The First Thing They Get Rid Of
I suggested a topic on retirees and the housing bubble, with this article. “These are tough economic times for people of all ages, but few are affected more than senior citizens living on pensions and Social Security. ‘Americans age 55 or older experienced the sharpest rise in bankruptcy filings during the 16-year period between 1991 and 2007, according to a report released by AARP, ‘Generations of Struggle.’ The rate of personal bankruptcy filings among those ages 65 or older grew by 125 percent, while the bankruptcy rate of seniors ages 75 to 84 jumped a stunning 433.3 percent.’”
“‘It’s frightening. It’s a horror story in the making. It will not get better. It will continue to get worse,’ said Thomas Mackell., chairman of the board of directors of the Federal Reserve Bank of Richmond and author of ‘When the Good Pensions Go Away.’ ‘We are facing a generation of boomers where 55 percent of them are ill-prepared economically to retire.’”
A reply, “What’s the average 401K balance, like 60 grand? That’ll last a year or two at best. I have a bad feeling there are a lot of boomers out there that will be hurting. A lot of people say that it just means people will keep working, but where? And no, it will not be their houses that save them.”
Another posted, “Problem is, the Boomers expected it to go on and on forever (and they’ve done their damnest to try and keep it all propped up)… and haven’t planned for any future…”
To which was said, “This is exactly it. Most people, once they make money think it will go on for ever. My landlord made a couple hundred K on his prior rental property so he sold it at the peak and bought a bigger one. Now he looses 1800 a month when the place is fully rented. He says he is a year or two from bankruptcy. We’re moving to a new place this weekend. He hasn’t rented our unit yet. Ouch.”
One referred to the article, “Those stats on seniors filing for BK are nothing short of alarming.”
“How the REIC thought it would become typical for seniors to play with houses is another sign of the retirement fetish. For all the hype about seniors in AZ and FL, there are many, many more like my parents, and their neighbors, who are only leaving their homes (for many their first and only one) feet first.”
One observed, “Was talking to a couple of neighbors the other eve. All of us fall into that much-ballyhooed boomer age group. One neighbor noted that she has around $250k in her retirement account. The house is also paid off.”
“And guess what she and her partner aren’t about to buy? If you guessed ‘another house,’ you’re right. They have no intentions of living for their house payment during their senior years.”
One viewed it this way, “I consider a paid-for house a source of imputed tax-free cash flow. The amount of rent one would otherwise pay to someone else is instead paid to himself - tax free. If one were to purchase a tax free bond and use its interest to pay his rent, how much would the bond cost?”
“Whatever the cost, this could be considered the value of his house as measured by the imputed rent the house generates after all expenses.”
A reply, “What you’re saying here brings up a question I often struggle with: pay off the house or keep the cash? So far I’ve been going with ‘keep the cash.’ My thinking being that when cash is king, if I’ve paid off my house, I won’t be able to get easy access to the cash when there are great land/business/stock opportunities. On the other hand, I hate having the mortgage payment.”
One posted, “I contend that most of this $ holding demographic ALREADY retired. I can only speak for VT and NY but depending on department, you can draw on your pension as early as 50 years old. And this warped notion gave birth to all the moronic expressions we love to castigate like ‘the boomers are coming,’ ‘rich retirees want to live here’ blah blah blah.”
Another saw this, “The boomers retiring should do nothing but produce churn in the market.”
“Sell your 3000 sq/ft home in NJ, buy a 1500 sq/ft home in FL. Still the same number of homes out there, and still one for sale. Most boomers aren’t buying a 2nd home at 60 years old, they either already own it, or will sell their primary residence to buy their retirement home.”
“And, frankly, most of the boomers aren’t going anywhere. However, if the ’sell then buy’ does become real, it could put extreme pressure on house prices in the areas the boomers are leaving (NY comes to mind).”
One had this, “My parents were between the Boomers and ‘Greatest Generation.’ They owned thier own primary residences, and were RE investors over their lifetimes. As they grew older, they SOLD their ‘investment’ properties so they could have less work (rentals are a LOT of work) and more cash on hand.”
“Much easier to invest in fixed-income bonds/CDs than to manage rentals, especially when you are older. This notion that Boomers are going to save **any** market is a sham - stocks, housing, bonds, etc. will all be sold off as they age. This was meant to be what they lived off in retirement. They will not be investing NEW money after they retire, IMHO.”
From Bloomberg. “As a Mercedes-Benz E-Class sedan glides through a security check and uniformed staff straighten deck chairs by an outdoor pool, well-heeled serenity masks the upheaval taking place at Madrid’s most exclusive golf club.”
“Golfers at La Moraleja, like those at courses across Spain, are rushing to sell memberships. That’s cut their value by 32 percent since 2006, according to Pilar Sanchez, an administrator at the club.”
“‘It’s the first thing they get rid of,’ Sanchez says. ‘Next it’s the beach house.’”
“Wealthy Spaniards are abandoning luxuries as a decade-long economic boom based on the homebuilding industry comes to an abrupt halt. The richest 10 percent of Spanish families have two-thirds of their fortunes tied up in real estate, according to a Bank of Spain survey published last year.”
“With property values on the slide and banks curbing lending, dumping golf memberships is one way to raise cash quickly.”
“‘It’s a sign of the times,’ says Susana Garcia-Cervero, an economist at Deutsche Bank AG in London. ‘Many potential clients were in the real-estate market. They made a lot of money and now some are going to go under.’”
“Maria Dubois is asking 75,000 euros for the share she and her husband have at a club in the seaside resort of Sancti Petri, near Cadiz in southwest Spain. The couple will put the proceeds toward a new apartment and rent membership at the club for about 200 euros a month instead. With interest rates in Spain around 6 percent, paying off a loan for a 75,000-euro membership is almost twice as expensive as renting access to the same club.”
“‘I’m not short of money, but it’s a bit more difficult to get a mortgage loan,’ says Dubois, a 37-year-old travel writer. ‘This will help to pay for it.’”
“Wealthy Spaniards bought golf shares as an investment in the past decade when they had credit on tap, says Javier Olmos, a co- owner of Madrid-based 18golfclub, which brokers membership sales. That created a price bubble similar to the one in the housing market, where prices surged even when renting was cheaper.”
“Members also pay monthly greens fees of as much as 300 euros, Olmos says. Spain’s golf industry has surged in line with the housing boom. Investors bankrolled more than 100 new courses in the past 10 years, turning the sport into a $2.4 billion annual business. Many Spaniards started playing after buying vacation homes adjoining courses, Olmos says.”
“With inflation at a 13-year high eating into spending power and oil prices near a record, wealthy Spaniards are reconsidering other luxuries too. Sales of Audi AG’s Q7 sport utility vehicle, a $100,000 favorite in downtown Madrid, slumped by two-thirds in June from a year earlier, according to the Spanish Car and Truckmakers Association. Bulgari SpA, the world’s third-largest jeweler, is reporting slower sales in Spain.”
“Business at Spain’s hotels and restaurants contracted for the first time in more than three years in April, declining 3.7 percent on the year, according to the National Statistics Institute.”
“That slump means other exclusive hangouts are suffering. At the Puerta 57 restaurant in Real Madrid’s Bernabeu Stadium, the dining room is two-thirds empty on a recent afternoon. Fewer executives are tucking into the 100-euro lunch menu that attracts expense-account diners.”
“‘There’s the crisis for you,’ says Jose Carlos Diez, chief economist at Intermoney SA, Spain’s largest bond dealer, as he surveys the room. ‘A year ago we would have struggled for a table here and now look.’”
“‘People are going to have to cut their consumption,’ says Josep Prats, who heads a team managing about 11 billion euros at Ahorro Corporacion in Madrid. ‘They have been living beyond their means.’”
The Missoulian. “People are growing increasingly anxious as they react to gloomy news about the volatile stock market, ailing housing industry, and rising food and fuel costs. ‘There’s no question that this has created a lot of fear and angst,’ said Robert Seidenschwarz, financial adviser in Missoula, who estimates a 20 percent increase in activity recently.”
“Until the markets settle, brokers and financial planners said they are trying to reassure their clients. ‘We’re seeing more and more retirees coming in for estate planning because of the markets,’ Seidenschwarz said. ‘We’re in a bubble and it will take several years to get out of it.’”
“Missoula residents Nancy and Paul Svelmoe are planning for their retirement by investing mainly in real estate. They’ve owned a rental house in central Missoula for about 12 years and also have rented a house in Las Vegas since 2005.”
“They are now hunting for a single-family residence in Las Vegas, which was overbuilt and where home prices have dropped considerably.”
“‘We’ve always felt that real estate is the most solid investment, even with the ups and downs,’ said Nancy Svelmoe, 58. ‘It is something tangible that you will always have.’”
“She said the couple is confident that Las Vegas’ real estate will recover. ‘We feel people moving from California, where there is no place to grow, and the snowbirds will be part of the upturn in Las Vegas,’ she said.”
The Press of Atlantic City. “Touring the resort’s southern end on a wintry night is like being in a giant snowglobe full of beautiful but deserted million-dollar homes. No other place in America outside the Hurricane Katrina-ravaged South has lost more residents in the past five years than Cape May County, according to the Wall Street Journal.”
“Frankly, local experts say, many people can’t afford to live here. ‘It conforms with everything you hear and observe about Cape May,’ economist Richard Perniciaro said. ‘Schools are losing kids quickly. There are not a lot of young families.’”
“Perniciaro said older residents are dying or moving to warmer climates. Meanwhile, younger families are not taking their places. ‘An estate goes up for sale or a couple moves out who’s lived in Sea Isle City for 50 years,’ Perniciaro said. ‘They tear the house down and put up a quadraplex for second homeowners or vacationers. They displace a full-time resident.’”
“The U-Haul store at Cape May Riggins vouches for that. ‘I know of a lot of older folks who have died,’ Mechanic Joe Roth said. ‘They have kids from out of state who will take over the property as a vacation home,’ he said.”
“Ocean City Mayor Sal Perillo formed a special committee to investigate why the resort was losing so many of its landmark restaurants to new condos. Classes at Sea Isle City’s elementary school are so small the board is considering closing.”
“And the young families that Perniciaro identified need decent-paying, year-round jobs - the kind of jobs that are relatively scarce in a county dominated by seasonal tourism, Smith said. ‘Young families are flexible. They can pick up and move,’ he said. ‘These young families are probably going where they can afford housing.’”
The major Boomer problem is that so many of them have lived their lives paycheck-to-paycheck and have no real assets to speak of, in many cases not even a house if they fell into the HELOC trap.
I used to work with a guy, George. Not the sharpest tool in the shed, but he was nice and a decent worker (needed constant supervision, though or he’d just wander around all day). He retired two years ago at 63, with a paid off house (but that needed a ton of work) and $10k in the bank. That was it. His wife had never really worked, so its basically his social security check that will need to support them for the rest of their lives. He was aware that he could have substantially increased his monthly payment had he remained in the workforce for another two years, but retired the day that he turned 63 anyway.
If he and/or his wife lives past age 68 or so, he’s screwed and he’s representative of a lot of his demographic. They’ll wind up broke and living in a crappy nursing home until they expire, being a drain on state resources. It’s not a very pleasant fate, but that’s what awaits tens of millions of Americans who failed to properly plan for their retirements.
Not to worry. They will all get reverse mortgages and live in fossil comfort and security–just as depicted in the television commercials–till the mortgage companies see their potential profits dwindling, and bump the geezers off.
I don’t know if he’ll be able to get a reverse mortgage. His house is located in a really crappy area of Sacramento, needs a new roof (last time I spoke to him, which was 8-10 months ago), along with some other major issues. Even at the height of the bubble, his house would only have been “worth” ~$250k. Given its poor state, the market value would be well under $100k and this market still has another 30-50% decline to go. He’s not going to be able to raise a lot of cash from it, maybe $40-50k max. That will help, but it still doesn’t leave him much cash to live on. My guess is that its gone within two years of “liberation.”
I (and others at work) thought that he should a few more years at least until he was able to fix up the house and/or sell it and move into something in better shape that would require less maintenance.
Yup, and these are the people who are coming to “snap up” all the homes in FL, AZ, LV, etc. The simple fact of the matter is that most of these people won’t even have the financial ability to stay in the homes they currently own, let alone buying a 500 sq/ft condo on the beach in FL.
The other thing that nobody seems to want to talk about is that if the boomers do come (about as likely as the 3rd coming of the messiah, imho) to places like FL/AZ in force, the home prices in the area they are leaving will tank. A boomer who has the money to buy a 2nd home almost certainly has done it already. The people who are “coming” will need to sell their homes up north, putting dramatic pressure on prices there (and thereby reducing the amount they can spend in another area).
The only thing that would help the market is if all the boomers would keep their primary residences and buy a 2nd home in the sunbelt. That’s not going to happen in any significant number what-so-ever; there’s just not enough money in that demographic to support it. The boomers have an avg retirement savings of about 100K:
http://chaz11.blogspot.com/2008/05/baby-boomer-retirement-dilemma-how-much.html
That’s not even close to supporting a lifestyle in one of these high cost areas that has bet their entire future on the arrival of “rich baby boomers”.
This is exactly and precisely correct.
Earlier this week, I wrote and rather long and emphatic response to Reuven about nearly the same subject.
If anyone born before 1954 thinks that there’ll be hoards of people born after 1960 that will come along and buy their $600K houses, they had better think again - AND FAST. Anyone older than 55 with a house valued at anything near that amount - and who has no liquid assets to speak of - is in dire straits and is maybe just beginning to realize it.
This is a societal sea change folks - the gravy train is over for years 1938-1954. For people born then, the days of getting and spending easy money are over. At long last, they are beginning to experience the financial picture their parents and grandparents faced, and the financial picture their kids and grandkids will be saddled with throughout their lives.
I do have a little pity (a very miscroscopic amount) for this age group because most everything has come easy for them. Millions of them won’t know what hit ‘em.
Decades of no generational competition in the workplace (there was hardly anyone 10-20 years older than them in the workforce), huge peacetime dividends, scant international competition on nearly all fronts save autos, and 120 million citizens born just 5 to 15 years after them made life easy and demand strong.
Anyone spending their first 50-65 years of life under such a Goldilocks set of circumstances understandably has blinders on.
It’s what made the whole ME generation possible.
I think you have a very good point with your post, and it is often overlooked in the big picture of the changing reality of the USA.
I was born in ‘53. I’m tired of being blamed and named the “me” generation.
I was not spoiled. Nothing came easy to me — not my first job, nor my most recent. I faced enormous competition from the moment I was born — from both my siblings, who came for the front end of the “boomer” generation, and from my peers for the few jobs there were in the 70s and 80s. Many of those people made the mistake of spoiling their own kids *and* supporting their aging parents when they should have been taking care of themselves.
Furthermore, If I’d behaved toward my bosses and seniors at work the way young people behaved toward me (when I was still working), I’d have been fired on the spot. I’ve seen *plenty* of spoiled rotten 20 and 30-somethings who consider themselves too important to do the actual work required in a job. They think because they have a degree, they should be boss. When you explain you also have a degree, plus 25 years *experience* they throw tantrums and scream, “Well that’s not fair!” They lived at home well into their 20s, drove new SUVs, drank $4 lattes, bought houses with no money down and rock bottom interest rates. And now cry “It’s not fair” when they find themselves in an upside-down mortgage.
I sacrificed, slaved and saved for years. My home is paid for, I drive an 11 year old economy car, and I was well on my way toward a reasonably funded retirement. I did not cause the high-tech crash, nor did I cause 9/11, nor did I cause any of the fallout from that. I did everything I could to protect myself.
The fact is, you can do everything you’re “supposed” to do, and it still doesn’t matter. You amass a small pile, and a bigger thug comes along with a new way to steal it. And mark my words — there’s always a bigger thug.
I’m back in school now, re-tooling myself in a field that claims 100% employment with a worldwide shortage. I’ve seen 3 women my age fall through — 2 flunked out, the 3rd ended up in the hospital and seriously ill. And through it all, I’m praying that I’ll get hired into an entry level job in healthcare at age 56and that I’ll be able to work until I’m 70 or so. Otherwise, I am totally screwed.
That’s anecdotal. I can say that because I know of lots of friends’ parents who planned really well, and have a good retirement. I know of others who didn’t. That’s basic across all age groups. Some plan well, some don’t. You can’t really talk about “the major boomer problem” and then talk about one guy you know. I don’t think any generation is all good planners or all bad planners. I think the major gen x/gen y problem is blaming the boomers for everything. wah. ; ) just playing devil’s advocate.
The people around my imeadiate area that are doing the best in retirement are; Goverment or Muni retiree’s OR people who worked for companies (Lockeed) that relied heavily on goverment contracts…
Of course its anecdotal, but sometimes its more helpful to illustrate a case study then ramble off statistics.
I agree, not every Boomer is doomed financially, but a very high percentage are. Not every Boomer was fiscally irresponsible from 18-65, but a very high percentage were. Same with every other demographic.
I agree Peaceful, especially since “George” isn’t even a boomer. Kind of like using the “N” word on people that happened to be born black. It’s OK to whip up on the imaginary universal “boomer”, on whom all things can be blamed. It’s 44 to 62, folks. I would guess that 90% of non-government employed boomers are still slaving away, and the youngest boomers are still twenty-three, count them, years away from full Social Security. That’s assuming that the rules are not changed again.
How about if the boomer-haters minded your own finances, and quit throwing bricks over the cube wall at the boomer next door. After all, they have taxes to pay and money to save, lest they burden the superior non-boomers with their destitution.
FYI - by your classification (1946-1964), I’d be a Boomer myself.
However, I disagree with your premise. I advocate that Boomers were born from 1938-1954, give or take a couple of years on either side. Doubt me? Try placing a 62-year-old and a 44-year-old in the same room together to compare their life histories, formative years, work environment, etc.
No 44-year-old remembers Hula-hoops, the Beatles, I Love Lucy, Camelot, JFK’s assassination, Howdy Doody, roller skates, dropping below their school desks in preparation for nuclear bomb blasts, the Tet Offensive. The early memories of those born in 1964 are women’s liberation, man on the moon, hippies, gas lines, Watergate, Saigon, rampant inflation, the fall of Chrysler and the entry of Japanese cars, helicopters that blew up in Iran, and mandatory Selective Service starting in 1980.
The youngest so-called “Boomers” didn’t graduate college until 1986. Some don’t remember a time without cable television.
Those born in 1946 and 1964 look at each other as being from totally different eras. Ask them.
Anyone born from 1938 to 1954 owes a respectable amount of their good fortune to demographics. It doesn’t matter if they like that fact or not, or if they really did work their asses off or not. It IS true.
If it weren’t true, they wouldn’t be receiving MediCare, Prescriptions Meds and Social Security right now. Such programs would be too costly to exist.
I agree with you, imo, for political reasons older Boomers (WW2 Boomers) lumped too many decades into their fold.
imo, there are age groups that can be separated in numbers by wars:
The WW2 Boomers
The Korean War Generation
The Early Vietnam War Legacies
The older Boomers (WW2) are the ones who have benefited from the housing run-up and who have generally economically oppressed, through absurd housing prices, those younger than them.
~Misstrial
At least get your generations right before you begin your generalizations. Baby boomers were born AFTER WWII unitl the mid-1950s. There was a very low birth-rate before and during that war.
As for the easy life–War-time rationing, outdoor plumbing, economic recessions, Appalachia, the rust belt, the draft, Viet Nahm. Yeah life was really comfortable back then. Why/how did I ever save enought to put 25% down on a house, buy a car for cash, and still retire?
“His wife had never really worked…”
I’ve tried to explain this economic handicap at work, but the insecure religious types can’t imagine their spouse out in the world commingling without supervision.
Where do you live, Saudi Arabia? I’ve lived in the “Bible Belt” all my life and half the workforce are women. The only place I can think of in the US is the mormon communities in Utah
RMS -
Perhaps this retiree could never imagine a time when one spouse would have to work full time to pay for government largesse while the other worked to put food on the table, buy a house, save money for their retirement, etc.
Instead, he never gave it a day’s thought as he apparently was more than okay with the notion of stealing from those younger than he.
Frankly, I really don’t give a damn about his fate. He’s been willing his whole life to suck others dry, so why should I care if he’s in the gutter? Besides, it’s where leeches belong.
RE: but that’s what awaits tens of millions of Americans who failed to properly plan for their retirements.
Today, a financially crippling divorce, major illness, or job loss can roll down the pike at any time, blowing the best laid of plans right out of the water.
And the funny thing is…you alway think you’re immune to this type of misfortune…it always happens to the other guy.
So who is to say someone didn’t properly plan for retirement.
But I know if the various forms of government didn’t confiscate 50% of my income over the last 30 years, I’d be in fine shape not withstanding that finanically ruinous -ex of mine.
I agree HD….
I agree too, HD. Been through a divorce, although it was only semi-financially crippling for me ( it was for the ex, who wanted out after forging my name to a business loan years earlier ), and a business gone bad ( didn’t bankrupt - paid almost all of the debt off over 11 years - but boy was it crippling ). I’ve nearly always lived below my means, saved for my retirment, worked for companies that have a good 401K match, and remarried a hard-working, kind man who is also a tightwad, thrifty person like myself. Now that I’m married to a stable person who isn’t always losing jobs due to personality conflicts, we do pretty well. At least adequately, and we save quite heavily, and still manage to have fun. We have our retirement home paid for already. We rent it out at present, and it pays for the smaller house we’re living in right now due to job locations. We’ll sell ( ditch ) this one when we do retire. We could buy a 2nd retirment home in AZ (Anthem ) for half of what they were selling for 4 years ago (at least the ones in foreclosure ) , but we don’t want to. We talked it over, and, forget it. There you have it from 2 55-year old, still working ( one looking for work ) baby boomers. And, we’ll both have lifetime employer-paid health insurance when we retire. Now, that’s pretty good. Not ALL baby-boomers are idiots, unlike their detractors so enjoy believing.
Sounds like you are government employees of some sort who will banqrupt us by sucking on the public teat !
Not to worry, Pisco, we still have to get up every morning for the teat. And just to let you know, my husband’s been in private industry all of his life, and I work for a university. I did spend a whole four years working for the feds at Social Security in the 1970’s when I first graduated from college, so I guess I did get a little bit, but not to worry, I don’t have a pension. I have to save everything myself, coupled with employer contributions to the 401k/403b. But, of course since you don’t know anything about me, it’s easy for you to generalized like the obvious moron you are.
It’s not just this sort of Boomer (1938-1954) that’s going to be in BIG trouble due to stupidity and lack of productivity.
It’s also those who own $700K houses and have $100K in liquid investments. It’ll be interesting to see what will happen when no buyers show up to buy a $700K property.
Better woo those potential suckers from overseas to buy the all-too-common $700K houses at a premium.
You are so weird and bitter, Eudemon.
And you’re just a wee bit scared, aren’t you?
I’m scared for effects of us entering into a 3rd great depression ( the first being the depression of the 1880’s, the second one being the eponyous Great Depression of the 1930’s, and the 3rd possible depression approching ). I’m not particularly scared for myself, since I’ve been through a lot in my life, survived it sucessfully, and have taken the best measures that I can to prepare for the possibility of another depression. Besides, I have it on the best of authority from my grandfather that you can eat bean sandwiches during a depression and survive.
You seem pretty scared, though. Also, the definition of a baby “boom” began AFTER WWII. People from 1938 etc. were not included in those demographics because they were part of an era when the birthrate was decreasing, not increasing. And since most of the able-bodied, younger men were at war during the War, obviously, children born during the war years were not part of the “boomer” demographic, either. You can make it up as you go, but obviously, using the historically-accepted definitions makes it easier for everyone to understand what you’re trying to express.
A sign of the times here in W Central Florida are the number of radio and TV adds suggesting that folks cash in anumities and structured settlement monies using XYZ’s freindly company. The adds tout, “after all it’s your money.”
Fine and dandy, but what happens when the lump sum is used up and/or squandered?
I suspect the fees for liberating “your money” are probably a wee bit outlandish as well.
Yep, J.G. Wentworth will allow you to cash in your structured settlements for ready cash. Add these commercials to the ones saying in effect “send us your gold and we’ll send you cash” and you get a real feeling there is a real cash shortage out there, no?
I spend a week/month in Central Florida. The ads on TV and Radio get worse and worse each time I’m there. Radio ads are almost exclusively for get-rich-quick schemes or credit repair now.
Central FL is particularly doomed, and people are in a state of denial. By my reckoning, many homes are worth $0!
People I talked to last week would tell me that “my house isn’t upside down”, yet when I went to realtor.com or zillow (nevermind the wishing prices) and looked, there were 100 homes just-like-theirs for sale within blocks of their home. The price of your home is, at best, 5% less than the most recent foreclosure sale price.
Savvy buyers won’t touch any of these! Orange County, FL, as well as many others in that area MANDATED HOA’s for all new developments (to cut down on code enforcement by the county, so the theory goes). All those HOAs are now in extreme debt, if not bankrupt. Nobody with half a brain would enter into a situation where you have to spend an amount each month that can raise arbitrarily to a bankrupt entity. And as the HOA collapses, there will be more lawsuits against it. Guess who has to pay for these settlements? No intelligent investors will be snapping up these homes even when median house prices do settle down to 3x median income in a few more years. The HOA liability is too big a question mark.
And once the common areas start to rot away, they may NEVER get fixed. The gates and guard booths are the first to go, followed by the common area grounds-keeping, etc. (Of course, the local Orange County newspapers a few years ago published statistics showing residential crime (car and house burglary) was no lower in gated communities than ungated ones…)
Aren’t the tv and radio ads pretty much the same everywhere in the U.S.?
Since I live in Florida, I just accept them as normal (if annoying) without giving them much thought.
I have noted over the years, that criminals flock to Florida, though I don’t know why, unless all the old people are seen as easy marks. Miami was taken over by drug dealers in the 1980s; Tampa was always run by the Mafia, though I don’t know if it still is.
I keep getting unsolicited magazines extolling luxury Florida living, and crammed with real estate advertising. I wonder if everyone here gets them, or if they’re targeted to people in specific zip codes. Somehow, hunkering down in a giant particle board house sprayed with stucco doesn’t strike me as luxury living, but then, I grew up thinking luxury meant something exceptionally refined, elegant, comfortable (and unneeded), not gitchy, flashy, cheaply-made, and expensive.
No. The radio ads in Northern CA aren’t dominated by get-rich-quick schemes, get-out-of-debt. It’s only about 25% of the ads.
Reuven,
I have very much appreciated the wisdom and insights in your posts.
Sammy
‘between 1991 and 2007, according to a report released by AARP…the rate of personal bankruptcy filings among those ages 65 or older grew by 125 percent, while the bankruptcy rate of seniors ages 75 to 84 jumped a stunning 433.3 percent.’
‘The richest 10 percent of Spanish families have two-thirds of their fortunes tied up in real estate’
I read in 2006 the average credit card balance of seniors was something like $30k! These people probably didn’t even have credit cards as young adults. And it’s rich that the AARP puts out alarming reports, while they use their muscle in DC to do what about it? Lot’s of chickens coming home, but I don’t know about the roost.
What can the AARP do in Washington? The only thing that can be done to help these people is to increase government handouts.
Raising SS payments when times are tight could provoke an extreme response by those that finance them (taxpayers). At present, SS is about 17% of my total marginal taxes. It is a higher fraction of my total taxes. And, the tax does not go down for low earners (like income taxes). Someday, some politician is going to get elected by promising to cut Social Security taxes (and benefits).
Maybe the AARP is smarter than the NAR and realizes that sometimes it is better to be seen as an honest broker of information.
Do you consider SS a government handout ? Wouldn’t it be more correctly viewed as a return of the original money paid with a modest rate of compounded interest ?
“Moderate rate of compound interest”??!!! What would that be? 10% per month? The average Social Security recipient receives EVERYTHING he or she paid into the system over their entire working lifetime PLUS INTEREST back in 18 MONTHS. All remaining payouts are stolen from future generations. It is fraud so large it makes the housing bubble shenanigans look like Three Card Monte. Where in the heck do people get the idea that they “earned” a couple of grand per month to live on because they used to pay in a couple of grand a year? Get real!
Obviously you failed math. So let me walk you thru this.
I will use an example from my own situation. Say for instance, in 1983 I made 30k, which I did. That year the SS tax was 10.9%, so Uncle Sam extracted about $3,300 from my pay. I will be eligible to draw full benefits at age 66 in the year 2014 some 31 years later.
Now try and stay with me, if you were to put that same $3300 in a savings account at 6% interest compunded monthly for 31 years I would have $21,100 or $1,758 a month for that years contribution. Guess what, the amount I am scheduled to recieve at age 66 is $1,800.
Do you think 6% per year is a ridiculous amount ? I sure don’t, especially considering the t-bill rate was probably around 10% at that time. If anything, I will get way less than I could have earned on my own in my lifetime.
Another thing, people have argued it both ways, but even though employees pay half anf employers pay the other, I contend we pay the whole thing, as the employers contribution is figured in as part of our wage consideration. Also keep in mind, self-employed persons pay both halfs of the tax, they really come up short when it comes drawing their benefits.
What savings account do you have that pays 6% a year? How about all the people who didn’t work or came over here at an older age? You personally might have paid enough into it, but many people didn’t.
The interest rate is an average over the years. Right now,rates are at a low so 6% looks like a lot. In 1981 I bought T-bonds with my savings and locked in 16% for 10 years. In 1991 I recall saving money in a bank money market account and the rate was around 9%.
Right now,for a one year CD you might get 4.5%.
I have a rewards checking account at Charter Bank in New Mexico that pays me 6% a month.
I do agree with you about people who have paid in little or nothing getting a guaranteed “minimum” amount for life, that part has always sucked. I would rather state welfare funds took care of those folks.
Nope, passed of Calculus III and more importantly Accounting and Statistics (with a Professor who was honest enough to have a motto of: “there are lies, damned lies, and statistics.”) Cherry picking double digit interest rates from 1983 and using darn near double the average wage at the time and a fantasy interest rate of 6% for today when half of that is more likely does not change the facts: the average person receives everything he or she paid in their entire lifetime plus PREVAILING interest back in 18 months while future generations are left holding the bag. Social Security is fraud, fraud, FRAUD and today’s toddlers are being left with (at this point in time) a $100 Trillion liability that they will not be able to pay and they will rise up and cut off the Seniors and they will be absolutely correct to do so.
““Moderate rate of compound interest”??!!! What would that be? 10% per month? The average Social Security recipient receives EVERYTHING he or she paid into the system over their entire working lifetime PLUS INTEREST back in 18 MONTHS. All remaining payouts are stolen from future generations.”
Huh? I’m self-employed so I’m the lucky one who gets to pay the full 15.3%, only 1/2 of which is untaxed BTW. You really need to relook at the math - there is no way that 15.3% of your income for DECADES is repaid in 18 months. And if you only worked one decade (the necessary 40 quarters) you only get a tiny payout - still not repaying what you put in if you figured a conservative return on your money.
I am so tired of SS being called an entitlement program. If I had 15.3% of someone’s income I could 1.) Fund their very comfortable retirement 2.) Buy life insurance to cover their dependents in the event of their early demise 3.) Fund a good disability policy. What I could not do is cover unlimited medical expenses in retirement. Medicare and a Congress that spends the funds instead of investing them is what is killing SS. But we pay way too much for this “entitlement program” for any ignorant wealthy elitist to say we don’t deserve it. Or to use ignorant math to make a false claim.
Thank you Bill.
Bill and SD Real Estate Bear: excellent discussion. I pay 15.3%, and have for quite a while. Probably will for another 15 years (I’m 56 and enjoy what I do; also, I’ll need the time to rebuild savings from earlier reverses). No way does that mean my SS ben (if and to the extent it’s still there in 15 yrs) of $1800 will equal a quick return of my contributions. Since the older generations will have died off, maybe my excess contributions will actually be funding some %^!(*&&#%#(^ younger worker’s retirement. Fricking kids these days :- )
Thank you, SD RE Bear!!!
I also get tired of the generational in-fighting and the false claims that SS is an unearned “entitlement” — and I’m Gen-X.
FWIW, I have no problem paying a little extra in taxes so those less fortunate can have a safety net. Just MHO.
Of course it’s a handout!!!
The government is stealing from those younger (who will never recoup THEIR original money, now will they?) in order to pay for the excesses of many of today’s retirees.
Social Security was and is nothing more than a giant Ponzi scheme, intended to do nothing more than generate votes for socialists. The more people on the government dole, the more power they attain. It’s all very simple.
No. It’s an insurance plan.
It doesn’t as hell doesn’t insure me.
There’ll be nothing left when I’m 67. I’d have better odds “investing” in an annuity, as swindlous as those can be.
I am sorry to state, that I have no problem with increased taxes if my income increases. For me, the issue is increased income. Somewhat similar to my lack of interest. I am more concerned about the return of my investment.
Just one stupid fool in a sea of ignorance.
All the AARP does is tout selling insurance to a bunch of idiot boomers. They should take their tax exempt status away. Just like Jessie Jerkson’s and Sharptson’s outfits. I’m a Boomer too!
If I were in my 60s and didn’t expect to leave any assets to my heirs, then I’d certainly rack up as much CC debt as possible while I could. The problem to this moral hazard is that is has to be easier for the banks to deny credit simply based on the age. The AARP has successfully lobbied Congress to make such discrimination illegal in most cases.
Pretty hard to deny credit credit to seniors when banks will give credit cards and home loans to illegal aliens who just vanish when they can’t pay anymore. Many 300K plus homes here in California were sold to illegal alien construction workers who obtained multiple family loans. Now that construction is dead, they have vanished and left thousands of empty houses, mostly totally gutted of plumbing,wiring and kitchen cabinets and fixtures, including water heaters !
It continues to astound me that illegals were able to secure any type of financing from well-established US financial institutions. Nonetheless, that the banks chose to lend irresponsibly to them (and others across all demographics) does not mean that they should be legally required to offer unsecured debt to the elderly on comparable terms to other borrowers of younger ages.
What about if they are elderly illegal aliens?
Are you in the central valley Bill ??
No, I live in Santa Maria,Ca. We are on the Central Coast, about 65 miles north of Santa Barbara.
My sister lives in Bakersfield and she sees the same thing there only worse.
Good Lord, I have to grind up ( shred ) 3-4 credit card offers A DAY sometimes - at least 2 per day. We already have quite a few credit cards we rarely use. What’s 5-10 more per week ? If I knew that I wouldn’t need a good FICO score to get anything more, EVER, then it would make economic sense for me to just live off of the credit cards and leave the cash to my daughter ! I’ve got credit lines higher than what I gross in a year on some cards. They just keep increasing them. I don’t ever ask for an increase. I just let them keep doing it in case we ever hit an era of super-inflation, in which case, I might just want all that credit. Or maybe I would have to buy a boat-load of gold and some assault rifles. Ya never know.
See this website to opt out of prescreened credit card offers
“The problem to this moral hazard is that is has to be easier for the banks to deny credit simply based on the age”. The AARP has successfully lobbied Congress to make such discrimination illegal in most cases.
IN ALL cases, this is why we have ECOA, a civil rights act that prohibits all creditors from discriminating against consumer and business applicants on the basis of race, sex, marital status, AGE, color, religion, national origin, receipt of public assistance.
“I read in 2006 the average credit card balance of seniors was something like $30k!”
I always wondered: Upon death of the irresponsible elderly, would that credit card debt be payable out of the person’s estate or does it get written off?
Creditors are generally first in line
This should be a surprise to no one, considering today’s eldest Boomers are not 70 years ago.
Baby Boomers: Born 1938 to 1954. Not 1946 to 1964. Those born in 1946 and 1964 have a very different attitude towards life and have vastly different life experiences.
Sorry to burst the bubble of any 70-year-old deniers out there!! You ARE a boomer in every way. Look at your surroundings, your $700K house for 2 people, your frequent golf outings at the club, your hip replacements, your plastic surgeries, your properties on two or more coasts, your big-screen televisions. It must be rough living such a non-Boomer existence.
You yuppies, you. Always in denial of your excessive lifestyles.
Make that “Boomers are now 70 years old.”
Umm, your source? The baby boom was after WWII and everything I have ever seen dates it from 1946 to the early sixties. If you have another data source please provide it. If not, the first boomer turned 60 in 2006.
Well, my father, is a WW2 vet, European theater, still living, healthy and I was born in 1966. So I guess I’m not a boomer either huh? I’m not sure where you get the idea that boomers are a pre-WW2 phenomenon ending in 1954. Are you for real?
Huh?
Who says I need a source?
You two act as if the *Boomer* description as being from 1946 to 1964 was something more than a completely arbitrary idea.
How has it EVER been a fact? Has it been proven mathematically?
I maintain it’s from 1938 to 1954 because of the similarities of attitudes, behaviors and shared history of those born during those years.
If that rattles your cages, fine by me. Just because someone was born before WWII started doesn’t preclude him or her from being a ME-generation yuppie type. My uncle, born in 1937, certainly fulfills the stereotype. So do two aunts, two former bosses. All have massive houses, take annual vacations to exotic, expensive locales, belong to all sorts of dues-paying clubs, etc.
Further, those born in 1938 and after have fleeting, if ANY personal, direct recollection of the Depression or World War II. What they remember is the END of World War II (when our government last allowed our military to actually WIN a war), lots of newborn babies everywhere, lots of new cars and a quickly rising standard of living.
Eudemon,
I think your mistaking the “Baby Boomer” name for something to do with a particular culture.
There are some social scientiss who try to divide the first and last halves (relatively speaking) due to cultural differences, but the term Baby Boomer usually means those who were born between 1946 and 1964.
http://en.wikipedia.org/wiki/Baby_boomer
I may be *Mistaking* it, but I sure as hell have a better grasp of what is actually going on than those who support an arbitrary population-based statistic in absence of all else as meaningful.
To think there’s no cultural/economic opportunities and differences among those born at the front end of an 18-year window of 75 million people and those born at the end is crockery.
Jealousy becomes you, Eudemon.
And sanctimonious descibes you.
Incidentally, do you live in Boulder? If not, you should. There, they have covenants to keep people like me out. I bet you’d love it there. You could among a sea of Joan of Arcs (even if she never did say let them eat cake)!
Yeah, sure. That’s where I’ll buy my 3rd summer home. It’s where I’ll put my eco-friendly ski slope.
Some recently retired friends have returned to work, as their house equity has vanished (they were planning to sell and make a 500K profit), and the stock market has taken them back to 2003 levels also. A number of them are selling their timeshares. . .now THAT will be an interesting statistic to track - timeshare sales - the glut there will drive down prices. . .already Wyndam and Starwood reported lower earnings because of declining timeshare sales.
It is amazing but most people I know were planning to retire “on their house.” 10% appreciation a year was “in the cards” so they bought a 500K place in 2003, planned to sell ing 2013 for one million or more, and live on the 500K profit.
SOLD their ‘investment’ properties so they could have less work (rentals are a LOT of work) ???
They are zero work if you get into NNN commercial property Either individually or in a TIC…IMO, Boomer investment in these type of properties is what has help fuel the rampant investment into 1st, 2nd & 3rd tier markets for these type of properties…6% CAP rates for a Taco Bell in Fernley Nevada is just ridicules…Furthermore, even in major Metro’s like Phoenix Ar., how much commercial space can be supported ?? Particularly in a economic slow down ?? Add to that, the substance of this article that the boomers won’t have as much disposable income that many have anticipated what is the future for a lot of these neighborhood commercial centers ??
(they were planning to sell and make a 500K profit),
What makes no sense: during the bubble, all house prices were rising. There was no way to sell and make a 500K profit if you planned to buy again! There was nothing reasonably-priced to buy. Everything, even crappy rental-to-condo conversions, were priced at least at $417K (the conforming maximum)…..
Good to see you, reuven.
There were many opportunities to make big profits. There still are.
Remember, there are many Californians who sold at or near the high of the market, left the state and bought much less expensive, high-end houses elsewhere. $300K can buy LOTS of house in a market where average household wages are $35K.
Lots of people in New York, Jersey and New England did the same thing as those in California.
Should you sometime take a spin around the USA, ask the locals you meet of the effect those arriving from the coasts have made on the local economies. They’ll tell you that after their arrival from the coasts, a great deal of local real estate became out of reach to locals.
A fair amount of the bubbly-ness in states like Nevada, Arizona, Texas (Austin, in particular), Florida and elsewhere is due in part to big money coming in from California and New York. Big money that artifically boosted prices elsewhere.
Californians and New Yorkers made out like bandits. They still can if they can manage to somehow sell their $600K properties.
Funny you should mention timeshares, Mark.
Just in the past couple of months, we’ve had two people try to sell us thier timeshares. This will be a very weak market in the near future.
A lot of us boomers get a bad rap. I am 59,plan to work until I am 65.
I have an IRA and 401K as well as a Teamster pension equal to my estimated SS monthly check. I worked hard long hours all my life, saved, put three kids thru college. We were not well to do, but nobody in our family went without food or medical/dental care.
One thing younger people need to keep in mind is, IRA and 401K plans weren’t even in exsistence the first half of our working careers. There was no Pension Guarantee Corp. either, so a lot of folks saw there pension vanish when a company went bankrupt.
Yes, a lot of boomers are financially ignorant or irresponsible, but a lot of us have done a decent job also. I venture to say more people in their 20’s and 30’s are living with their parents than parents being taken care of by them. I see foreclosures all over the place here in California, many more to come. Guess what, most of the people being evicted are not boomers, they are young families who did not plan past the next pay check.
Yes, it is sad to boomers go bankrupt at 60 ,70 or 80 years old, but even worse to 30 years olds fail even sooner.
Sorry, last line should have read:
Yes, it is sad to see boomers go bankrupt at 60 ,70 or 80 years old, but it is even worse to see 30 years olds fail.
I’d rather go broke at 30 than at 60
“Yes, it is sad to boomers go bankrupt at 60, 70 or 80 years old, but even worse to 30 year olds fail even sooner.”
But 30 year olds have the time to correct financial shortfalls that 60, 70, 80 year olds don’t.
True,they do have time to recover and fix their credit ratings.
If they are lucky, some will be able to live rent free with their irresponsible boomer parents while they try and get their act together.
I guess my point was, stupid financial moves are not always age related.
True, but not all mistakes are equal. Some have a hefty cost attached to them while others are relatively sanguine.
And it is far better to have learnt a lesson or two at 30 than to be doing it at 50.
Do they? Seriously. Do they?
How long do 30-year-olds have until MediCare comes calling? Or Social Security. Or the need to completely re-build our energy industry?
I realize the comparisons aren’t exactly parallel between what you and I are writing about here, but I think one would want to take into account the new, massive costs that will arrive on the doorsteps of today’s 30-year-olds in 10 years.
My Father who died at 62 and a mother who retired at age 70 worked hard in Manhattan most of their lives. They saved their pennies to put 3 of us kids thru private schools and private colleges including paying for masters degrees from Ivy League. I know a lot of her family and friends who have done the same thing. My parents did not buy new cars; go on expensive vacations or buy second homes. This was a selfless sacrifice on their part. Their aim was to make sure their kids lived a better life than theirs. I always remind my mother how proud and thankful I am of her sacrifice.
IMHO let’s give credit and thanks to a lot of boomers who have raised decent families. Maybe in their time of need the children will step up and help.
Well said, SUGuy.
“as well as a Teamster pension equal to my estimated SS monthly check.”
So, for upcoming “young” Americans…”union pension type jobs” are a viable hope of retirement income inclusion over the next 30-40 years…
Bugs: “eh, I don’t think so Doc…Daffy, have you got your new Warner Bros. union card…read the fine print on the back…MADE IN CHINA!
Daffy: “Page 63,…Daffy gets blasted again!
Unless trucks start driving themselves,I would say many union jobs will still exist after China dominates the world.
However, I work in the defense industry,nothing to do with trucks
I think union type jobs are only about 10% of the workforce now, but there are so many companies offering 401k’s now that can move with you from job to job that a young person should be able to do as well or better than I did with my pension.
If I’m not mistaken, trucking jobs are experiencing a decline in wages due to that pesky thing called cheap labor. Paying only slightly better than the local McDonalds, it’d be hard to call it a career.
We are talking about UNION truck drivers, who do quite well, the drivers that work on the base make about $32.50 hour. Non union drivers are lucky to make $30K per year these days.
Ummm….in case you guys didn’t know, with NAFTA Mexican truck drivers are allowed to work in the US/Canada.
Currently, the Liberals are attempting to keep this from happening as it should have 8 years ago, but it will be a matter of time before Union truck drivers go the way of Union autoworkers.
There will be a few, but they will be paid 1/3 of what the oldsters are making.
Wasn’t it the Democrat-controlled Congress and Bill Clinton who signed NAFTA into law in 1993? Now they are trying to reverse the effects of their actions?
NAFTA had been in the works for quite a while.
I distinctly remember every living president appearing with Clinton in support of NAFTA. When I saw Bush/Reagan/Ford/Carter/Clinton all together, I thought to myself, wow - something extra special corrupt must be happening to get all of these presidents together at one time in support of this.
Only Ross Perot dared say something about how NAFTA would destroy the middle class. Both parties made him out to be a fool. I’ll never forgive Al Gore for hoodwinking America on Larry King in that debate with Ross over NAFTA.
Isn’t it ironic, that one of the richest men in the country cared more about middle class America then the politicians that are paid to act on their best interests?
“IRA and 401K plans weren’t even in exsistence the first half of our working careers.”
That’s a bit of an exaggeration. IRA’s have been around since 1974. If you’re 59 and have worked full-time since you were 18 (1967), then the IRA was only not available for the first 7 years of your working career (or 15%). Likewise, 401k’s have been around since 1980, but didn’t really catch on until 1983-84. So the first 18 years of your working career (38%).
For younger Boomers, these options were available for almost their entire working careers. As were non-retirement opportunities to save and invest. Many simply failed to take advantage of it.
Obviously not every Boomer is underprepared, just like every 25 year-old isn’t a blithering idiot. But the overwhelming trend in the US is that a majority of every demographic is not adequately preparing for their financial futures. The Boomers get targeted because the ramifications of their fiscal irresponsibility is so close at hand and because the job and financial markets were so strong for most of their working lives. In addition, they supported political leaders who indebted this country so that they could secure tax breaks.
IRA accounts were not really mainstream until the 80’s. If you will recall, there was a $2000 a year contribution limit until the mid 90’s or so. Very few companies offered 401K’s in the 80’s, not widely available until the early 90’s and they too had lower limits.
Thru most of my working career income tax rates were much higher than they are now. Before the law changed in the late 90’s, if we sold a house we had to buy another within two years of equal or greater price or pay federal and state income tax on the gain. Now you can exclude the first 500K of gain from taxes.
People had to pay around 16% for a mortgage in 1981,no matter how good your credit was.
I do agree though about the AARP, I am not a member, nor ever will be. I like to think for myself.
“…the overwhelming trend in the US is that a majority of every demographic is not adequately preparing for their financial futures.”
Here’s the “trend” I see…
Which of the following has your financial interest as their # 1 concern:
Medical “Industry”
Banking “Industry”
Gov’t “Industry”
Insurance “Industry”
real estate “Industry”
Chemical / Food “Industry”
Seems to me…folks ought to start wearing overalls again…they seem to have more & larger pockets than most of today’s fashions,
.
Gov’t is a easy #1….Its the biggest entitlement program we have by far….Example;…Senator spends one term in office and qualifies for a pension…Nuff said…
Only the Govt Industry can throw you in a cage if you don’t hand over a significant portion of your income.
First, 70% of those on Social Security presently have no other income but Social Security. This is particularly true for never-married women, who were less likely to have pensions at all, or for widows whose husbands’ pensions died with them. It is possible that most people here have parents who were prudent and/or rich, but this is not true of the vast majority. What this means is that a large number of Boomers are caring financially for their elderly parents–and this at the same time they are putting their children through college.
That’s because Boomers, particularly those born 1954 and later, delayed having children until they were in their 30s. The job market for younger Boomers was much more competitive and housing had become much more expensive by the time they were old enough to consider buying.
So older Boomers may be relatively well-fixed. Their children were grown by the time they had to begin caring for their parents. They bought their houses when houses were still relatively cheap and they were the last generation where a substantial minority had pensions. But this is not true of younger Boomers–and it has nothing to do with character, but of timing.
Post got eaten, sorry if double post..
Yup, and these are the people who are coming to “snap up” all the homes in FL, AZ, LV, etc. The simple fact of the matter is that most of these people won’t even have the financial ability to stay in the homes they currently own, let alone buying a 500 sq/ft condo on the beach in FL.
The other thing that nobody seems to want to talk about is that if the boomers do come (about as likely as the 3rd coming of the messiah, imho) to places like FL/AZ in force, the home prices in the area they are leaving will tank. A boomer who has the money to buy a 2nd home almost certainly has done it already. The people who are “coming” will need to sell their homes up north, putting dramatic pressure on prices there (and thereby reducing the amount they can spend in another area).
The only thing that would help the market is if all the boomers would keep their primary residences and buy a 2nd home in the sunbelt. That’s not going to happen in any significant number what-so-ever; there’s just not enough money in that demographic to support it. The boomers have an avg retirement savings of about 100K:
http://chaz11.blogspot.com/2008/05/baby-boomer-retirement-dilemma-how-much.html
That’s not even close to supporting a lifestyle in one of these high cost areas that has bet their entire future on the arrival of “rich baby boomers”.
No matter how bad it seems for retirees right now, it will be much worse for the next generation. Current retirees can sell right now and still benefit handsomely from the bubble - not as much as they may have been expecting, but if your goal was to screw your kids and their friends to retire by piling a mountain of debt onto them rather than saving and living within their means, too bad. Not many ppl buying today can dream of paying down their credit cards, much less putting money into their 401k. The only right the retirees had to take their house into account in their retirement plan was that if they paid off the mortgage by such time, they wont have mortgage payments when they retire. Any expectation higher than that was unreasonable.
Please no remarks about health care and/or unexpected job loss. Sure those are major issues, but not one that should relate to housing other than the fact that is precisely why no one should ever offer more than they can easily afford and within historical ratios so the property will always be liquid. Always remember those that took out equity loans to pay such costs had a benefit others in their situation at other times did not. They were the lucky ones, even if they cant afford to pay the money back.
No matter how bad it seems for retirees right now, it will be much worse for the next generation. Current retirees can sell right now and still benefit handsomely from the bubble -
——————————————————————–
Isn’t that true of anyone? Casey Serin, etc.? This argument makes it sound like only one generation (retirees) “can sell right now and still benefit handsomely from the bubble.” There are 19 yr. olds who are homeowners right now. When you say the “next generation” do you mean the kids of these 19 year olds?
It was a generational comparison because it was a generational thread. Clearly those that owned well before the bubble are the best off, and those that got burdened with debt very early, especially in connection with their first home, are the worst off.
and those that got burdened with debt very early, especially in connection with their first home, are the worst off.
—————————————————————–
Ok, but like everyone always says here, they’re not victims. they could have rented.
they didn’t “get burdened with debt very early”, they got themselves into debt very early. Debt didn’t jump onto them, they jumped onto it. Aren’t these people who got themselves burdened with debt the very ones that everyone on here usually refers to as “sheeple”, “idiots”, and “FBs” who deserve everything they get and more? Aren’t “they” the ones that are supposed to be working at WalMart as greeters? Except when its boomer hating time, I guess . . . : )
: ) : )
Im not a hater of any generation. I do get furious though about ppl expecting home appreciation to fund retirement, and that holds true regardless of current age.
‘Whatever the reason, 2008 is the year metro-east groups and individuals are pushing back against what they consider a common scourge: a property assessment-and-taxation system they contend is broken and that gobbles up a progressively bigger chunk of their paychecks.’
‘People that are elderly are on fixed incomes … are not going to be able to manage these double-digit increases,’ said Hal Patton, a dentist who is running as an independent for the chairmanship of the Madison County Board.’
‘McCarter, of Our Tax Money, …denied some critics’ claims that his group is opposed to the funding of public education. In fact, his group’s members are happy with the quality of O’Fallon schools. ‘We’re just telling them we can’t pay anymore,’ he said.’
‘Such a system seemed to work all right because home values could be counted to rise steadily, said Heiligstein, D-Freeburg. “The system that was in place worked for years until this housing downturn, where the values, instead of increasing, are decreasing, and the multiplier won’t catch up with it for three years,” he said. “That’s where the hurt is.”
Ugh, another property tax nightmare. This whole system is SO easy to fix, just cap the total revenues and float the mill rates; there’s NO reason that home prices going up 2-3X should have ANY effect on taxes what-so-ever. It doesn’t cost more to provide city services to grossly overvalued homes then it does to undervalued (or fair valued) homes.
It’s totally insane that in many areas (FL being my home state, and favorite example) the property values went up 3-4X over 5 years, and the tax rates remained totally unchanged. It’s criminal; it really is, and it needs to stop. The way to stop it forever is to cap the revenues of all the taxing bodies. Then, the only way to get a big “unexpected” tax bill is if your home dramatically increases in value compared to those around you. And, if that’s the case, go ahead and sell it and move somewhere else; you’ll have a massive windfall, and be able to buy your home for much less in a different part of town.
How are the government drones going to get pay raises and early retirement if they don’t keep increasing taxes?
my parents are revolutionaries.
they just do without. i know it’s crazy…i mean what retiree should have to go without there audi ag.
“…i mean what retiree should have to go without there audi ag”
Hey, I come to the conclusion that hot rods & sport cars should only be sold & driven by people with “grey hair…or… no hair at all!”
New Black: Nitro Honda Civic with painted flames & blue tooth.
Love this! Thanks, michael.
One thing to remember about NY is that the state doesn’t tax income from NY municipal employee pension payouts (at least from teachers). At this point, my folks (having sold the house in 2003 or so, leaving about $120k on the table, minus property tax differences of about $28k) are paying less in overall tax living in upstate NY than they would if they moved to a state that taxes any income but has low property tax.
As it is, the combined property tax on the house I was raised in is north of $22k now, on their current home it’s about $6k (with well water and septic tank, gotta love NY). Then again, the NYTimes has been pimping the Berkshires pretty relentlessly, and I hate to think in 10 years the property taxes will go up as migrant yuppie locusts invade…
“As it is, the combined property tax on the house I was raised in is north of $22k now…”
So how much could that house have fetched at the bubble’s peak? If the taxes are $22K but the house is worth $2.2 Million, that seems reasonable.
LOL!
Try Westchester Co, NY. They sold at $650k, IIRC it topped out at $725-750 on Zillow.
Lots of spoiled brats and very strong teachers’ and administrators’ unions in Westchester. Best part is, suckers pay those taxes and _still_ send their kids to private schools..
Gotta love NY…
Otis, my wife is a state employee and you’re correct. NY doesn’t tax public employee pensions. However, that is one lame excuse to stay in NYS in retirement. Your calculation is off. Way off. They would have been far far ahead by retiring to Delaware where the property taxes are nearly non-existent.
Berkshires?!!! LMAO. Good luck.
When I get home from work and fling myself down for a nice evening of watching campy giant mutant bug movies on the SciFi channel, there is one thing that makes me really mad– besides that Bigfoot left a stinky on the front porch again, I mean–and that is when a commercial comes on with a bunch of boomers standing there with smug cheery expressions while an obsequious young fellow holds their blueprint plans for their vinyard or their ‘eco-friendly chateaux’ in the Sonoran desert, or else there’s a boomer lady flying around all chipper like in a little glider, while over it is a voice talking about ‘enjoying your retirement’… you all know the commericals I mean?
I am 35 years old, and there is no fookin’ way I’m going to keep on working years and years while forking over more and more tax money whilst simultaneously watching my standard of living and quality of life erode, while bridges get all rusty, and roads get crappier, etc etc, just so I can help support some entitlement-minded retirees and make sure they can keep enjoying their Viagra, Rogaine, vinyards, and spa massages. Fook that. I won’t. That’s all there is to it. Retirees can go be greeters at Walmart, if they didn’t plan ahead. And furthermore, I am pretty sure I am not the only 35 year old out here thinking this.
You’re not the only 35 year old thinking this.
Perhaps it’s the circles I hang out with but every 35 year old or younger that I know thinks like you.
Some are quite well off too, and they periodically talk about leaving the US. As for the practicality of that, well, I dunno…
Leaving the USA won’t help. Same shit, different hemisphere.
Really?!?
Have you studied the demographic profiles, say, in China or India or Singapore?
If you’re speaking about Europe or Japan, sure, but I wasn’t talking about them.
I’m 37, in the fairly well off camp for my age and looking at evaluating the landscape at 40 and determining whether I want to keep supporting this country with huge taxes. Every time I travel I pick a new place to evaluate as a candidate - Australia, New Zealand, Fiji, Costa Rica, Canada, etc. I have Bali, Brazil, and various islands in the Carribean up next. I actually enjoy working but I see the odds stacked against the honest hardworking folk who pay the taxes and don’t scam the govt or credit companies and I don’t want any part of it.
This beast needs to be destroyed.
We’ve looked at New Zealand, but housing is tight (out of sight for most emigre’s ), and Canada has outrageous taxes. I’d personally look towards Panama myself. It’s pretty nice-looking, their currency is the dollar ( not pegged to the dollar, IS the dollar ), the weather is extremely nice, the government has been stable since they kickedo out Norriega in 1989, if you’re a registered pensionaro ( a foreigner who retires to Panama and supports himself ), the income taxes are extremely low, and if you buy new construction there are no property taxes on it for TWENTY YEARS. Pretty good deal. On the other hand, you have to get on a plane and fly to Miami for major surgeries, etc.
http://www.habitatsrealty.com/HTML/whypanama.htm
amoney,
would be curious to know what your current favorite is and why…
Sorry if you don’t catch this - I live on Kauai (if you have to be in the US, this isn’t a bad place as long as you have a good gig, and fortunately I do). Big Island isn’t bad either.
I should preface this by saying that I surf, and I need waves like normal people need oxygen. Its not everything in my life, but its something I have to do to decompress.
I like Costa Rica a lot, but its been over 2 years since I’ve been there and there’s been nothing but building since. I favor the playa hermosa area (central coast, not the one in the Guanacaste region) and I’ve been meaning to get back to check out the Lake Arenal area near the volcano as I have heard its really nice there - the temperature is cooler. Still, along the coast there are places to get away, cheap food and the pace of life is by necessity slower due to the proximity to the equator. CR is raw, nature is in your face and if you like your experience more tame than Australia’s sunshine coast (Noosa area) is nice. If you can handle colder climes north island NZ might work and I also like Vancouver Island in Canada but for me its summer only and even then the water is freezing. More raw = less money needed to live there.
I’ve been meaning to get to Panama eventually too - everytime I see pictures (such as the improvements to the canal) my jaw drops. Supposed to be brutally hot and humid. Good surf in the Bocas del Toro region.
Some are quite well off too, and they periodically talk about leaving the US. As for the practicality of that, well, I dunno…
Unless they’re going back to the old country, that might not be a realistic course of action. Most countries don’t take immigrants - only people whose ancestors came from that country. But the link has to be fairly recent - many countries only take the children or grandchildren of former nationals. The countries that do take immigrants usually require a postgraduate degree or heaps of dough - a million bucks is the number I usually hear.
But, didn’t all the money they paid into SS go to support the generation before them ? And how exactly do you propose to “opt out” of the SS system ?
Lots of people will stop working, or possibly working hard.
To those that are not particularly enamored by the consumerist lifestyle, this will pose no great hardship.
Leaving the country (as I pointed above) is also an option. Impractical? Almost certainly. On the cards? Almost certainly too.
Well, everyone has the option of working or not I guess. Hard to imagine providing food and shelter for yourself and family with no income let alone that trip to Cancun every summer.
Trips to Cancun would be part of the consumerist lifestyle, and not everyone has kids either.
Generally, from my experience, the smartest people bail from the sinking ship the first.
Mark my words! I will stop working if BHO uncaps the SS tax. It won’t be worth it for me to bust my butt to keep 34 cents of every additional dollar I earn.
Uncapping is the only way SS can be structured for what is really is…. an insurance plan. Pooled risk…. Get it?
I can see it coming reuven, just like the medicare portion.
exeter, the benefit is not uniformly proportional to the amount paid in. In other words, X makes the ss wage base and pays in $k, Y makes 1/2 as much and pays in $k/2. X’s benefit is much less than twice Y’s.
You couldn’t have picked a better state for wasted tax money, a crumbling infrastructure, and overall government incompetence. The Alaskan Way viaduct, badly damaged by the earthquake, might actually collapse before the buffoons in charge make any sort of proactive decision. Roads? HAH! Washington is waaaaaay behind the curve on repairs, expansions, etc., and western WA has some of THE nastiest traffic in the entire country.
Furthermore, even when something is actually budgeted for and completed, ie. the Tacoma Narrows expansion, the PTB will find a way to further INCREASE the financial burden after the fact (higher tolls infinitum?) I won’t even get into the state sponsored meth addictions via welfare and “disability due to mental illness”. If the natural surroundings weren’t as they are, and I wasn’t a gardener, I’d blow this popsicle stand tomorrow.
Retire a little bit everyday…
Fook that. I won’t.
Am right there with you on those sentiments, Olympiagal, but not sure you or me have any say in the matter, given the AARP’s political clout. “The sins of the fathers” are definitely being visited upon the sons (and daughters), but there’s not a lot we can do about it, unless an until we start limiting voting priviledges only to those who pay more into the system in taxes than they take out in benefits.
Well, that leaves some people with kids out of the voting loop. If the national average to educate a child is $10k a year and you have 3 kids, you better be paying 30k “into the system” as you are taking that much out in benefits unless all your kids are in private schools.
Ok, sure, but they’re “commercials” . . . not reality . . . they’re marketing departments run by 35 yr. olds, trying to SELL these entitlement ideas to retirees . . . i always luv your comments, but I don’t get mad at people in commercials because I know they’re just made up people trying to get their acting career going . . .
Okay, don’t work hard to support we evil, rotten, not giving it to you on a silver spoon baby boomers. I guess that’s why I still get my rotten, spendthrift, luxuriating, lazy-ass butt up every morning and go and collect and code medical charts for a big university hospital for the munificent sum of $ 35,600 per year. Yep, I’m a just a high living bitch I guess. But don’t worry, I’ve got my plans for eco-friendly Arizona grapevines clutched in my hands. ( And the reason why I CHOOSE to work my lazy boomer ass off there is that I WILL HAVE lifetime health insurance and I get a 10 percent match on my 403b money ). Life is a series of tradeoffs, so kwitherbitchin and either work. Or dont. Who cares.
At least try not to be so frickin’ jealous in print. It’s funny.
Note - I should have written “collect on insurance claims and code “. Also, between the university and myself, $1100 per month is put into (at present) money markets with the TIAA-Cref and Fidelity thru the university retirement. As far as I’m concerned, besides the Bible and almost anything written by John Maddox Roberts, the greatest book ever written is “The Millionaire Next Door.” It’s possible to be a millionaire if you follow some of the ideas that are expounded in that volume, and it’s sister volume, “The Millionaire Mind”. We don’t need $20,000,000 to retire. We keep our standard of living low, but comfortable. My hobbies are Pogo, walking, reading, a trip each year to Disney World to our time share (paid for), eating out a couple of times a week with my husband at less-expensive-type dining establishments, talking with my husband & friends and my 83-year old father, and visiting our daughter. All relatively low-cost hobbies. Our cars are paid for and the newest ones are 6 years old and get good gas milage.
Calm down. You won’t have to support ALL of us. I hope.
Hooray for ‘Mystery Science Theater 3000′ and the little men.
Yes. I always liked that show.
Oly,
Well, I’ve nearly 10 years on you, and I’m of very similar mindset. The very idea that I’m supposed to work my @ss off for them for decades only to end up broke because I’ve been paying for my elders fancy retirements is beyond the pale.
(And someone on this very thread tags me as being “jealous” instead of “furious” just furthers my notion of who people like this really are. What assholes.)
I hope there are millions like you, Oly. Those of you in your 20s and 30s need to revolt for all it’s worth. If someone like me (age 44) gets screwed in the process, so be it. I’m already getting screwed (and it’ll be too late for me to make up the difference by the time I’m 70. That’s how it goes).
But, it’s not too late for you. Go for it. Be prepared to see and accept people my age and older to rot in the streets, which is exactly where we belong. We shouldn’t get any of your money.
That’s not why you and your younger brethren exist.
I apologize to you for the bullshit we’re throwing in your laps. I really don’t know what else to say except that I fully recognize it, am cognizant of a good many of the ramifications, and how rapidly our standard of living is already declining. You shouldn’t have to suffer as a result of our greed - and I hope you don’t.
THAT said….a few weeks ago, I suggested a weekend topic about buying property overseas. Who has done so, where, and what are the minefields to contend with. The topic hasn’t shown yet, perhaps it will soon.
Like you, I want OUT. I’m through with all the empty hands that are shoved in my face and the 100 million people (old and young alike) who are more than happy to allow it to continue. Traitors, these people.
On top of all this, we are also of a generation that was encouraged to take on massive school loan debt to go to college, because we were promised better wages if we did. Where are those better wages? Wages are stagnant, but we have to pay that back. I live very very frugally, but I swear, I just don’t see myself being able to ever retire … mid 30’s here …
Why isn’t anybody mentioning bankruptsy due to medical issues. Harvard did a study awhile back and a huge proportion of bankruptsies were due to medical problems. I had a friend who had excellent credit for 20 years - ran into health problems which of course means unemployment and he filed bankruptsy. 20 years of good credit wiped out due to illness and the corrupt insurance / healthcare frauds in this country.
You are correct, health has a lot more to do with it than lifestyle.
There is a “no mans land” area between the ages of 62 and 65. While you could retire and draw early SS benefits at 62, your spouse as well,you are not eligible for medicare until you are 65,so a lot of people work the extra 3 years just for that reason,even though they may not need that much income.
It is just easier to blame the generation before you. I know I did when I was young, I kind of remember the mantra in the late 60’s, “don’t trust anyone over 30″
That study isn’t very reliable. It is a self-reported survey; some undergraduate at a phone bank called a bunch of bankrupts and asked them why they’d filed. Predictably, the bankrupts blamed it all on “medical problems” instead of “my own stupidity” or “gross irresponsibility.” For some reason, the architect of the survey never anticipated that this would happen.
There is a study out there based on hard numbers from United States Bankruptcy Trustees which is much better. It uses the information from the bankrupts’ schedules of assets and liabilities. IRRC it concluded that medical problems had little to do with bankruptcy.
Well, my friend wasn’t irresponsible. You obviously have never had to deal with chronic hard to treat health issues. One good thing about dealing with that stuff, it makes you a more compassionate and humble person. Again, obviously you’ve never had to deal with it.
Agreed, DC Renter. I’ve always been lucky enough to enjoy excellent health, but have had friends financially devastated by health problems (one was injured while riding his bike by a hit-and-run driver). There are few things more terrifying to most people, especially younger breadwinners, of debilitating health issues.
What are you talking about? I never said that medical problems could not lead to bankruptcy, and certainly never mentioned your friend.
What I said was that most bankruptcies aren’t caused by medical problems.
Maybe you should read what I said before you accuse me lacking compassion.
Predictably, the bankrupts blamed it all on “medical problems” instead of “my own stupidity” or “gross irresponsibility.”
You wouldn’t be so cavalier if you understood what it was like to not be able to work because you were too sick. In this country, only the healthy get decent health benefits — cause they don’t need them. Disability is incredibly hard to prove, and stressful — which a chronically ill person shouldn’t have to deal with. And yeah, you did insult my friend.
“You wouldn’t be so cavalier if you understood what it was like to not be able to work because you were too sick.”
This is unbelievable.
I have some news for you: oftentimes, people who do something wrong make up a socially acceptable excuse to explain away their behavior because they are too embarrassed to admit the truth. For example, it is hard to find an innocent criminal in jail — they are all “wrongly convicted” and “victims of the system.” Similarly, lots of fat people have “metabolic conditions,” and lots of people who were too lazy to finish college say that they “couldn’t afford college.”
Of course, SOME people in jail WERE wrongfully convicted and ARE victims of the system. Similarly, some fat people really do have metabolic conditions.
So it is with bankruptcy. SOME people who go bankrupt, including your friend, DO have genuine medical problems. But OTHER people use “medical problems” as an EXCUSE for their own irresponsibility.
I don’t see how you could have misunderstood me. You seem to have a very thin skin.
I have been following this and other economic blogs since Apr of 2007. I have slowly realized that the predictions made are accurate in hindsight. However, since I was a common member of the working class, I never understood how the economic system operated on a micro level other than it was a gigantic “ponzi scheme”. As a college graduate with some courses in Micro-economics, that was the extent of my knowledge on this subject.
I would like to state up front, that with a college degree, my attitude is middle class, however my income over 40 years in insurance has been lower class. Heck, plumbers, electricians and construction employees consistently made more than me.
Now, to the present. My debts are low ( mortgage/HOA/Ins/Taxes are extremely low). The market/job creation is tanking. Assets (real estate and stocks) are depreciating dramatically. Can not trust the banks (insolvent) or FDIC. The govt. can not pay the full SS and Medcare.
So this is the situation that we all must face. So how is J6P (I include my self in that group) deals with the future at 60 years of age and slightly less than 100K in an IRA?
Personally, I have no intention of ever retiring. But what to invest my cash in? Govt lies about inflation and the CPI, so bonds and treasuries are losing value daily. Stocks and Realestate, are declining, most likely dramatically in the near future. Gold and Silver (PM) could be confiscated
by the Govt.
So what do I do? I have some cash and gold and silver small denomination coins stashed in the mattress. I have a loyal 60 lb. chow and numerous weapons. Not against the police, however, but roving gangs.
So thats where I stand, until this reaches some kind of conclusion. It appears that your activities are so intertwined with mind and the rest of the world, that no on can figure out what to do.
Anyone, any suggestions?
It’s very difficult to ‘invest’ in an environment populated with malinvestments. In the end, you have to invest in failure. That too is extremely challenging when certain interest actively and relentlessly attempt to persuade those around you there are no malinvestments.
Sometimes it’s best to observe and preserve. After all, opportunities are easier gained than losses.
Mom is heading to BK court at the end of the month. She’s finally made peace with the darn thing and is enjoying her rental for less than 1/2 the price.
Big Sis is still wrestling the beast. Gimme some credit, however. I was able to persuade her that a career as a Realtor was ill timed.
Warn the others. They never listen.
Well, good for your mom. Good that she saw the light before it was too late.
I think you’re gonna see a lot more of this.
Walk away, walk away, walk away now.
I’m a ‘boomer’. I like to think of my generation as the protest generation but lots sold out or got scared, got fat or forgot. Some didn’t. Me and wife and friends kept at evironmentalism,anti war and sustainable living so we ate brown rice and veggies and tofu for like 35 years and didn’t fall for no consumerism. Saved lots of money that way. (We will have a healthy retirement). Grew my own food, bought food in bulk, watched no TV. We saved our money and drove beater cars and didn’t use them much as in Northen California biking is a much better way to get around. pushed for mass transit systems and bullet trains of the future. Pressed our Congress for slashing the military budget so we could have health care for all instead of making better WMD’s and bio weapons and space weapons. there’s where the real hemmhoraging of money went. Not in social programs but in Military and bio weapons. I believed the duty of my generation was to create a better world that was won for us by our parents, live with less, and create a world based on peace and understanding and new technologies to prevent the planet from heating anymore or from disintegrating in a nuclear winter. We did fair. we could’ve done much better . That was thirty five years ago we started working toward new energy systems and cleaning our oceans,but things got broken somehow. The oil companies were formidable foes as was the military hardware industry. they wanted nothing to do with electric cars and redirecting industry towards sustainable growth. They bought up all the major media and brainwashed an entire generation to worship materialism and celebrity instead of keeping their focus on Change. They wanted you and me fighting each other so we didn’t see who the real enemy was. People started buying SUV’s and big unsustainable houses. It was like watching a train wreck in slo mo. the oceans are dying and yet we are somehow focussed on sports and celebrity and bigger Stuff. How in all hell could we be buying this Stuff when what we should be doing is the exact opposite! Cleaning our oceans, taking care of our elderly, upgrading our infrastructure, building electro-magnetic trains, caring for our poor. I am still in awe of our misdirection. So i understand the anger many have toward ‘baby boomers’. we let you down. Many of us lived up to our ideals as best we could, we were up against a tidal wave of I WANT MORE. and even that never really fills the Emptiness.
Melvin Frumph Hoppe,
I suspect that you were 35 years to early, however I believe that you are the wave of the future. My mother, I know, would agree with you as she is 89 years old and lived through the GD.
I suspect you would be doing a great service to put up any websites that will support people in cutting costs by getting back to basics.
Just one person’s opinion.
@lostcontrol
sure
just off the top of my head (bookmark list) here is a wonderfully engaging animation on the Story of Stuff. A good way to start rethinking our materialistic lives. where does our stuff come from and what is the impact of our consumption level on our world and ourselves. Highly recommended and eye-opening.
http://www.storyofstuff.com/
here in the east bay we’ve got the ecology center. this is ‘alternative’ living at its epicenter. you wanna go to a farmers market, these folks run organic farmer’s markets 3x weekly. this is the best food on the planet with no middle man, no pesticides.
http://www.ecologycenter.org/
also these
http://www.earthislandinstitute.net/
http://www.carfree.com/
http://consciouschoice.com/index.html
http://www.commondreams.org/
many links on the common dreams website
Finally this is a pretty cool blog, Cage Free Family (lol)
http://www.cagefreefamily.com/
Melvin Frumph Hoppe,
I copied your post and I intend to refer to it. As a 60 yr person, I live like I was a college student in the late 60s.
I do not mine. Other than my low mortgage payment/taxes/HOA?ins., my costs are cheaper than renting.
My moto is that the the less you have, the less you have to maintain and insure from loss (though I have fire/liability/earthquake on my condo and all but the earthquake on my 1992 lumina.
My attitude is forewarned is forearmed!
Thanks!! : )
I believe that Ben is correct. This is a site on housing.
Everything else is so intertwined that it reinforces use in our obligations to each other. SS, Medicare, and pensions for boomers failing. Over taxation for younger individuals, however greater tax breaks in IRAs, ROTH IRAs and opting out/controlling own retirements that did not exist previously.
This situation is ugly and getting worst. So why is their a generational war occurring? Why we fight over what generation is worst, those making money, continue to make money from you. Its like politics, the Reps in power screw up and we vote in Dems. What no one is saying is that strings are being pulled by the same elite group that controls both/all groups.
Just one fools opinion who has opted out and at 60 years of age living a college lifestyle as if he was 18 years old.
Well, the point would be that it’s not who you are but who your demographic equals are.
And we all know the answer to that.
So whether you like it or not, you are going to be judged by the standards of your peers. There is no mechanism to paper over this generational conflict.
As has been mentioned, stereotypes are stereotypes.
All generations have all kinds of people. There is no “demographic equals” or “standards of your peers”. There is a lot of variety out there. This has been brought up here again and again, but some people just cannot/will not open up their minds.
The “mechanism” to “paper over this generational conflict” is to open your mind to see the wide variety in all generations, and to be willing to work together for a solution, rather than doing what “they” want and becoming distracted by Britney Spears and inter-generational warfare.
Exactly, peaceful.
We need to stop turning on each other. We are all in this together, one way or another.
The generational war is occurring because there is not enough to go around. The US economy is not expanding like it used to expand. Doing better than one’s parents is unlikely. So, this is a fight about who has to suffer.
If my housing costs were lower (or my income higher), SS (and all other) taxes wouldn’t bother me as much.
There was never any expansion.
There was only the expansion of credit, and the rolling over of previous credit into future credit at lower rates.
Now the debt Ponzi scheme has come to a grinding halt.
Cheerio!
Yes, there was economic expansion for my parents and my grandparents after the World Wars. It was not smooth or pretty, but the everybody started living a lot better.
“‘It’s frightening. It’s a horror story in the making. It will not get better. It will continue to get worse,’ said Thomas Mackell., chairman of the board of directors of the Federal Reserve Bank of Richmond ”
I wonder if terrorists high-five each other, ’cause I can sure imagine THIS must make ‘em happy.
While they stroll around in their nightgowns in their dusty towns.
I’ve got my own boomer story, sort of.
Back in the late ’90s one of my neighbors was a classic angry feminist in her fifties. She’d been an antiwar protester in the ’60s and attached herself to every “progressive” cause since then. Despite knowing my wife was pregnant with our first child, she invited me to a “pro-choice” soirée in Denver. She said she wanted to protect her own daughter’s “right to choose.” I just looked at her and said, “Maybe one of these days, rather than supporting you in a nursing home, she’ll choose to have you put down instead. Abortion-on-demand will pave the way by making life that much cheaper.” You should’ve seen the look on her face. Truly priceless. No more invites for me.
“Pro-choice” does not mean anti-pregnancy.
“Despite knowing my wife was pregnant with our first child, she invited me to a “pro-choice” soirée in Denver” So what? Being pro-choice does not mean you want everyone who is pregnant to have an abortion.
She may have had that look on her face for reasons other than you imagine.
Exactly.
I’m a radical pro choice male and proud. Men have no right to be against abortion.
I’m a libertarian but when it comes to abortion, I will sacrifice privacy: I want EVERY anti-choice protester to register with the government. That way when they stuff their idiotic religious laws upon women and force them to be breeders, we will charge each of them $250,000 (indexed to inflation) to raise the born unwanted child to the age of 18.
Bill,
My opposition to abortion doesn’t come from “idiotic religious laws.” I am secular in outlook and would not want to see the “theo-cons” pick up where the “neo-cons” left off. Also, with very rare exceptions, no one “forces” women to be “breeders.” They assume that risk when their sexually active, especially if they or their partners aren’t careful about birth control. To me, there are few things as horrific as snuffing out the life of an unborn child, who from the point of conception is a unique individual, separate and distinct from the woman who is carrying it - his or her mother.
A few years ago, the nation was horrified when a young mother strapped her two young boys into their car seats, then pushed or drove her car into the lake to drown them. That was rightly called murder. Yet if she would have killed them in the womb, it would’ve been called “a choice.” I call it what it is: infanticide. And don’t give me the crap about men have no say in the matter since they don’t bear children. The issue isn’t gender: it’s human life, and the unborn are uniquely innocent and undeserving of being slaughtered by the abortionist - let’s call it what it is. Just because you weren’t planned or wanted doesn’t give anyone, including the woman who conceived you, the right to end your existence.
Since this is a housing bubble blog, I think it best if we do not turn this into a thread on “pro-choice” vs. “pro-life.”
Being pro-choice does not mean you want everyone who is pregnant to have an abortion.
Inviting a couple who are eagerly looking forward to the birth of their first child to a pro-choice fete is inappropriate and in poor taste, in my opinion.
Excellent. This is why I like you as a poster, Sammy. Sorry you had to deal with such a classless individual…you made the appropriate response.
Listen to that Evan Sayet piece already. Dammit!
Pro-choice means just that — children should be chosen and WANTED. I can’t believe that people don’t remember this, so here goes. There came a time in the abortion rights’ movement, along about 1971 or so, when some Native American and Puerto Rican women said to the then mostly-white abortion rights’ movement, uh, excuse us, but we were forced to have abortions and, then, sterilized without our consent–even sometimes without our knowledge. We really want to support abortion rights, but we’d also appreciate it if you recognized our experience here and demanded our rights too. So pro-choice replaced abortion rights to include women who had not been well-served by our health care system and whose most personal rights had been violated.
A reply, “What’s the average 401K balance, like 60 grand? That’ll last a year or two at best. I have a bad feeling there are a lot of boomers out there that will be hurting. A lot of people say that it just means people will keep working, but where? And no, it will not be their houses that save them.”
Many boomers worked at several different companies. I have 3 401ks and 3 IRAs. Better questionis “What’s the average tax deferred retirement account(s) balance per individual?”
I do think the average balance is low among boomers because they ignored all the free advice from unrelated areas pointing to stock mutual funds as the way to save for retirement. Instead they put on the stupid suit and “bought” several houses.
Also less than ten percent of U.S. households are middle class these days. Middle class is when there is one breadwinner in the family.
Face it: We have more taxes and regulations than former Iron curtain countries. We are more socialist than some of them. At least two of them have a 13% flat income tax. They have far fewer lawyers and thus far fewer regulations.
Most European countries have lower or no capital gains taxes than us.
We have only our Bill of Rights and Declaration of Independence to fall back on. But when we fall back on those items, watch out! We will be the freeest country in the world once again.
Bill, you really hit the nail on the head with this comment:
“I do think the average balance is low among boomers because they ignored all the free advice from unrelated areas pointing to stock mutual funds as the way to save for retirement. Instead they put on the stupid suit and “bought” several houses.”
Over the 40-60 year horizon we must think about saving before (and after) retirement, the stock market appreciates a bit faster than inflation because the economy grows over time. Nothing else comes close, and residential housing is a real dog. Prices might rise a bit above inflation, but high transaction costs, and even higher holding costs in taxes, insurance, maintenance and repairs, make the expected return negative, even before allowing for inflation.
Residential housing makes for good consumption, and, like commodities and gold, is a fun bet during the positive phases of the cycles, but it is not a serious investment for retirement.
I think if the younger generations had good paying jobs with benefits
they would not be as upset about Social Security . Who is to blame for the lack of jobs and reductions in benefits for Americans in general ? If anyone paid into Social Security for 45 years they would be upset if they didn’t get this forced retirement plan . You have all these baby boomers that trusted the government to pay .Well ,the funds are not going to be enough sometime between 2027 to 2047 from what I have read ,(I have even heard as early as 2017 the system will be paying out more than it takes in .)
The government has already raised the retirement age by a few years
for certain cut off dates ,but I imagine the government will raise the entitlement age even more as this problem compounds .In addition the government has been taxing social security more and more .
But ,I don’t know how anyone can say that anybody that is denied what they were promised by the government ,after paying in for years ,is deserved or is a good thing . I remember they had Company plans that would based your Company retirement on what it amounted to in addition to Social Security . So, I’m saying Corporate America for a number of years would figure retirement plans in conjunction with Social Security ,as grounds for paying a lower pension amount ,or they would use Social Security as a excuse to pay lower pension plans .Now in recent years the models have changed ,but millions of people planned their retirements on what the Corporation plans were .
I think people are dumb to trust government or Corporations ,but people did . But the other problem is that people are living longer so the system was not designed for these really long life spans either . So ,I don’t know what the answers are . And this problem with medical costs is another one that never seems to get addressed the way it should . When I was young medical costs took about 1% of your income but now it takes a far greater % of your income to cover medical costs or medical insurance costs . If inflation doesn’t get every last penny a person has by the time they die ,than medical costs do in a lot of cases .
exactly … I’m not opposed to soc security itself … but wages are stagnant, costs are up for everything, I can’t afford a house, I drive an 11 year old car, and I have to fund my own retirement (in a 401K/stock market) on top of paying for everyone else’s retirement who is older than me. I just want to feel like I’m not taking one step forward and two steps back every day …
At this point, I just hope I’m healthy enough to work for the rest of my life …
I hear you Jen . Watch out for yourself and save more than you even think you might need ,if at all possible . But, people have to live in the now also and enjoy a little life when they are young . Heck,only a certain percentage of ones income should go to savings ,but in a inflationary world it’s taking that percentage that should go to savings away . Investing in bubbles gets risky ,so where do people invest their retirement funds ?