"Entitled Selfishness": Great article on the dismal future of Social Security

[MrsPete]

Our neighbor down the street did this. They added onto their house. Now, their house is the biggest in the neighborhood. Four car garage, they added housing on top of both garages and added onto the back with a 3 season deck/room. They have alot of people living their, it seems crowded at times, but I believe they needed that extra room for their sanity. I think the daughter has 4 kids and then the grandparents.

See, this is one more way the children-of-boomers generation is getting screwed: Your neighbor has added on to get the space she needs to take care of her family, but in doing so, she's set herself up to lose money when she sells the house. The biggest house in the neighborhood always sells for less (less per square foot, that is) than the rest of the neighborhood -- it's "overbuilt" for the area.

Looking at the house as an investment, you always want to own the smallest house in the nicest neighborhood -- that sets you up for a good sale price.

However, she probably had no good choices.

 

[ducklite]

Do you think this "I planned well, but got screwed over" scenerio is common, or is it the exception to the rule? I know it happens, but I wonder how often it happens.

I think that for those who are in their mid-50's through currently retired, if their pension funds were plundered (Enron) or plans were changed (IBM and many others) they were "screwed over."

But for anyone under 50, there's no screwing, they still ahve time to change their lifestyle and save for thier future. I have NO sympathy for people who are in thier 30's and 40's and don't ahve a dime in retirement funds yet. They are just stupid, and frankly can eat out of garbage cans for all I care if they don't change their ways.

What's more common? Retirees being screwed over by the company, or retirees messing up their own situations? I don't know -- I'm just basing this on my own personal experience.

I think that more were scrwed over by pension plans or just poor planning because the mindset of those in their 40's during the 1970's was that the government would take care of them.

That is why we need to come up with a plan NOW and phase it in over time to allow maximum benefits and financial security to everyone.

I think teh government also needs to do a MUCH better job of informing people that they will need more than SS, and they can't count on pensions in thier retirement. Frankly I do'nt think they are currently doing enough to encourage people to save for retirement. I'd like to see people be able to put up to $10K tax free a year into IRA's, over and above and 401K savings.

Anne

 

[mickeyfan2]

I don't know what numbers would be fair, but I think this is a good start towards a more fair system -- those who paid in more, get more. Who could argue with that?

Those who paid in less. Look at how people complain about tax cuts. The ones who got the largest cuts actually paid in the most. I remember the arguement about why did those who did not pay any taxes did not get a tax cut too. Well they did but any number multiplied by 0 is still 0.

 

[ducklite]

You know I thought SS was based on a pool and then you draw from the spouse's money. My mom is collecting SS from being a SAHM her entire adult life. Her and my dad split after 25 years of marriage. She called the SS agent and wanted to know if they would take away from my dad's amount. They said no. I don't understand this. What, the money just appears magically out of nowhere. Are other people that paid in, not getting their part because of this? I'm so confused with how this works, but without it she would pretty much be on the street; which she's already close to it. She has no insurance at all.

That's where she had a bad attorney. SHe should have gotten spousal support from him, and her attorney should ahve known that she wasn't going to ahve any income in her senior years based on her work history. A good attorney would ahve made sure she was taken care of in that respect.

Anne

 

[ducklite]

I don't think we'll see a large number of people buying the large houses for their extended families -- I think people won't make those choices until the financial need is great, and then they won't have the resources to buy the big houses.

SOME famlies, of course, will see the inevitable need to take in grandma and grandpa, and they'll buy a house with a mother-in-law suite well ahead of time . . . but I think they'll be the exception rather than the rule.

I agree that reverse mortgages will become commonplace. Probably other creative methods of financing retirement will pop up too.

We don't plan on a reverse mortgage, but we do know that eventually the house we are living in now will be "too big" and will be sold, and at that time we'll buy a smaller--less expensive home. Using todays numbers, if we wer eto sell this hosue and buy one in the community across the street (assuming the mortgage was paid off and we were paying cash for the new place) we'd net about $500K on this place, which will further add to our nest egg.

Anne

 

[mickeyfan2]

I remember talking to my paternal Grandparents about retirement. The three statements that they made that I never forgot were:

1) The governement promised to take care of us so we don't need to save for retirement.
2) Their income went up the year they retired.
3) You make a good income so you should pay.


This makes it easy to see how we got to where we are in this country.

 

[ducklite]

Those who paid in less. Look at how people complain about tax cuts. The ones who got the largest cuts actually paid in the most. I remember the arguement about why did those who did not pay any taxes did not get a tax cut too. Well they did but any number multiplied by 0 is still 0.

That has got to be the most sadly funny thing I've ever read!

I can't believe that someone who is paying no taxes--or even getting an EIC--has the nreve to complain about not getting a tax cut. Shut up already!

Anne

 

[MrsPete]

I have NO sympathy for people who are in thier 30's and 40's and don't ahve a dime in retirement funds yet. They are just stupid, and frankly can eat out of garbage cans for all I care if they don't change their ways.

That's a little harsh, but I agree that there's no excuse not to put aside something. People always say, "I just don't have any extra money" -- well, who does?

Saving for retirement is a matter of priority. I remember back when DH and I were first married. We didn't have furniture in all our rooms, we had old sheets on the windows, we literally never ate out or bought new clothes, etc. We only had one car between us, and my grocery budget was $25/week -- you can bet we didn't see meat every night. BUT we put something extra on the house every month, and we maxed out our 401Ks. If you don't have "extra money", you either need to bring in more income or spend less -- but the truth is that retirement just isn't a priority for most people.

I'd like to see people be able to put up to $10K tax free a year into IRA's, over and above and 401K savings.

I don't think it'd make much difference. People who are already saving would take advantage of it, but people who aren't saving would still whine, "It'd be nice to have that tax advantage, but I just can't manage it."

 

[ducklite]

I would love to send a link to this thread to every member of congress.

I think it's a good non-partisan representation of what the taxpayers feel needs to be done, with some good possibilities to explore on how to do it.

Anyone with me?

Anne

 

[ducklite]

That's a little harsh, but I agree that there's no excuse not to put aside something. People always say, "I just don't have any extra money" -- well, who does?

Saving for retirement is a matter of priority. I remember back when DH and I were first married. We didn't have furniture in all our rooms, we had old sheets on the windows, we literally never ate out or bought new clothes, etc. We only had one car between us, and my grocery budget was $25/week -- you can bet we didn't see meat every night. BUT we put something extra on the house every month, and we maxed out our 401Ks. If you don't have "extra money", you either need to bring in more income or spend less -- but the truth is that retirement just isn't a priority for most people.I don't think it'd make much difference. People who are already saving would take advantage of it, but people who aren't saving would still whine, "It'd be nice to have that tax advantage, but I just can't manage it."

I agree completely, although I do'nt think it was an overly harsh statement for *most* people in their 30's and 40's who have plenty of time to plan, they just need to get over the whoel mine-mine-mine attitude of keeping up with the Jonses. The poster from quite a while back who said they have nothing saved because her DH was finishing a degree would be an exception, because his income should increase quite a bit and as long as they continue living on a students income level, they'll be able to catch up in a few years. But I believe they are a rare example of an exception.

It would be nice to be able to deduct that much more off the tax return as a reward for being responsible though.

Anne

 

[kinntj]

No current retiree is losing benefits because of this situation, but FUTURE retirees will hurt because of it.

I don't mean to insult your mom at all, but this is the type of situation I think should be stopped. She didn't pay in, so she shouldn't be able to draw out. And I think we need to educate people about this EARLY in their work careers so that they'll know they need to prepare themselves for retirement.

You didn't insult her at all. My dad and her made that decision together and she was proud of the job she did. I agree that it stinks that future retiree's will be affected by this though. My dad should be penalized for their choices, not present workers putting money into system. My dad has a great retirement plan with SS, pension, and having a 36 year old wife that makes great money. I wouldn't cry if money got yanked from him.

I agree that she didn't have a great lawyer. My dad had hired the best one, so of course she got screwed. You would have to know my mom to know she's afraid of everything, so it was hard for her to defend herself.

 

[C.Ann]

But for anyone under 50, there's no screwing, they still ahve time to change their lifestyle and save for thier future. I have NO sympathy for people who are in thier 30's and 40's and don't ahve a dime in retirement funds yet. They are just stupid, and frankly can eat out of garbage cans for all I care if they don't change their ways. Anne

--------------------------------------------------------

I too think this is a little harsh - because you don't know the particulars of everyones situations - but - I wouldn't have an awful lot of sympathy for those who spend $1000 per child (or more) on Christmas gifts for their children; buy expensive cars with huge car payments; buy homes that are 2 or 3 times the size needed to live comfortably; buy every new electronic gadget that comes along; eats dinnner out multiple times a week; takes numerous expensive vacations per year; and a multitude of other things - just because they have the money "now" - with no thought to "later".. I don't believe that every single extra penny needs to be saved, but on the other hand, you can see right here on the DIS a tremendous amount of overspending and waste that should be put aside for the future.. "Instant gratification" has become a MAJOR problem in our society and sadly, it's being passed right down to the younger generation..

Still - I would never go so far as to say "someone can eat out of a garbage can for all I care"..

 

[tedhowe]

Saving for retirement is a matter of priority. I remember back when DH and I were first married. We didn't have furniture in all our rooms, we had old sheets on the windows, we literally never ate out or bought new clothes, etc. We only had one car between us, and my grocery budget was $25/week -- you can bet we didn't see meat every night. BUT we put something extra on the house every month, and we maxed out our 401Ks. If you don't have "extra money", you either need to bring in more income or spend less -- but the truth is that retirement just isn't a priority for most people.I don't think it'd make much difference. People who are already saving would take advantage of it, but people who aren't saving would still whine, "It'd be nice to have that tax advantage, but I just can't manage it."

And I think this may be the truest thing I've read in this thread.

No matter what we do, if people have a choice about what to do with their retirement money, MANY of them will choose to not save a bit.

What then do we do about their welfare in their retirement years?

I don't know what solution there is.

 

[kinntj]

--------------------------------------------------------

I too think this is a little harsh - because you don't know the particulars of everyones situations - but - I wouldn't have an awful lot of sympathy for those who spend $1000 per child (or more) on Christmas gifts for their children; buy expensive cars with huge car payments; buy homes that are 2 or 3 times the size needed to live comfortably; buy every new electronic gadget that comes along; eats dinnner out multiple times a week; takes numerous expensive vacations per year; and a multitude of other things - just because they have the money "now" - with no thought to "later".. I don't believe that every single extra penny needs to be saved, but on the other hand, you can see right here on the DIS a tremendous amount of overspending and waste that should be put aside for the future.. "Instant gratification" has become a MAJOR problem in our society and sadly, it's being passed right down to the younger generation..

Still - I would never go so far as to say "someone can eat out of a garbage can for all I care"..

So true, so true. I always like the paying the debt down or going on vacation threads. I would say not to ask that question on the budget board if you don't like the "pay down the debt" answer. I always hear the life is short answer too and that's all fine, but we expect so much nowadays. I guess I was raised so differently. I never went to Disney and my dad always told me to stop my whining when I asked about it when my friends got to go. He would always add "I give you love, a roof over your head, food, clothes and you get an education". "What more do you want?" As a kid, what are you suppose to say to that? I was just left standing there with nothing to say, because he was right. Now, kids always argue and parents give in. Not all parents, but more so these days.

Even I get sucked into those "I deseve" traps that get advertised/marketed to us. I buy into it. I'm learning every day though. Today I'm going out with cash to get me 1 pair of jeans from JCPenney. I'm returning something too to help pay for it. Right now I own 1 pair of jeans. I start school on Tuesday, so I need another pair of casual pants to make it through the week. All the clothes I own are more dressy for church or really old for around the house. It's obvious I don't spoil myself with clothes.

 

[C.Ann]

So true, so true. I always like the paying the debt down or going on vacation threads. I would say not to ask that question on the budget board if you don't like the "pay down the debt" answer. I always hear the life is short answer too and that's all fine, but we expect so much nowadays. I guess I was raised so differently. I never went to Disney and my dad always told me to stop my whining when I asked about it when my friends got to go. He would always add "I give you love, a roof over your head, food, clothes and you get an education". "What more do you want?" As a kid, what are you suppose to say to that? I was just left standing there with nothing to say, because he was right. Now, kids always argue and parents give in. Not all parents, but more so these days.

Even I get sucked into those "I deseve" traps that get advertised/marketed to us. I buy into it. I'm learning every day though. Today I'm going out with cash to get me 1 pair of jeans from JCPenney. I'm returning something too to help pay for it. Right now I own 1 pair of jeans. I start school on Tuesday, so I need another pair of casual pants to make it through the week. All the clothes I own are more dressy for church or really old for around the house. It's obvious I don't spoil myself with clothes.

------------------

Well I don't particularly see anything wrong with taking "a" trip to WDW every few years or so IF your bills are current; you don't have to put it on a CC; you're saving money on a regular basis; and you're not WASTING a ton of money on other things.. "Waste" is the key.. Too many people think they can "have it all" - and "have it all" NOW!!! The concept of "saving" before making a purchase is totally foreign to them.. Gotta have it NOW..

Don't even get me started on clothes.. The outrageous prices and the sheer amount of clothing that some people "have to have"..

 

[dvcgirl]

--------------------------------------------------------

I too think this is a little harsh - because you don't know the particulars of everyones situations - but - I wouldn't have an awful lot of sympathy for those who spend $1000 per child (or more) on Christmas gifts for their children; buy expensive cars with huge car payments; buy homes that are 2 or 3 times the size needed to live comfortably; buy every new electronic gadget that comes along; eats dinnner out multiple times a week; takes numerous expensive vacations per year; and a multitude of other things - just because they have the money "now" - with no thought to "later".. I don't believe that every single extra penny needs to be saved, but on the other hand, you can see right here on the DIS a tremendous amount of overspending and waste that should be put aside for the future.. "Instant gratification" has become a MAJOR problem in our society and sadly, it's being passed right down to the younger generation..

Still - I would never go so far as to say "someone can eat out of a garbage can for all I care"..

I don't even think that spending has to be as over-the-top as the scenario you mention here C.Ann....not that it isn't out there, because it is. But I think just the day to day stuff and month to month stuff is eating away at peoples' ability to save. It's insidious...how the "little things" can eat into a budget. Like eating out too a little too frequently and too much money on activities for the kids. Then throw in cell phones for everyone and their kids, high speed internet, high end cable and just a couple of electronics. One extra car payment for a car that you can't really afford. And finally (yes I have to bring it up), the 2-3K or more family vacation (because you deserve it too!). Now that family making 60K, even 80K is likely stretching their budget, and so the first thing to get cut, or the first thing not increased....retirement savings.

The trip to Walt Disney World is priority, the 401K is not. We see so many threads on these boards about getting out of debt...and most of the time people are talking about consumer debt, and car payments. Most people want out of debt so that they can feel a little breathing room in their budget, and so they'll have more money to spend. You never hear any talk about the lost savings opportunities that this debt is causing them. Most people don't even think about it....others put it way in the back of their mind. It's always the first thing I think about....that Americans are spending their future today.

 

[MrsPete]

So true, so true. I always like the paying the debt down or going on vacation threads. I would say not to ask that question on the budget board if you don't like the "pay down the debt" answer. I always hear the life is short answer too and that's all fine, but we expect so much nowadays. I guess I was raised so differently. I never went to Disney and my dad always told me to stop my whining when I asked about it when my friends got to go. He would always add "I give you love, a roof over your head, food, clothes and you get an education". "What more do you want?" As a kid, what are you suppose to say to that? I was just left standing there with nothing to say, because he was right. Now, kids always argue and parents give in. Not all parents, but more so these days.

Even I get sucked into those "I deseve" traps that get advertised/marketed to us. I buy into it. I'm learning every day though. Today I'm going out with cash to get me 1 pair of jeans from JCPenney. I'm returning something too to help pay for it. Right now I own 1 pair of jeans. I start school on Tuesday, so I need another pair of casual pants to make it through the week. All the clothes I own are more dressy for church or really old for around the house. It's obvious I don't spoil myself with clothes.

My favorite word -- when it comes to budgeting -- is BALANCE. If you need and can afford a new pair of jeans, great. There's no need to deny yourself things under those circumstances. The problem comes in when either you genuinely don't have money, and you choose to buy on credit with no clue how you'll pay, or when you already have a dozen pair of jeans and you just want another pair in this particular style.

By the way, I own two pair of jeans. I cannot wear them to work (on normal days), and it's too hot to wear them during the summer months when I'm not teaching . . . so two pair is plenty for me. It might not be right for someone else, but it's the right BALANCE for my life.

 

[C.Ann]

I don't even think that spending has to be as over-the-top as the scenario you mention here C.Ann....not that it isn't out there, because it is. But I think just the day to day stuff and month to month stuff is eating away at peoples' ability to save. It's insidious...how the "little things" can eat into a budget. Like eating out too a little too frequently and too much money on activities for the kids. Then throw in cell phones for everyone and their kids, high speed internet, high end cable and just a couple of electronics. One extra car payment for a car that you can't really afford. And finally (yes I have to bring it up), the 2-3K or more family vacation (because you deserve it too!). Now that family making 60K, even 80K is likely stretching their budget, and so the first thing to get cut, or the first thing not increased....retirement savings..

--------------------------

True - but you do have to admit that you read a lot of over-the-top spending here..

Then there's the old "make more - spend more" scenario.. When my DH was still alive - and working - we never changed our lifestyle when he would get a raise.. We didn't buy a bigger house; didn't eat out; didn't buy a new car; didn't take an extra trip; etc.. The money was put aside and we continued to live the way we always did - unless there was an emergency that justified a "dip" into that additional money.. Although his job was about as stable as a job could get (38 years with the same company), we never, EVER allowed ourselves to believe that he couldn't get "canned" on any given day..

I don't know.. Maybe I just have different ideas because I was raised in a different generation and raised in a different manner as far as money was concerned..

 

[MrsPete]

I don't even think that spending has to be as over-the-top as the scenario you mention here C.Ann....not that it isn't out there, because it is. But I think just the day to day stuff and month to month stuff is eating away at peoples' ability to save. It's insidious...how the "little things" can eat into a budget. Like eating out too a little too frequently and too much money on activities for the kids. Then throw in cell phones for everyone and their kids, high speed internet, high end cable and just a couple of electronics. One extra car payment for a car that you can't really afford. And finally (yes I have to bring it up), the 2-3K or more family vacation (because you deserve it too!). Now that family making 60K, even 80K is likely stretching their budget, and so the first thing to get cut, or the first thing not increased....retirement savings.

The trip to Walt Disney World is priority, the 401K is not. We see so many threads on these boards about getting out of debt...and most of the time people are talking about consumer debt, and car payments. Most people want out of debt so that they can feel a little breathing room in their budget, and so they'll have more money to spend. You never hear any talk about the lost savings opportunities that this debt is causing them. Most people don't even think about it....others put it way in the back of their mind. It's always the first thing I think about....that Americans are spending their future today.

I think you're right: it's so easy to spend on this and that little thing, and suddenly you've spent a ton. Eating out, cell phones, etc, etc, etc. And since we have these "little luxuries" every day, we feel that we "must" really blow-out big occasions like Christmas, prom, etc. Moderation isn't a popular word anymore.

 

[tedhowe]

it's so easy to spend on this and that little thing, and suddenly you've spent a ton. Eating out, cell phones, etc, etc, etc. And since we have these "little luxuries" every day, we feel that we "must" really blow-out big occasions like Christmas, prom, etc. Moderation isn't a popular word anymore.

You are absolutely right about that. Moderation is not easy in this day and age.

We have always saved for retirement first - it comes out of our paychecks before we ever see it, so we don't miss it.

Where we have had trouble in the past is in the moderation with other spending and saving for non-retirement things.

One thing that is very different today is the whole subscription model of consumer behavior. Think about it. Here is a brief brain-stormed list of things that many people have on a subscription basis that weren't there before:

Cell Phone
Cable TV
Netflix subscription
Unlimited calling home phone
Gym memberships
Rhapsody or yahoo music subscription
Internet service
Monthly Tivo Service fee
Audible.com membership
Lawn service
Housekeeper
Pool Membership


I have had each of these from time to time - many of them all at once. None of them is particularly large and expensive in an of themselves, but taken together they are a big drain on a budget. I find myself saying "Hmm... $9.99 a month for unlimited access to any music I want. That's a good deal." Then I'll use it for a month or two and stop using it, but keep paying for it for a year or more until I get fed up with myself and finally cancel it.

I do this out of discretionary money, but it is still money I could be saving for other things.

Ted