3 ms·

I'm so confused about how, on the one hand, I keep seeing articles about the enormous wealth transfer that's expected to happen, but at the same time, articles

by smeej 3y ago

I'm so confused about how, on the one hand, I keep seeing articles about the enormous wealth transfer that's expected to happen, but at the same time, articles saying retirees don't have any money. Which is it? Pretty much the only thing I would definitely trust less than any random individual on the street to manage savings well for retirement would be government. I don't know who or what should do it instead when people aren't working more than a few years at any given company, but it sure as hell shouldn't be government.

toomuchtodo 3y ago
> I'm so confused about how, on the one hand, I keep seeing articles about the enormous wealth transfer that's expected to happen, but at the same time, articles saying retirees don't have any money. Which is it? This is sort of silly? Older generation estates and owners have to pass their wealth down to somewhere, either their children or other causes. Concentrated wealth via ultra high net worth estates is moving between generations [1] [2], it's not being spread like butter across everyone. > Pretty much the only thing I would definitely trust less than any random individual on the street to manage savings well for retirement would be government. I don't know who or what should do it instead when people aren't working more than a few years at any given company, but it sure as hell shouldn't be government. Social Security is one of the most efficient benefits systems in the country, and expenses are less than private annuities (~0.5%) [3]. It is entirely possible to create effective pension management systems besides what the US has today [4]. We have made a choice not to. We could make better choices. “You can always count on the Americans to do the right thing, after they have exhausted all the other possibilities.” ― Churchill [1] https://content.knightfrank.com/resources/knightfrank.com/wealthreport/the-wealth-report-2024.pdf https://content.knightfrank.com/resources/knightfrank.com/we... ("Knight Frank 2024 Wealth Report") [2] https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/2022-BofaA-Private-Bank-Study-of-Wealthy-Americans.pdf https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/20... (2022 Bank of America Private Bank Study of Wealthy Americans: The impact of shifting generational attitudes amid an historic wealth transfer) [Only 27% of the ultra wealthy are self made; 70% of Americans who hold more than $3 million are over 56 years old.] [3] https://www.cbpp.org/research/policy-basics-top-ten-facts-about-social-security https://www.cbpp.org/research/policy-basics-top-ten-facts-ab... ("Policy Basics: Top Ten Facts about Social Security") [4] https://www.cnbc.com/2022/10/13/these-countries-have-the-best-pension-systems-in-2022.html https://www.cnbc.com/2022/10/13/these-countries-have-the-bes... ("These countries have the best pension systems in 2022—and the U.S. didn’t make the list")
advael 3y ago
Weird, because as I understand it, government intervention is the only way an appreciable amount of people ever had retirement savings
- smeej 3y ago
  The government basically invented the notion of "retirement" in the first place, too, though. There was no historical precedent for just stopping working before you physically couldn't anymore, in which case you generally died very shortly thereafter. At the time U.S. social security was invented, the age at which you could draw benefits was higher than the average life expectancy, the thought being, "Well you've put in as much good work time as most people do when they die, so if you live longer than that, we'll take care of you." This whole notion of a decade or more of "retirement" being totally normal is extremely novel, and I'm not at all sure it's good for people. Is it good not to have to do physically demanding work when you're 70? Sure. But as a culture, we would benefit an awful lot from learning from elders in advisory roles, if we didn't idolize the innovative flash-in-the-pan-probably-won't-work-but-let's-try-it-anyway startup mentality.
lazyasciiart 3y ago
Both. The average net worth of retired Americans is over $1million. But the median net worth is ~$200,000 (according to recently released data from the Federal Reserve).
hnick 3y ago
I'm not familiar with the articles but where I live it wouldn't be surprising for an elderly person to have a million dollar home and not much free cash, since they bought and paid it off decades ago. So that is 'wealth' but not easily accessible as 'money'.

by smeej 3y ago

toomuchtodo 3y ago

> I'm so confused about how, on the one hand, I keep seeing articles about the enormous wealth transfer that's expected to happen, but at the same time, articles saying retirees don't have any money. Which is it? This is sort of silly? Older generation estates and owners have to pass their wealth down to somewhere, either their children or other causes. Concentrated wealth via ultra high net worth estates is moving between generations [1] [2], it's not being spread like butter across everyone. > Pretty much the only thing I would definitely trust less than any random individual on the street to manage savings well for retirement would be government. I don't know who or what should do it instead when people aren't working more than a few years at any given company, but it sure as hell shouldn't be government. Social Security is one of the most efficient benefits systems in the country, and expenses are less than private annuities (~0.5%) [3]. It is entirely possible to create effective pension management systems besides what the US has today [4]. We have made a choice not to. We could make better choices. “You can always count on the Americans to do the right thing, after they have exhausted all the other possibilities.” ― Churchill [1] https://content.knightfrank.com/resources/knightfrank.com/wealthreport/the-wealth-report-2024.pdf https://content.knightfrank.com/resources/knightfrank.com/we... ("Knight Frank 2024 Wealth Report") [2] https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/2022-BofaA-Private-Bank-Study-of-Wealthy-Americans.pdf https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/20... (2022 Bank of America Private Bank Study of Wealthy Americans: The impact of shifting generational attitudes amid an historic wealth transfer) [Only 27% of the ultra wealthy are self made; 70% of Americans who hold more than $3 million are over 56 years old.] [3] https://www.cbpp.org/research/policy-basics-top-ten-facts-about-social-security https://www.cbpp.org/research/policy-basics-top-ten-facts-ab... ("Policy Basics: Top Ten Facts about Social Security") [4] https://www.cnbc.com/2022/10/13/these-countries-have-the-best-pension-systems-in-2022.html https://www.cnbc.com/2022/10/13/these-countries-have-the-bes... ("These countries have the best pension systems in 2022—and the U.S. didn’t make the list")

advael 3y ago

Weird, because as I understand it, government intervention is the only way an appreciable amount of people ever had retirement savings

smeej 3y ago
The government basically invented the notion of "retirement" in the first place, too, though. There was no historical precedent for just stopping working before you physically couldn't anymore, in which case you generally died very shortly thereafter. At the time U.S. social security was invented, the age at which you could draw benefits was higher than the average life expectancy, the thought being, "Well you've put in as much good work time as most people do when they die, so if you live longer than that, we'll take care of you." This whole notion of a decade or more of "retirement" being totally normal is extremely novel, and I'm not at all sure it's good for people. Is it good not to have to do physically demanding work when you're 70? Sure. But as a culture, we would benefit an awful lot from learning from elders in advisory roles, if we didn't idolize the innovative flash-in-the-pan-probably-won't-work-but-let's-try-it-anyway startup mentality.

lazyasciiart 3y ago

Both. The average net worth of retired Americans is over $1million. But the median net worth is ~$200,000 (according to recently released data from the Federal Reserve).

hnick 3y ago

I'm not familiar with the articles but where I live it wouldn't be surprising for an elderly person to have a million dollar home and not much free cash, since they bought and paid it off decades ago. So that is 'wealth' but not easily accessible as 'money'.