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Boomers in the US lived through potentially the most economically prosperous environment in the history of humanity. Of course you can point out various crises

Boomers in the US lived through potentially the most economically prosperous environment in the history of humanity. Of course you can point out various crises and low points, but generally every factor has worked in their favor. They've had strong employment, cheap education, population growth, strong unions, rising wages, common pensions, strong dollar/low inflation, low real estate prices that later peak around retirement age, great stock market returns peaking around retirement age, advent of the 401k, cheap debt in peak earning years, and the list goes on. Unless they had incredibly bad luck or a major disability it'd be hard to be in a bad spot for retirement without being completely financially irresponsible. I have much less compassion and willingness to help in that situation.

rickydroll 3y ago
It doesn't take incredible bad luck or major disability. It can just be a steady drip drip drip of bits of bad luck. something like 40+ percent of the Boomer generation is going to retire to poverty. There are many reasons ranging from jobs that don't pay enough or didn't offer a retirement plan. Divorce especially grey divorces are a common reason for no retirement money as is medical bankruptcy. job loss in your 50s and age discrimination contributes to lack of recovery. All the benefits that you pointed out of growing up in the Boomer era were concentrated in a very small part of the population. Pensions were not as common as you might think and a many of them were underfunded and collapsed in the late 1980s. 401(k)s were never intended to be a retirement plan. They were created to supplement pensions and personal savings. In my darker moments I think they were also created as a rent seeking vehicle for the financial industry. Great stock market return benefits mostly the financial elite. My father bought stock for his kids and returns were pretty crappy. Every ESOP program I participated in found me buying high and selling low (bad financial advice). Debit is never been cheap. When I bought my first house in 1980, it was 14 1/2% interest on a three year arm. we refinanced down to something like 9% a few years later. Over 15 years, it only appreciated by something like 2x-ish what we paid for it. when we bought our second house, interest was in the 6% range. yes, I had a lot of opportunity but between exploitive/bad financial advice, medical bankruptcy, and divorce all those advantages came to nothing. The lesson to take from this is you are just as vulnerable to the same forces. You sound like you have better financial literacy but doesn't matter if it's one bad event or series of smaller bad events, all of your retirement planning goes in the dumpster with no hope of recovery. what am I doing about my (lack of) retirement? Saving as much I can, choosing a better partner this time around, and like half of my generation, working till I die, and hoping I die quickly when the time comes.
- lotsofpulp 3y ago
  >Debit is never been cheap. In the US, it objectively has been for the last few decades (especially 15 years), hence the enormous asset price inflation. If you were not invested, you were losing ground, and if you were not leveraged, then those ahead of you were pulling away. https://fred.stlouisfed.org/series/fedfunds https://fred.stlouisfed.org/series/fedfunds
jddj 3y ago
Yeah, I feel this way in general but then I think about the specific. Growing up, I knew a single mother who worked in a woman-dominated and rather underpaid field despite being (eventually) university educated and working her way up to management. She could afford to rent, but not to buy, mostly because the down payment was perpetually out of reach despite living relatively frugally. Then as her career started to make some traction (her late 40s), where she lived and worked the property market went stratospheric over a relatively small number of years and she was entirely priced out. She died before retirement, so I don't know what that would have looked like.
PopAlongKid 3y ago
>you can point out various crises and low points, but generally every factor has worked in their favor. Except for the crises and low points, of course. My first mortgage was 11% interest, inflation was roaring but there was still a recession (see "stagflation"[0]). Don't forget the 20% drop in stock market value in 1987. And the oil embargo[1]. And the Bush (1st) and Clinton tax increases. [0]https://en.wikipedia.org/wiki/Stagflation https://en.wikipedia.org/wiki/Stagflation [1]https://www.britannica.com/event/Arab-oil-embargo https://www.britannica.com/event/Arab-oil-embargo

rickydroll 3y ago

It doesn't take incredible bad luck or major disability. It can just be a steady drip drip drip of bits of bad luck. something like 40+ percent of the Boomer generation is going to retire to poverty. There are many reasons ranging from jobs that don't pay enough or didn't offer a retirement plan. Divorce especially grey divorces are a common reason for no retirement money as is medical bankruptcy. job loss in your 50s and age discrimination contributes to lack of recovery. All the benefits that you pointed out of growing up in the Boomer era were concentrated in a very small part of the population. Pensions were not as common as you might think and a many of them were underfunded and collapsed in the late 1980s. 401(k)s were never intended to be a retirement plan. They were created to supplement pensions and personal savings. In my darker moments I think they were also created as a rent seeking vehicle for the financial industry. Great stock market return benefits mostly the financial elite. My father bought stock for his kids and returns were pretty crappy. Every ESOP program I participated in found me buying high and selling low (bad financial advice). Debit is never been cheap. When I bought my first house in 1980, it was 14 1/2% interest on a three year arm. we refinanced down to something like 9% a few years later. Over 15 years, it only appreciated by something like 2x-ish what we paid for it. when we bought our second house, interest was in the 6% range. yes, I had a lot of opportunity but between exploitive/bad financial advice, medical bankruptcy, and divorce all those advantages came to nothing. The lesson to take from this is you are just as vulnerable to the same forces. You sound like you have better financial literacy but doesn't matter if it's one bad event or series of smaller bad events, all of your retirement planning goes in the dumpster with no hope of recovery. what am I doing about my (lack of) retirement? Saving as much I can, choosing a better partner this time around, and like half of my generation, working till I die, and hoping I die quickly when the time comes.

lotsofpulp 3y ago
>Debit is never been cheap. In the US, it objectively has been for the last few decades (especially 15 years), hence the enormous asset price inflation. If you were not invested, you were losing ground, and if you were not leveraged, then those ahead of you were pulling away. https://fred.stlouisfed.org/series/fedfunds https://fred.stlouisfed.org/series/fedfunds

jddj 3y ago

Yeah, I feel this way in general but then I think about the specific. Growing up, I knew a single mother who worked in a woman-dominated and rather underpaid field despite being (eventually) university educated and working her way up to management. She could afford to rent, but not to buy, mostly because the down payment was perpetually out of reach despite living relatively frugally. Then as her career started to make some traction (her late 40s), where she lived and worked the property market went stratospheric over a relatively small number of years and she was entirely priced out. She died before retirement, so I don't know what that would have looked like.

PopAlongKid 3y ago

>you can point out various crises and low points, but generally every factor has worked in their favor. Except for the crises and low points, of course. My first mortgage was 11% interest, inflation was roaring but there was still a recession (see "stagflation"[0]). Don't forget the 20% drop in stock market value in 1987. And the oil embargo[1]. And the Bush (1st) and Clinton tax increases. [0]https://en.wikipedia.org/wiki/Stagflation https://en.wikipedia.org/wiki/Stagflation [1]https://www.britannica.com/event/Arab-oil-embargo https://www.britannica.com/event/Arab-oil-embargo