As Gen X Nears Retirement, Many Fear They Can't Afford It | Hacker News Reader

As Gen X Nears Retirement, Many Fear They Can't Afford It

bloomberg.com

31 pointstoomuchtodo44 comments

Every time the US Federal Reserve prints money, it's devaluing anyone that has cash or equivalents. Edit: that was not worded strong enough. It hurts everyone, but is unbelievably regressive against new savers and the impoverished.

An average person is unlikely to win this game. Our real returns are not 10% per year, they're closer to 4%. The 1%ers that hold top tier offices in this country voted themselves out of this game.

One thousand times this. The government punishes those who save. It's going to get worse, too when Social Security is means tested, which, is pretty much inevitable at this point. When that happens you'd have to be an idiot to save for retirement unless you're wealthy enough to take advantage of loopholes rich people put into the tax code.

I don't understand. If you buy an S&P500 ETF you are crushing.

https://www.statista.com/chart/30224/share-of-americans-who-...

Only 60% of us own any stock at all and often through 401k or other indirect investment.

Last year, sure. Not over the long run. If it's outside your 401(k) the value of your money is going down due to inflation and taxes.

I think they're distinguishing between "saving" vs "investing". Investment carries risk.

Isn’t it nearly entirely the commercial banks “printing” money by fractional-reserve lending? Low interest rates mean more, bigger loans from banks, ergo more money out there.

The Federal Reserve chooses the amount that the banks are required to have on hand. They could ban the practice tomorrow if they wanted to.

It’s not really the fed printing money though is it. It’s private banks meeting demand for loans.

If you want to be that pedantic it hasn't been printing money for decades since it is all digital.

The fed, in essence, delegates the printing of money to banks since they are on the ground and should understand if more loans are necessary.

What do you mean "necessary?" It's a function of demand, they only write the loans for borrowers who want and qualify for them.

It's not pedantry. It's understanding the model of attribution which blames the "fed" for this when it clearly seems like a function of the systemic design of our economy and financial system. Put another way - abolish the fed, and I'm not sure how this would change. And in fact it might get worse as you've removed an oversight and controlling body.

When people talk about ending the fed they don't just mean the actual Federal Reserve. They mean the Federal Reserve along with everything they control such as fractional reserve banking, quantitative easing, etc. Perhaps there is somebody out there who wants to end the fed, but keep fractional reserve banking, but I haven't seen them.

Fixing that will, potentially fix the issue ... Or completely crash everything.

Ahh, “end the fed” doesn’t mean end the fed, OK. Because if you did end the fed, you’d have unregulated banking and maybe a return to wildcat banking which um, would probably not be better for your long term finances.

A quick perusal of Wikipedia’s article on the history of banking would reveal that banks figured out they could lend out more than the amount they had in deposit well before the concept of a central bank came into being, and the central banks’ role has historically been to keep things at least somewhat under control. So again, to put it simply, blaming the fed seems totally misguided here.

I don't think you understand how catchy phrases work. You don't make your phrase 50 words long to accurately convey your thoughts or it will never catch on. The majority of those advocating for ending the fed are Austrian economics supporters who consider the Fed, and the things they are involved with, to be things that need to end and use the phrase end the fed to encompass all of that.

Heh. I think it’s more likely most people saying that don’t really know what it’d entail.

For instance without our current banking and financial system you’d have to pay banks to look after your money, if all they were allowed to do with it was hold on to it. This would have a similar drag on your principal as inflation does on buying power.

Just invest in the market or you get your savings chewed up. I think it unlikely that the government, the Fed and huge corps are going to stop printing money because it has been working great (for them). Almost 100% of my money is in VOO and VOOG ETFs. Maybe 5% in cash, no real estate or other assets.

You can see this dynamic in various investment markets. Stocks are priced according to their expected earnings while fart coin is a repository of excess liquidity. If you massively increase liquidity through money/debt creation you pump asset prices. Assets with a well determined return profile are inflated, but those with an unknown distribution (speculation)see an explosion of value. Only people with large stores of wealth can invest in the memes without risking financial ruin from crashes. Terrible policy choice imo

https://archive.today/tp4tj

Regardless of how much money you save, there also needs to be enough people still working when you retire, so that your money can buy things for reasonable price.

Retirement really depends on a pyramid shape age distribution.

How much money are Gen Xers looking to need for retirement? My financial advisor says that for a similar lifestyle, I'll need $3M USD.

On the other hand, apparently Costa Rica is very nice and affordable, with great healthcare and happy population. It's hot though.

For how long? Americans will drive the prices up.

Cost rica is the most expensive Central American country. I visited both coasts for a month and the west coast is mostly boomers driving up prices. I felt like I was in southern cali.

"The most expensive Central American country" is still, from what I gather, rather affordable compared to the US. And the quality of living is fairly high, with good, affordable healthcare.

What I'm thinking is: I'm at about half my target retirement savings. Which means if I can halve my expenses, and get healthcare, I can retire now.

Sorry I meant it costs the same as southern cali. Sure there are cheap pockets. If you don’t mind not having reliable electricity. Visit first. You’ll see. Also: do some research on what the us government takes from your retirement if you expatriate. Eye opening.

AFAIK the US government doesn't take anything from your retirement unless you give up citizenship, which you don't need to do in order to expatriate. One can be a US citizen and live his life in any country one sees fit.

The FA is probably charging you a significant fee to calculate predicted_annual_spending_in_retirement_before_tax_and_fees / 0.04

The idea is that you can reliably withdraw 4% of invested savings over decades without exhausting the capital. Some feel the 4% should be 3.75%, 3.5%, 3.25%, ..., especially if you retire early.

I've been keeping an eye on his return vs just doing a target retirement plan, and some years it's been neck-in-neck, but this past year he really hit it out of the ballpark. I have some money, around 10%, that I direct. Some is "play money" that I put in moon-shots, some I put in more reasonable investments to try to track vs the FA. He charges me 1%. He did save me his fees this year by pulling out of Supermicro at the first signs of issues.

There is some friction with the FA, the biggest has been when I was heavy into some individual investments due to huge returns, and their oversight wanting me more diversified, but in the end I could sign a paper saying I understood this risk. One friend did recently point out that if I had followed my own advice rather than following others advice, I'd literally be a billionaire now, so that's one point I have to watch related to the FA.

My self-directed currently is mostly out of the market.

Guesstimation of the numbers is not promising. The article mentions 1 to 3 million as targets, let's say 2 million as an asset at retirement. At 4% withdrawal, that gives 80k a year. Median wage is about that.

There are about 4 million people in an age cohort below, say, 80 (80 * 4 million = 320 million). Let's say a generation is 20 years. So for Gen X to retire all at this comfortable level, that would be 4 million * 2 million * 20 = 160 trillion dollars in assets. This is staggered, but still.

The total US stock market value was recently about 55 trillion [1] and 110 trillion for global stock market [2]

These numbers seem a bit off from each other. Looking at the chart for the US growth, the value doubled from 1998 to 2014, then doubled again from 2014 to now. The later bit is presumably due to the massive injection of money (inflation) from the past 5 years which all seems supported by looking at the massive jump in value in 2020 in the chart.

And here is some analysis about GDP to total market value [3]. Also not a promising conclusion. Has market value at 60trillion at the moment and GDP at 30 trillion.

1: https://siblisresearch.com/data/us-stock-market-value/ 2: https://www.visualcapitalist.com/the-109-trillion-global-sto... 3: https://www.gurufocus.com/stock-market-valuations.php

Idk how anyone in the lower 95% can expect to retire unless they have a pension of some sort. 3m retirement is just not practical for most

Shitsky, that's $120k a year, $10k a month at 4% withdrawal. Plus you'd get SS too? That's nice, but more income than I made over most of my career and hard to get enough work to break that level this year, even after all the inflation.

I think most people would be hard pressed to come up with a mil for 2, so that's only 40k. For 2 people that would not be anywhere close to enough even in the boonies. 120k isnt really that much, assisted living is something like 5-6k here so you need 1.5m to just cover that without other expenses.

I’ve been living on less than $40k a year my entire life. I’ve spent years driving around the world, snowboarding, hiking, camping.

I work the least amount possible to make it happen.

When my parents were getting close to retirement Dad an I ran the numbers a hundred different ways. I think the experts said they’d need $100k a year, and no matter what we did we couldn’t get it over $60k. Now in retirement it’s less than $50k.

I don’t know how people spend so much

Yeah there’s two different subjects here. Retirement vs. nursing home, the second being a lot more expensive. Difference between a high and low cost county is important as well. Own a home, etc.

40k a year does not even cover cost of basic housing in high cost of living areas.

People don't retire to such areas, and only would stay if they owned a home bought decades ago.

> assisted living is something like 5-6k here so you need 1.5m to just cover that without other expenses.

For what it is worth, the average person in the US spends about $7,300 per person over a lifetime on nursing homes. Only 32% spend anything. The 95th percentile is $47,000. The median person spent just a week or so in a nursing home. 5% of the population spend more than 4 years in a nursing home. You seem to have costed 20 years. Possibly I don't understand the nature of 'assisted living'.

Source: https://www.pnas.org/doi/full/10.1073/pnas.1700618114

How much to save for the potential eventuality comes down to your risk profile and appetite. I'm always intrigued by those who on one hand have a very risk-hungry investing approach yet also have a very risk-averse outlook on end of life care.

I have a family member who has been in a nursing home for 4 years. I hope they'll last another 4. Essentially, the person was able to trade in their home for this care, and more. I'd say that's a fairly common transaction.

you may be out of touch. My parents just retired with $1.6m, zero pensions, and they're still paying a mortgage. They are comfortable and when they get social security in a few years they'll have more than they know what to do with. They saved it all on one income.

I mean, yeah. My retirement forecast has been upgraded from homelessness to a hope of housed poverty. Amassing retirement funds requires luck and effort and the luck part evaded me decade after decade. Unfortunately, my score is far from rare.

I'm a very young gen x person... I still have two decades for societal collapse to happen while late stage capitalism is slowly festering in preparation of killing its host. It will be quite the show of despair and violence.

Have baby boomers even retired?

Plenty of them did, in Québec, Canada.

At 67, I'm in the middle of the pack, and I'll be tuning in and dropping out in just the next few months.

The youngest ones would be 60, so yeah, a lot of the cohort would have by now.

~4M/year turn 65, ~11,200/day.

Reply on news.ycombinator.com