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>Generation X Approaches Retirement finds a dismal retirement outlook for Generation X, the first generation to enter the labor market following the shift from
by Clubber 3y ago
>Generation X Approaches Retirement finds a dismal retirement outlook for Generation X, the first generation to enter the labor market following the shift from defined benefit pension plans to 401(k)-style defined contribution accounts.
That's probably going to be every subsequent generation too.
- gonzo41 3y agoI think millennials and zoomers know they've on their own. It'll be less of a shock.
- upon_drumhead 3y agoI also plan to work until the grave. I don't see any other way.
- rickydroll 3y agoI'm already doing that. retirement is really depressing. No matter how I look at it, there is no way the markets could generate enough returns for give everyone the 7-8% they would need.
- mycall 3y agoWatching the boomers go through retirement looks quite boring, but they do have different life interests.
- StanislavPetrov 3y ago>No matter how I look at it, there is no way the markets could generate enough returns for give everyone the 7-8% they would need. The markets can easily generate 7-8% returns, but you are right it won't be enough for what people need, when the cost of living (rather than the phony CPI number that is bandied about) is rising at more than 8% a year.
- rickydroll 3y agoI will agree with you that the market can generate 7-8% returns for a certain volume of cash infusion through 401(k)s. but what happened if everybody participates? I'll spare you the back of the envelope calculation with but if everybody saved 10% of their income to a 401k, it looks like we would have approximately $24 trillion that would need to get that 7-8% return. FWIW,the current 401(k) number 7 trillion. The current stock market size is 46 trillion so where would that money go? feel free to come up with your own numbers, as professors have told me, more accurate calculations are left as an exercise to the reader. I suspect that the vast majority of people would stick their money into robot funds and cause the value of the stock market to inflate to unsustainable levels because as we know, stock prices have nothing to do with reality. Anyway, this calculation is interesting exercise and shows how people really haven't thought through the true cost of retirement and the impact it has on the financial system.
- skissane 3y agoMy parents both turn 74 this year - and both are still working. Not sure when they plan to retire. My mother works as a doctor, my father as a pharmaceutical industry management consultant
- gymbeaux 3y agoEither your mom really enjoys her work (doubtful if she’s a doc in the US- they hospital administration seems to ruin that career), or she’s calculated she needs every penny she can get while she is able to work.
- matheweis 3y agoAh yes, and when they do retire there will be no one to take their place..
- russh 3y agoSame here, I got to watch my dad burn though his retirement nest egg at an astonishing rate once he fell Ill and needed long term care. Started out at only $3800/m for assisted living and ended up at $11,000/m in a nursing home. This was by far the most stressful period of of both our lives. You will need much more money to retire than you realise unless you stay in good health or die young.
- gymbeaux 3y agoI intend on going the suicide route if my only other option was being such a burden, financial or otherwise, to my next of kin. But you’re right, it’s a common fate for the would-be inheritance. It was around $10k/month for one set of grandparents, and as much as it sucks that they’re gone, there’s a sense of relief across the family that they didn’t live another, you know, 5 or 10 years ($600k-1.2M)
- hotnfresh 3y agoYeah, I don’t think inheritance is gonna be much of a thing anymore below the top percent or two of estates. The rest of us are just temporarily holding the healthcare industry’s money, when we save. Including most Boomers.
- dylan604 3y agoThe grave is my retirement plan
- Gigachad 3y agoAt least in Australia they will be fine. 11% of your income is taken before you receive it and put in to retirement funds. It’s also taxed at a much lower rate. To end up at retirement age without any savings accumulated, you’d have to either have been unemployed for your whole life, or run a business/be self employed and never make any contributions to retirement savings.
- dylan604 3y agoThat's funny if you believe that money will still be there for you. That money is paying for those retired now. It's not like that money is in an account with your name on it. It's just a note in a ledger that says you're "owed" that money. Good luck collecting it. Truly. Edit: missed the relevant Australian bit. makes a big difference to grok the full comment when deciding to reply to it
- dcw303 3y agoIt literally is in an account with your name on it.
- ikr678 3y agoNo, that's exactly how it works in Australia - a compulsory tax advantaged managed investment account for the individual. There is a separate social security-type (pension) scheme that may or may not still exist for future generations, but superannuation is very much your own asset.
- deleted 3y ago[deleted]
- xarope 3y agoThat's the old system, I had a choice of staying with the "old" system or moving to the superannuation scheme. My older (read: then about to retire) colleagues told me I HAD TO move to the "new" system, as by the time they retired and took out their money, there would be no money left in the "old" system for me.
- verve_rat 3y ago
- tw04 3y agoYou just need to be patient - trickle down just needs another 30 years to really start hitting its stride.
- lokar 3y ago[flagged]
- SoftTalker 3y agoYeah if you didn't contribute to your plan all those years you probably regret it now.
- gedy 3y agoMaybe it was just me (Gen X), but I didn't even work for a company that had retirement plans until I was in my 30s. Right when I also got married, trying to save up for a house, and having kids. Oh and dot com bust and 2008 crisis...
- Clubber 3y agoOhh, that sounds familiar. We're probably gonna have another bust with inflation and rising interest rates. Hopefully not a big one this time around.
- jandrewrogers 3y agoI didn’t have access to a plan for a significant fraction of my working life.
- hotnfresh 3y agoYep, it is gonna be worse. Same-age savings are shockingly worse for X than Boomers, and worse still for Millennials and Gen Z. Why does the shift from pensions to 401ks matter? Because it frees up money for zero-sum competition for benefits for one’s kids, in the form of housing (indirectly, paying for quality schools) and tuition/advantage-granting activities. Which drives up the cost of those things, pushing spending even higher. Plus probably some pure keeping-up-with-the-Joneses. [edit] oh fuck it just occurred to me that a lot of US GDP growth in the 80s-today may be because everyone but the Boomers has been burning what should have been retirement savings just to keep from falling behind. And now I’m breaking out in a cold sweat.
- gymbeaux 3y ago[flagged]
- tstrimple 3y agoI'm 40 now. I could see myself being able to retire in about 10 years except for one primary expense. Healthcare. I could have my house paid off, have just enough net worth for investments to live out a very modest lifestyle. But healthcare costs alone blow up any chance of being able to retire until I'm 65 or whatever the age to qualify for medicare will be in a few decades.
- rnk 3y agoIn the us there's obama care before age 65. I bet a lot of gen x programmers are thinking if they have 7 or 10 years till 65, and they retire in late 50s, how will they cover retirement until then (when they might take social security & medicare). That reminds me, vote for politicians who want to make sure social security and medicare and ACA will be around when we all retire, instead of the foolish ones who want to end these programs without any replacements. We can continue to pay for it all with tiny tax increases. We've under-taxed ourselves with paying more than the system affords to the previous retired generation.
- Clubber 3y agoObamacare sucks if you are anywhere above "barely scraping by." The annual deductibles are really high too. $9,100 a year will break someone making $50K a year. I wholeheartedly supported it when it was passed, but it just ain't good. More damage to the middle class who pays for it with higher premiums. >In 2023, you'll typically be eligible for ACA subsidies if you earn between $13,590 and $54,360 as an individual, or between $27,750 and $111,000 for a family of four. >For the 2023 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $9,100 for an individual and $18,200 for a family. https://www.valuepenguin.com/aca-subsidy-calculator https://www.valuepenguin.com/aca-subsidy-calculator
- rnk 3y agoThat's an important point that obmacare is too expensive for non-wealthy people and we should change that. For the reasonably well off programmer types like a lot of us, I saw it as a thing i could afford in the transition time before 65. Several people in my family worked until 63.5 and then had cobra. If I retire a few years before that I see obamacare as the main reasonable solution. My state has a healthcare plan separate from that, wonder how I could make a decision. I'm fortunate but there must be tens of millions of people in their 50s and 60s looking for a job and health care.