Last edited Mon Jun 8, 2015, 07:49 PM - Edit history (1)

I've been 'working poor' my entire adult life... Paying my bills, but with nothing left over.
Scraping by, hoping for nothing catastrophic, because i have neither savings nor credit.
The idea of a 'retirement account' for someone of my means is laughable.

Worse, i have student-loan debt of over $40k that i'm paying off slowly -- the product of the grand idea that i should go back to school at age 40, and then not being able to balance full-time academic study with a full-time job to take care of the family (hence taking the max amount out in federal student loans each semester to pay bills).

I'm pretty well screwed, and will be lucky if i can ~ever~ retire... unless of course the PowerBall gods smile on me -- which won't happen either, because i don't waste my meager earnings on games of chance.

Take the money Americans have in their 401k plans, invest it in bonds to strengthen social security.
2 problems solved, a win-win for everyone involved. The bonds could also be used to pay off excessive student loan debt, that will do more than anything else to help younger workers to plan for their retirement.
All it will take is a brave politician and the support of the electorate. What's the alternative? Class warfare? If we do nothing 15 years from now we will have even a larger gap between rich and poor.
401k plans are the elephant in the room, a huge pool of untaxed money benefitting a relatively small percentage of the population. For the good of the country the money should be put to better use.

So i'm not sure why you chose this as a specific response to my comment...

Did you mean to respond to the OP?

Because that plan could help pay off your student loan debt and help shore up your social security benefits in the future.
The candidate who can get the majority behind wealth redistribution will be a truly revolutionary leader, a revolution that will come either at the ballot box or in the streets. If the minority in our country that own the wealth are smart they will get on the right side of this coming revolution.

Have a plan so that if people save money and leave it in their savings account for a specific time period, the government will match it. That encourages saving. Our system in the US discourages saving and encourages borrowing. In the end our system is unsustainable.

We are impoverishing ourselves, living on tomorrow's dollars. The government should subsidize savings. We should also have free education from earliest pre-school through graduate school. Students enrich our society and grow our economy by lifting the level of understanding and knowledge and in general reducing the level of crime in our country.

Government can make the difference. It would be better to have free education and savings subsidies than lower taxes. Government is the means through which we work together.

people are existing hand to mouth. The government could match savings 100 to 1, but I highly doubt much savings increase.

It is really hell for people to have to carry cash and pay the fees attached to every single form of money transfer available to the 70% 'lower class'!

it's being discussed. But currently the US Postal Service is limited in the services and products it can provide, something the GOP did to insure that it doesn't bring in much revenue deliberately in order to claim that it's inefficient and should be privatized as in FedEx and UPS.

Teddy Roosevelt advocated for the idea, and his successor, William Howard Taft, put it into practice. That was back when there was a Progressive movement within the Republican Party. Can you imagine that? Incredible today.


The United States Postal Savings System was a postal savings system signed into law by President William Howard Taft and was operated by the United States Post Office Department, predecessor of the United States Postal Service, from January 1, 1911 until July 1, 1967. The system paid depositors 2 percent annual interest. Depositors in the system were initially limited to hold a balance of $500, but this was raised to $1,000 in 1916 and to $2,500 in 1918. At its peak in 1947, the system held almost $3.4 billion in deposits. The system originally had a natural advantage over deposit-taking private banks because the deposits were always backed by "the full faith and credit of the United States Government." However, because the Federal Deposit Insurance Corporation gave the same guarantee to depositors in private banks, the Postal Savings System lost its natural advantage in trust.

http://en.wikipedia.org/wiki/United_States_Postal_Savings_System

People also used to be able to buy US Savings Bonds. We still can, but it is more difficult because it has to be done as I understand it on the itnernet.

I wanted to look into savings bonds and know it's all online now. That TR and Taft were involved I can believe, back when the Repubs had good progressives. Unfortunately the USPS is not permitted to provide faxing, copying, money orders and other services and products. There was mention a few years ago by Bernie and Thom H. probably of how the USPS should set up an email service. I could go for that even if there was a fee. It's good that the German and Austrian systems encouraged savings rather than borrowing on credit like we have in the US.

It seems no matter what you do, the system just keeps kicking you in the ass and not in a good way. It's sort of a kick them while they are down.

You start out young and think, I have plenty of time for that, then the kids come along and if that isn't enough to drain your savings, but then they want to go to college and get married. They don't have the resources to even begin to think about that in today's economy.

When we were first married, we could buy a new car for $15,000, now you can't touch a car with less than 100,000 miles for that. Houses cost 1/4th of what they do today. And that college thing, what cost me $5,000 now cost upward of $100,000.

Then just when you think now we can catch up on what was drained from our savings, your employer downsizes you. Your in your mid 50's, who is going to hire you? So much for experience! When you do find a job, you are going to be making a fraction of what you were making. So now not only are you back in the hole with your savings, you don't have the resources to even think about making it up.

Then there is health care, no matter how good your insurance is these days, you are going to go broke if you get sick.

Retirement? I think we are all going to be working into our 70's if it doesn't kill us.

My spouse keeps telling me we will NOT buy a car for the same amount we bought our first house for.

This capitalist economic system that terrorizes most Americans, is designed so that every last nickle and dime has been spent before you die. If you are NOT spending it on paying off millionaire doctors, you are spending it to cover overpriced hospital care or health insurance. If you are not spending your last bit of savings on your mortgage, you use it up to pay for the increase costs of property taxes, insurance, water, electricity and gas.

It is a sin to be poor in America just ask any uber Christian turn Calvinist. The handful of rich capitalist (and capitalism is designed to only have a handful of the lucky rich) have developed ipso facto debtor's prison. They have turned the cops into nothing more than fascist bill collectors who are allowed to shoot and kill any one of the specified minorities and the poor.

You will never be able to save enough for a comfortable retirement because the system is rigged to take it all away from you. You will never be able to save enough to even cover the cost of your medical bills before you die. Unless you were born into wealth then turned that wealth, connections and privilege into more stolen loot, you will never save enough to retire.

This is America today. If you were born into poverty you will very likely stay there. If you were born into the middle class, you have a 50/50 chance of falling into poverty sometime in your life. But if you were born into wealth, God has blessed you, you have won the life lottery and you, and about 100 others out of 300,000,000 plus people in America, will never want a day in your life.

Our second house was 4 times that.

And you are so correct about the car. $40K just gets you the base model with a lot of cars.

This was 1976 and we had to go to the SF Valley because we couldn't afford $75,000. for a fixer-upper
in Santa Monica where we were renting.

We sold the house about 3 years later for twice that. It had a big lot, and the people who bought eventually
added several hundred more sq. feet to it. According to Zillow, the people we sold to are still there and the house
is now worth $1.2 million.

The ex-husband still lives in the house we bought in Woodland Hills when we sold the one in Studio City. We bought
that house for $153,500. and Zillow says it's worth $811,000. Of course, he's since remarried and divorced again,
so who knows how much equity he has in it? And what did I get after 7 years of marriage when we divorced in 1979 ?
$13,000. It is not enough to fund my retirement!

And the reality of today's America, thanks.

And so often they blame themselves. The fact that this situation is so common, so widespread, suggests strongly to me that it is not a matter of the failure of individuals to plan realistically but rather a failure in the system to support people as they try to live one day at a time.

Used to be most of us live don farms, and when we were too old to work, we still, hopefully, owned some land that we could pass on in exchange for a place to live and food as we aged. That is no longer the case. The tiny three-bedroom home in some big city where we have, as we matured, earned just barely enough to get by (applies also to people in small towns) gives us no property or capital to turn into at least shelter and food as we age.

This is a shameful situation. On top of that, the Republicans want to do away with or limit Social Security and Medicare and Medicaid as much as possible.

So tell your friends in their 50s to vote for Democrats whether they like them or not. It's the only realistic choice.

And while we are at it, we should make it much easier for people over 50 to sue for age discrimination. And we should make age discrimination awards much bigger than they are.

I cannot prove this, but I suspect that a lot of working people who do manage to save a little money for retirement save it between the ages of 50 and 65 or 70 -- depending on when they retire. Prior to that time, people who have children are trying to help their children pay for college and are paying off a mortgage or losing a job and living of their meager savings.

We have undergone huge economic changes due to our various trade agreements and to computerization in the workplace. People over 50 have been seriously harmed by these trends. One reason I support Bernie Sanders is that I think he is likely to be the most sensitive to these problems and the most likely to suggest proposals to deal with them like making the penalties for age discrimination much heavier than they now are.

But we have to support Bernie Sanders and also Progresisve, Liberal Democrats for Congress if we are to get any change.

I could never see the financial sense in that.

I stated the price of a car just for the effect of the cost of living.

But the price of a used car is more than that of a new car 30 years ago. I couldn't afford that then and not sure if I can afford the used prices now.

Just keep fixing up the old wreck, it still runs good and I keep patching the rust spots best as I can.

That's about 3 months of living tops in most places. Having $10K in a retirement fund is essentially zero.

10 K can keep you going for a year or more, I think. OK, not in SF or NYC, but who would keep living there after retiring, especially if they don't have much money?...

Pretty contradictory...

Not enough income, too many basic expenses, grocery and necessity costs increasing daily, medical costs still unaffordable.

Wage theft by the rich, another name for economic slavery.

Haven't had a raise in years. Not gonna see one anytime soon. Meanwhile, the cost of living keeps going up. Add no raises to the economy chipping away at what I do make, and you realize that saving for retirement isn't going to happen.

people tried desperately to hang onto their homes, and what little retirement they had was withdrawn to keep up with the bills. 100's of thousands of people in that predicament. We are still feeling the fall out of Reagan trickle down and Bush's destruction of the economy. It will be felt for at least another 25 years...as the nation tries to take care of an aging population that was not able to save much after the destruction of the financial system.

But some of those with no savings could have had savings.

It means no eating out, skimping on vacations or taking them at home, settling for a house that's smaller than you can afford, driving a smaller car than you can afford. It means skimming money off the top and consciously deciding you can only afford significantly less than you can afford. It may mean not paying for braces for the kid because you can't afford them. It may mean a doing without a lot of things that, to be honest, we can probably do without, and doing a lot of things yourself instead of paying others to do them for you. All those $30 and $40 savings add up over 30, 40 years. Between Social Security and something like $1000/month, you can be doing okay in retirement, barring disasters. For 20 years, that's $240k. Work 40 years, and that's manageable.

Our mortgage broker was speechless when he said we'd easily qualify for $300k in a loan and we said we wanted $100k. The realtor kept showing us houses that went for $250k and more, and we looked online and scoped out houses with a price tag of just over $100k. We finally told her what houses we wanted to see, picked one, and told her to work out the details. When our income dropped because of unemployment, we didn't default. Emergency savings and what income we had was sufficient for the basics. Had we bought a house for $250k, we'd have defaulted months before our income level was restored. (In other words, lots of things are symptoms of the same cause, however unpleasant that may be.)

For a lot of people below median household income, what they can afford is what they must afford, or less than is really necessary. So savings aren't really possible, no enough to do any good at all. They already don't do luxuries, or do trivial luxuries. But I know a lot of people with skimpy retirement savings who take vacations costing $4-5k/year, eat out regularly, and generally act like their goal in life is to afford all that they can.

around here if you point out some people could have saved instead of buying a lot of crap, you will be accused of all kinds of things

about those who can afford to take $4K/year vacations. If you can do that, then you are upper middle class theses days.

But it took sacrifices.

I only have one kid. I was 35 and well established when I had him. I always had a house far below what I could so I could save a lot. I waited till I was 30 to get married so had a nest egg building before I started the family.

I realize things happen you have no control over but many other things you do have control over.

I just fuckin' knew it.

....that we are an empire in decline? The middle class is shrinking, the wealth is concentrating at the top, and everything is moving to Asia. I have saved for both retirement and college for my three kids and I still have out-of-pocket expenses that keep me living on the edge. Between my wife and myself, we make a good living but it seems like it is never enough.

I marvel at people that say that they live on 60 or 70K annually because I simply couldn't get by making that much money. I don't live in an expensive area, I don't have a huge house or expensive cars and I pay my debts off and usually early. I save for the future but even my savings and retirement benefits are under attack. Medical costs keep going up, co-pays keep rising, and nothing feels like getting financially ahead anymore. What the heck is happening to this country?

My husband got sick. The uncovered medical bill came to 60k. Then he didn't work for 3 years so his income was gone. Then he died. I've held onto some money but I'm going to keep working as long as I can. I have no choice.

I can't even imagine how difficult this has been for you.

have one and her college education put a large hole in our retirement savings -although I wouldn't change a thing. I honestly don't see how people can provide for their families and have enough money left over to assure a comfortable retirement for themselves. I'm 62 and my husband is 64. We do not want to live in poverty by retiring any time soon. We will work until we drop.

A private college. I never thought school could be this expensive. Worried about retirement too.

Most Households Approaching Retirement Have Low Savings:

http://www.gao.gov/products/GAO-15-419

Lots of these people had 401k plans, but when they left their jobs they cashed them in. The reason was no cash reserve to get them to their new job. Some people have done it 3-4 times.

are in jail or face any kind of prosecution! Until the non-governing elite lose control over the governing elite...expect things to get worse for those that have to work for a living.

hit the Boomers especially hard but no one is talking about it. We had plenty in savings and retirement then both of us lost our jobs, were over 50 and despite scads of education and experience, couldn't buy a damned job. Guess what we lived on? So, the retirement is gone and the savings are gone and we have no more time to build it up again.

I'm almost afraid to look upthread but I'm guessing there is some asshole posting that we should have been more wise with our money.

also makes it more competitive for work. if no one retires because they can't afford to, and everyone is trying to work, then getting a job is going to continue to be a game of musical chairs and not everyone will get a seat. It's already like that now and it's gonna continue to get worse. And of course thanks to the TPP, we will lose a lot more jobs and the ones that are left will be of lesser quality and income, so people will be stringing together even more part-time jobs to try to get by thereby further increasing the competition for the jobs that are available. It's going to be like lord of the flies and the One per centers will be watching from their box seats and laughing.

So we can extend our retirement ages out and with AGW we know they will save on heating bills and with nothing to eat they will save on food bills.

and is severely disabled from radiation. This was in 1993 and 1995 respectively. My mom and I did the best we could. My parents now have no savings or equity or anything for retirement. Nor does my brother (age 42). Nor do I (age 40).