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

[dvcgirl]

I don't think I agree. I think everyone "knows" on some level that they should be saving money, but I think MANY people assume there's plenty of time later . . . it'll all just work out . . . it'll be easier to save once I get the promotion, once the kids are all in school, once we move to the new house, once the kids are out of the house . . . And I don't think everyone realizes just how much difference it makes to start YOUNG.

I think that you're exactly right on this Mrs. Pete...most people have no idea what they'll need. And they always think that they'll have more time.

 

[ducklite]

I don't think I agree. I think everyone "knows" on some level that they should be saving money, but I think MANY people assume there's plenty of time later . . . it'll all just work out . . . it'll be easier to save once I get the promotion, once the kids are all in school, once we move to the new house, once the kids are out of the house . . . And I don't think everyone realizes just how much difference it makes to start YOUNG.

Then maybe the problem is how do we wake up the ones who do'nt know better but WOULD start to save if they did?

Anne

 

[MrsPete]

While I agree that many people under 45 know that they should be saving for retirement, many simply have no *clue* how much they'll really need. Most people are positively shocked when they first see their "number". They think..."I can't possibly need one or even *two* million dollars when I retire...we're not rich, and that would make us rich." The truth is, if you have no pension and make 80K combined (and believe that SS will be there in full), you'll need at least one million dollars to maintain something close to your quality of life in retirement. You'll pull 40K from your cool million, and you'll get another 17K or so from SS. That will give you about 70% of your previous income....so you'll be taking a paycut too. Still, if you've paid off the house, maybe gone down to one car, you should be okay...but this isn't going to be a budget with a ton of frills in it either.

A lot of financial planners say that people often get so discouraged when they see the "number" that they just give up. Of course, the problem is that many people are visiting with a financial planner for the first time in their 50s, when it's too late to make major adjustments or catch up.

I really think that some very basic personal finance courses need to become mandatory for high school students. I have a couple of degrees and read about this stuff all of the time. A lot of people just don't have the knowledge for this stuff, others would rather eat paint chips than have to think about it. Forget learning about it.

Corporate America used to do all of the work for their employees. They collected the funds automatically, invested them, and then distributed them in retirement. People knew what their pension check would be, and they knew what social security would be....and most would be just fine.

Now we're trying to get everyone to save the funds themselves. We all know how that's going. Then we need them to invest those funds appropriately. Now we have too many invested too conservatively and others too heavily weighted in their own companies stock. And finally, we need for them to know how much to pull out each year in retirement. We really need a massive education program dealing with this issue.

I agree with every word. Duck says people under 45 know these things -- I think they do in a vague sense, but -- as you said -- the majority vastly underestimate how much they need to retire.

That reminds me of something: Years ago -- even before I was a teacher, when I was still working in human resources and hating it -- I was writing out some bills at work, and I was chatting with a girl who worked with me. Somehow I mentioned that we'd just paid off our car, and we were putting that payment into an account so we'd be prepared to pay cash for our next car. She was amazed that anyone would do that and said she'd NEVER be able to amass enough savings to pay for a whole car at once (of course, she always drove really expensive cars). The whole conversation was lighthearted and we were laughing about her inability to save, and I asked her HOW if she couldn't save enough for a car, HOW she'd ever be able to retire. She didn't "get it" -- the concept that retirement would require more than a car was foreign to her. Though we both laughed, I thought it was very sad.

 

[ducklite]

BTW-- I also don't have a Blackberry, IPod, Itunes, any pay channels on TV (HBO, etc), or a ton of this other newfangled stuff.

XM radio came free for three months with my car. THey mistakenly put in the receiver even though I hadn't ordered it, and I refused to pay for it. I cancelled after the free three months. I can think of better ways to spend that $$. I also plan on cancelling the Onstar, again free for a year, because I've got a cell phone and AAA card.

I have what I need. The biggest splurge DH and I have made lately was he gave me a flat screen (just regular tv, not plasma or HDTV) for my bathroom wall. Yes, it was a splurge. A big one. But I had gotten an unexpected bonus at work, and I had also gotten an unexpected cash windfall from another source, so we used some of it. Half of the total of those two went into savings, because frankly there wasn't really anything I "needed" to do with it, and at this point in my life I'd generally rather save than get a want.

Anne

 

[MrsPete]

Cell Phone--have one, it's also my business phone

Recently I was charged with the task of making a phone tree for our department so we could contact one another in case of bad weather. I tried to include both home/cell phones, but I was surprised to learn that 100% of the younger teachers have ONLY a cell phone.

That could be a very good move, and I'm considering going that direction myself. DH is investigating -- slowly investigating -- options for our internet, cell phones, cable. I think we could bundle some of these and pay less each month.

I think instead of saying that the cell phone is a luxury, it'd be more truthful to say that a SECOND phone is a luxury. I have both a house and a cell phone -- I could do with just one.

 

[MrsPete]

Then maybe the problem is how do we wake up the ones who do'nt know better but WOULD start to save if they did?

Anne

I don't know, but it's an uphill battle because anyone who says, "You should be saving", is fighting against all the advertisers who are spending $$$ to make us believe that "we deserve" this and that.

 

[Amii]

So you feel that those who bother to save for retirement should ten have to be penalized in favor of those who shucked personal responsibility in favor of a spend every penny lifestyle?

That's punishing those with personal responsibility and integrity, and frankly the biggest problem in our declining society.

Anne

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'm not lucky, I'm a hard worker. Almost my entire adult life I've worked two and three jobs. I've done so to be able to save for my future while still having little luxuries in my life. I'm also able to seperate my wants from my needs, and IMHO saving for retirement is a need that trumps all wants.

That's a concept that many just don't get.

Anne

I have 2 children who have multiple medical issues. One had leukemia for several years. We were in debt for several hundred thousand dollars because of my 2 son's medical problems. My husband and I could have claimed bankruptcy, but we did the right thing and spent years using every penny we had to pay off the bills.

We just about dug ourselves out of the medical debt and my mother had a routine surgery. The Dr. messed up and now my mother is disabled and needs 24 hour care for the rest of her life. I had to quit my job so my brother and I can provide the 24 hour care. She didn't save for retirement so now we are left trying to take care of her financially along with the medical bills my 2 sons still have.

I don't have money saved for retirement and I have no idea when I will be able to. My husband and I have worked hard for the "luxury" of having my 2 sons and my mother still alive. My husband and I have done the right thing. We have not shucked personal responsibility in favor of a spending every penny lifestyle. I would like to see some of the money that we have paid into social security but I do not expect the government to support us. I do not think that people should wish we eat out of garbage cans either.

Don't get me wrong. I am very greatful for what I have. I also know there are also people who have it a lot harder than me. I just get tired of people thinking we are lazy or we don't have personal responsibility and integrity.

 

[snowwite]

They are just stupid, and frankly can eat out of garbage cans for all I care if they don't change their ways.
Anne

All I can say is wow! I am just shocked. They say what goes around comes around. We can only hope that life is as good to you as you have judged and declared it should be for others.

 

[ducklite]

I have 2 children who have multiple medical issues. One had leukemia for several years. We were in debt for several hundred thousand dollars because of my 2 son's medical problems. My husband and I could have claimed bankruptcy, but we did the right thing and spent years using every penny we had to pay off the bills.

I"m very sorry to hear this, and glad that your children are well.

We just about dug ourselves out of the medical debt and my mother had a routine surgery. The Dr. messed up and now my mother is disabled and needs 24 hour care for the rest of her life. I had to quit my job so my brother and I can provide the 24 hour care. She didn't save for retirement so now we are left trying to take care of her financially along with the medical bills my 2 sons still have.

If your mother is disabled, she is elinigble for SSDI, regardless of if she ever worked or not. IN all honesty that's generally enough to pay for a daytime aide to help with her care so you can continue working. Additionally often there is a stipend for those who are caring for a disabled person in thier home as opposed to having them in a nursing home--have you looked into all of this?

I don't have money saved for retirement and I have no idea when I will be able to. My husband and I have worked hard for the "luxury" of having my 2 sons and my mother still alive. My husband and I have done the right thing. We have not shucked personal responsibility in favor of a spending every penny lifestyle. I would like to see some of the money that we have paid into social security but I do not expect the government to support us. I do not think that people should wish we eat out of garbage cans either.

Don't get me wrong. I am very greatful for what I have. I also know there are also people who have it a lot harder than me. I just get tired of people thinking we are lazy or we don't have personal responsibility and integrity.

And like I've said all along, there are certainly some exceptions. Try to save $15 a week into an IRA, even if it means not paying a medical bill off as fast. You will NEED that money more than any doctor does.

Another thing you can do is get a job working nights. Have your brother take care of your mother at night or in the evening. You should not be shouldering the entire financial burden. I have worked a second job almost my entire adult life, you get used to the extra hours.

Anne

 

[ducklite]

All I can say is wow! I am just shocked. They say what goes around comes around. We can only hope that life is as good to you as you have judged and declared it should be for others.

First of all, I was referring to people who are spending their money on lots of wants and not saving. As I've said all along, there will be some exceptions.

Life has only been good to me because I FORCED it to be. I have a son with a disability, no college degree, and was a songle mother for several years. I never got welfare or foodstamps. I worked my butt off to get what I have. It wan't luck, it was hard work. And it galls me that many who can't be bothered to work and/or feel that they are entitled to what I've got, what I've worked my butt off for. Only when someone can honestly say they've worked as hard as I have in life and have done without like I have in the past, will I have an ounce of sympathy.

I do not believe that the rest of us who have saved for our retirement should end up not getting anything while those who have squandered should be taken care of by taxpayer dollars. Do you?

Anne

 

[ducklite]

I don't know, but it's an uphill battle because anyone who says, "You should be saving", is fighting against all the advertisers who are spending $$$ to make us believe that "we deserve" this and that.

I just don't buy that. No one is holding a gun to anyone's head. Again, a matter of personal responsibility.

Anne

 

[dvcgirl]

I don't have money saved for retirement and I have no idea when I will be able to. My husband and I have worked hard for the "luxury" of having my 2 sons and my mother still alive. My husband and I have done the right thing. We have not shucked personal responsibility in favor of a spending every penny lifestyle. I would like to see some of the money that we have paid into social security but I do not expect the government to support us. I do not think that people should wish we eat out of garbage cans either.

Don't get me wrong. I am very greatful for what I have. I also know there are also people who have it a lot harder than me. I just get tired of people thinking we are lazy or we don't have personal responsibility and integrity.

Sorry to hear about your kids and Mom. Glad that they are all well now, and I applaud you for doing the right thing in paying your medical bills. I certainly would never include a family like yours in with the "slackers" group, but you must understand that there are an awful lot of them out there. And some aren't even slackers....they simply don't get it.

How old are you now? What types of jobs do you have? You shouldn't give up hope because you're getting a late start.....join the club. Ben Stein has a great line in his book, "Yes, you can still retire comfortably!!" He says,

"Yes, you can still retire comfortably. Maybe not everyone will, but *you* can, and we're about to tell you how. Don't get overwhelmed with the fate of the whole generation. Just worry about yourself, and then plan and act. You don't need to outrun the bear; you just need to outrun the other hunter."

I love that last line....

Another really viable strategy for late starters is (and I'm not trying to we a wise*** here....) is to work longer. Even working a few more years can add considerable bulk to your nest egg. And of course, there's always part time work. It's interesting....in Ben Stein's book he sets the retirement age for Baby Boomers at 70. He's being realistic because he knows very few will be able to retire before that age. That extra 5 years can make a world of difference.

 

[runwad]

While I agree that many people under 45 know that they should be saving for retirement, many simply have no *clue* how much they'll really need. Most people are positively shocked when they first see their "number". They think..."I can't possibly need one or even *two* million dollars when I retire...we're not rich, and that would make us rich." The truth is, if you have no pension and make 80K combined (and believe that SS will be there in full), you'll need at least one million dollars to maintain something close to your quality of life in retirement. You'll pull 40K from your cool million, and you'll get another 17K or so from SS. That will give you about 70% of your previous income....so you'll be taking a paycut too. Still, if you've paid off the house, maybe gone down to one car, you should be okay...but this isn't going to be a budget with a ton of frills in it either.

A lot of financial planners say that people often get so discouraged when they see the "number" that they just give up. Of course, the problem is that many people are visiting with a financial planner for the first time in their 50s, when it's too late to make major adjustments or catch up.

I really think that some very basic personal finance courses need to become mandatory for high school students. I have a couple of degrees and read about this stuff all of the time. A lot of people just don't have the knowledge for this stuff, others would rather eat paint chips than have to think about it. Forget learning about it.

Corporate America used to do all of the work for their employees. They collected the funds automatically, invested them, and then distributed them in retirement. People knew what their pension check would be, and they knew what social security would be....and most would be just fine.

Now we're trying to get everyone to save the funds themselves. We all know how that's going. Then we need them to invest those funds appropriately. Now we have too many invested too conservatively and others too heavily weighted in their own companies stock. And finally, we need for them to know how much to pull out each year in retirement. We really need a massive education program dealing with this issue.

BINGO...you've hit the nail on the head EDUCATION!! We really are Stupid In America, when it comes to money and finances. Heck in my own family I have a sister that has been working for Fed Ex for 16 years and she's never gotten in the 401k (geez how are we related???) anyway I found out last year and it was her New Years Resolution for "06 to start saving in her 401. You know why she never did before? Because her husband did at his work and will get a pension so she just figured he'd take care of her, WHAT?? I said it's free money why would you give up free money (speaking of the match!) but the sad truth is so many people just don't get it!!! Education really needs to be kicked up a notch.

 

[disneysteve]

How would they accomplish any means testing though?

Wow! Don't log on all day and 7 pages of posts get generated on one thread.

Anyway, means testing is impossible. There are far too many ways for folks to hide money and income. Get a job where you are paid under the table. Stash a couple hundred thousand in cash in your safe deposit box. Give the money away to your children and then have them buy stuff for you. Anybody with a brain will figure out how to cheat the system.

 

[C.Ann]

Education really needs to be kicked up a notch.

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

Several notches - and it should start very early on - like first grade..

I'm going to "age" myself here - but does anyone else remember having "bank day" in elementary school? Each child opened an actual savings account in a bank that was convenient for the school to make deposits in - got their own honest to goodness passbook - and would make a deposit every Friday?

I still have mine around here somewhere..

Too bad they couldn't do something similar with the little kids now - only geared towards investing or something along those lines.. High school is too late (actually even middle school is probably too late) because by then the kids are already suffering from the "Gimme's" and have already developed the mind set of "instant gratification".. Maybe if the parents saw what their children were learning, they could grasp the concept as well - killing two birds with one stone..

 

[ducklite]

BINGO...you've hit the nail on the head EDUCATION!! We really are Stupid In America, when it comes to money and finances. Heck in my own family I have a sister that has been working for Fed Ex for 16 years and she's never gotten in the 401k (geez how are we related???) anyway I found out last year and it was her New Years Resolution for "06 to start saving in her 401. You know why she never did before? Because her husband did at his work and will get a pension so she just figured he'd take care of her, WHAT?? I said it's free money why would you give up free money (speaking of the match!) but the sad truth is so many people just don't get it!!! Education really needs to be kicked up a notch.

Wow. Just wow. I'm simply amazed.

I do agree that education is key. My 20 year old son joined the Publix 401K plan the day he was eligible. Actually I joined it for him, he brought home the paperwork and I filled it out. BUT, I've been using it as a learning tool. We look every month at how much he's contributed. We look at the funds he's in, compare earnings, and talk about the difference between the slower growing but safer funds and the faster growing but riskier funds. Last week he said something to me that made me think it was really beginning to sink in. He also saw how completely painless it was to save $1000 at this point in his life. 50 years from now that $1000 will be worth a LOT of money.

I'm not sure that a class in school would work, it's just too foreign a concept for teenagers who think they are invincible, old people (anyone over 30) are clueless, and just do'nt care. It seems that SOCIETY needs to target young adults as they hit thier mid-20's, the time that they should be starting to save, and the point in their lives that they might just be bothered to pay attention if the material was presented in a manner that appealed to them.

One of my neighbors works for one of the big brokerage houses, and he was telling me about a young guy at the firm who has brought in a ton of new clients. He's doing "your financial future" seminars--at a local bar that young adults frequent. Free beer and finger foods for attendees (company reimburses it as an expense) and he gives the presentation in terms they can understand. Driving sports cars, drinking beer, and going on cruises with topless sunbathing decks in retirement. He signs up an average of 10 guys into IRA's each time he does it, and has gotten a bunch of them to also open investment accounts. Most of these guys are single skilled labor blue collar types who would NEVER be saving like this on thier own. And the word is spreading as these guys are seeing thier money grown over 18 months or so. Interesting concept--reaching out to them on their terms, on an emotional level they understand.

Anne

 

[C.Ann]

There are far too many ways for folks to hide money and income. Get a job where you are paid under the table. Stash a couple hundred thousand in cash in your safe deposit box. Give the money away to your children and then have them buy stuff for you.

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

Thanks for those GREAT tips, steve... You're swell.. I always knew there was "something" about you that I really liked..

If I'm not back on for a few days, you'll know I'm workin' on something..

 

[snowwite]

First of all, I was referring to people who are spending their money on lots of wants and not saving. As I've said all along, there will be some exceptions.

Life has only been good to me because I FORCED it to be. I have a son with a disability, no college degree, and was a songle mother for several years. I never got welfare or foodstamps. I worked my butt off to get what I have. It wan't luck, it was hard work. And it galls me that many who can't be bothered to work and/or feel that they are entitled to what I've got, what I've worked my butt off for. Only when someone can honestly say they've worked as hard as I have in life and have done without like I have in the past, will I have an ounce of sympathy.

I do not believe that the rest of us who have saved for our retirement should end up not getting anything while those who have squandered should be taken care of by taxpayer dollars. Do you?

Anne

I guess I misunderstod your previous post. It came off pretty harsh. I have been working full time since I was 15 and for a several years I was a single mom who put herself through nursing school so I can understand where you are coming from. No, I dont think people who are lazy and sponging off the govt ought to get a free ride on the backs of thise who worked. I just want what I am entitiled to and what I conributed to all my working life. I should not be penalized because the govt didnt fix this when they first noticed a possible problem. We should get to collect social security and enjoy retirement and not have to work until we are dead.

 

[ducklite]

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

Several notches - and it should start very early on - like first grade..

I'm going to "age" myself here - but does anyone else remember having "bank day" in elementary school? Each child opened an actual savings account in a bank that was convenient for the school to make deposits in - got their own honest to goodness passbook - and would make a deposit every Friday?

I still have mine around here somewhere..

Too bad they couldn't do something similar with the little kids now - only geared towards investing or something along those lines.. High school is too late (actually even middle school is probably too late) because by then the kids are already suffering from the "Gimme's" and have already developed the mind set of "instant gratification".. Maybe if the parents saw what their children were learning, they could grasp the concept as well - killing two birds with one stone..

I remember my mom giving me $5 to open a passbook savings account when I was about 8. I was soooo proud. I put a lot of my birthday money and some of my allowance into it. And when I began working as a waittress I lived off my tips and put my paycheck (about $30 a week) into my savings account.

Anne

 

[Amii]

I did apply for SSDI for my mother many moths ago. That has been a pleasure in itself. We live in an area where the cost of living is crazy and $700.00 a month is not going to even begin to support anyone. Medicare also does not pay for many things my mother needs. The medical bills alone will be way over $700.00 a month.

I'd love to get even a part time job. It just isn't possible at this time. I had no idea how much was involved with totally caring for a parent. I do try to ebay when I get the chance. (what I'm doing while I'm here)

The good news is I'm only 37 and my mortgage will be paid off in 7 years and I have no credit card debt! That should free up money to save for retirement. *fingers crossed* Maybe I should start saving a little while I pay all of the medical bills. I just want so much to be out of debt.

Anyway, thank you for the kind words. Sorry about my rant. I guess I'm just tired.

My best advice is not to have a false sense of security because you have medical insurance. We have really good medical insurance but the bills still pile up big time if you have a medical catastrophe. I didn't realize that until we were put in this position. Hope no one here has to deal with medical issues!