Twenty-Two Percent of Americans Would Rather Die Than Retire w/ No Savings!

[Matt1970]

It might be a horrible idea to rely solely on SS, but he is right -- depending on where you live, you might be able to live off of just social security if your house is paid off. By the time I retire, my house would've been paid off for many years and I figure I can either keep it or, if I am not in great health, sell it and pay cash for a smaller home and invest the rest.

I used to think I would never retire so I didn't invest in my 401k as much as I should have in my younger days. Many years later, I still think it is rather likely that I'll never fully retire. However, I'm hoping once I hit my mid 50s, I can quit the full-time gig and do some part-time consulting.

We just had a thread where a lot of people were trying to say that it wasn't necessarily a good idea to buy a house. Imagine retiring and trying to pay rent and normal living expenses of SS.

 

[WhipperSnapper]

I can understand assisted suicide in cases such as terminal disease, but simply retiring with no savings? Even assuming I reached retirement age with no savings, I'd still rather work.

What if, after a lifetime of manual labor or various illnesses, you can no longer work, or at least no longer work comfortably? There's a reason it's called "work". As you get older, it becomes increasingly difficult to work.

Some people are going to reach the conclusion that they no longer want to struggle with constant discomfort while living near the poverty line or being homeless. For many people suicide may thus be a rational option. We should allow people to obtain voluntarily euthanasia if they want to.

Ironically, many of the same people who claim to oppose "big government" have no problem with big government making personal decisions for people (aka "Big Government in the Bedroom").

 

[WhipperSnapper]

It's grand how everyone here assumes life just let's you save and then you can have your golden years. Reality doesn't work like that.

It's part of the, "I've got mine, Fuck you!" mentality that many people have. The Free Market Morons have a religious belief in Meritocracy. They have faith that if people act rationally and work hard, good things will happen. So if everyone went to college and majored in STEM fields, voila, everyone could be at least comfortably middle class. Of course they fail to realize that in reality there are only so many high paying jobs available for people even if everyone went to college. But like I said, they're morons, so they wouldn't understand that sort of a concept.

I do not believe the number. When the time comes, the broke asses with no saving will vote for "income distribution fairness" to take from the savers/frugals.

It's difficult to save for retirement when you have a low income. Is that so hard to understand? (You don't need to be a rocket scientist to apprehend that simple concept.) Some people even have student loans for college education that did not result in middle class jobs and careers.

We all know it. Half the leftwing retards here have exactly this "retirement plan":

"Wahh! Someone else saved all their working life while I pissed around...

It could also be argued that many people were unable to save simply because the wealthy people ended up taking more wealth than they actually produced while workers were underpaid.

Of course, if you're a Free Market Moron, the notion that the world is not always fair and that people do not always get what they deserve would not occur to you since you would maintain a religious-like belief in Meritocracy.

 

[pcgeek11]

Your definition of meritocracy seems to be a little off as the way you are using the word as if it is a bad thing.

Meritocracy people would get what is merited by their worth or what they earn or deserve. Just as it should be.

Definition of MERITOCRACY

1 : a system in which the talented are chosen and moved ahead on the basis of their achievement.
2 : leadership selected on the basis of intellectual criteria.
3 : an elite group of people whose progress is based on ability and talent rather than on class privilege or wealth.
4 : a system in which such persons are rewarded and advanced.
5 : leadership by able and talented persons.

 

[Subyman]

I don't believe the poll. Sounds like some people were joking. If they were actually faced with either being killed or retiring poor, then they would not choose death. No way.

 

[Jhhnn]

It's part of the, "I've got mine, Fuck you!" mentality that many people have. The Free Market Morons have a religious belief in Meritocracy. They have faith that if people act rationally and work hard, good things will happen. So if everyone went to college and majored in STEM fields, voila, everyone could be at least comfortably middle class. Of course they fail to realize that in reality there are only so many high paying jobs available for people even if everyone went to college. But like I said, they're morons, so they wouldn't understand that sort of a concept.



It's difficult to save for retirement when you have a low income. Is that so hard to understand? (You don't need to be a rocket scientist to apprehend that simple concept.) Some people even have student loans for college education that did not result in middle class jobs and careers.




It could also be argued that many people were unable to save simply because the wealthy people ended up taking more wealth than they actually produced while workers were underpaid.

Of course, if you're a Free Market Moron, the notion that the world is not always fair and that people do not always get what they deserve would not occur to you since you would maintain a religious-like belief in Meritocracy.

Righties also believe in the infinite pie theory, an idealization of the time when there was a western frontier. They believe in ownership, but fail to understand what it means when a very, very few own & control most of what's there to be owned. It means the little guy gets crowded out by economic forces beyond his control.

Figure it out, guys. Investment has grown at 7% for 30 years & wages at 2%. We're living the results of that trickle down deception. It's like job slots at a company, and the bosses have downsized, rightsized, merged, outsourced, offshored, & consolidated it into a lot more poverty & near poverty job slots. Downsizing opportunity means more people needing jobs, & the less you have to pay any of 'em.

Keep electing Repubs for more of the same, harder & deeper.

 

[werepossum]

Sounds about right.

I already draw one pension. I am almost done with my second career and it also has a Company paid pension. Add that to my SS Income, Savings, 401K and investments...

I should be in good shape and will not have to commit suicide. Whew!

Well done, sir.

Now we'll just take those for the, um, good of the many.

I think too many people get the idea that retirement is a set date. Since it depends on factors outside your control there will likely be at least a couple of year swing either way. Even with the Great Recession a properly balanced portfolio only would have needed about 4 years to recover assuming continued contributions

Quite true, and it's not like you're going to draw out every penny once you retire.

 

[irishScott]

What if, after a lifetime of manual labor or various illnesses, you can no longer work, or at least no longer work comfortably? There's a reason it's called "work". As you get older, it becomes increasingly difficult to work.

Some people are going to reach the conclusion that they no longer want to struggle with constant discomfort while living near the poverty line or being homeless. For many people suicide may thus be a rational option. We should allow people to obtain voluntarily euthanasia if they want to.

Ironically, many of the same people who claim to oppose "big government" have no problem with big government making personal decisions for people (aka "Big Government in the Bedroom").

Being medically unfit for work is a whole different story, but generally speaking the rational approach to suffering is to act towards alieviating said suffering. We live in an amazing age in an amazing world where there is some sort of safety net for virtually everything. It certainly isn't easy but there are almost always options. The issue with the vast majority of suicides is almost never that the people lack options, it's that they're unwilling to acknowledge or take advantage of the options they have.

Anyone who reaches retirement age and is still "constantly struggling just above the poverty line" and is otherwise physically able to work needs to take an extremely close look at their life and figure out what they're doing wrong; and then implement personal changes to fix said flaws. Easier said than done, but imminently doable with enough discipline and fortitude. That person should have multiple decades of mistakes to draw from.

The issue with making suicide legal is that most who choose it are suffering from severe mental illness and are making an irrational decision. People in that state are not fit to make such decisions IMO.

As for my credentials, some 13 years ago I held a very sharp knife to my own jugular (in private) and came very close to making one fateful stroke. Obviously I didn't follow through, but having long recovered from that dark stage of my life I can say from experience that suicide is generally pointless and cowardly. My other options at the time sucked ass and didn't offer any real way out. I still chose them over death, and the years of additional suffering brought on by that decision have been well worth it, given my life's current upward trajectory.

Granted everyone's situation is different, but I'll never accept "being tired of struggling" as a valid excuse for suicide.

 

[IronWing]

Going to be an interesting future...

Uno

I think it is interesting that even the "welfare state" countries with generous pension systems still have higher personal savings rates than the U.S.

 

[IronWing]

Your definition of meritocracy seems to be a little off as the way you are using the word as if it is a bad thing.

I think his point is that we don't actually live in a meritocracy and that reward has little relationship to merit, particularly at the high end of the income distribution curve

 

[Fern]

Ironically, the most conservative states gets the most welfare. How do you explain that?

Which state and what type of "welfare" benefits?

Fern

 

[bshole]

If a person is really an investor and not a play-trader, market "crashes" are almost like a free money ATM machine.

My Dad for example, jokes that he made more money after the "crash" of 2009 (while in retirement of course, which he has been for years) than he ever did in any single stretch of years prior- except maybe for a very select few market "crashes" before then.

But then again, he and people like him are investors- not play-traders. Play-traders should just keep their money out of the market really. Complaining you lost everything in a "crash" which for others who actually know what they are doing is a major boom-time, is just being stupid really. People that know what they are doing don't risk any catastrophic amount of their assets to any single event, can spot most "crashes" coming while everyone else is piddling around and ignoring the avalanche of warning advice coming from other people who also know what-the-fuck they are doing... and then make out like bandits picking up deals for cheap while all the play-traders are whining and selling.

Soo....... when does your Dad think the next crash is coming? With the Republicans now in charge, it can't be that far off.

 

[Exterous]

And if you're already retired & depend on your investments for income, it eats away at your principal at a higher rate, reducing your potential to earn.

Not necessarily. It should be painfully obvious that the stock market\investments fluctuate so you should expect fluctuations in retirement as well. Ideally you would reduce your spending accordingly or have a planned buffer.

Truth is that the great recession has been a lot harder on middle America than most people realize, particularly Conservatives.

Part of that is middle America's fault. While I agree that there are wage issues the middle class has actively shunned the stock market since it peaked in 2007. The Middle class has actively decided to buy high and sell low. Those that remained invested greatly reduced their contributions and have not returned to pre-recession levels despite the positive returns. Over $500 billion has been removed from stocks and placed in bonds during the last couple of years.

http://money.cnn.com/2013/05/09/investing/american-stock-ownership/

 

[CLite]

Going to be an interesting future...

Uno

Does that plot count the fact that every working American saves 12.4% of their salary (6.2% personal withholding to SS + 6.2% employer donation)?

 

[unokitty]

Does that plot count the fact that every working American saves 12.4% of their salary (6.2% personal withholding to SS + 6.2% employer donation)?

Unconvinced, syndicated columnist Charles Krauthammer wrote a subsequent column questioning Lew’s assertions. “This [Lew’s] claim is a breathtaking fraud. The pretense is that a flush trust fund will pay retirees for the next 26 years. Lovely, except for one thing: The Social Security trust fund is a fiction. … In other words, the Social Security trust fund contains—nothing.”

Since the Federal Government has already spent every thing in the social security 'trust fund,' why would it count as savings?

Uno

 

[Fern]

Since the Federal Government has already spent every thing in the social security 'trust fund,' why would it count as savings?

Uno

SS is an annuity (along with a package of other financial products such as disability insurance) backed by one of the strongest players in the world - the US govt.

Whether or not it is a good investment in terms of return on investment is another matter.

But yeah, it's savings. I've been self-employed most of my adult life. That means I've got to pay in 15%. That's pretty damn steep and makes it difficult to have even more in savings for a 401k etc.

Fern

 

[CLite]

Since the Federal Government has already spent every thing in the social security 'trust fund,' why would it count as savings?

Uno

The trust fund holds ~2.5 trillion dollars of securities. If you think that holds no value we should tell anyone holding T-Bills or equivalent devices to toss them into the fire pit. Actually, if your bank account holds any USD you may as well give it to me because it's equally worthless.

 

[Svnla]

It's difficult to save for retirement when you have a low income. Is that so hard to understand? (You don't need to be a rocket scientist to apprehend that simple concept.) Some people even have student loans for college education that did not result in middle class jobs and careers.

Let me answer you with this quote from a very well know and very rich person:

“If you are born poor it's not your mistake, But if you die poor it's your mistake.” Bill Gates

Not very difficult to understand what he was trying to say.

 

[unokitty]

SS is an annuity (along with a package of other financial products such as disability insurance) backed by one of the strongest players in the world - the US govt.

Whether or not it is a good investment in terms of return on investment is another matter.

But yeah, it's savings. I've been self-employed most of my adult life. That means I've got to pay in 15%. That's pretty damn steep and makes it difficult to have even more in savings for a 401k etc.

Fern

PewResearch

At its root Social Security is, and always has been, an inter-generational transfer of wealth. The taxes paid by today’s workers and their employers don’t go into a dedicated individual account, nor do Social Security checks represent a return on invested capital. (Although you might be forgiven for thinking so, since the “personalized Social Security statements” that used to be mailed out once a year and now are available online detail your payment history and projected monthly benefits.) Rather, the benefits received by today’s retirees are funded by the taxes paid by today’s workers; when those workers retire, their benefits will be paid for by the next generation of workers’ taxes ...

... since 2010 Social Security’s cash expenses have exceeded its cash receipts; negative cash flow last year was about $55 billion, according to the latest report from the system’s trustees. While credited interest is still more than enough to cover the deficit, that will only be true until 2020. After that, Social Security will begin redeeming its hoard of Treasuries for cash to continue paying benefits — as was the plan all along.

Social Security’s reserves will be fully depleted by 2033, according to the trustees’ report. (The Congressional Budget Office, in a separate report that uses somewhat different demographic assumptions, puts the date at 2031.) ...

You're welcome to your belief. And paying in 15%, you've got my empathy.

Nonetheless, I find the (above) position of Pew Research more persuasive.

Uno

 

[werepossum]

PewResearchYou're welcome to your belief. And paying in 15%, you've got my empathy.

Nonetheless, I find the (above) position of Pew Research more persuasive.

Uno

You're both right. The Trust Fund (Algore's lock box) contains actual valuable securities. However, they aren't YOUR securities, just securities bought with your money.

Worse, the federal programs funded with your money still have to eat now that the surplus is gone. The federalies not only bought votes with your "savings", but the machines they built still compete with you for getting what was promised. And at its heart, Social Security remains an inter-generational transfer of wealth, because the federal government is $17 trillion in debt and can only make good those securities by taxing your children and grandchildren.

 

[Fern]

PewResearchYou're welcome to your belief. And paying in 15%, you've got my empathy.

Nonetheless I find the (above) position of Pew Research more persuasive.

Uno

There's nothing incompatible with my post and your quoted source.

The 'inter-generational transfer of wealth' is true in two respects, neither of which means SS is not an annuity investment combined with other financial products. Rather, the "inter-generational transfer of wealth" describes the manner in which the annuity company (the US govt in this case) funds annuity benefits.


1. The first SS/annuity beneficiaries received full retirement even though they had not been paying in. They couldn't, the program had only been started when they retired. Thus, their benefits were funded by younger workers. I.e., an "inter-generational transfer of wealth". They got what they never paid for (or invested in) and that came from younger workers. This was a 'one-time' occurrence and has long passed.

2. Current benefits are (mostly) funded by current contributions. So, in a way, one can say it's an "inter-generational transfer of wealth". I would personally disagree since many retirees don't receive more than they paid in (invested), and for most that do the ROR would be abysmally meager. Simply put, the cash flow arrangement utilized by the annuity payer does not work to define the program, merely defines the payer's practices. E.g., if I invest in a bond and am paid 2% interest, the fact the bond debtor stole money to make the 2% payment doesn't mean I'm a thief. However, the payer is.


SS will never bankrupt (or, if it did it would be the least of our problems. I.e., it wouldn't matter a whit.). Worse case scenario, no money in the trust fund, no fixes, no improvement in the economy etc, benefits will drop to 70% of promised levels. Hardly good news, but nothing close to bankruptcy and zero benefits.

Bankruptcy and zero benefits would only happen if no one was working. If no one is working there's nothing to buy, no food, no electricity etc. anyway. If that happens the fact that SS is bankrupt won't matter. Won't matter if it isn't bankrupt; where are you going to cash that check (nobody employed in banking) and even you could cash it, what would you buy?

Fern

 

[werepossum]

There's nothing incompatible with my post and your quoted source.

The 'inter-generational transfer of wealth' is true in two respects, neither of which means SS is not an annuity investment combined with other financial products. Rather, the "inter-generational transfer of wealth" describes the manner in which the annuity company (the US govt in this case) funds annuity benefits.


1. The first SS/annuity beneficiaries received full retirement even though they had not been paying in. They couldn't, the program had only been started when they retired. Thus, their benefits were funded by younger workers. I.e., an "inter-generational transfer of wealth". They got what they never paid for (or invested in) and that came from younger workers. This was a 'one-time' occurrence and has long passed.

2. Current benefits are (mostly) funded by current contributions. So, in a way, one can say it's an "inter-generational transfer of wealth". I would personally disagree since many retirees don't receive more than they paid in (invested), and for most that do the ROR would be abysmally meager. Simply put, the cash flow arrangement utilized by the annuity payer does not work to define program, merely defines the payer's practices. E.g., if I invest in a bond and am paid 2% interest, the fact the bond debtor stole money to make the 2% payment doesn't mean I'm a thief.


SS will never bankrupt (or, if it did it would be the least of our problems. I.e., it wouldn't matter a whit.). Worse case scenario, no money in the trust fund, no fixes, no improvement in the economy etc, benefits will drop to 70% of promised levels. Hardly good news, but nothing close to bankruptcy and zero benefits.

Bankruptcy and zero benefits would only happen if no one was working. If no one is working there's nothing to buy, no food, no electricity etc. anyway. If that happens the fact that SS is bankrupt won't matter. Won't matter if it isn't bankrupt; where are you going to cash that check (nobody employed in banking) and even you could cash it, what would you buy?

Fern

Duh, hookers and blow. They aren't counted in official employment figures.

It's also worth pointing out that unlike any other annuity, the issuer is free to change the payout terms and value at any point - even after making the payments for 55 years.

 

[Fern]

Duh, hookers and blow. They aren't counted in official employment figures.

It's also worth pointing out that unlike any other annuity, the issuer is free to change the payout terms and value at any point - even after making the payments for 55 years.

True, so let's call it a 'variable annuity'.

It varies of the govt's whims.

Fern

 

[Brovane]

Going to be an interesting future...

Uno

I would like to know a little bit more about this data and the actual metrics on what is showing. I have found some graphs online showing US savings rate. Down below in small print it says after tax income savings. So if I am socking away 15% in a 401k that is pre-tax income, I wonder if this graph even picks it up? This graph showing a low savings rate could be really skewed if it doesn't include 401k savings when it determines the personal savings rate.

 

[unokitty]

I would like to know a little bit more about this data and the actual metrics on what is showing. I have found some graphs online showing US savings rate. Down below in small print it says after tax income savings. So if I am socking away 15% in a 401k that is pre-tax income, I wonder if this graph even picks it up? This graph showing a low savings rate could be really skewed if it doesn't include 401k savings when it determines the personal savings rate.

Original Source

OECD Table

OECD Sources and Methods

Uno