The Looming Threat Of Boomer Retirement

wallyj84

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What you don't know about your parents' retirement plans could hurt you financially

Boomers will soon retire and most don't have much saved up for retirement. What's more social security is in dire straits which might lead to it being not as generous in the future. This might lead to future hardship for their children.

What do you guys think of this problem? Do you thinking is a big problem or just overblown? Should we worry about it? What can be done to fix it?

If someone thinks this shouldn't be in politics, it can be moved.
 

keenobserver

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What you don't know about your parents' retirement plans could hurt you financially

Boomers will soon retire and most don't have much saved up for retirement. What's more social security is in dire straits which might lead to it being not as generous in the future. This might lead to future hardship for their children.

What do you guys think of this problem? Do you thinking is a big problem or just overblown? Should we worry about it? What can be done to fix it?

If someone thinks this shouldn't be in politics, it can be moved.

It's a political issue absolutely. The problem is easily fixed but congress and Trump (he's not the first who refuses, just the latest) will not take action. The easiest fix is to raise the limit on income that is taxed to fund social security. Now it is capped at somewhere around 110,000 (not sure of the exact figure). Anything over that is not taxed for social security. When the caps were set, no one ever though many people would make over 100,000 and have challenges raising a family and saving for retirement. The second thing is include all income that is declared on a tax return as taxable for social security. Jeff Bezos for example only pays himself 85K a year, so his social security contribution is fairly small by comparison of what he actually earns.

We need to get younger workers more involved in their retirement planning much earlier. A younger friend who was a neighbor growing up had a massive paper route when he was a kid. He was like a venture capitalist of paper routes. He took over other kids routes when they got tired of doing it every morning for days on end in all kinds of conditions. We used to tease him about how much money he made - and this was when EVERYONE read the newspaper - and retiring on a paperboys pension. That's not quite what happened but he did learn the most important lesson one needs to learn - pay yourself first. Before you buy anything for fun, clothes, electronics, entertainment, set aside money to the future in a separate place like a due bill everytime you get paid. He did that all his life and it has paid of very well for him and his family. Most people find reasons not to save and invest. That is a critical habit that has been lost in my lifetime.

The GOP has always hated social security and medicare, George W. wanted to put some of social security revenues into the stock market but backed off due to the outcry. Critics rightly pointed out the fees would stifle any returns on such small amounts. Social Security was always meant to be a fallback plan - money in addition to what you saved. It has become the mainstay and so needs to be treated as such. Trump wants to make big cuts in benefits, using the savings for deficit reduction (read - more tax cuts for the rich). If we don't get rid of him and the GOP he will succeed.
 

spaj8987

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Social security is in more than dire straits. It's flat out being attacked on a regular basis. Same goes for healthcare, medicaid and so on.

I think with recent events america has a chance to fix these problems. And yes, i do think they are major problems. America breaking problems. I also think we should in fact worry about it. I'm gonna sound like a broken record at this point but i think people becoming more logical could help.

Considering that this generation doesn't have nearly as much disposable income as the last and the last before that. I'm thinking that the first step should be the rich paying their fair share. Which would infuse an insane amount of money back into america.

Read a partly joking but mostly serious question on social media not too long that kind of went like. If jeff bezos gave everyone in the world a part of his wealth, what would you do with your $17.50?

Which is kind of mind blowing. I'm not sure if he does in fact make enough money to do that but it was one of the best ways i've read so far on expressing just how much more money the rich makes compared to the rest of the world. So i think starting there is a very good idea.
 
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Thikn2velvet1

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It's a political issue absolutely. The problem is easily fixed but congress and Trump (he's not the first who refuses, just the latest) will not take action. The easiest fix is to raise the limit on income that is taxed to fund social security. Now it is capped at somewhere around 110,000 (not sure of the exact figure). Anything over that is not taxed for social security. When the caps were set, no one ever though many people would make over 100,000 and have challenges raising a family and saving for retirement. The second thing is include all income that is declared on a tax return as taxable for social security. Jeff Bezos for example only pays himself 85K a year, so his social security contribution is fairly small by comparison of what he actually earns.

We need to get younger workers more involved in their retirement planning much earlier. A younger friend who was a neighbor growing up had a massive paper route when he was a kid. He was like a venture capitalist of paper routes. He took over other kids routes when they got tired of doing it every morning for days on end in all kinds of conditions. We used to tease him about how much money he made - and this was when EVERYONE read the newspaper - and retiring on a paperboys pension. That's not quite what happened but he did learn the most important lesson one needs to learn - pay yourself first. Before you buy anything for fun, clothes, electronics, entertainment, set aside money to the future in a separate place like a due bill everytime you get paid. He did that all his life and it has paid of very well for him and his family. Most people find reasons not to save and invest. That is a critical habit that has been lost in my lifetime.

The GOP has always hated social security and medicare, George W. wanted to put some of social security revenues into the stock market but backed off due to the outcry. Critics rightly pointed out the fees would stifle any returns on such small amounts. Social Security was always meant to be a fallback plan - money in addition to what you saved. It has become the mainstay and so needs to be treated as such. Trump wants to make big cuts in benefits, using the savings for deficit reduction (read - more tax cuts for the rich). If we don't get rid of him and the GOP he will succeed.

You would have to change Social Security. The reason there is a cap is because SSI was never to be an income transfer but a retirement vehicle. It was capped that very high earners could not be paid exorbitant amounts of benefits. Remember as is, SS is a “the more you pay in” the more you can take out” plan. You want to change it to welfare.
 

spaj8987

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You would have to change Social Security. The reason there is a cap is because SSI was never to be an income transfer but a retirement vehicle. It was capped that very high earners could not be paid exorbitant amounts of benefits. Remember as is, SS is a “the more you pay in” the more you can take out” plan. You want to change it to welfare.

I think you might have just come dangerously close to this.

  • Deliberately misquoting or removing sections of a quote to mislead others or change/remove the context will not be tolerated.
  • Editing or adding to quotes in order to mislead others or change the meaning will not be tolerated.
 

keenobserver

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You would have to change Social Security. The reason there is a cap is because SSI was never to be an income transfer but a retirement vehicle. It was capped that very high earners could not be paid exorbitant amounts of benefits. Remember as is, SS is a “the more you pay in” the more you can take out” plan. You want to change it to welfare.

No, but you think anything the government does to help people be secure is bad - unless you are helping yourself to government's money.
 
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wallyj84

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You would have to change Social Security. The reason there is a cap is because SSI was never to be an income transfer but a retirement vehicle. It was capped that very high earners could not be paid exorbitant amounts of benefits. Remember as is, SS is a “the more you pay in” the more you can take out” plan. You want to change it to welfare.

This is a fair point. It would be hard to justify keeping SS capped at $3790 a month if we removed the income cap.

How would propose we fix the problem?
 

wallyj84

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It's a political issue absolutely. The problem is easily fixed but congress and Trump (he's not the first who refuses, just the latest) will not take action. The easiest fix is to raise the limit on income that is taxed to fund social security. Now it is capped at somewhere around 110,000 (not sure of the exact figure). Anything over that is not taxed for social security. When the caps were set, no one ever though many people would make over 100,000 and have challenges raising a family and saving for retirement. The second thing is include all income that is declared on a tax return as taxable for social security. Jeff Bezos for example only pays himself 85K a year, so his social security contribution is fairly small by comparison of what he actually earns.

We need to get younger workers more involved in their retirement planning much earlier. A younger friend who was a neighbor growing up had a massive paper route when he was a kid. He was like a venture capitalist of paper routes. He took over other kids routes when they got tired of doing it every morning for days on end in all kinds of conditions. We used to tease him about how much money he made - and this was when EVERYONE read the newspaper - and retiring on a paperboys pension. That's not quite what happened but he did learn the most important lesson one needs to learn - pay yourself first. Before you buy anything for fun, clothes, electronics, entertainment, set aside money to the future in a separate place like a due bill everytime you get paid. He did that all his life and it has paid of very well for him and his family. Most people find reasons not to save and invest. That is a critical habit that has been lost in my lifetime.

The GOP has always hated social security and medicare, George W. wanted to put some of social security revenues into the stock market but backed off due to the outcry. Critics rightly pointed out the fees would stifle any returns on such small amounts. Social Security was always meant to be a fallback plan - money in addition to what you saved. It has become the mainstay and so needs to be treated as such. Trump wants to make big cuts in benefits, using the savings for deficit reduction (read - more tax cuts for the rich). If we don't get rid of him and the GOP he will succeed.

You're very correct when you say that we need to get younger people focussed on saving for their retirement. But that is difficult to do and will only become more difficult as more people are forced to take care of their parents.


General question to everyone, how much knowledge do you have of your parents retirement income? Do they have anything saved up?
 
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keenobserver

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You're very correct when you say that we need to get younger people focussed on saving for their retirement. But that is difficult to do and will only become more difficult as more people are forced to take care of their parents.


General question to everyone, how much knowledge do you have of your parents retirement income? Do they have anything saved up?

That's a factor to be sure, but if saving is started early and conditioned, and we improve access to medical care vis a vis insurance or mediacre for all that can be addressed. The cure is not quick, but it is doable with the reforms discussed.
 

Thikn2velvet1

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A bigger more ominous retirement problem is grossly underfunded public sector pension plans backstopped by the tax payer. Tax payers have to fund both their own retirement AND teachers and police retirements
 

spaj8987

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A bigger more ominous retirement problem is grossly underfunded public sector pension plans backstopped by the tax payer. Tax payers have to fund both their own retirement AND teachers and police retirements

As far as i can tell it is grossly underfunded because people's wages weren't raised along with the cost of living. The more people who need money the less they can pay into government programs.

Don't think i need to say why people's wages haven't risen.
 

wallyj84

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That's a factor to be sure, but if saving is started early and conditioned, and we improve access to medical care vis a vis insurance or mediacre for all that can be addressed. The cure is not quick, but it is doable with the reforms discussed.

There would have to be a lot of reforms. Beyond medicine, which is obvious, I think our entire approach to housing will have to change.


A bigger more ominous retirement problem is grossly underfunded public sector pension plans backstopped by the tax payer. Tax payers have to fund both their own retirement AND teachers and police retirements

Yes, that is also a big problem. I live in Illinois and the pension problem here is horrible and has driven state taxes up to insane levels. I think it is something like 30-40% of tax revenue goes towards funding the pensions.

It is a big problem and one that can't be easily fixed due to an amendment to the state constitution that prevents these benefits from being changed.
 

wallyj84

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Both of which should be changed. Problem solved. Next!

Would it? I'm not convinced. I think the most you would do is just push it down the road. Which might be the best option, but is still kind of depressing.

Perhaps social security needs a new funding mechanism? Or maybe it should be phased out and replaced with a UBI. #Yang2024. J/K
 

keenobserver

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As is the contribution cap.

Both of which should be changed. Problem solved. Next
Would it? I'm not convinced. I think the most you would do is just push it down the road. Which might be the best option, but is still kind of depressing.

Perhaps social security needs a new funding mechanism? Or maybe it should be phased out and replaced with a UBI. #Yang2024. J/K

Well the UBI idea just died for the time being. I just proposed new funding. When the social security was started the country was very different. Population trends have changed so the basic formula needs to be adapted to delve that. Less people, older population. Hard industry gone.
 

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I think if you rid the world of tax havens...you may have little shitbox nations who think they are wealthy..(and many of them are in the top 25 wealthy nations) because they hide other countries tax entitlements...well, they'll go bust because they have no income from other areas.....but you would probably go a long way in solving some pretty serious social issues in many of the worlds nations.

But hey...for some reason it's all to hard for nations to get together and outlaw it. Whatever party is in power.

Go figure....