GenX Are a Retirement Time Bomb for the American Economy(medium.com)
medium.com
GenX Are a Retirement Time Bomb for the American Economy
https://medium.com/utopiapress/genx-are-a-retirement-time-bomb-for-the-american-economy-8de323da970f
78 comments
> At the net macroeconomic level, workers make stuff and a portion of that gets redirected to taxes, debt repayment, and return-on-capital that non-workers then consume
It's not quite that simple. "Stuff" can be divided into things we consume (spending) and things that build more stuff (investment). You can spend more on factories, infrastructure, etc. and then shift towards consumables as the number of non-workers increase. Of course we didn't do that, but it's at least theoretically possible.
It's not quite that simple. "Stuff" can be divided into things we consume (spending) and things that build more stuff (investment). You can spend more on factories, infrastructure, etc. and then shift towards consumables as the number of non-workers increase. Of course we didn't do that, but it's at least theoretically possible.
The marginal factory has an expected net present value of zero - if it were positive, market forces would already be adding them. Maybe you can find some examples of over-regulated long-lived infrastructure (nuclear power comes to mind), or non-excludable goods (roads and bridges), but there's a remaining problem that these things don't typically live long enough for a 30 year old to build and then enjoy the fruits thereof in their 80s.
And to keep social security solvent for GenX would require squeezing Millennials even harder by increasing the taxes or reducing payouts or both.
Or, you know, the US could refrain from starting three trillion dollar wars, and cut the bloated military budget.
That only buys time against the long-term trend of increasing retirees per worker. Which is great and all, but there's only so much military budget bloat to cut. Eventually you need either higher taxes or savings, more workers per retiree (eg, through raising retirement age), higher worker productivity, or lower real consumption by retirees.
Reducing future payouts doesn't make Millennials worse off today from an analysis of the flows of real goods and services. At most, it means they need to save more to maintain the same expected standard of living at retirement, which ends up bidding up asset prices and thus indirectly subsidizing retirees currently selling assets.
> Almost half of Gen X respondents, defined as ages 38 to 53, said they have no money saved in a retirement account.
> Curiously, the Gen Xers were the least likely generation to say they would save or invest an extra $1,000, instead using it to pay outstanding bills and debt.
How is this “curiously”? The fact that GenX has high debt balances is why their marginal income is more likely to go to paying (high-interest) debt rather than going into (low-yield) retirement savings, which is also why they don't have retirement savings since their money has instead been going to debt repayment.
> Curiously, the Gen Xers were the least likely generation to say they would save or invest an extra $1,000, instead using it to pay outstanding bills and debt.
How is this “curiously”? The fact that GenX has high debt balances is why their marginal income is more likely to go to paying (high-interest) debt rather than going into (low-yield) retirement savings, which is also why they don't have retirement savings since their money has instead been going to debt repayment.
> (low-yield) retirement savings
Not sure about that. The last 20 years (most of Gen Xers working lives), returns in the stock market have been reasonably good, despite there having been multiple recessionary periods.
Jan 2000-April 2019 S&P500: 5.688% annualized (190.085% for the period)
https://dqydj.com/sp-500-return-calculator/
Not sure about that. The last 20 years (most of Gen Xers working lives), returns in the stock market have been reasonably good, despite there having been multiple recessionary periods.
Jan 2000-April 2019 S&P500: 5.688% annualized (190.085% for the period)
https://dqydj.com/sp-500-return-calculator/
Low yield compared to paying off debt. Reasonably good stock market yields are still well below lots of the debts people have; 5.688% isn't much more than interest on a lot of federally subsidized student loans, and far less than on lots of consumer debt.
You say that's good performance, but the rule of thumb for the baby boomer generation was to assume a 10% annualized return from the market. In fact, many pensions are in trouble from assuming 10% while there was actually a gap.
Both indebtedness and the low yield of retirement savings are related - they're the macroeconomic effects necessary for current workers to consume a smaller share of their current productivity, leaving a larger share behind for non-workers.
"U.S. households with any kind of debt — mortgage, credit cards, student loans, auto loans, etc. — owe an average $135,768"
So, if we exclude everyone who has no debt, and include mortgage debt as 'debt', Gen X has a scary-sounding level of debt! Whodathunkit?
I started a new job last year, and it's pretty scary to login and look at my 401k, where it says: "People My Age: Average Savings Rate: 6%. Account Balance: $29,428". Now, presumably, some/many of their account holders ALSO have other retirement accounts, but I imagine the average age of these accounts is probably more than the 1 year I have into it.
So, if we exclude everyone who has no debt, and include mortgage debt as 'debt', Gen X has a scary-sounding level of debt! Whodathunkit?
I started a new job last year, and it's pretty scary to login and look at my 401k, where it says: "People My Age: Average Savings Rate: 6%. Account Balance: $29,428". Now, presumably, some/many of their account holders ALSO have other retirement accounts, but I imagine the average age of these accounts is probably more than the 1 year I have into it.
Would probably be more useful to know the relative size of the mortgage that remains to be paid compared to prior generations at the same age. Or even - the average amount of debt relative to the holder's average annual income and compare that against prior generations at that age.
I wonder if this in any sense reflects the Gen-X cynicism I associate with the 1990s, the expectation that the system that bore up their parents would crumble before their turn came. Had perhaps already crumbled. Were they right? Is this self-fulfilling prophecy?
As a Gen-Xer, I think that cynicism had its roots in both the 80s and 90s with the number of companies that left our parents out to dry with disappearing pensions and people doing the math to realize that Social Security was unsustainable and would be gone by the time we retire. And somehow our generation was expected to support all of society including the generation behind us.
I would postulate the opposite - I would have thought because we believe that neither companies nor the guvmint would be there to support us, we would have fended for ourselves better (I know that's how I personally took it, and many/most of my friends). But you might be right... sounds like an attitude of "ef it, we're doomed" set in.
I would postulate the opposite - I would have thought because we believe that neither companies nor the guvmint would be there to support us, we would have fended for ourselves better (I know that's how I personally took it, and many/most of my friends). But you might be right... sounds like an attitude of "ef it, we're doomed" set in.
Social Security will not be gone, and it is not unsustainable at a macro level. Currently configured, it will pay out ~75% of earned benefits once the trust fund is exhausted in 2034. Several small changes, in concert, remove any insolvency concerns. It keeps 22 million Americans out of poverty [1], and is very efficient in terms of admin costs vs distributed benefits. I posit it's cheaper to keep those benefits recipients out of poverty, versus paying for what happens if they aren't kept out of poverty.
Healthcare? Universal healthcare (Medicare For All), allowing for shedding the current jigsaw of healthcare benefits across the country. Less admin overhead, more care providers. If you're a pension that committed to healthcare expenses (state & local government, and manufacturers), you should be ringing the Medicare For All bell the hardest, to get the necessary infrastructure in place before your shortfalls arrive.
> I would postulate the opposite - I would have thought because we believe that neither companies nor the guvmint would be there to support us, we would have fended for ourselves better (I know that's how I personally took it, and many/most of my friends). But you might be right... sounds like an attitude of "ef it, we're doomed" set in.
Most Americans don't have the discretionary income after mandatory expenses to save to "fend for themselves" due to forty years of wage stagnation. This is why so many must rely on government programs to survive. [2]
[1] https://www.cbpp.org/research/social-security/social-securit... (Social Security Lifts More Americans Above Poverty Than Any Other Program)
[2] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... (For most U.S. workers, real wages have barely budged in decades)
Healthcare? Universal healthcare (Medicare For All), allowing for shedding the current jigsaw of healthcare benefits across the country. Less admin overhead, more care providers. If you're a pension that committed to healthcare expenses (state & local government, and manufacturers), you should be ringing the Medicare For All bell the hardest, to get the necessary infrastructure in place before your shortfalls arrive.
> I would postulate the opposite - I would have thought because we believe that neither companies nor the guvmint would be there to support us, we would have fended for ourselves better (I know that's how I personally took it, and many/most of my friends). But you might be right... sounds like an attitude of "ef it, we're doomed" set in.
Most Americans don't have the discretionary income after mandatory expenses to save to "fend for themselves" due to forty years of wage stagnation. This is why so many must rely on government programs to survive. [2]
[1] https://www.cbpp.org/research/social-security/social-securit... (Social Security Lifts More Americans Above Poverty Than Any Other Program)
[2] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... (For most U.S. workers, real wages have barely budged in decades)
>Social Security will not be gone, and it is not unsustainable. Currently configured, it will pay out ~75% of earned benefits once the trust fund is exhausted in 2034
The trust fund is the government loaning money to itself. Ultimately, it is an accounting fiction. Instead of tax payers having to shore up a SS shortfall they have to pay back T-Bills. Either way, there's about 3 trillion dollars missing that will need to be paid.
The trust fund is the government loaning money to itself. Ultimately, it is an accounting fiction. Instead of tax payers having to shore up a SS shortfall they have to pay back T-Bills. Either way, there's about 3 trillion dollars missing that will need to be paid.
As long as the US government exists and has taxing authority, the general fund will survive and be able to support paying back special issues securities [1] that were provided to Social Security. You can't invest the same way as Vanguard and Blackrock at nation state scale (ie "let's throw it all in a three fund/target date fund and call it a day"), although the Bank of Japan is going to be a pioneer in acquiring and distributing the gains from public companies in Japan [2] due to their demographic situation (which all first world countries will eventually transition through).
I would agree there are lots of liabilities (somewhere between single and triple digital trillions) we should start paying back now versus later though, before the debt service becomes unmanageable and we steal from savers by inflating the debt away, but this is a policy issue. We must stop kicking the can down the road, as a society, as a country, and as a species.
[1] https://www.ssa.gov/oact/progdata/fundFAQ.html (Frequently Asked Questions about the Social Security Trust Funds)
[2] https://news.ycombinator.com/item?id=19686549 | https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be... (Bank of Japan to be top shareholder of Japan stocks )
I would agree there are lots of liabilities (somewhere between single and triple digital trillions) we should start paying back now versus later though, before the debt service becomes unmanageable and we steal from savers by inflating the debt away, but this is a policy issue. We must stop kicking the can down the road, as a society, as a country, and as a species.
[1] https://www.ssa.gov/oact/progdata/fundFAQ.html (Frequently Asked Questions about the Social Security Trust Funds)
[2] https://news.ycombinator.com/item?id=19686549 | https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be... (Bank of Japan to be top shareholder of Japan stocks )
>You can't invest the same way as Vanguard and Blackrock at nation state scale
You can, it's just that current consumption is fulfilled by current production. Current production gets allocated to some combination of return to labor, return on capital, and taxes. All else equal, the state owning more capital will just squeeze out some combination of return to labor and return on capital. If you look at the cash flows, there's no difference between the government owning 1% more of your employer vs taxing an extra 1% of the company's overall value.
The biggest practical consideration is that taxation is a much more visible way of paying for benefits for current retirees, so replacing that with less obvious means is more politically viable.
You can, it's just that current consumption is fulfilled by current production. Current production gets allocated to some combination of return to labor, return on capital, and taxes. All else equal, the state owning more capital will just squeeze out some combination of return to labor and return on capital. If you look at the cash flows, there's no difference between the government owning 1% more of your employer vs taxing an extra 1% of the company's overall value.
The biggest practical consideration is that taxation is a much more visible way of paying for benefits for current retirees, so replacing that with less obvious means is more politically viable.
Taxes also provide steady cash-flow. For much of equity you need to sell in order to get money back.
The point of the parent comment is that even without the trust fund, each year’s social security taxes will be sufficient to pay 75% of benefits. This makes it clear that claims that the program is bound to disappear completely are overblown.
Sure, "gone" is clearly hyperbole. But the sentiment is accurate. GenX will pay for the Boomers to get 100% of their SS while they will likely receive less than the full value of their SS.
Taxes (currently at historic lows) will go up, and GenX will get paid.
Oh good, because everyone knows millennials are just swimming in extra taxable cash
You'd tax those making >$10 million/year, not those making <$100k/year.
That’s not going to work. There just aren’t that many people making >$10M per year and there are way too many collecting pensions.
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I mean, there aren't many but they hold the substantial fraction of total wealth. So if we have 100 people who can pay an extra billion/year and another 1k people who can pay an extra 100M and another 10k people who can pay an extra 10M then a total of 11k people are suddenly paying $300B.
The currently missing number is 3T and growing. An extra 300B is 1/10 of the needed funds assuming the debt cycle stopped now.
How long so you think you can charge an individual or company an "extra 100M"? Realistically would you stay in a country that suddenly added an extra 100M to your tax bill?
How long so you think you can charge an individual or company an "extra 100M"? Realistically would you stay in a country that suddenly added an extra 100M to your tax bill?
$300B ain’t that much. Age distribution is skewed older, so you might have 60M collecting a pension. Your $300B gives them all a fat $5,000 per year.
And your numbers are wealth, not income.
And your numbers are wealth, not income.
Realistically, as each generation lives longer the retirement age will rise. Thus the productive time (and net life-time production) will increase.
Exactly how productive do you think a 72 year old will be?
In a behind a desk job doing what they have immense experience doing I think they can be very productive. Even in SWE it doesn't take massive intellectual agility to write 90% of production code and that's a relatively brain-utilizing job. Lots of 72 year olds nowadays are quite healthy and mentally sharp, I think the trend will continue and future median 72 year olds will more like current 60 year old.
Let me put it in another way. I think a 60 year old doing manual labor in 1980s would be less productive than a 72 year old doing desk work in 2030.
Let me put it in another way. I think a 60 year old doing manual labor in 1980s would be less productive than a 72 year old doing desk work in 2030.
"the sentiment is accurate"? To how many decimal places?
Agreed. My high school Econ teacher told me I was too young to be cynical after I told her I expected to pay into SS throughout my career, but I didn’t expect to receive it. This was early 90s.
I’ve never included it in my retirement planning.
I’ve never included it in my retirement planning.
Likewise - as far as I've ever been concerned, it's just another form of income tax. I don't really mind doing my bit to take care of the old folks, but I certainly don't imagine any of that will ever come back around for me.
I didn't realize this was a generational thing.
I didn't realize this was a generational thing.
The news about the Social Security fund being insolvent right around when gen X was due to hit eligibility has quieted down in the last decade. I figure it's mostly because the media has largely forgotten gen X exists, instead focusing on the boomers and echo boomers, the millenials.
But social security is solvent and is projected to be so for a while. It’s Medicare that isn’t.
Social Security is projected to be insolvent in 2035, exactly when Gen X begins to hit retirement age:
https://www.cnbc.com/2019/04/22/social-security-is-headed-fo...
https://www.cnbc.com/2019/04/22/social-security-is-headed-fo...
checks math
Ok, so maybe it'll be ok for two years.
Ok, so maybe it'll be ok for two years.
I’m wondering how these two statements comport:
> Just over half (53%) of Gen Xers report having three months worth of salary socked away — money that could be used as an emergency fund. What’s more, 48% of Gen Xers said they’re living paycheck to paycheck
Since 48 + 53 > 100, either there is a rounding error or there are people who have 3 months’ savings who are also living paycheck to paycheck. I don’t see how it’s possible to be living paycheck to paycheck and have significant savings, unless this implies a sudden and relatively recent change in circumstances. It would be interesting to see if there is more detail on this in the linked MetLife study (which I haven’t got time to read right now, unfortunately).
> Just over half (53%) of Gen Xers report having three months worth of salary socked away — money that could be used as an emergency fund. What’s more, 48% of Gen Xers said they’re living paycheck to paycheck
Since 48 + 53 > 100, either there is a rounding error or there are people who have 3 months’ savings who are also living paycheck to paycheck. I don’t see how it’s possible to be living paycheck to paycheck and have significant savings, unless this implies a sudden and relatively recent change in circumstances. It would be interesting to see if there is more detail on this in the linked MetLife study (which I haven’t got time to read right now, unfortunately).
Is the 3 months of salary socked away somewhere it is accessible? I have hundreds of thousands of dollars in 401k, but I live paycheck to paycheck and have no readily accessible savings.
Why did you do that? You should be funding an emergency savings account before funding your 401k.
Why? To avoid the situation you’re in - no easy access to savings.
Why? To avoid the situation you’re in - no easy access to savings.
Because my employer does 5% matching. So I put in my 5% and they put in their 5%. I know I should have an emergency fund, I just don't have the means to fund it.
I see. That’s risky.
If you have steady employment, might I suggest opening a line of credit with your bank? If you have good credit the rate is reasonable. It costs you nothing unless you use it. And if you have to liquidate your 401k, you can pay it back in days.
If you have steady employment, might I suggest opening a line of credit with your bank? If you have good credit the rate is reasonable. It costs you nothing unless you use it. And if you have to liquidate your 401k, you can pay it back in days.
Employer-matched contributions to a 401k should be prioritized before an emergency fund. Otherwise you are leaving free money on the table. This applies to many Americans.
Disagree. What happens if you have an emergency? Then you end up withdrawing from the 401k + penalty.
> What happens if you have an emergency?
You borrow from the 401K. If for some reason that's not an option, you take money out with a penalty, but with sufficient match you are still often ahead.
You borrow from the 401K. If for some reason that's not an option, you take money out with a penalty, but with sufficient match you are still often ahead.
Even with the penalty and tax, it will be less than 50 percent, making it financially beneficial since the employer is matching 100 percent.
Sure, if it's 100% employer match. Even employers that do matching often do it below 100%.
How often do you have emergencies? Seems to me that if your life is going sideways, paying the penalty to get money out of your 401k would be worthwhile; but I expect that my life generally won't go sideways, so the extra percentage of income is more likely to be a benefit than the potential penalty is to be a detriment.
If your regular pay just barely makes ends meet, but you've had a couple of windfalls and exercised financial discipline with the results. You aren't able to save, but you aren't broke.
For me until I got a slight pay bump recently.
I have devoted all my savings to an oh shit fund.
I was also living pay check to pay check.
My definition of pay check is two fold.
1) Having to withdraw from the emergency fund to cover bills/groceries. 2) Hitting 0 in the daily spending bucket, and counting down the days until the next pay date.
So there can be some people. With good intent of saving, and putting away what they can. But also being fiscally tight.
My definition of pay check is two fold.
1) Having to withdraw from the emergency fund to cover bills/groceries. 2) Hitting 0 in the daily spending bucket, and counting down the days until the next pay date.
So there can be some people. With good intent of saving, and putting away what they can. But also being fiscally tight.
Could be they've earmarked the savings earlier. Or had a windfall, or they include putting aside 1% of their income to savings as still living paycheck to paycheck.
It can definitely be the case that someone's income is being entirely spent each paycheck and that they have some savings.
It can definitely be the case that someone's income is being entirely spent each paycheck and that they have some savings.
Are those stats really that different from those at or near retirement in the boomer generation? They're also likely better (in the weakest sense possible) than the projected retirements for Millenials forward.
Hard to say. We keep hearing that millennials can't afford to buy a house or have kids; OTOH savings rates went way up after the 2008 recession and have continued to fare surprisingly well.
The only comparison made in the article between Gen X and other generations was the subjective statement of being spoiled by their parents. If this article meant to be useful, it would compare other statements, like how many of the previous generation had funded retirement accounts at this age. Instead, it's doom and gloom scare tactics but I feel it lacks substantial information to provide value.
I'm a little older than Gen X, but I share many of the same concerns. When the economy crashed, I saw many people I know who had done everything right in terms of retirement savings get wiped out just as they were retiring. They were ruined.
It's awfully hard to have any sort of trust in a system that allows this to happen.
It's awfully hard to have any sort of trust in a system that allows this to happen.
When the economy crashed, I saw many people I know who had done everything right in terms of retirement savings get wiped out just as they were retiring. They were ruined.
Each individual case is different, but en masse household net worth (house value and stock market investments) dropped 17%. Four years later, it was back to where it was pre-recession. 17% is a hell of a haircut, but not what I would categorize as "ruined". Unless, and here's my most likely theory, they panicked and made a poor timing choice in selling the house or selling stocks at the worst possible time, and then had to buy back in at higher prices (because they missed most of the upswing while sitting out).
My parents, OTOH, sat it out just fine, and are so far from ruined that Mom bought herself a new C7 Corvette a few years ago. Anecdata all around, but if you can't sit tight for four more years, you're doing something wrong.
Each individual case is different, but en masse household net worth (house value and stock market investments) dropped 17%. Four years later, it was back to where it was pre-recession. 17% is a hell of a haircut, but not what I would categorize as "ruined". Unless, and here's my most likely theory, they panicked and made a poor timing choice in selling the house or selling stocks at the worst possible time, and then had to buy back in at higher prices (because they missed most of the upswing while sitting out).
My parents, OTOH, sat it out just fine, and are so far from ruined that Mom bought herself a new C7 Corvette a few years ago. Anecdata all around, but if you can't sit tight for four more years, you're doing something wrong.
That's en masse though. There are plenty of folks who went from >1M net worth into the negative.
I am at a loss to come up with any other explanation than those folks were over-leveraged, which in my book does not count as "doing everything right". Flipping houses is about all I can come up with, but there plenty of people more creative than I am about taking on debt.
So, being "negative" means someone is owed money. How does one do that with >1MM net worth? You sold everything, and still owe people money? You either weren't really a millionaire to begin with, or you were over-leveraged (which means you probably weren't really much of a millionaire to begin with).
So, being "negative" means someone is owed money. How does one do that with >1MM net worth? You sold everything, and still owe people money? You either weren't really a millionaire to begin with, or you were over-leveraged (which means you probably weren't really much of a millionaire to begin with).
If you're near retirement and your investments are so volatile as to be "wiped out" and "ruined" by a short term economic downturn then they are absolutely not doing everything right. In fact it's pretty much the opposite.
I'm between you two on this. The GenX cohort (I'm on the older end at 53 BTW) is caught in a bind. No, those near retirement shouldn't have all of their assets in volatile investments. But also no, they shouldn't have all of their assets in super-safe low-yield investments either because compounding is an essential part of building up a retirement fund. The transition from prime-earning-years portfolio choices to near-retirement (and then actual-retirement) portfolio choices is far from simple.
Also, keep in mind that even supposedly-safe types of investments got hit pretty hard in that downturn. Top-rated funds were actually far riskier than anyone knew because of the ratings shenanigans that were part of the MBS/CDO/etc. mess. Home values also declined sharply. Many lost their jobs, so they had to draw from already low and declining retirement funds.
I was fortunate. Many of my friends were not. While I'm proud of having made choices that preserved my ability to provide for my family, I wouldn't be so quick to criticize others whose rationally-equivalent choices turned out much worse.
Also, keep in mind that even supposedly-safe types of investments got hit pretty hard in that downturn. Top-rated funds were actually far riskier than anyone knew because of the ratings shenanigans that were part of the MBS/CDO/etc. mess. Home values also declined sharply. Many lost their jobs, so they had to draw from already low and declining retirement funds.
I was fortunate. Many of my friends were not. While I'm proud of having made choices that preserved my ability to provide for my family, I wouldn't be so quick to criticize others whose rationally-equivalent choices turned out much worse.
If you are nearing retirement, you should already have moved some of your portfolio into low volatility assets. Those are the ones you should then be prepared to draw on in the immediately coming years. Retirement shouldn't viewed as an event. You don't just cash your chips one day. It will be a phase of life where you have to continue to do a mixture of short term and long term planning.
The more volatile assets, if sensibly diversified, were not "wiped out" in 2008. The paper value dropped but then rebounded. As a GenX worry wort, I watched my own retirement account do this dance. I also watched my cash accounts slowly deteriorate against inflation. I am too risk averse to have gone all-in on the stock market even in my younger years, so had a portfolio mix more like someone 15-20 years older. If I'd been forced to live off my multi-year cache equivalent reserves, my 401K equivalent investments had mostly bounced back before I had to think about tapping any.
What was the worst in 2008 were those who had gone all-in on the housing market and turned out upside-down. And, those who still counted on a pension as a large part of their retirement plan and saw their pension providers going bankrupt. Those were really wiped out.
The more volatile assets, if sensibly diversified, were not "wiped out" in 2008. The paper value dropped but then rebounded. As a GenX worry wort, I watched my own retirement account do this dance. I also watched my cash accounts slowly deteriorate against inflation. I am too risk averse to have gone all-in on the stock market even in my younger years, so had a portfolio mix more like someone 15-20 years older. If I'd been forced to live off my multi-year cache equivalent reserves, my 401K equivalent investments had mostly bounced back before I had to think about tapping any.
What was the worst in 2008 were those who had gone all-in on the housing market and turned out upside-down. And, those who still counted on a pension as a large part of their retirement plan and saw their pension providers going bankrupt. Those were really wiped out.
I wouldnt call the Great Recession a short term economic downturn. A financial crisis of that scale hadn't happened in nearly a century.
Well, I was not privy to their entire approach, so you could be right. However, they thought they were doing it right.
Nonetheless, it did, and does, give me pause.
Nonetheless, it did, and does, give me pause.
You bring up a good point. When it comes to investing, most people don't have a clue what they are doing.
This in my opinion is the biggest problem with the move from a defined benefit to a defined contribution retirement scheme. It took the investing out of the hands of the people that knew what they were doing.
Along those lines it really grinds my gears how the financial industry is ripping off people who are saving for retirement. Most 401k plans I've seen have incredibly high fees with a few investments that charge equally as high of fee. Especially those at small companies.
This in my opinion is the biggest problem with the move from a defined benefit to a defined contribution retirement scheme. It took the investing out of the hands of the people that knew what they were doing.
Along those lines it really grinds my gears how the financial industry is ripping off people who are saving for retirement. Most 401k plans I've seen have incredibly high fees with a few investments that charge equally as high of fee. Especially those at small companies.
> When it comes to investing, most people don't have a clue what they are doing.
This is why I largely avoid investing (I do have some money in index funds, though). I know that I don't know what I'm doing in that world, and I also lack the time or interest required to become competent in it.
This is why I largely avoid investing (I do have some money in index funds, though). I know that I don't know what I'm doing in that world, and I also lack the time or interest required to become competent in it.
“love to blame individuals for systemic issues.”
Standard advice is to move weight from equity investments to income investments as you near retirement. Lots of people stay(ed) heavy with equity because the potentially higher returns and shucked off the general advice.
If by "systemic" you mean that the universe itself does not coddle you and prevent you from making poor decisions, then yeah sure.
Did the Bankers deserve 29Tn bailout?
How’s that for “coddling and preventing them from making poor decisions”
The yield curve has already inverted so we’re looking down the barrel of “Recession The Sequel.”
But yeah, keep blaming GenX (and presumably GenY and GenZ) for someone else’s problem. Many of them aren’t even earning a wage to save, avocado toast aside.
How’s that for “coddling and preventing them from making poor decisions”
The yield curve has already inverted so we’re looking down the barrel of “Recession The Sequel.”
But yeah, keep blaming GenX (and presumably GenY and GenZ) for someone else’s problem. Many of them aren’t even earning a wage to save, avocado toast aside.
frankly I am quite skeptical of the macro-economic predictions of a 'blockchain mark consultant'
In other words, GenX getting squeezed by debt payments and cost-of-living etc isn't something that comes ex nihilo. It's deeply related to the demographic situation - large number of long-lived Baby Boomers compared to the demographic makeup of prior generations.