Standard of Living Changes

stretch5881

stretch5881

Member
Location
Wisconsin
I tend to look at things that most people think is boring. I read over company financial reports, pay attention to geopolitical events and history.
In light of the current events, I think back to '73 and '79. The events those years caused global inflation. Could it happen this time?
Geared more at us retirees, the Social Security trust that pays part of our monthly check, will be depleted in 6 years 8 months. Our monthly payment will be reduced by 23%. This goes for all payments made by the SSA.
The trusts for Medicare will be depleted starting 2040.
You could go to the government websites and fall asleep trying to read their financial statements, or, you can just do a search for "Social Security trust" and "Medicare trust" to get the short versions.
How are the people, without investments, going to survive?
What kind of life will our children and grandchildren face when they are retirement age?
I try to teach mine and I can see the light in their eyes going dim.
 
My DH, a USNavy Submarine Vet, has always worked for an hourly wage. We moved around a lot, even after the military, for work and managed to upgrade our house a little bit at time so that when, we sold to move for retirement, we were in a comfortable spot. I handled the finances and invested as much of any inheritance we received along the way, as I could. In 8+ years, we haven't had to touch our savings but once during COVID19 to re-roof and paint the house.

When each of our sons graduated college, we scheduled a meeting with the Representative from both of our life insurance/investment companies. (I have always split our investments/savings between 2 companies. I've seen a number of news articles along the way about Reps disappearing with people's life savings and I didn't want to lose everything, should that ever happen)

Anyway, they explained some of the ways they could save and protect their money. So far they seem to have taken that to heart. Another person they might listen to is a Tax Preparer. I have NEVER done my own taxes but have always had a lot of questions for the professional (who attends the IRS update classes and actually knows what they're doing) about how to minimize our tax footprint and maximize our deductions. Has worked pretty well for us over the years. Sometimes they will listen to a someone other than a parent or family member - even if you're saying the same thing :) Good luck!
 
There was similar concern when the government and companies began moving away from traditional pensions in favor of 401k plans, IRAs, etc…

I believe that our elected officials will pull a rabbit out of the hat to save Social Security and or implement harsher means testing so that people in higher income brackets will be cheated out of the benefits that they were promised and paid into over their working lives.

Personally, I would like to see all of the State and Federal social programs like unemployment insurance, Medicaid, Medicare, welfare, snap, Social Security, etc… rolled into one benefit program that we pay into when times are good and protects us when times are bad from the cradle to the grave.

We need to give people credit, they’ll figure it out and life will go on.

“Do what you can, with what you have, where you are.” - Theodore Roosevelt
 
I think they’ll save Social Security at the last minute and there will not be any cuts for our generation. Luckily, I also have a pension so I’ll be fine even if they do cut it. I am really worried about my kids, however even though they are also saving for retirement.
 
This has already been discussed in threads several times. The whole running out of SS funds narrative is a constant manipulative effort by puppet newsmedia and politicians to divert the issue away from corporations and wealthy who don't want ordinary citizens realizing it can easily be fixed by increasing the maximum income levels greatly above where they've been. Yeah, the same ultra rich that created in our lifetime, a vast difference between the wealthy and ordinary USA citizens, much less our poor. And let's start making those most responsible, the corporate billionaires and Wall Street that just laugh at the rest of us while they pay golf.
 
stretch5881 said:
I tend to look at things that most people think is boring. I read over company financial reports, pay attention to geopolitical events and history.
In light of the current events, I think back to '73 and '79. The events those years caused global inflation. Could it happen this time?
Geared more at us retirees, the Social Security trust that pays part of our monthly check, will be depleted in 6 years 8 months. Our monthly payment will be reduced by 23%. This goes for all payments made by the SSA.
The trusts for Medicare will be depleted starting 2040.
You could go to the government websites and fall asleep trying to read their financial statements, or, you can just do a search for "Social Security trust" and "Medicare trust" to get the short versions.
How are the people, without investments, going to survive?
What kind of life will our children and grandchildren face when they are retirement age?
I try to teach mine and I can see the light in their eyes going dim.
Click to expand...
I'm concerned about the same things Stretch. When I used to try to teach my son about what to do to be financially secure, he wasn't receptive. Now that he is middle age heading to senior-hood...he understands why and wishes he had taken my advice a lot sooner. I told my grandchildren, even before they had jobs, to save at least 20% of their pay (IMO the old 10% is inadequate in today's world). I said if you make a dollar, pretend you only made 80 cents and save that other 20 cents until you have enough of an emergency fund to begin investing.

Seeing how much rents and houses cost now, I wonder how they'll make it too. I've also made my Gen-X and Gen-Z loved ones aware of the 23% cut to social security that's slated to happen in just 8 years. I also told them that Medicare comes directly out of their SS benefit, so they can't rely on the figures given them in the SS estimate of benefits reports. Unfortunately, the reality doesn't hit many people until it's too late.
 
OneEyedDiva said:
I'm concerned about the same things Stretch. When I used to try to teach my son about what to do to be financially secure, he wasn't receptive. Now that he is middle age heading to senior-hood...he understands why and wishes he had taken my advice a lot sooner. I told my grandchildren, even before they had jobs, to save at least 20% of their pay (IMO the old 10% is inadequate in today's world). I said if you make a dollar, pretend you only made 80 cents and save that other 20 cents until you have enough of an emergency fund to begin investing.

Seeing how much rents and houses cost now, I wonder how they'll make it too. I've also made my Gen-X and Gen-Z loved ones aware of the 23% cut to social security that's slated to happen in just 8 years. I also told them that Medicare comes directly out of their SS benefit, so they can't rely on the figures given them in the SS estimate of benefits reports. Unfortunately, the reality doesn't hit many people until it's too late.
Click to expand...
So true. I know more than a few people that lived beyond their means through life. Spent it all. Now, in retirement, they have an angry personality.
 
Sadly, this same item has been going on for decades.
They will run out of money because everyone has kicked the SS issue down the road and we are running out of road. Many suggestions have been made and dismissed. Same complaints and blame game repeated over and over.

Pensions are great for those who have them in the biggest time of pensions only about 27% had them. Many pensions went broke with either bad investments or unscrupulous management of the pensions. A good friend is getting 6 cents on the dollar of a pension she had high hopes for her older age.

401k was created for self-directed investment and portability. The younger generation was not going to stay with company 30 years. But if people failed to put in even the minimum or did not research the investment choices available in a plan made big errors.
Employees now had No one to blame for bad investment or unfunded, so complaint became the whole system sucks.

Not really educating people other than just a suggested % advice...and serious mistakes have been made... Before the 2008 crash had so many co-workers only pick the risky plan (based on big returns in past). They lost big. Some up to 50% plus.
I was more conservative and lost less about 30% but I just stayed the course and recovered. Many others cashed out and sat out and lost big on future earnings as well.

People who changed jobs and never rolled over money left in old plans. I guess not realizing "it is your money" you need to watch it make changes if needed and know what you can do with it. Many all say similar things that someone did not tell you they did not read the long legalese letters sent to them and left alone, most small 401k's were eaten up in maintenance fees.

I also think it is about envy or jealousy for those who often self-taught learned to maximize the 401k system and even IRA's and have a large amount in them. I find many people in reality do not want the responsibility of risk taken. yet want to claim praise for accumulated large amounts.
A huge problem now is the loans against the 401k use to be only about hardship or emergency and Now people do it for frivolous reasons and only dig themselves into a mess.
 
stretch5881 said:
I've always thought they should have a semester of personal finance in high school to prepare for adult life. A person could then recognize the mistakes they are making and how it will affect them later in life.
Click to expand...
My school did have an elective class, wish I could remember the name of it. You selected a career and then tried to live on that salary, over the weeks you would get temtations (great deal on a boat!) or unforseen exspenses (furnance needs replaced!). The class touched on budgets and savings and working toward retirement.

I liked the class and found it worthwhile. I came from a poor home where the goal was survival, my parents never had a plan, so the class opened my eyes.

The most important thing I took away from it was living within my means and planning for retirement. The first company I went to work for had no pension or retirement plan so I started lobbying for a 401(k), which were still kind of new. It took a few years and ultimatly I had to put my job on the line, but on what was to be my last day the owner agreed to implement a plan.

Having a retirement plan and avoiding debt lead to a comfortable retirement, I'm constantly surprised and grateful how well it's worked out for me. It's possible that simple highschool class changed the trajectory of my life.
 
Jeni said:
Sadly, this same item has been going on for decades.
They will run out of money because everyone has kicked the SS issue down the road and we are running out of road. Many suggestions have been made and dismissed. Same complaints and blame game repeated over and over.

Pensions are great for those who have them in the biggest time of pensions only about 27% had them. Many pensions went broke with either bad investments or unscrupulous management of the pensions. A good friend is getting 6 cents on the dollar of a pension she had high hopes for her older age.

401k was created for self-directed investment and portability. The younger generation was not going to stay with company 30 years. But if people failed to put in even the minimum or did not research the investment choices available in a plan made big errors.
Employees now had No one to blame for bad investment or unfunded, so complaint became the whole system sucks.

Not really educating people other than just a suggested % advice...and serious mistakes have been made... Before the 2008 crash had so many co-workers only pick the risky plan (based on big returns in past). They lost big. Some up to 50% plus.
I was more conservative and lost less about 30% but I just stayed the course and recovered. Many others cashed out and sat out and lost big on future earnings as well.

People who changed jobs and never rolled over money left in old plans. I guess not realizing "it is your money" you need to watch it make changes if needed and know what you can do with it. Many all say similar things that someone did not tell you they did not read the long legalese letters sent to them and left alone, most small 401k's were eaten up in maintenance fees.

I also think it is about envy or jealousy for those who often self-taught learned to maximize the 401k system and even IRA's and have a large amount in them. I find many people in reality do not want the responsibility of risk taken. yet want to claim praise for accumulated large amounts.
A huge problem now is the loans against the 401k use to be only about hardship or emergency and Now people do it for frivolous reasons and only dig themselves into a mess.
Click to expand...
What you've written is true Jeni. I'm blessed to receive a pension but when I retired in 1998, our pension plan was billions in the hole. Now it's even worse. Our last governor promised to fund the plan to the degree that all governors were supposed to have done, but did not. Then of course, there were the market downturns that took their toll. I constructed an alternate financial empowerment plan (my term for budget), in case our pensions were reduced or suspended. Thankfully that has not happened (yet).

One of the problems with 401Ks to begin with are that they depend of people actually taking advantage of them. And for those who do, the self control needed to stick with it, especially when money is a little tight, is often gone out the window. Then of course, like you inferred, self gratification for now takes over because the need for saving for the future seems like a long way away.

stretch5881 said:
I've always thought they should have a semester of personal finance in high school to prepare for adult life. A person could then recognize the mistakes they are making and how it will affect them later in life.
Click to expand...
I agree Stretch but I will go as far as to say two semesters. I would venture to say most young people who graduate from high school don't even know how to balance a check book, especially now that checks are damned near obsolete.

@C50 It's great that the financial class had such a positive impact on you. It set you on course to manage money successfully. KUDOS to you for what you did for your fellow employees when you lobbied for the 401K plan at your job. Admirable!
 
OneEyedDiva said:
KUDOS to you for what you did for your fellow employees when you lobbied for the 401K plan at your job. Admirable!
Click to expand...
Thanks but truthfully it created some major conflict.

Long time employees felt cheated that their years of labor weren't recognized, when the plan was implemented everyone started fresh toward the vesting schedule, I didn't believe that was fair either but that's how it worked out. The vice president was so enraged he quit the very day the owner agreed to add the plan, he had lobbyed against from the start, what was to be my last day ended up being his last day. lol
 
David777 said:
This has already been discussed in threads several times. The whole running out of SS funds narrative is a constant manipulative effort by puppet newsmedia and politicians to divert the issue away from corporations and wealthy who don't want ordinary citizens realizing it can easily be fixed by increasing the maximum income levels greatly above where they've been.
Click to expand...
But the minimum income level to qualify for social services (welfare) has been increased. I think it's been raised twice in the past 10-12 years - pretty significantly the last time - which made millions more people eligible for welfare benefits. So, what you're saying doesn't make sense to me. (except for the running low on SS funds story being a false flag. I believe that.)
 
Jeni said:
Sadly, this same item has been going on for decades.
They will run out of money because everyone has kicked the SS issue down the road and we are running out of road. Many suggestions have been made and dismissed. Same complaints and blame game repeated over and over.

Pensions are great for those who have them in the biggest time of pensions only about 27% had them. Many pensions went broke with either bad investments or unscrupulous management of the pensions. A good friend is getting 6 cents on the dollar of a pension she had high hopes for her older age.

401k was created for self-directed investment and portability. The younger generation was not going to stay with company 30 years. But if people failed to put in even the minimum or did not research the investment choices available in a plan made big errors.
Employees now had No one to blame for bad investment or unfunded, so complaint became the whole system sucks.

Not really educating people other than just a suggested % advice...and serious mistakes have been made... Before the 2008 crash had so many co-workers only pick the risky plan (based on big returns in past). They lost big. Some up to 50% plus.
I was more conservative and lost less about 30% but I just stayed the course and recovered. Many others cashed out and sat out and lost big on future earnings as well.

People who changed jobs and never rolled over money left in old plans. I guess not realizing "it is your money" you need to watch it make changes if needed and know what you can do with it. Many all say similar things that someone did not tell you they did not read the long legalese letters sent to them and left alone, most small 401k's were eaten up in maintenance fees.

I also think it is about envy or jealousy for those who often self-taught learned to maximize the 401k system and even IRA's and have a large amount in them. I find many people in reality do not want the responsibility of risk taken. yet want to claim praise for accumulated large amounts.
A huge problem now is the loans against the 401k use to be only about hardship or emergency and Now people do it for frivolous reasons and only dig themselves into a mess.
Click to expand...
The 401k replaced the retirement deduction when I worked for a major insurance company. Employees were given only a vague description of what a 401k was, and we didn't choose how we wanted our money invested, the company did. We were given one or two-word categories, such as "technology" and "medical research", but nothing specific. The whole thing was hazy.

The thing that alarmed me most was that, as I understood it, with that type of investing, your financial gains are not only subject to occasional losses, they're subject to seizure.
 
I agree they should raise the upper limit. Back when SS was first implemented the current top was a lot of money. Now its not.
Personally I think they will probably pull a rabbit out of their hat. It would be political suicide for any party that cut off benefits.
If they dont I will still be fine. My house is paid for and I have savings and annuities. I also waited till 70 to collect SS.

Back when I was working every time I got a raise I put that money in a company savings plan. My company matched what
you put in and it came directly out of your paycheck. It always amazed me the number of people who never put any money in.
That company match was free money. #headsmack
 
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