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Meerkat
05-17-2006, 01:30 AM
The average middle class American can look forward to a retirement of living, working and dying in poverty. The disappearance of a large segment of consumers is going to pop the consumer driven economy. The illusion of the real estate nest egg will fail when people can't sell because people won't be buying.

At least that's what the facts indicate is going to happen. Maybe a nice pandemic will happen to shift the demographics.

PeterSibley
05-17-2006, 03:53 AM
Now ,thats one of your more positive posts Meer :) and you might be right

shamus
05-17-2006, 04:13 AM
Always an illusion for the hoi polloi to think they're going to live on a windfall, I would think. There is a persistent habit of thinking in yesterdays dollars when talking about real estate. People need to face the facts: there has been a massive bout of inflation in Western economies over the last couple of years. It is not recorded in the faked consumer price indices, and as always it would be much more accurate to call it a devaluation of the currency than price inflation. But don't whinge- Scott Rosen and I suggested buying gold a couple of years ago, right here.

Milo Christensen
05-17-2006, 05:43 AM
The average middle class American can look forward to a retirement of living, working and dying in poverty.

From the founding member of the Nattering Nitwits of Nihilism.

Andrew Craig-Bennett
05-17-2006, 05:49 AM
I entirely agree with David.

Not just the American middle classes but the British middle classes as well. The process is already under way.

China has done a fantastic job of exporting deflation by lowering the price of consumer goods, but that has pretty much run its course.

I need to keep working for another 20 years (I'm 53) if I live that long. The prospect does not bother me much.

Mrleft8
05-17-2006, 07:18 AM
It will take a "nest egg" of somewhere between 3 to 12 times your annual salary to maintain your lifestyle through your retirement years.

geeman
05-17-2006, 07:22 AM
The average middle class couple,,now days is an allusion.To live the lifestyle they either grew up in,,or trying to move up to that lifestyle,a good many couples simply live on credit.Most of us now daysPoeple decide they want something,they go buy it assuming they will pay for some way.Gas goes up,the power bill goes up and they scream because it crimps their lifestyle that they realistically couldnt afford in the 1st place.I'm not pointing fingers here,I'm probably as guilty as most people .

Popeye
05-17-2006, 07:30 AM
Those afflicted through the fault of a burning bush,
The transgressor is in the opposite party:
He will send meds to those of bilge that compelled
They be to deliver the great chef of Boyardee

-- Nostradamus , Quatrain 67 , Ceneturie XI

High C
05-17-2006, 08:14 AM
Ahh, liberalism at its core, pessimism.

George Roberts
05-17-2006, 08:45 AM
About 10 years ago I wrote a paper titled "The Bigger Fool Theory of Saving For Retirement:"

In the future as in the past, it will take several big fools to support a an individual in retirement. In the future unlike the past, there will a shortage of bigger fools.

geeman
05-17-2006, 08:51 AM
Would it be a stretch to say that with modern medicine as it is now,we now outlive our ability to sustain ourselves?

huisjen
05-17-2006, 08:59 AM
Actually, I'd call a cautious view of the future a sort of healthy conservatism.

Dan

Milo Christensen
05-17-2006, 09:08 AM
It will take a "nest egg" of somewhere between 3 to 12 times your annual salary to maintain your lifestyle through your retirement years.

NPR did a thing yesterday on this and the financial gurus said that you should plan a nest egg such that spending 4% of it per year would maintain your desired retirement lifestyle.

High C
05-17-2006, 09:36 AM
Actually, I'd call a cautious view of the future a sort of healthy conservatism.

Dan

You're not seeing cautious conservatism here, you're seeing fatalism, and it's damn sad. It also can be self fulfulling.

RichKrough
05-17-2006, 09:53 AM
You're not seeing cautious conservatism here, you're seeing fatalism, and it's damn sad. It also can be self fulfulling.

You know us liberals we are only happy when we are unhappy about something.
But I agree with you I don't see the future as being that bleak. Yes some people living outside their means might have a very difficult time but I think most of us who are living within our means and making reasonable preparations for our twilight years will adapt to the changing economic conditions and live well enough.

Meerkat
05-17-2006, 10:56 AM
I think that's an extremist statement, but not without elements of truth.
You should have watched Frontline last evening.

Among other tidbits:
* You should have 8-10x your last 3 years of annual salary in your retirement fund. Given a median income of ~$50,000, that's $400-500,000.

* The average 401(k) has $29,000 in it.

* The founder of Vanguard funds estimates it will take about $450Bn to cover unfunded pension liabilities (I think this is where the "bigger fools" come in).

* The typical 401(k) is a dismal failure as a retirement vehicle. The state of Kansas did a study and terminated their 401(k) program and returned to a defined benefit (traditional) retirement program.

Your personal situation may vary and, give the relative affluence of many forum members, probably does. BUT, you don't live in a vacuum...

B_B
05-17-2006, 11:03 AM
I entirely agree with David.

Not just the American middle classes but the British middle classes as well. The process is already under way.


something on Nightline last night about home foreclosures - highest number of foreclosures ever IIRC.

Popeye
05-17-2006, 11:05 AM
posts like these tend to remind me to look at the global picture

i then realize abruptly once again how the western world pales by comparison on many different scales

the majority of people (well billions really) are non-white and survive in a social realm most can't imagine, moreover they do not complain , what is more to the point is this : people are people where ever you go , so lacking clean water and universal medical is as big a burden to them like it (would be) to us


time to get the message

Meerkat
05-17-2006, 11:06 AM
FWIW, last evening's Frontline is available as streaming video on PBS' website.

Phil Heffernan
05-17-2006, 11:11 AM
I also think a trend will be for some to relocate to parts of the world with a lower cost of living than here in the USA, esp. Central & South America...

The Northeast US is one of the costliest places on the planet...Outside of California...

PH

TomF
05-17-2006, 11:18 AM
2 things to support Popeye's post.

First, I received a copy of Annie Hill's "Voyaging on a Small Income" two days back; it rather brings home the concept of voluntary simplicity. Hard to argue with folks who consider they've lived well, while cruising on no more than $3,500/year since the mid 1970s.

Second, I also received a copy of a convocation address my aunt recently made to a graduating class of Anglican priests. For the past 20 years or so, she's been a senior administrator for the Anglican Church of Canada's work in global and home missions. The disparity between our lifestyle wants/needs and most of the rest of the world is ... well, you know.

So chin up, folks. Poverty by the standards we're discussing looks like luxury to most of the world.

t.

Ken Hutchins
05-17-2006, 11:25 AM
Those who worry about the need to have millions saved for retirement will die young and might not ever get to retire because of all the worrying.
Retire early, adjust your style of living based on your income and enjoy life. We can live on less actual money, there are many ways to supplement income, grow some veggies and fish or hunt for food. Sell some of the excess, clip coupons, stop useless driving around guzzling gas in the vehicles, make use of senior citizen discounts, etc.
Don't listen to the 'financial planners' they are just in business to suck off some of your hard earned money.
Be happy enjoy what you have, live within your income.

Hughman
05-17-2006, 11:29 AM
Scott Rosen and I suggested buying gold a couple of years ago, right here.

"Healthy soil beats gold hands down."- J.I. Rodale

Popeye
05-17-2006, 11:37 AM
the last read i did on financial planning , after going over technicals , bond trading this and short position that blah blah blah, in the final few words , said exactly one thing, if all else fails , be sure to own a little strip of fertile land , at least you will be able to raise a few chickens and eat veggies

a wooden sailboat would be nice too

huisjen
05-17-2006, 12:39 PM
I think Popeye, Hughman, and TomF have covered my point of view well enough. Thanks guys.

Dan

Popeye
05-17-2006, 12:43 PM
i knew i could raise Tom's ire :)

TomF
05-17-2006, 12:47 PM
i knew i could raise Tom's ire :)When it comes to ire, my wealth is simply extraordinary. :D

Sailor
05-17-2006, 03:52 PM
Anybody ever read "the wealthy barber"? I think it's canadian IIRC but the concepts are great and it's really well laid out. check it out some time if you can.

PeterSibley
05-17-2006, 04:27 PM
Those who worry about the need to have millions saved for retirement will die young and might not ever get to retire because of all the worrying.
Retire early, adjust your style of living based on your income and enjoy life. We can live on less actual money, there are many ways to supplement income, grow some veggies and fish or hunt for food. Sell some of the excess, clip coupons, stop useless driving around guzzling gas in the vehicles, make use of senior citizen discounts, etc.
Don't listen to the 'financial planners' they are just in business to suck off some of your hard earned money.
Be happy enjoy what you have, live within your income.

for me,Ken's comments plus "Voyaging on a Small Income " or at least the spirit thereof.I need 1/4 acre of good soil ,sun and water to supply the most important thing I need. 2k invested to cover hip replacements ................and hope to die cleanly.I have no debt and good health , the rest is up to me.

Bob Adams
05-17-2006, 07:28 PM
It's not a problem, keep shopping at Wal Mart and there won't be a middle class to be concerned about.

Peter Malcolm Jardine
05-17-2006, 07:33 PM
How much is a good bottle of say... 12 year old Ire?

Phil Heffernan
05-17-2006, 08:11 PM
It also has higher average incomes than most places in the US... it's the ratio that counts. If you recall, the slur 'Taxachusetts' was applied because Massachusetts was #7 in terms of absolute tax dollars... but #31, when compared to income (making it actually a low tax state, compared to the median).

There are also intangible reasons to live here... quality of life, quality of environment, and other intagible factors.

If you're a sailor, I submit that there's no finer place in the country to own and sail a boat, than the area south of the Cape, including Narragansett Bay.

Norman, no dispute. I hope to never give up my spot on the Hudson.
But I've always been an adventurer, and if needs be, then I'd opt for a new life style.

The islands of the Central American Pacific coast have always had an allure, for the 'live aboard' full time water lifestyle. I think I'd like it. Not for everyone, though...

PH

Phil Heffernan
05-17-2006, 08:14 PM
Those who worry about the need to have millions saved for retirement will die young and might not ever get to retire because of all the worrying.
Retire early, adjust your style of living based on your income and enjoy life. We can live on less actual money, there are many ways to supplement income, grow some veggies and fish or hunt for food. Sell some of the excess, clip coupons, stop useless driving around guzzling gas in the vehicles, make use of senior citizen discounts, etc.
Don't listen to the 'financial planners' they are just in business to suck off some of your hard earned money.
Be happy enjoy what you have, live within your income.

My sentiments exactly...I enjoy my work, hope to be doing it until I'm 106

PH

Meerkat
05-17-2006, 08:49 PM
It's not a problem, keep shopping at Wal Mart and there won't be a middle class to be concerned about.
When the middle class retires, there won't BE a WalMart!

Anyone know what the demographics of the boomers are over the next 20 years? What percentage of the population?

Stiletto
05-18-2006, 12:37 AM
The use of the term 'middle class' in the USA seems to have quite a different meaning from that used in Europe.
The middle class europeans I have met have been quite well off indeed.

shamus
05-18-2006, 04:06 AM
Quote:

"Healthy soil beats gold hands down"

You won't get an argument out of me on that score Hughman, though of course gold can be traded in very small quantities. It's a matter of balance. I kind of happen to have enough of one, and not enough of the other, personally.

Milo Christensen
05-18-2006, 05:51 AM
Anyone know what the demographics of the boomers are over the next 20 years? What percentage of the population?

"As the nation's 76 million "baby boomers" (born between 1946 and 1964) enter their sixties, they will come face-to-face with the challenges of financing their retirement and will reshape U.S. markets for housing and financial services..."

"... FDIC analysts report on how long-run demographic trends are affecting the funding of pension plans; how a large and relatively affluent baby boom generation is influencing the demand for housing..." http://www.fdic.gov/news/news/press/2006/pr06039.html

David, it would surprise you to know how affluent the average baby boomer really is. A trend taking place that doesn't receive much press has been called the "greatest transfer of wealth in the history of the world" and it is coming about as the parents of boomers die. Just think about that for a minute. ALL the assets of the parents of 76 million people has been / is being / will be transferred.

Reflect also on the fact that 40% of all home sales last year were for second homes, that's 3.34 million second homes. But then, most everyone I know in my age bracket already has a cottage up north or a condo in Florida or a gazillion time share points or a $100K motorhome.

But hey, I didn't drink all the Kool-Aid, so I have to admit that there are very serious problems with un/underfunded/bankrupt pension plans.

geeman
05-18-2006, 08:54 AM
My experience seems to be different then a lot here.Most of the people I come into contact with have no clue where they will be working,IF they will be working ,or how much they will be making 2 years from now much less 20.

bjmullins
05-18-2006, 10:34 AM
What about the death tax?

geeman
05-18-2006, 10:40 AM
My opinion of the death tax is,,I cant afford to die at this time.