That's probably going to be every subsequent generation too.
retirement is really depressing. No matter how I look at it, there is no way the markets could generate enough returns for give everyone the 7-8% they would need.
The markets can easily generate 7-8% returns, but you are right it won't be enough for what people need, when the cost of living (rather than the phony CPI number that is bandied about) is rising at more than 8% a year.
I'll spare you the back of the envelope calculation with but if everybody saved 10% of their income to a 401k, it looks like we would have approximately $24 trillion that would need to get that 7-8% return. FWIW,the current 401(k) number 7 trillion. The current stock market size is 46 trillion so where would that money go?
feel free to come up with your own numbers, as professors have told me, more accurate calculations are left as an exercise to the reader.
I suspect that the vast majority of people would stick their money into robot funds and cause the value of the stock market to inflate to unsustainable levels because as we know, stock prices have nothing to do with reality.
Anyway, this calculation is interesting exercise and shows how people really haven't thought through the true cost of retirement and the impact it has on the financial system.
The rest of us are just temporarily holding the healthcare industry’s money, when we save. Including most Boomers.
To end up at retirement age without any savings accumulated, you’d have to either have been unemployed for your whole life, or run a business/be self employed and never make any contributions to retirement savings.
Edit: missed the relevant Australian bit. makes a big difference to grok the full comment when deciding to reply to it
It is a savings system, not taxation.
NZ has a similar (but shit in comparison) system.
That reminds me, vote for politicians who want to make sure social security and medicare and ACA will be around when we all retire, instead of the foolish ones who want to end these programs without any replacements. We can continue to pay for it all with tiny tax increases. We've under-taxed ourselves with paying more than the system affords to the previous retired generation.
>In 2023, you'll typically be eligible for ACA subsidies if you earn between $13,590 and $54,360 as an individual, or between $27,750 and $111,000 for a family of four.
>For the 2023 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $9,100 for an individual and $18,200 for a family.
We should all have healthcare as american citizens. We choose (through the actions of our leaders and the influence of rich people having so much political influence or control over the us govt like the koch family) to not have national health care, to live in a country where huge numbers of people are one accident, health issue, job loss, or car crash away from being on the precipice of their family losing their house.
Why does the shift from pensions to 401ks matter? Because it frees up money for zero-sum competition for benefits for one’s kids, in the form of housing (indirectly, paying for quality schools) and tuition/advantage-granting activities. Which drives up the cost of those things, pushing spending even higher. Plus probably some pure keeping-up-with-the-Joneses.
[edit] oh fuck it just occurred to me that a lot of US GDP growth in the 80s-today may be because everyone but the Boomers has been burning what should have been retirement savings just to keep from falling behind. And now I’m breaking out in a cold sweat.