4 ms·

For the half of working Americans who earn < $35k/yr, gambling and lotteries and such appear to be the only way to have a shot at a dignified retirement. Like s

For the half of working Americans who earn < $35k/yr, gambling and lotteries and such appear to be the only way to have a shot at a dignified retirement. Like so many problems, I think it can mostly be explained by stagnant wages and gargantuan, historic levels of wealth inequality.

keithalewis 4y ago
You are on to something. Dignified retirement used to mean a pension for years of hard work. We now live in a world of charlatans, and people who allow themselves to be taken advantage of. Paging P. T. Barnum. P. T. Barnum to the sucker born every minute phone.
- throwaway894345 4y ago
  We also live in a world devoid of conventional wisdom. My grandparents learned that gambling was at best entertainment, they also learned to scrimp and save. My peers don’t learn this, they depend on regulation to protect them against everything, and when there isn’t regulation, they racked up six figures of student loan debt (financing a party lifestyle) and they gamble as a financial strategy. The point isn’t to shame my peers, nor is it that my grandparents generation was without vice, but that maybe there’s something robust about developing a culture of conventional wisdom as a fallback for an increasingly unreliable government? Maybe policy isn’t the only thing that matters?
  - michaelscott 4y ago
    Well our grandparents lived in a world (if they were in a first world country) where working a normal job with a stay-at-home mom was enough for a comfortable retirement. This made gambling, at best, the entertainment it was viewed as. In a lot of ways things are much more difficult now considering decades of wage stagflation and the wealth inequality globally, and this is before we factor in the recent rise in inflation everywhere. If you're not in a first world country you can raise these problems by an order of magnitude easily. It's not difficult to see how people look to gambling as the last sliver of financial hope
    - throwaway894345 4y ago
      I think it probably has more to do with them living through the Great Depression and WWII. I don't know why living in better economic times would have made them less cautious.
      - michaelscott 4y ago
        I'm not sure how you got less cautious from my comment. In fact I was saying the opposite, that they viewed gambling as a pastime or entertainment, not as a legitimate way to make money. It's when a person considers it a means of getting out of a financial tight spot that they start to make ridiculous and dangerous bets.
bluedevil2k 4y ago
Where’d you get the number $35k as half of Americans? Median household income in the US is $70k.
- yieldcrv 4y ago
  household is defined as 4 people so divide by the number of adults and you get the same data
  - leetcrew 4y ago
    no, a household is a tax filer plus a spouse and any others claimed as dependents. if you are single with no children and file a tax return, you are an entire household yourself. the median income for adults employed fulltime is about 33% less than the median household figure, not half.
    - yieldcrv 4y ago
      okay 33% less, not half, there you have it folks
    - pyrale 4y ago
      > for adults employed fulltime That's still not what the original poster was talking about. I didn't check his numbers, but involuntary partial employment is a thing, and I don't see a reason why those people shouldn't be counted.
jimbob45 4y ago
The lottery should not be used as an investment strategy by anyone.
- hnbad 4y ago
  Okay, according to this article[1], you need a "nest egg" of $2 million to have a retirement income of $80k per year. In 2021[2] the median household income was about $70k. The average household size[3] in the US is currently around 2.5 people, so let's round this up to 3. The poverty line[4] for a 3 person household in 2022 is roughly $23k, for 2 people it's roughly $18k. Let's say we want a nest egg allowing a two-person household to have a retirement income of $60k: quite a bit below the median household income in the US but still considerably above the poverty line, a net positive considering you don't need to work for a living as long as you don't plan for either one of you to live for more than 30 years. $60k is 75% of $80k, so that nest egg shrinks down to a mere $1.5 million dollars. But you should aim to live on 80% of your pre-retirement salary, so your pre-retirement salary should therefore have been $75k. In order to get there you need to set aside 15% of that $75k household salary (including any 401(k)s) every year, or just shy of $12k, leaving you with $62k actual income after retirement savings or $5.2k per month for the household (you, your spouse, any children, rent, cost of living and savings for emergencies like health, maintenance or replacements). If that doesn't sound so bad, consider that this is for someone living just above the median and aiming to maintain a similar standard of living. The further your household income is below the median, the more painful those 15% will be and the only reward will be to get to live in the same level of distress just with a more reliable stable income (assuming it doesn't get eaten up by other expenses you couldn't save for or that arise as a consequence of your already low standard of living, e.g. health issues). So if that's the "best case" prospect, can you imagine why the chance to become a "millionaire" (and remember: a $2 million nest egg represents a $80k retirement income, a good $10k above the median household income) might be more enticing to a significant chunk of the population than the safer more reliable investments that will at best help them maintain their meager standard of living as long as they don't have any unforseen emergencies? The exact numbers here are entirely irrelevant. Jobs with higher income generally also offer better options for investment and retirement plans, jobs with low income may not even offer a 401(k). Low income also means any expense represents a larger percentage of your income because costs don't scale linearly, especially when it comes to essentials (e.g. gas prices are the same for everyone and a cheap car may actually get worse mileage and require more frequent repairs compared to a newer model that may still be in warranty). [1]: https://www.investopedia.com/retirement/how-much-you-should-have-saved-age/ https://www.investopedia.com/retirement/how-much-you-should-... [2]: https://www.census.gov/library/publications/2022/demo/p60-276.html https://www.census.gov/library/publications/2022/demo/p60-27... [3]: https://www.statista.com/statistics/183648/average-size-of-households-in-the-us/ https://www.statista.com/statistics/183648/average-size-of-h... [4]: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...
paganel 4y ago
Unfortunately sports gambling has already become a world-wide problem by this point, for reasons similar to what say apply to the US working people. I live in an Eastern-European country, and the half-time pause of yesterday's football World Cup opener was more than 75% filled with sports bet adds. This was happening on national television. I can sincerely say that that wasn't the case 10 to 15 years ago.
headsoup 4y ago
With of course the irony that it will almost guarantee they don't get that.
djbebs 4y ago
Ironic that they are giving up their actual realistic chance for a dignified retirement by blowing their money on gambling.
- andrepd 4y ago
  Is it realistic if it was never going to happen in the first place?

keithalewis 4y ago

You are on to something. Dignified retirement used to mean a pension for years of hard work. We now live in a world of charlatans, and people who allow themselves to be taken advantage of. Paging P. T. Barnum. P. T. Barnum to the sucker born every minute phone.

throwaway894345 4y ago
We also live in a world devoid of conventional wisdom. My grandparents learned that gambling was at best entertainment, they also learned to scrimp and save. My peers don’t learn this, they depend on regulation to protect them against everything, and when there isn’t regulation, they racked up six figures of student loan debt (financing a party lifestyle) and they gamble as a financial strategy. The point isn’t to shame my peers, nor is it that my grandparents generation was without vice, but that maybe there’s something robust about developing a culture of conventional wisdom as a fallback for an increasingly unreliable government? Maybe policy isn’t the only thing that matters?
- michaelscott 4y ago
  Well our grandparents lived in a world (if they were in a first world country) where working a normal job with a stay-at-home mom was enough for a comfortable retirement. This made gambling, at best, the entertainment it was viewed as. In a lot of ways things are much more difficult now considering decades of wage stagflation and the wealth inequality globally, and this is before we factor in the recent rise in inflation everywhere. If you're not in a first world country you can raise these problems by an order of magnitude easily. It's not difficult to see how people look to gambling as the last sliver of financial hope
  - throwaway894345 4y ago
    I think it probably has more to do with them living through the Great Depression and WWII. I don't know why living in better economic times would have made them less cautious.
    - michaelscott 4y ago
      I'm not sure how you got less cautious from my comment. In fact I was saying the opposite, that they viewed gambling as a pastime or entertainment, not as a legitimate way to make money. It's when a person considers it a means of getting out of a financial tight spot that they start to make ridiculous and dangerous bets.

bluedevil2k 4y ago

Where’d you get the number $35k as half of Americans? Median household income in the US is $70k.

yieldcrv 4y ago
household is defined as 4 people so divide by the number of adults and you get the same data
- leetcrew 4y ago
  no, a household is a tax filer plus a spouse and any others claimed as dependents. if you are single with no children and file a tax return, you are an entire household yourself. the median income for adults employed fulltime is about 33% less than the median household figure, not half.
  - yieldcrv 4y ago
    okay 33% less, not half, there you have it folks
  - pyrale 4y ago
    > for adults employed fulltime That's still not what the original poster was talking about. I didn't check his numbers, but involuntary partial employment is a thing, and I don't see a reason why those people shouldn't be counted.

jimbob45 4y ago

The lottery should not be used as an investment strategy by anyone.

hnbad 4y ago
Okay, according to this article[1], you need a "nest egg" of $2 million to have a retirement income of $80k per year. In 2021[2] the median household income was about $70k. The average household size[3] in the US is currently around 2.5 people, so let's round this up to 3. The poverty line[4] for a 3 person household in 2022 is roughly $23k, for 2 people it's roughly $18k. Let's say we want a nest egg allowing a two-person household to have a retirement income of $60k: quite a bit below the median household income in the US but still considerably above the poverty line, a net positive considering you don't need to work for a living as long as you don't plan for either one of you to live for more than 30 years. $60k is 75% of $80k, so that nest egg shrinks down to a mere $1.5 million dollars. But you should aim to live on 80% of your pre-retirement salary, so your pre-retirement salary should therefore have been $75k. In order to get there you need to set aside 15% of that $75k household salary (including any 401(k)s) every year, or just shy of $12k, leaving you with $62k actual income after retirement savings or $5.2k per month for the household (you, your spouse, any children, rent, cost of living and savings for emergencies like health, maintenance or replacements). If that doesn't sound so bad, consider that this is for someone living just above the median and aiming to maintain a similar standard of living. The further your household income is below the median, the more painful those 15% will be and the only reward will be to get to live in the same level of distress just with a more reliable stable income (assuming it doesn't get eaten up by other expenses you couldn't save for or that arise as a consequence of your already low standard of living, e.g. health issues). So if that's the "best case" prospect, can you imagine why the chance to become a "millionaire" (and remember: a $2 million nest egg represents a $80k retirement income, a good $10k above the median household income) might be more enticing to a significant chunk of the population than the safer more reliable investments that will at best help them maintain their meager standard of living as long as they don't have any unforseen emergencies? The exact numbers here are entirely irrelevant. Jobs with higher income generally also offer better options for investment and retirement plans, jobs with low income may not even offer a 401(k). Low income also means any expense represents a larger percentage of your income because costs don't scale linearly, especially when it comes to essentials (e.g. gas prices are the same for everyone and a cheap car may actually get worse mileage and require more frequent repairs compared to a newer model that may still be in warranty). [1]: https://www.investopedia.com/retirement/how-much-you-should-have-saved-age/ https://www.investopedia.com/retirement/how-much-you-should-... [2]: https://www.census.gov/library/publications/2022/demo/p60-276.html https://www.census.gov/library/publications/2022/demo/p60-27... [3]: https://www.statista.com/statistics/183648/average-size-of-households-in-the-us/ https://www.statista.com/statistics/183648/average-size-of-h... [4]: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...

paganel 4y ago

Unfortunately sports gambling has already become a world-wide problem by this point, for reasons similar to what say apply to the US working people. I live in an Eastern-European country, and the half-time pause of yesterday's football World Cup opener was more than 75% filled with sports bet adds. This was happening on national television. I can sincerely say that that wasn't the case 10 to 15 years ago.

headsoup 4y ago

With of course the irony that it will almost guarantee they don't get that.

djbebs 4y ago

Ironic that they are giving up their actual realistic chance for a dignified retirement by blowing their money on gambling.

andrepd 4y ago
Is it realistic if it was never going to happen in the first place?