankee
(63,912 posts)low. She was able to leave me her investments when she passed away. It wasn't a fortune, but without it I wouldn't have been able to retire. Even then, I only retired from full time. I took a part time job to supplement my income. I was planning on sharing it with my brother but he died suddenly from a stroke before mother passed away...I was "the last one standing" so to speak..
theHandpuppet
(19,964 posts)My father retired from the railroad where the union was strong. He carried a comfortable income plus health and insurance benefits into his retirement years. This country is really starting to see the effects of a non-union workforce. While the CEOs are guiding their golden parachutes into a comfy retirement, workers are scrambling over a pot of beans.
CTyankee
(63,912 posts)probably in a high rise apt. building with an elevator. Both hubby and I have back issues and I can't take too much more of going two flights down to the basement to do laundry and carry it up...condos here in CT tend to be bi-level so that's no big improvement. So I'm thinking of a rental. I don't much care for the idea of yet another mortgage and being responsible for every damn thing that goes wrong in the house...
ChisolmTrailDem
(9,463 posts)the need for $1.8 Million or the idea that any typical working grunt could ever save that much?
B Calm
(28,762 posts)haele
(12,680 posts)That is, barring any serious chronic medical issues, natural disasters requiring you to replace your home, or greedy "caretaker"/heirs writing checks on your account that drain your retirement. Those events are equally likely to happen as the ability to save $1.8 million to retire.
Of course, the ability to save that much requires you need to have stable employment from the ages of 25 - 65, and be making enough to regularly put aside around $1K a month in a reliable investment account by the time you're 30/35. And that you don't have more than three kids you're going to be putting through college.
Or you get $1K or more bonus money or tax returns on your job every year you're employed that you're able to put away instead of spending on paying off the necessary bills that had accumulated over the year.
Haele
B Calm
(28,762 posts)I am drawing social security at age 62 and have my investments in an income fund. I am drawing a monthly check of 4% from my investments and it's worth more today than what it was 2 years ago. Ask your financial advisor about income funds.
haele
(12,680 posts)I'm currently on track to graduate with a BS in business next spring. Problem with all investments is that one needs to stop hemorrhaging money because one needs to survive before one can begin investing money. As I said, I only have almost $40K in my 401K and that was only after I had a secure enough job that I could be sure of making enough money to put some aside without worrying about covering the next period where I would be between jobs and wouldn't have enough income to pay rent/mortgage and utilities. That happened every year for a good dozen or so after I left active duty. Never knew how long that "wait" period would be; I made good money while I was working, just not when I wasn't, and seniority, raises, and more security was always just the next couple jobs out...and then I got badly injured and my husband became disabled and dependent on my employer's health plan and SSDI. That put us four or five years behind. If I hadn't become injured, I'd be looking at something like an income fund, and would certainly have more than $40K put aside.
From experience, every week without a paycheck took four week's work of paychecks to recover from. Every month on unemployment takes three months of work at the same pay to recover from.
Maybe if we can get this mobile home fixed up and move in soon enough, we'll be able to start saving again. That is, if the kids don't suddenly decide they're going to go to college after all...
Haele
upaloopa
(11,417 posts)gut pension funds end the minimum wage out source jobs cut public education destroy the middle class increase income inequality establish an oligarchy then tell you you don't save enough .
OutNow
(868 posts)Let's assume that we all support expanding Social Security and Medicare and all other progressive legislation. Given that, what advice do you give your kids about saving and retirement. Do you tell them not to save any money because all the macro-economic data shows it isn't possible?
My family is very well aware of my leftist views on politics and economics. I rail against the banksters, the insane federal spending on "defense", how Wall Street is corrupt, etc. etc. But I have discussed money, savings, and retirement issues with my kids and my nieces (I don't have any nephews).
My advice: 1) save at least 10% of what you earn. I don't care how much or how little it is; save 10%. 2) put together a budget and stick to it. 3) Build up a 3 month cash reserve so when (not if) you lose your job you have something to fall back on while you look for a new job. 4) stay away from credit cards as much as possible. The interest rates and monthly payments will destroy you. Pay cash. If you can't pay cash do layaway.
You can be both progressive and a saver.
CTyankee
(63,912 posts)I took a second job just to afford xmas gifts one year. So they saw me struggle. But I also learned to be smarter about money. I drive an old car that I paid off as soon as I could. I don't have a credit card that doesn't give ME something and I never charge more than I can pay for w/o accruing interest. Any tax refund we get goes directly into a "sinking fund" account to pay for home repairs, replacing appliances, any unforeseen expenses. We rarely eat out.
Doing a budget is the single best financial advice I have given my kids. I don't even do it on the computer. I just have a chart with two columns: income and expenses. I compare the monthly charts to make sure things are on course (the rise in oil costs was a huge outlier this time so we have a budget plan with our oil company, paying a certain amount for 10 months of the year).
I have started paying cash for my weekly groceries. My view is that if you actually see the cash each week going out, you're going to be more conscious of how much you are spending. I am constantly telling my husband that if we go over limit one week, we have to make it up the next week. I plan meals very carefully. We don't eat junk, we just don't buy lots of expensive food. I now need help with the heavy housework since we both have back problems. So I have cut my spending on clothes accordingly (and being retired I really don't need a lot of new things). Since his 2 back surgeries, hubby can no longer doing the lawn mowing or snow removal. That's why I want to sell the house and move to a high rise apt. eventually.
One daughter has married well and has no money problems, one daughter is struggling (now long term unemployed). I'm helping her and my grandson by paying for his summer program. My son works for the city of New York as a prosecutor in the Brooklyn DA's office. He has good (not great) pay but excellent health care and pension benefits.
I think my kids learned a lot from our lean years. They are great kids. I'm really proud of all three...
closeupready
(29,503 posts)Problem solved. K&R
Tuesday Afternoon
(56,912 posts)tired of this rat race. fuck the dumb.
B Calm
(28,762 posts)to live to age 78 just to get back the social security money I could draw from age 62 to 66. Like you I wanted to retire from being a wage slave. Into my 2nd year of retirement and it's been great!
Blue_In_AK
(46,436 posts)I was happy to let a couple of youngsters do my job.
onethatcares
(16,186 posts)been working in construction since I was 13, many times saved enough for 6 months of no work only to have no work. There were no 401ks or anything like that in non union construction jobs. Hell alot of times you had to chase your friday pay before the boss went out of town for the weekend and all that shit. The only medical insurance was workers comp.
I have been collecting my SS for the past 6 months, it ain't a lot but it's mine.