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It’s hard for me to feel sympathy for a generation that saw the largest expansion of wealth and failed to put $1000 a year away in an index. Over 40 years that’

It’s hard for me to feel sympathy for a generation that saw the largest expansion of wealth and failed to put $1000 a year away in an index. Over 40 years that’s just over $200k in current dollars at 7% inflation adjusted return.

nly 2y ago
1) $200K isn't a very good retirement fund. 2) I'm afraid 7% above and beyond inflation is pretty optimistic going forward
- ryandrake 2y ago
  Exactly. I think people don't realize just how much they're going to need in order to live an arbitrarily long retirement. Retiring with only $200K is pretty much a retirement into severe poverty. $200K at a 3% draw-down is $6,000 a year. If you want to eat into your principal, do a 4% draw-down and you can live on a whopping $8,000 a year. And that's not today's dollars, that's the value of the dollar in the future. US Poverty level for a couple retiring today is $20K/yr. You need $500K saved up to get that kind of income in retirement. And next year, inflation means you need even more.
  - hollerith 2y ago
    Almost every American citizen of retirement age (currently 67) will receive a monthly social security check. Even if you never paid into the system (because for example you never worked a day in your life) you would get $943 for an individual and $1,415 for a couple.
    - ryandrake 2y ago
      Yea, I disregarded Social Security on purpose since there is so much political risk around it, especially the closer we get to the financial shit hitting the fan. When you consider it though, yes, it adds a non-trivial baseline amount to these calculations.
      - hollerith 2y ago
        I disagree that the risk is any higher than the failure of whatever asset your retirement savings are in.
        ryandrake 2y ago
        I'd agree with that in normal times, but we're not in normal times anymore. We just had a presidential candidate promising he'll "fix it" so people don't have to vote anymore[1]. Who knows what things are going to look like by the time I retire. Literally anything could happen to anything run by the government, and I don't think anyone can take SS for granted anymore. 1: https://www.youtube.com/watch?v=FOGTCKQklPQ https://www.youtube.com/watch?v=FOGTCKQklPQ
        hollerith 2y ago
        >we're not in normal times anymore Many voices have been saying that SS can't be relied on since about 1981.
        Izkata 2y ago
        That framing is severely misleading. He's talking to people who normally wouldn't bother to vote, telling them if they actually did it just this once he'd fix the problems the current administration caused that they're facing (one of his standard talking points) so they can go back to business as usual.
    - dbjacobs 2y ago
      That's simply not true. If you did not pay into Social Security for at least 40 quarter, the only way you can get retirement Social Security is through marriage (spouse benefit or survivor benefit). You can qualify for both benefits even if you're divorced if you were married at least 10 years. I'm ignoring disability benefits for the moment. For those who qualify for Social Security the minimum benefit for 2024 is $50.90/mo (10 yrs of work) and $1,066.50 for 30 years of work [1]. [1] - https://www.ssa.gov/OACT/ProgData/tableForm.html https://www.ssa.gov/OACT/ProgData/tableForm.html
      - deleted 2y ago
        [deleted]
      - hollerith 2y ago
        Most of my neighbors are considered disabled by the Social Security Administration and they all get at least $943 a month from the Administration -- even the ones who never had a paying job -- and when they get old enough (66 years and a few month in one recent case) they no longer have to prove that they are still disabled to continue to receive the income. For what you write to be true, the Administration would have to have a rule that if you apply for disability income when you are of working age, you get enough to survive for life even if you paid nothing into the system (through FICA), but if you apply past the retirement age and you didn't pay into the system, you get basically nothing. I suppose that could be true (and I'm not going to search the web to try to find out) but it seems unlikely. If you have a very strong work ethic, but have piss-poor ability to get paid a decent income and never applied for Social Security disability income, you've almost certainly worked some and consequently paid some amount into the system. When you get to retirement age, my strong guess (although I don't have personal knowledge) is that the SSI program kicks in such that the combination of your month Social Security retirement check and the SSI check adds up to $943 if you are single (plus $20 because the first $20 per month of non-SSI income is not counted) just like the millions of chronic schizophrenics that went on SSI in their 20s who never paid any FICA. But if someone replies saying that they personally know an American with no other sources of income and no savings who has applied, but gets less than $943 a month from Social Security, I'll believe them. ADDED. If you apply for disability or retirement benefits, the Administration automatically assesses whether you qualify for SSI benefits: one application suffices for both programs.
- linotype 2y ago
  It’s better than zero, and I wasn’t talking about the future. Don’t shift the goalposts.
lapcat 2y ago
> It’s hard for me to feel sympathy for a generation that saw the largest expansion of wealth and failed to put $1000 a year away in an index. Individuals own wealth, not generations, and individual wealth is distributed extremely unevenly. "The top 10% of households by wealth had $6.7 million on average. As a group, they held 66.9% of total household wealth. The bottom 50% of households by wealth had $50,000 on average. As a group, they held only 2.5% of total household wealth." https://www.stlouisfed.org/institute-for-economic-equity/the-state-of-us-wealth-inequality https://www.stlouisfed.org/institute-for-economic-equity/the...
azemetre 2y ago
Not every person was born into the elite or wealthy or corpo classes. My mom still works minimum wage jobs, she never had the ability to save any money. Especially when raising a family of 5. You should feel sympathy toward them because not all monetary gains are felt uniformly. If you look at the savings from median Americans and median wages you’ll notice most Americans are not actually wealthy as the media portrays. When you have the working poor battling payday lenders, bank fees, credit card debt, increasing healthcare costs, or lack of homeownership for their entire lives why would you expect them to suddenly become rich when they retire? I mean for myself I didn’t start saving aggressively until I was 32 and I didn’t get my first programming job until I was 25. I was 28 when I met the first person in my life that owned stocks (CTO of my second job). I already have more money saved for retirement than my parents and siblings combined. I honestly attribute this to complete luck too. I could have easily ended up like them financially. I suppose I should count myself blessed because my parents raised me to value education, a love for learning, and reading books. I’ll forever be grateful for them because I’m positive I’ll be able to provide a better life for my family because of their sacrifice. A sacrifice not everyone is even allowed to make.
- linotype 2y ago
  There are janitors that are millionaires through hard work and disciplined saving. There are many people that make six figures that are worse than broke. Anecdotes are easy to find.
  - azemetre 2y ago
    Yes, that's why it's useful to use real statistics and not rely on comments that attack Americans that had the audacity to be poor: https://www.visualcapitalist.com/americas-average-retirement-savings-by-age/ https://www.visualcapitalist.com/americas-average-retirement...
    - linotype 2y ago
      I’m just tired of the victimhood. How can we blame the system when people had forty YEARS to save and they saved nothing. The US savings rate is abysmal, and we know they _can_ save, because the savings rate spiked during the pandemic even before the checks went out. The majority just choose not to. I get why it’s an emotional issue for some though.
MattPalmer1086 2y ago
That wealth is unevenly distributed. As a Gen-Xer myself, I grew up in the 70s and 80s. In the UK at least in the north of England, there was massive unemployment. At the start of my career, I earned very little (I was lucky to have a job at all). Certainly no spare money to save for the first decade. Then house prices went insane, and the financial crash and almost zero interest rates meant we got no value from compounding the minimal amount I could save for most of the rest of my working life so far. I am lucky in the sense that I now earn a lot compared to my peers. I am fully in catch up mode. Despite what I earn, the majority of it goes to pension contributions and paying off my very large mortgage (on a tiny house next to the railway tracks). I have very little disposable income. And I am doing a lot better than most of my peers, who don't even have the luxury of having somewhere to live and not being in absolute poverty when they retire. Some people have obviously done very well in my generation, but most have not.

nly 2y ago

1) $200K isn't a very good retirement fund. 2) I'm afraid 7% above and beyond inflation is pretty optimistic going forward

ryandrake 2y ago
Exactly. I think people don't realize just how much they're going to need in order to live an arbitrarily long retirement. Retiring with only $200K is pretty much a retirement into severe poverty. $200K at a 3% draw-down is $6,000 a year. If you want to eat into your principal, do a 4% draw-down and you can live on a whopping $8,000 a year. And that's not today's dollars, that's the value of the dollar in the future. US Poverty level for a couple retiring today is $20K/yr. You need $500K saved up to get that kind of income in retirement. And next year, inflation means you need even more.
- hollerith 2y ago
  Almost every American citizen of retirement age (currently 67) will receive a monthly social security check. Even if you never paid into the system (because for example you never worked a day in your life) you would get $943 for an individual and $1,415 for a couple.
  - ryandrake 2y ago
    Yea, I disregarded Social Security on purpose since there is so much political risk around it, especially the closer we get to the financial shit hitting the fan. When you consider it though, yes, it adds a non-trivial baseline amount to these calculations.
    - hollerith 2y ago
      I disagree that the risk is any higher than the failure of whatever asset your retirement savings are in.
      - ryandrake 2y ago
        I'd agree with that in normal times, but we're not in normal times anymore. We just had a presidential candidate promising he'll "fix it" so people don't have to vote anymore[1]. Who knows what things are going to look like by the time I retire. Literally anything could happen to anything run by the government, and I don't think anyone can take SS for granted anymore. 1: https://www.youtube.com/watch?v=FOGTCKQklPQ https://www.youtube.com/watch?v=FOGTCKQklPQ
        hollerith 2y ago
        >we're not in normal times anymore Many voices have been saying that SS can't be relied on since about 1981.
        Izkata 2y ago
        That framing is severely misleading. He's talking to people who normally wouldn't bother to vote, telling them if they actually did it just this once he'd fix the problems the current administration caused that they're facing (one of his standard talking points) so they can go back to business as usual.
  - dbjacobs 2y ago
    That's simply not true. If you did not pay into Social Security for at least 40 quarter, the only way you can get retirement Social Security is through marriage (spouse benefit or survivor benefit). You can qualify for both benefits even if you're divorced if you were married at least 10 years. I'm ignoring disability benefits for the moment. For those who qualify for Social Security the minimum benefit for 2024 is $50.90/mo (10 yrs of work) and $1,066.50 for 30 years of work [1]. [1] - https://www.ssa.gov/OACT/ProgData/tableForm.html https://www.ssa.gov/OACT/ProgData/tableForm.html
    - deleted 2y ago
      [deleted]
    - hollerith 2y ago
      Most of my neighbors are considered disabled by the Social Security Administration and they all get at least $943 a month from the Administration -- even the ones who never had a paying job -- and when they get old enough (66 years and a few month in one recent case) they no longer have to prove that they are still disabled to continue to receive the income. For what you write to be true, the Administration would have to have a rule that if you apply for disability income when you are of working age, you get enough to survive for life even if you paid nothing into the system (through FICA), but if you apply past the retirement age and you didn't pay into the system, you get basically nothing. I suppose that could be true (and I'm not going to search the web to try to find out) but it seems unlikely. If you have a very strong work ethic, but have piss-poor ability to get paid a decent income and never applied for Social Security disability income, you've almost certainly worked some and consequently paid some amount into the system. When you get to retirement age, my strong guess (although I don't have personal knowledge) is that the SSI program kicks in such that the combination of your month Social Security retirement check and the SSI check adds up to $943 if you are single (plus $20 because the first $20 per month of non-SSI income is not counted) just like the millions of chronic schizophrenics that went on SSI in their 20s who never paid any FICA. But if someone replies saying that they personally know an American with no other sources of income and no savings who has applied, but gets less than $943 a month from Social Security, I'll believe them. ADDED. If you apply for disability or retirement benefits, the Administration automatically assesses whether you qualify for SSI benefits: one application suffices for both programs.
linotype 2y ago
It’s better than zero, and I wasn’t talking about the future. Don’t shift the goalposts.

lapcat 2y ago

> It’s hard for me to feel sympathy for a generation that saw the largest expansion of wealth and failed to put $1000 a year away in an index. Individuals own wealth, not generations, and individual wealth is distributed extremely unevenly. "The top 10% of households by wealth had $6.7 million on average. As a group, they held 66.9% of total household wealth. The bottom 50% of households by wealth had $50,000 on average. As a group, they held only 2.5% of total household wealth." https://www.stlouisfed.org/institute-for-economic-equity/the-state-of-us-wealth-inequality https://www.stlouisfed.org/institute-for-economic-equity/the...

azemetre 2y ago

Not every person was born into the elite or wealthy or corpo classes. My mom still works minimum wage jobs, she never had the ability to save any money. Especially when raising a family of 5. You should feel sympathy toward them because not all monetary gains are felt uniformly. If you look at the savings from median Americans and median wages you’ll notice most Americans are not actually wealthy as the media portrays. When you have the working poor battling payday lenders, bank fees, credit card debt, increasing healthcare costs, or lack of homeownership for their entire lives why would you expect them to suddenly become rich when they retire? I mean for myself I didn’t start saving aggressively until I was 32 and I didn’t get my first programming job until I was 25. I was 28 when I met the first person in my life that owned stocks (CTO of my second job). I already have more money saved for retirement than my parents and siblings combined. I honestly attribute this to complete luck too. I could have easily ended up like them financially. I suppose I should count myself blessed because my parents raised me to value education, a love for learning, and reading books. I’ll forever be grateful for them because I’m positive I’ll be able to provide a better life for my family because of their sacrifice. A sacrifice not everyone is even allowed to make.

linotype 2y ago
There are janitors that are millionaires through hard work and disciplined saving. There are many people that make six figures that are worse than broke. Anecdotes are easy to find.
- azemetre 2y ago
  Yes, that's why it's useful to use real statistics and not rely on comments that attack Americans that had the audacity to be poor: https://www.visualcapitalist.com/americas-average-retirement-savings-by-age/ https://www.visualcapitalist.com/americas-average-retirement...
  - linotype 2y ago
    I’m just tired of the victimhood. How can we blame the system when people had forty YEARS to save and they saved nothing. The US savings rate is abysmal, and we know they _can_ save, because the savings rate spiked during the pandemic even before the checks went out. The majority just choose not to. I get why it’s an emotional issue for some though.

MattPalmer1086 2y ago

That wealth is unevenly distributed. As a Gen-Xer myself, I grew up in the 70s and 80s. In the UK at least in the north of England, there was massive unemployment. At the start of my career, I earned very little (I was lucky to have a job at all). Certainly no spare money to save for the first decade. Then house prices went insane, and the financial crash and almost zero interest rates meant we got no value from compounding the minimal amount I could save for most of the rest of my working life so far. I am lucky in the sense that I now earn a lot compared to my peers. I am fully in catch up mode. Despite what I earn, the majority of it goes to pension contributions and paying off my very large mortgage (on a tiny house next to the railway tracks). I have very little disposable income. And I am doing a lot better than most of my peers, who don't even have the luxury of having somewhere to live and not being in absolute poverty when they retire. Some people have obviously done very well in my generation, but most have not.