Why work has failed us: Because no one can afford to retire anymore
fastcompany.com
fastcompany.com
> The IRA won’t make anyone rich. A calculator on the site estimates that if you’re 22 years old and making $14 an hour–saving around $120 a month–you could end up with around $230,000 by the time you’re 65
1. $14 / hour? The median household (yes, I know, household, but wait) income is the highest it's been since at least 1985 [1] at $59k/year. So $14 is definitely a bit lower than "normal".
2. Saving $120/month on that salary is saving just 5%! Nobody is suggesting saving 5% is appropriate. 10% is the bare minimum anyone recommends. Doing that, an IRA at 65 would be worth > $763,000, enough to spend $30k each year for the rest of their lives.
Standard statement I feel like I always need to make: this is in no way a defense of our economic system. We absolutely need to raise taxes on the highest earners. We probably need a wealth tax as well. But we middle classers need to cool it with the defeatist attitudes. The poor have it hard. We, for the most part, do not. We spend too much and save too little. If you've got a car loan, eat anything but rice and beans, drink anything but water, have cable tv, a > $30/month cell phone bill, and complain about being broke, you've got some very obvious improvements you can make to get out of that dilemma.
[1] https://en.wikipedia.org/wiki/Household_income_in_the_United...
If we take that household income to mean it's two earners, they're each earning $14.75/hr ...
(assuming a standard 2000 work year), which is 40 hrs/wk for 50 weeks
[1] https://www.taxpolicycenter.org/statistics/household-income-...
And to convince people to spending so much.
The new iPhones will be announced next week. How many will buy a $1000 phone yet not have $1000 saved for any kind of emergency?
Also: How do those "FIRE" millenials manage to retire at 30? By living WELL below their means. It's no a lifestyle for everybody, but it demonstrates that money skills can be learned.
So no room for 2 years of education or a drop year for health issues or layoffs or travel or starting a risky business?
For me, the question anyone should ask is this, "If I needed $2,500 right now, could I get my hands on it quickly and reliably?" That number has gone up a bit but it is the 'emergency cash' number of old which would cover "a major car repair", "bailing out of jail", "the entire medical deductible in one payment" etc. It is the equivalent of "If life throws you a curve ball can you catch it or are you going to get knocked on your butt by it." [1]
If you can't answer yes to that question then it is important to recognize that you are operating without safeguards which puts you at risk of cascading financial difficulties. And if you can't answer yes to that question to have to ask things like "am I paying for Netflix? More than a bar budget phone? Do I eat out? Do I eat pre-prepared foods rather than making my own? Am I getting the most use/wear out of the things I buy like clothes, vehicles, etc?" Basically assess each thing you spend money on and look for ways to reduce that expense or eliminate it. As a fun anecdote I talked with a young adult who felt it was too much to ask to give up Netflix/Amazon Prime (for the streaming), I showed them they could buy a DVD player for $35 and check out movies and old television shows for free from the public library. It wasn't something they had opened their mind up to. But once they looked hard at things they found a bunch of stuff that they could change and that helped them get finances into a much better order.
I like the Mr Money Mustache site for ideas on ways to cut down your 'burn rate' as well.
[1] This can also be covered by a credit card, if you don't have any credit card debt, which is to say you have a credit card with a $2,500 credit limit but it (and no other card you have) carry a balance. Basically if you pull the trigger you'll add a monthy expense for the next 'n' months to get back out of the hole you just made.
> car loan
most of America doesn't have any way of getting to jobs without one
> eat anything but rice and beans
most people need fundamental nutrients from vegetables just to be able to survive, these vegetables tend to be more expensive than less healthy things
> a >$30 month cell phone bill
internet access gates opportunity in American and for many people their cell phone (which they cannot afford to pay for up front and therefore must lease) and its data plan is there only gateway to the rest of the world
> drink anything but water, have cable tv (or assuming Netflix)
any right to a Gatorade after shooting hoops at your dilapidated public park on a hot day, any right to 30 mins of entertainment after working your mind numbing job that drains of you all life
> You've got obvious improvements you can make to get out of that dilemma.
Why?
Why is the right to a just life gated by the requirement to surrender basic humanity? Who is this we?
A toss off link to a Wikipedia article?
The Census Bureau itself says American household income is the same since 1987 [1] while cost of housing, education and healthcare goes 2x-3x in the last decade alone [2]
How does a world view like this even get formed?
[1] https://img.washingtonpost.com/wp-apps/imrs.php?src=https://...)
[2] http://slatestarcodex.com/2017/02/09/considerations-on-cost-...
This place baffles me sometimes.
Agreed, MMM followers are die-hard. And I honestly applaud them for that. There's a middle road he also preaches about, realizing his method won't work for most people. Though I'd bet that most people don't get that far in his blog when he begins to talk about that.
I think if we use the big takeaways from what he's saying; we can all gain a little financial independence. Not everyone can get away with what he can in a beautiful town in Colorado. And he realizes that.
They're all saying the same sorts of things: Financial Advisors, Dave Ramsey, MMM et. al. The fact that most people aren't listening to them is the truly alarming part of it: Save, and don't overspend; or you'll be working for the rest of your life.
Two things:
1. That's patently false. Most trips in vehicles are between 1 and 10 miles in distance. Anyone without serious health problems can do that on a bicycle quite easily.
2. You don't need a car loan to own a car.
> most people need fundamental nutrients from vegetables just to be able to survive, these vegetables tend to be more expensive than less healthy things
My statement was about people who were broke and/or in debt. And it's not a 100% meal plan, but rice and beans is a good cheap staple food. You can add in cheap produce, too. The crux of the point is: if you're in debt and spending more than ~$1 per meal, you've got an easy way to cut costs.
> internet access gates opportunity in American and for many people their cell phone (which they cannot afford to pay for up front and therefore must lease) and its data plan is there only gateway to the rest of the world
Libraries have free internet and computers. And for cell service, using an MVNO, you can spend ~$30 and get 1GB of data, 100 mins of talk time, 100 text messages. (see Ting.com for example)
>any right to a Gatorade after shooting hoops at your dilapidated public park on a hot day, any right to 30 mins of entertainment after working your mind numbing job that drains of you all life
Are you serious? Getting out of debt is infinitely more important than having a Gatorade or watching Netflix. Especially when there are obvious free alternatives. Streaming Netflix hasn't been around a decade, and it's now "surrendering basic humanity" to go without? That's a pretty fragile position to take.
Dependents will be a major problem in such a scheme, adding another 2 hours. Unless there is a good bus connection, give it half an hour then. (those are not free but still inexpensive)
Libraries put even more pressure on transportation. It should be cheaper to use a mail order service. Heck, even for bigger groceries.
These are costs all hidden in plain sight. Everything takes a lot of time in the US if your mode of transport is not a car.
Now to own a cheap used car also has costs. And a poor person cannot afford a cheap modern car, used car market is full of landmines and a poorer person cannot afford even one failure in this regard.
What? I'd bet 99% of the people on a cheap road bike could get to 12-15 mph without even thinking about trying. 10 mph requires a ridiculously low 0.4 W/kg power output. (For reference, walking up stairs requires around 2.5 W/kg.)
https://saver.oregonsaves.com/home/educational-tools/simple-...
"The assumed investment rate of return before you retire is set at 4%, compounded annually."
The S&P500 has an average rate of real return of 7%, which makes an enormous difference.
This reads like a descent into satire.
If you assume 5% growth, then you will need to save about 14% of your income. Here, I'm using the average returns of the stock market minus inflation should get you 7%.
Some historical perspective: My understanding is that when Social Security was created, the average life expectancy was 67. So offering it for people age 65 was intended as providing for people in extreme old age who had probably worked physically hard their entire lives and were pretty beat up.
I'm not saying we don't have genuine problems here, but this article is bellyaching about, basically, a golden era when the world was relatively briefly unusually comfortable and acting like that was the norm throughout all of history. The reality is that money per se only became common place something like 300 years or so ago. So the very concept of retirement and saving for retirement is relatively new.
This makes it a little hard for me to take this article seriously, so I confess to not reading it in full. Some of the things it gets right: Pensions are going out of style precisely because people are living longer, so pensions wind up being financially unsustainable.
Given that people are living a whole lot longer and are generally in better health at 70 these days than 65 used to be, it isn't really some huge hand-wringing drama that older Americans need to continue working. Instead, it is evidence of how successful we have been in some sense.
This is a good problem to have. We need to make adjustments to the system, but people living longer and this requiring cultural adjustments isn't some giant tragedy.
Retirement for, say, two decades or whatever is hardly some historical and long standing human norm. It's really rather out of touch with reality to act like it ever was.
A very small number of people had the resource base to survive growing old gracefully: Social Security was an attempt to extend that to all on a consistent basis. That's not to say some form of it can't be made to work, but as much as we may love the core concept of retirement we may need to accept that it isn't broadly economically viable without a meaningful, direct index against increasing life expectancy (with the usual caveats for infirmity, disease, etc).
It is (in my opinion) a well meaning, long term social experiment that might be coming to an end. I am quite curious to see what (and how) we get to the other side of that.
a priori, I consider both of those fates worse than death. Support network or no.
I have a genetic disorder. I'm significantly impacted by it. I spend part of every single day wishing I were dead and I'm actually pro Right to Die.
But your sweeping pronouncements are hard to engage because your first one isn't about your personal preference to die if faced with certain things. It's a pronouncement about not supporting others.
I fully support your right to choose to die rather than live with certain things, but it's much more complicated when we start talking about making general policies. At that point, you really need to provide some support for people who have had something unfortunate happen because society just works better when you do.
Trying to decide who, what, when, where and how much gets tricky. But a society that throws people to the wolves if they are even temporarily impaired winds up actively creating more problems than it solves.
You are lumping together your personal preference to die rather than live with X into your desire to not do shit all for other people and that makes it really hard to have a meaningful discussion here.
Off the top of my head.
It was designed as a safety net for lower/middle income, disabled workers, and benefactors to workers; not a primary source of retirement income. It's becoming more and more apparent that it's the former, not the latter.
Once you're old, you've kinda "made it" as far as life expectancy numbers go. I think someone who is 70 in 1935 would be considered just as "old aged" as someone 70 today. In fact someone who made it to 70 in the early 1900's may be considered healthier due to obesity/diabetes epidemic numbers alone...
I'm not going to try to prove that. My understanding is that is common knowledge.
https://fred.stlouisfed.org/series/SPDYNLE00INUSA graphs out life expectancy for the US since 1960. I couldn't find a source where it went back to 1935 as well.
According to the World Bank, we're averaging about 78 right now. So, with the same assumptions made in 1935, we should be working until we're about 76; a full 11 more years of contributions before withdrawal. Some will live longer, some won't make it. Life sucks. (Aside: who will actively employ septuagenarians?)
Combine that same thought with the idea of the maximum taxable limit ($128,400) and the "demise of SS" would probably be a lot less of a real threat. Then again, in its inception, it only taxed from the first $3,000[1] wage earned (~$55,000 in today's money).
[1] https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html
While this is true, I think it's a misleading statistic. The relevant figure, it seems to me, is not life expectancy at birth, but life expectancy at age 65 (because the latter determines social security outlay). In the 1930s, a 65 year old could expect to live for about 12 more years, while in 2010, life expectancy was about 18 years. That's a considerably smaller increase than life expectancy at birth during that time.
There's a great book called How to lie with statistics. It makes a lot of excellent points about how framing the same data differently can support different conclusions.
So, some thoughts:
Law makers who passed it may not have realized the average 65 year old would live another 12 years. They may have only known average life expectancy was 67.
Six years longer may not sound like much, but it's 50 percent longer. That can have significant repercussions.
Interesting theory, but that mistake should have become evident by the late 1940s and led to a lot of debate, and I am not aware that there was one.
Six years longer may not sound like much, but it's 50 percent longer.
And labor productivity has more than doubled during that time, so society should be in a vastly better position to afford social security.
I think it's important to see past the framing of economic inevitability and realize that there is simply a well organized political movement that does not WANT there to be retirement security for the general population, and because that's not really a popular political goal, the framing is instead that social security is unaffordable.
I've just woke up and replying is probably a mistake simply because I just woke up. But I have seen no evidence that people routinely rethink such things when it becomes obvious that the original logic was flawed and I've seen tons of evidence that the original logic gets wholly forgotten and, now that the thing exists, it frequently just grows larger thanks to some variation of entropy.
People can't even remember why Liberal Arts got called that to begin with and I get told that's just my weird ass and utterly unfounded opinion and then I have to go looking for a source to cite to show that what I'm saying is historical fact and the actual origin story.
I read a well documented book on the history of minimum wage law in the US. It is unfortunate that I can't recall the name and can't find it again in spite of looking because it asserted that it was passed to eliminate the racist practice of paying blacks half as much as whites in the deep south because these days everyone seems to think minimum wage is some sort of racist policy that keeps people of color oppressed somehow. I can't find my source to try to show otherwise.
In the 5+ years I had a corporate job, some practice changed but the term used remained the same such that new people found it baffling. Older employees had trouble explaining it.
Everything I have ever experienced in my life indicates people are truly terrible at remembering why decisions got made that way to begin with, even in their own life. They date someone for X reason, X reason stops being relevant but now they are married and leaving isn't easy. Unless they are so utterly miserable that dismantling their life sounds better than continuing to live with this person, they stay.
And the beat goes on.
It appears that in 1950, a 20 year old had about a 73% chance of living to 65. In 2000, that likelihood was about 83%. A nice improvement, to be sure, but not an enormous increase.
(My point being that if somebody dies before ever paying into SS, they make no difference to the accounting one way or the other, and a lot of the change in life expectancy was indeed based on reducing mortality at younger ages).
"We think you need $7,840 more per month."
Sure... That makes two of us. I guess it's extrapolating my current salary out and how much I'll need to save to live with the same income after I retire. That's not going to happen.
Here's a helpful article to see how far behind you are in your retirement: https://smartasset.com/retirement/average-401k-balance-by-ag...
I'm 46, so I should have about 3x my annual salary in savings (I don't) and be putting in 8% of my salary into a 401k.
I'm going to go back to not thinking about this now like I usually do, as there's little I can do about it.
If you ever hope to retire, you must reign in your lifestyle creep versus your real post-savings available income. If you're not saving enough, you are living above your means. This is fixable, but it will hurt.
That said, most retirement calculators overestimate your retirement expenses. Estimate what your expenses will be and plan for that. (And treat interest as inflation-adjusted so you don't end up down that rabbit-hole)
(BTW that calculator is awful because it assumes you need to spend a specified fraction of your income during retirement. That's not how this works at all! By that standard, almost anyone is going to be behind the curve.)
That doesn’t discount the reality that most people don’t invest nearly enough, but still the “recommended” contributions they give are definitely over-estimated in many cases.
I'm guessing that you must be closer to retirement age right now and probably haven't saved enough or had investments with low returns (no personal judgement here, shit happens). Thus the system is predicting how much "catching up" you need to do and not taking various parameters such as your age and the laws in to account.
I've never heard the 3x annual salary in savings, but that also seems super extreme. Assume a salary of $100K per year... No one I know has ~ $300K in their savings. Maybe they have equity in their house, or other equity assets that get them to that sort of number on paper, but I've never heard of someone in our age group (40-50) just having $300K liquid in a bank account.
I'm not sure what others have saved in theirs, but in my case, it was more like $200,000 in my 401k when I got divorced at age 40. I didn't always earn the same income as I do now, and also had times where I have needed to decrease my contributions, etc.
(Or I'm in total denial. That's a real possibility as well).
We really need to include suggestions for adding programs and laws for encouraging saving, removing predatory lending, and incentivizing responsible spending in articles like these. There is too much focus on consumer spending and not enough on household stability and having money in the bank for emergencies.
The new Prime Minister just announced he won't raise it to 70, which was on the table. I think it's clear that's just a sign of things to come.
What annoys me is that those making the decisions claim it’s for the betterment of the country which is fine but are totally unaffected by it.
My own?! Holy crap, and I'm bitchin' here in the U. S. because I can't touch the 401K until 59.5.
So any pensioners planning to retire to SE Asia because of the lower cost of living are screwed.
Lots of Australian retirees live in Asia.
It's possible your friends had not lived in Australia long enough to fully qualify.
It is not the same system as social security in other countries. You don't notionally "pay into" your account with variations on how much you will then be able to draw out.
We also have other employee pensions (though far fewer these days), and now the superannuation system (roughly 9.5% of full time earnings go into a compulsory tax effective defined contribution investment scheme)
[0]: https://www.theatlantic.com/business/archive/2014/10/how-ret...
[1]: http://www.demog.berkeley.edu/~andrew/1918/figure2.html
[2]: https://fred.stlouisfed.org/series/SPDYNLE00INUSA
I don't personally understand the expectation that average people be economically sustainable while jobless for two decades+. It makes sense to me to slowly increase the retirement age.
One had half his body paralyzed by a stroke, and you couldn't really tell how much understanding he had of the world around him when he was alert. The other two had forms of alzheimer's that, eventually, left them occasionally speaking czech instead of english (they moved to the USA as children) and not recognizing their own children. The first sign they needed full-time care was when we caught one of them overdosing on ibuprofin- get a headache, take some, forget, take more, repeat. That, and leaving the gas stove on for hours.
I fully agree that the retirement age should start increasing, but there's definitely a point of diminishing returns. We may be living longer as a whole, but our physiology hasn't caught up enough to trust that those extra years can be spent making economically valuable contributions to society.
But, not everybody's mind slips. I'm hopeful that we will have better preventative measures for Alzheimer's and other mind or body crippling diseases soon. I do recall seeing some good news on the Alzheimer's front in the last year.
My first article mentions what you said: past a certain point, it may be more detrimental for some to work.
I don't mean that people should work hard until they die; people should be able to enjoy their lives while working -- hopefully at a job they enjoy, maybe more community oriented as their needs for large salaries to support families goes away.
I don't think that is happening, I think people are nearly destitute, and I see that as the problem.
- Nimbys—scarce expensive housing
- Higher-education costs skyrocketing.
- Negative wage growth for positions without degree requirements.
- Article mentions no more pensions.
Article subject not entirely unexpected. :-/
A 25 year old who only puts $300 into a reasonable retirement fund each month will have over $1M at retirement age.
Disclaimer: I don't live or work in the U.S
https://www.nerdwallet.com/investing/retirement-calculator is a good calculator for this. (though I'm not a fan of its spending assumptions - if in retirement you have paid for houses and cars you definitely will be spending far less than today)
We have advanced our standard of living, but haven't kept up our standard of responsibility. Our parents/grandparents didnt have videogame consoles, laptops, phones, coffee besides cheap store drip, meals out more than 1x per month, tattoos, anything from a spa etc. All of those were likely dumped into home equity (owning your home was the predecessor to diversified assets in retirement savings).
Another thing that hasn't helped is the government has been printing money like crazy, playing a mind game that means even though you make 2x when you started your career, you might actually be really earning less. For example, my earnings have gone up about 6x across my career, but my rent has gone up 10x...
They also didn’t have six figure student loan debt, and their housing costs were not 50-75% of their salary. Video games and cell phones are small potatoes—-not what is keeping the current generation financially insecure, but they are visible “luxuries” that Baby Boomers can point to and try to shame people over.
But our grandparents did predominately live in rural areas. You can still live quite affordably in rural areas now. Most people just aren't happy with that lifestyle anymore.
Additionally, the majority of our grandparents didn't own their homes. If the majority of us were okay with renting like our grandparents were, you wouldn't see the irrational behaviour of buying at any cost that pushes the market beyond what is sensible (i.e. paying 75% of salary for no reason).
Good luck retiring to a farm. Even better luck getting health care there.
Agricultural work can be available in rural areas, but even in the most agriculturally productive areas, makes up a small portion of the workforce. The age where the majority of the population are farmers is long gone. Even within the agricultural sector, a lot of the work is in front of a desk.
In my foolish youth I once tried to maintain two development jobs at the same time. That turned out to be a really big mistake. With that in hindsight, I really have to question why people are worried about how much opportunity there is. Maybe you are better than me and can handle two jobs without issue, but three? How many jobs do you really need? One available opportunity is all I will ever need again.
The second time, later in my career, I did find myself without work, but with the substantial savings I was able to accumulate thanks to a low cost of living, I didn't even bother to look for another job. I essentially took a couple of months of vacation during the worst of it and then employers started knocking on my door again when things started to turn around.
I am sure another downturn will come again, and if that means having to move, so be it. I also have no qualms about working in other industries. I'm especially fond of the agriculture industry, which is convenient for me. But, as you well know, having a tech career for long enough to have gone through those two downturns, we're getting into the position that we could start to seriously think about retiring when that time comes. While the average career may not have that luxury, you can save a lot of money with a high tech income.
The risk seems overblown to me. If the worst case scenario is having to move back to where you came, that's not a very big risk. You will be there even if you stay put.
I'm not as familiar with how to navigate the BLS to see what things are like stateside at a localized level, but you might want to look more closely. You may be surprised. I was.
75% is far above what any reasonable person would recommend to be the maximum portion of salary that should be spent on housing. Personally, my housing is around 25% of my posttax income, and I thought I was pushing it a bit.
This isn't a generations problem, this is a supreme-ignorance problem.
Two rules of thumb i've heard are: 1) Do not mortgage more than 4x your annual salary (household if double income) . 2) Do not pay more than 20x annual rent for a place (eg, $50k annualized rent == $1M house) .
Another way to rephrase an ignorance problem is a lack of education problem. On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education") , on the other hand those tasked with educating us have failed us (parents, school system) .
Being younger than the Web, I utilized neither of those things to learn how to set up a budget.
> On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education")
Damn straight.
Is the problem lack of education, or is it that humans also have emotions to contend with?
If, hypothetically, someone with a $100k income spends $75k on rent, they are left with $25k to spend elsewhere. If another location allows you to rent a place for $10k, that means that a $35k income would also leave you with $25k to spend elsewhere.
Assuming all else is equal, try and convince someone with that $100k income that they should move and take a $40k job instead. It, in almost all cases, isn't going to happen.
Sure, they would technically be better off, giving them an additional $5,000 in their pocket. But from a social perspective, saying that you make $100k sounds way more impressive than saying you make $40k. And moving isn't a desirable action for most. It seems that is difficult for a lot of people to overcome, even when they know the numbers are not in their favour.
> Is the problem lack of education, or is it that humans also have emotions to contend with?
On second thought, it is indeed good that there is selection pressure against the weaker-minded.
I'm not a baby boomer and IMO people shouldn't both consume luxuries whilst complaining they cannot afford necessities (IMO retirement is a need), irrespective of how "small" the potatoes are, they add up and compound.
Now it's up to subsequent generations to get the calculus back on track.
I prefer shrinking our population, especially as developing countries are rapidly growing.
FWIW, I think people tend to overstate the risks of overpopulation; the Earth could support 10x the current population with a comfortable standard of living, if space and energy usage per person was reduced (which could be helped along by increased urbanization, among other things).
It is no coincidence that the human population has doubled sine 1970...while the number of wild (non-domesticated) animals has halved.
So sure, we might be able to support 80 billion (!!) humans...but with a correspondingly devastating loss of biodiversity.
You don't need population growth for economic growth. Technology is sufficient.
https://www.nytimes.com/2018/09/01/style/fire-financial-inde...
i am not the only one that has put their income, expenses, and savings rate into one of those "financial independence" calculators (http://mustachecalc.com/#/calcs/time-to-fi). i found that my predicted retirement age was in my 130s if i was willing to settle for a very modest retirement with a lower standard of living than i currently have.
that's right: i'm roughly 100 years from having enough money to retire, even if i save perfectly diligently every single month from now until then, which is extremely unlikely. it doesn't even make sense to plan for because i won't live that long; the calculation doesn't include anything along the lines of medical debt which is sure to accrue in old age if not sooner. the calculator may or may not be accurate to the decade, but it's accurate to the half-century in any event. if it's inaccurate by a half century in my favor, that still puts me as retiring in my late 80s -- hardly much more to look forward to.
i am always harping on the same thing: 6.5% interest rate student loans, rising rent, rising living costs, lower income, rising healthcare costs, shrinking benefits, and no social safety net to speak of have totally devastated the economic prospects of a generation.
the first plans to be thrown out the window during economic insecurity are the ones which are farthest away timewise. most people haven't had a chance to even plan that far in the first place. by the time they have accumulated enough resources to start saving some each month, they may be forced to take care of their then-elderly parents, or, alternatively, their children -- which most people can't afford anyway. so much for building up savings.
to be clear, it isn't "work" that has failed us. it's capitalism.
You weren't born entitled to anything. I'm in better circumstances than you for my generation but it's unlikely I'll live to retirement age (disease). Grousing about 'capitalism' or the 'corporation' (or The Man, man) isn't going to change a single thing.
I envy your clear vision of who to blame and where the problem lies but unless you get into a career in politics you're not changing anything. Easier to become an astronaut.
I know people who deliberately don’t save for retirement because they are betting that by the time they are old, the majority of people also won’t have enough, and the government politically can’t let elderly people mass-die on the street. When the non-savers vastly outnumber the savers, the retirement problem could be solvable politically.
"no millennials" is just wrong. I'm a millennial (Though just barely, born in '82), and I fully expect to retire by 67, possibly by 65, and if markets do well, maybe even 62, and I didn't even begin saving for retirement until 3 years ago.
I always question how many millennials complaining about student loan debt either didn't actually finish their degree, or they got a degree that doesn't lead to gainful employment due to lack of research before choosing a major, or they let themselves be bullshitted by some university's marketing and wayyyyy overpaid for their degree.
Certainly millennials have the deck stacked against them, but with proper planning, they can be successful.
Correct. But this happens because not everyone is privileged enough to get good advice. The vast majority of 18 year olds know nothing, they've seen none of the world, and can only rely on the little knowledge they've acquired up to that point in their life. Lots of people go into college thinking "gee 100k loan, 50k loan, will be fine when I graduate and get a job."
Capitalism is a system in which risk takers are rewarded / punished based on how their risky moves pan out. Unfortunately that means people with safety nets / more leeway to take risks (more wealthy) get more dice rolls and thus increase their wealth, vs if you're poor, you either stay poor, or in many cases if you look at what society's advice has been it's "go to college, a college degree means you'll make so much more money and even at the cost of $200k in debt will be worth it" <-- there's often no nuance like what field of study that gets incorporated into this common advice.
It's one thing to say "capitalism is how things fall naturally." It's another to say "this is perfect and how it should work and nothing's broken, everyone gets their just desserts, capitalism is the only way, move along." I'm not saying that this is actually what you're trying to convey, but the anecdote you inserted here definitely rings of this (common) sentiment.
> Certainly millennials have the deck stacked against them, but with proper planning, they can be successful.
This is pretty bleak. A chance at success is true in any system. That the deck is stacked is the only salient point.
I'll see your anecdote and raise you one more: talk to a few people who are the first to get college degrees in their family. I suspect you'll find that the vast majority of their parents offered no or even counter-productive advice when it comes to what field to study, or that it matters. Especially if the school they ended up at is one like Harvard/Stanford; there's some pretty good writing about what it's like to be very poor at those schools.
The gap is widening between rich and poor, straight-up capitalism exacerbates those effects, and I don't think it's easy to argue that's a good thing.
Which is why IMO, we should stop pushing 18 year olds into college. Let them work a full-time job somewhere and live outside of their parents' place for a few years go get a feel for the real world.
> society's advice has been it's "go to college, a college degree means you'll make so much more money and even at the cost of $200k in debt will be worth it"
Society sucks and definitely needs to stop saying that kind of BS.
> It's one thing to say "capitalism is how things fall naturally." It's another to say "this is perfect and how it should work and nothing's broken, everyone gets their just desserts, capitalism is the only way, move along." I'm not saying that this is actually what you're trying to convey, but the anecdote you inserted here definitely rings of this (common) sentiment.
I have a friend that's constantly sharing stuff from /r/LateStageCapitalism and it makes me roll my eyes.
IMO, Capitalism is a necessary evil to encourage innovation and reward hard work. The problem is that it also leads to abuse of workers, blaming the poor for being poor, worship of money, idolization of the rich, and most annoyingly, the idea that everyone that is rich is rich because they worked hard, and not because they inherited wealth. At the very least, people frequently don't acknowledge that many wealthy CEOs that built their company from their garage still started wealthy and had access to the funding to get an Ivy League education plus their own money to kickstart their company. Bill Gates's dad was a lawyer, his mom served on the board of directors at a bank, and he went to a private school as a child and then to Harvard. To say he pulled himself up by his bootstraps would be highly misleading. Trump even said he got a loan from his father for $1mill to start his businesses, and some of his followers STILL think he's a self-made man. But I've digressed...
The TL;DR is that capitalism sucks, but it sucks less than the alternatives.
> talk to a few people who are the first to get college degrees in their family.
That would be myself.
I like to think I can truly call myself self-made. I moved out of my parent's place when I was 21 with mostly nothing but a full-time job in retail. I paid for my rent, my apartment deposit, all my furniture/appliances, and my PC. My parents gave me nothing. I had been a huge slacker in high school and didn't even have my diploma. When I was 27 (2009), I decided I was done working a low-wage job, got my GED, and started going to college. 4 1/2 years later, spring of 2014, I had a Bachelor's in Computer Science and $43,000 in student loan debt. I got a job as a software engineer a few weeks after graduation, and about two years ago, moved to a job in application security. I own a house, a respectable car, and I take nice vacations. I'm the quintessential middle class now.
Other than a couple thousand dollars in Pell grants and my student loans over the course of the time I was in college, I have never received financial assistance from anyone. I've never been on SNAP/food stamps/etc.
And yet I try to have empathy for those that are in such dire straights that pulling themselves out is next to impossible. I recognize that the apartment I lived in when I first started going to college in 2009 was $650/month, but is now $950/month, while wages haven't kept up. I recognize that many retail and fast food businesses often avoid hiring people full-time, so the poor end up needing to work two jobs with unpredictable hours to pay the bills. I could go on.
> The gap is widening between rich and poor, straight-up capitalism exacerbates those effects, and I don't think it's easy to argue that's a good thing.
I absolutely agree 100%. The gap is widening and it's a terrible thing. But I feel that some millennials are using it as a scapegoat when they made their own bad choices, like going to an out-of-state university for an art degree.
The sad thing is that college degrees are practically a minimum requirement for most jobs. So in order for your suggestion to work, employers need to be convinced to accept people with no degrees.
This sentiment makes two mistakes. The first is that it implies capitalism is only a whole framework and can't be treated as a function to be applied piecewise in a larger system. The second is that "no alternatives are as good." This is like saying C++ is the best programming language; it certainly has its merits, but can totally be used in conjunction with other languages and programming language research doesn't just sit still; new compositions of ideas are constantly coming and we can learn from the mistakes of poorly designed systems to build better ones.
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...
I grew up around the tone of superiority that you are, knowlingly or not, expressing. It really just sounds like you blame the poor for their own poverty.
That's kind of niave. For one, the economic conditions in our country have changed. So managing to save now is a little harder than it was in the past. Another thing is you blame the poor for being too lazy to do this long list of things but if your hatred were actually sincere you would have had enough introspection to realize that growing their own food is not something they are capable of doing. etc.
The class gap is widening and it's not pretty.
>> and know that the inability to save for the vast majority of people is just bullshit. Its an inability to sacrifice and “suffer” in a consumerist society.
How do you know this? median income (50th %) in US is 37k before taxes. The average rent is 1k, so 33% of pretax is going to housing but its definitely lazy people?
>> I’ve been so poor my calculated net per month was minus $1000 for about 16 years while supporting a family. I worked and saved my way out of it
How did you save while having a net of -$1000/month?
First hit on google for usa median income is 59k https://amp.businessinsider.com/us-census-median-income-2017...
it was a very quick google, so i could've been misled