Worrying statistics about American's retirement future

Wouldn't that be ironic if Democrats were voting for Democrats because they are financially struggling, suffocating under heavy property taxes... which were implemented by Democrats!

 

Generation X was born between 1965 and 1980, and this age group is getting closer to retirement.
This generation faces a "dismal retirement outlook", according to a recent report by the National Institute on Retirement Security (NIRS).

Dan Doonan, executive director of NIRS, says the vast majority of Generation X is "not even close to having enough savings to retire."
"This really isn't surprising given the terrible retirement hand that has been dealt to the latchkey generation. Most Gen Xers don't have a pension plan, they've lived through multiple economic crises, wages aren’t keeping up with inflation, and costs are rising. The American Dream of retirement is going to be a nightmare for too many Gen Xers."

The bottom half of workers in Generation X have put away just a few thousand dollars for retirement. Overall, a typical Gen X household has a measly $40,000 in retirement savings.
Most Gen X retirement wealth can be found in the coffers of a relatively small number of higher earners. Black and Hispanic Gen X earners have much lower rates of retirement savings than do earners who are white.

from the NIRS report:
"The youngest members of Generation X are at least two decades away from retirement. They still have time to improve their financial situation, but if current trends continue, many Gen Xers will experience a decline in their standard of living during retirement."​

As the Sun Sets on Gen X Careers, Dark Clouds Gather, Money Talks News, Chris Kissell, 11-25-2023

'Unconscionable': American baby boomers are now becoming homeless at a rate 'not seen since the Great Depression'

Thanks in part to a series of recessions, high housing costs and a shortage of affordable housing, older adults are now the fastest-growing segment of America’s homeless population, according to a report in the Wall Street Journal, based on data from the Department of Housing and Urban Development.

"The fact that we are seeing elderly homelessness is something that we have not seen since the Great Depression," University of Pennsylvania social policy professor Dennis Culhane told the Journal.

Dr. Margot Kushel, a professor of medicine and director of the Center for Vulnerable Populations and Benioff Homelessness and Housing Initiative the University of California San Francisco (UCSF), has observed an escalating rate of homelessness among older Americans.

In a 2020 journal article for the American Society on Aging, Kushel wrote that of all the homeless single adults in the early 1990s, 11% were aged 50 and older. By 2003, she says that percentage grew to 37%.
Now, the over-50 demographic represents half of the homeless single adults in the U.S. -- with no sign of their numbers slowing, leaving baby boomers (those aged 57 to 75) particularly vulnerable.
"Elderly homelessness has been rare within the contemporary homeless problem. We've always had very few people over 60 who've been homeless historically," Culhane from the University of Pennsylvania told PBS NewsHour.
But in recent years, Culhane says that has changed. Older Americans, he says, are "now arguably the fastest rising group."

After living through multiple recessions, leaving some of them with little savings, aging boomers are now also contending with insufficient affordable housing. And with everything from gas to groceries costing more these days, many aging Americans are struggling to make ends meet.

And if they need additional support at a certain point, finding a low assisted living center is becoming more challenging -- as the field contends with labor shortages, inflation and reduced funding that puts the already limited number of facilities at risk of closing.
Even rent is becoming increasingly out of reach in certain areas, like Massachusetts, New York and Florida.

During the COVID-19 pandemic, Florida resident Judy Schroeder told the Journal the apartment building she was living in was sold to a new owner, raising her monthly rent by more than $500. Schroeder lost her part-time job, leaving her living off Social Security alone, and couch-surfing for months before she finally found a place in late August.
"I never thought, at 71 years old, that I would be in this position," she said.

Researchers at UCSF told the Journal that about half of the homeless older adults in places like Oakland, California and New York, became unhoused for the first time after their 50th birthday.
These individuals pointed to a major event, like the death of a spouse or a medical emergency, as the trigger.
"It's an entirely different population," said Kushel. “These are people who worked their whole lives. They had typical lives, often working physically demanding jobs, and never made enough to put money away."

There's also the matter of income, as the federal minimum wage of $7.25 has failed to keep up with inflation.

Some cities, like San Diego, have even piloted programs to provide rental subsidies for a limited time to older, low-income adults to help them find their feet. (Perhaps a good idea, but that is not really so much of a permanent solution)​

'Unconscionable': American baby boomers are now becoming homeless at a rate 'not seen since the Great Depression' -- here's what's fueling this terrible trend , by Serah Louis, Moneywise, September 22, 2023

 

This whole thread is a good testimony to the plight of capitalism that is unfolding right in front of us. It's amazing to me that so few can see through the propaganda to recognize the history and trajectory.

We, as a country, are screwed.

 

Something is wrong. The first step is to be able to recognize that something is going wrong.

That said, I'm not sure if "capitalism", with all its breadth and entirety, is the thing that's "wrong". That sounds to me a little bit like throwing out the baby with the bathwater.

It might be that the "capitalist" system can start going dysfunctional outside certain constraints, if certain societal and economic preconditions are not right -- a little bit like the engine in a car.
What I mean is we could have a long discussion about what more specific factors have changed in society and the country's economy, rather than just say "the problem is capitalism".
Capitalism has seemed to work well, at certain times and places. The question is what changed.

 

~ Corporatism had overtaken Capitalism. The free market is impinged by large corporations and trade unions influence on politics. Too much favoritism towards special interest groups has tainted the playing field.
The recent "pandemic " debacle is an example.

 

In my personal opinion, corporatism is a factor, but a smaller factor, only 10 to 25 percent of the problem. There have also been certain underlying economic factors that led to this modern dysfunctional growth of corporatism, so we'd have to closely examine that. (A discussion for another thread, I think)

The influence of trade unions in modern times is null. The power of unions died out with the death of manufacturing in America, in the 1970s. The only unions of any significant influence now are the public sector unions composed of workers employed by government.

 

~ You could be right. However, here in California the entertainment industry unions have a big influence on getting politicians elected – unfortunately.

 

Given the OP facing the CAUSE would mean not having an excuse to bash the left.

The Xtofascist controlled GOP has become the LACKEY of the Greed obsessed Wall Street Casino Banksters and will do EVERYTHING they want.

The GUTTING of corporate pension schemes occurred under St Reagan so we all know where that blame lies.

Replacing the pension schemes with 401k's was yet another BOONDOGGLE because it expected those who work minimum wage jobs to be KNOWLEDGEABLE enough to make GOOD investment decisions with whatever pittance they might have jingling in their pockets? It was SCAM written all over it in Vegas neon lettering but they OWNED Congress and so it happened.

Multiple Red Flags have been raised that I am aware of but NONE of them have been heeded because of who OWNS the party of the TRAITOR-in-Chief.

NOW we have the UGLY reality of what happens when the Greed obsessed Wall Street Casino Banksters tell the Xtofascist controlled GOP what legislation to pass.

Do you remember what happened when people became homeless in the Great Depression?

The VOTED for someone who would HELP We the People in our HOUR of NEED.

That is WHY we have Social Security. The single safety net that has to carry the weight of the MALFEASANCE of the Xtofascist controlled GOP.

Biden should just remove the Income cap with an EO. Problem solved. More than enough money to provide a larger SS check for those in need.

 

They did away with pensions and went with $401K where everyone is personally responsible to save enough for retirement. This "personally accountable" idea was pushed heavily by certain factions, who argued pensions were some kind of socialist conspiracy, while 401K was an example of capitalism. 40 yrs later we know it didn't deliver what it was supposed to deliver. I remember in the 90s the Fidelity, Merrill Lynch etc reps would come to the work places claiming that if you put 10% of your earning into 401K starting in your 20s, you'll have $5 million or more in the bank when you retire. BS, I know lot of people who maxed out their 401K all their lives, and no one has anywhere near $5M in their accounts. Banks are the only ones who make millions out of it. Pensions guarantees steady income in retirement, and many boomers are getting that, but younger generations will not.

Also, lot of people who had money in 401K already spent when they needed to buy a BMW, or put in a swimming pool in the back yard. ​

 

Related to Kode's comments,
There are two more threads, I would have people read:
Lower labor costs will lead to dominance of corporations over small businesses (March 24, 2023 ) Which is related to "corporatism".
the problem with bringing in foreign workers to take care of the old (Nov 9, 2017 ) Which is about how growth of population did not lead to saving old people like mainstream policymakers were claiming at the time, but rather kicked the can down the road and made things worse.

 

I guess it could be said that your comments exemplify what I said. Specifically, like for most Americans, there is a tendency to ignore the trajectory capitalism has taken and instead to just be familiar with what we're given in the news and economic reporting. That means propaganda dominates.

I am not someone who simply started out with a "hatred" or a bias against capitalism and then worked to justify it. I've owned two businesses. I've taken classes in accounting. But I compared my experience and my observations against what we're told to believe. I explored. I investigated. And here I am.

Capitalism has, where ever it has existed, sought to increase sales, markets, revenue, and profit. And these have been considered to be "good results" when they grow at 2.5 to 3 percent per year. I say thins because anytime I say capitalism requires growth, I get a string of defenders of capitalism telling me that's not true and that capitalism is fine with zero growth. But we only very rarely in some Nordic countries and where heavy regulation and taxation is the rule.

TRAJECTORY:
So how long can that continue? How long can revenues and profits continue to increase at 2.5 to 3 percent per year? Do what I did. Create a spreadsheet with one dollar growing annually at 2.5% over 200 years. Then project that into a graph which the spreadsheet's graphing function makes possible. Then look at the curve.

At the end you will see that it rapidly curves upward until it is all but vertical. VERTICAL! That is not sustainable!

This is long enough now, so I'll leave it here. But another consideration might be the changing means by which the leading capitalist class members have worked to obtain those needed annual increases, and you begin to see that they are at the end of their rope when they finally resort to taking it directly from your pockets.

 

What changed is that any economic system evolves, develops, and changes. It is never static. But most defenders of capitalism pretend capitalism is capitalism and the underlying realities remain as is. FEUDALISM changed, and that's why there was a transition to capitalism.

 

To me, this is all a case of getting entangled down in the weeds. All these concerns contribute to the changing of capitalism, but how is it changing? How is it evolving and what are the large influences? (BTW, union membership shrank from 25% to 7% of the workforce because the capitalist class and its government took numerous small and large steps to crush it, not just simply because manufacturing was out of fashion.)

Capitalism began as a great force for good. (See? I'm not just a mindless "capitalism hater".) It has the ability to supercharge production, technology development, and innovation. But in the very early 1900s as it grew in strength and in ruthlessness, labor unions grew greatly, and representations of the working class in the form of communist and socialist parties also grew and became a genuine force that worried the capitalists who attacked unionists and hired thugs like the Pinkertons to murder them.

After WWII FDR was elected and he had to gain control of the working class while he served the capitalist class and provided them with growth opportunities. And he did. He did it by going to the top capitalist industrialists and by telling them that they needed to pay plenty to the benefit of the working class and to appease them, or the workers have another plan for the capitalists that they would not like at all.

And at the end of his term FDR famously said "I saved capitalism".

Then women's lib fed capitalism.

Then the transition from a manufacturing economy to a finance economy fed capitalism more.

Then a rapid transition to an information technology economy fed capitalism.

Then a degenerating and corrupt finance economy gave a boost to the dying gasp of some financiers.

Then quantitative easing kept the stock market going up for an unprecedented 13-14 years as the corporate elite took advantage of it to extract wealth from it with schemes of stock buy-backs, unrestricted stock options available to no one else, and instant gains via gifts of corporate stock.

Then, in a last-ditch move they "took price" as they called it when they suddenly jacked up the prices of their goods using COVID as a cover.

So what's next? Where can they go now?

 

Of course, inflation has hurt older people too.
Whose fault is that?
(rhetorical question, a discussion for another thread)

That part doesn't seem to be the fault of "capitalism".

Government was spending a lot of money between 2019 to 2021, and a lot of that excess money wasn't coming from taxes. That money had to come from somewhere.

It came from people's retirement accounts, in the form of lower purchasing power.

 

I’ll comment here. The median income for senior age 65 and older and retired and living alone, is about $27,000/year. That probably has plenty to do with inflation hurting them.
https://www.fool.com/research/average-retirement-income/

And note that less than a quarter of them have paid off their house mortgage.

 

A rural town in WA state.

 

You are aware the Federal Reserve has been lending out money and buying up home equity, and embarked on an intentional policy of trying to prevent home prices from falling, after the 2007 bubble popped?

I'm not saying that's the main cause of this problem, but it's just one example of the type of things that are factors.

When they pumped lots of money into the system to lend to buyers and buy up their mortgages, it pushes home prices higher.

 

And maybe you don't see how some of the policies coming from the Left was the push that made "greedy" investors push up home prices.
Things like immigration-fueled high population increase (focused in the areas where prices were already high), creating shortages and causing housing prices to increase, which in turn fueled speculation that home prices were going to continue to rise more. What you seem to be ignoring is that speculation driving up prices doesn't tend to happen unless there is a shortage of that thing that exists to start off with. (Greedy investors wouldn't be pouring in if there were more houses than people, since it's hard to start driving up the price of something when there's an excess of it)
Inflation only pushed investment groups to pour more money into the housing market, in an attempt to protect their assets from inflation. This wasn't really good for investors or would-be homebuyers.

Hate to say it, but the Left is often the party of unintended consequences.

I'll also point out the statistics that the Democrat Party gets twice as much donations from Wall Street as the Republican Party. But that little fact is neither here nor there.

(I'm not really trying to denigrate the Left here. I'm just providing push-back to what you're saying)

 

That's because the left doesn't seem to believe in unintended consequences.

 

I think older people who have not purchased a house are going to feel the brunt of this, with rising rent prices.

On the other hand, older people who are retired and no longer work in a career always have the possibility of moving to a different region of the country, where homes and rent prices are cheaper. But many do not want to move away from everyone and everything they have known.

It's not just rents. In some areas the increasing population is driving housing prices up, and along with that property taxes.

 

~ Fortunately some invested in Hunter Biden’s artwork and Nancy Pelosi's stock picks !

​

 

Tell me more. Can you direct me to specific documentation explaining the Fed “buying up home equity”?

I know that the Fed has been interfering in the stock market in a similar way with QE since the crash ended in 2009 and it resulted in an unprecedented 13-year bull market.

 

There is a very clear inverse relationship between property tax rates and cost of housing. In Detroit, which has recently had the highest property tax rates in the USA (~4%), you can buy a serviceable SFD house for a few months' median after-tax wages, because land values are two orders of magnitude lower than in most other major US cities.

 

The other poster seems to be confused about what home equity is. The Fed has been buying up mortgage-backed securities:
https://www.investopedia.com/terms/a/agency-mbs-purchase.asp
which increases housing prices by making more money available for purchases. And it has also been lending at low rates to private investors seeking to buy up housing for rental investment:
https://www.forbes.com/sites/forbes...-opportunity-of-our-lifetime/?sh=68064c631fe5

More to the point, the Fed commissioned Blackrock, a private hedge fund, to use newly created Fed money to support the prices of specific stocks during the COVID response. I never thought I would live to see the day that the Fed created new money to buy stock in private corporations. But, here we are.

 

That may indeed be true, according to economic theory. The basic idea though is that you can't make the total costs of housing (that includes taxes) go down, whether property taxes are raised or lowered. (And of course, as you know, when we're talking about "property taxes" in this theory, we're actually specifically focusing on "land taxes")
But keep in mind we are talking about "American's retirement future" in this thread. So increasing property taxes would be likely to hurt the old (the current older generation, to be more precise). (One other minor factor in the mix is that higher home prices relative to lower property taxes have the effect of inducing homeowners to save more, even though this may mostly be a psychological effect. It also helps insulate from the effects of inflation over the years)