Chicopee John Posted March 30, 2015 Report Share Posted March 30, 2015 The old personal finances model said that saving for retirement was a three-legged stool: 1) Pension, 2) Social Security, 3) Personal Savings. Well, for most people, the "Pensions" leg has been removed and, it appears, only a minority of people are compensating by increasing "Personal Savings" - or - even HAVING Personal Savings. By blending my understanding of the shifting demographics in the U.S. with the above scenario, I see an inverted pyramid right before my eyes. And the road isn't very long. For working folks, the government requires that we contribute to the Social Security system, basically, forcing us to comply with #1 above. My question is should the government, also, require workers to contribute - at least - a minimum amount of their gross salary to a personal retirement fund IN ADDITION TO Social Security? I know, I know: who will oversee, how will it be implemented (seems to be relatively easy) and will there be any exceptions? [QUESTION: do the 47% of households that do not pay Federal Income Tax still pay Social Security taxes? My guess is Yes, they do, but I'm not sure. So here is the dilemma: We are told that we have a consumer-driven economy. This appears to encourage spending, not saving. At the same time, I see an atomic bomb falling on us as demographics, etc. continue on the current path. There are plenty of excuses why people claim they cannot afford to put some money aside - even if they 'pay themselves first'. I disagree and believe putting away, at least, 10% is doable. The key is 'paying yourself first' and putting it into a fund - tax deferred, or not - that has severe penalties for 'early' withdrawl. I have been putting aside money - IRA, 401(k) - for nearly 40 years. Yes, I have been fortunate. On the other hand, I started early and had the discipline to have a portion of my salary 'put aside' BEFORE I received my take home pay. So, where do we go from here? Government mandated Health Care Coverage AND Personal Pension Savings? Although it smack against my notion of Small Government and less intrusion, the Government appetite for intrusion is already getting more voracious and the Middle Class is being eaten alive. If not this being a necessary evil, what are YOUR thoughts on saving for the future: both at the personal level and the national level? By Kathryn Vasel @KathrynVasel For many of us, it's time to step up our savings plan. When it comes to saving, we aren't doing enough of it. Roughly half of Americans are saving 5% or less of their incomes, including 18% that are not saving anything, according to a survey from Bankrate. Only about a quarter of people are saving more than 10% of their earnings. So how much should you be saving? Bankrate recommends 15%. "Between emergency savings and the ever-increasing burden of retirement savings that is on the individual, the goal should be 15% of your income," said Greg McBride, the personal finance website's chief financial analyst. Currently, one in seven people are saving more than 15%, the report showed. "For a lot of people, it won't happen overnight. It's going to take some time, but it's doable, as the middle class is showing." Those in the middle class are proving to be the super savers with 35% of people with an annual income of $50,000-$74,999 saving more than 10% of their earnings. Of those taking home more than $75,000 a year, 32% were saving more than 10% of their income, according to McBride. Saving more is easier said than done, which is why McBride suggests making it automatic by having a portion of each paycheck be directly deposited into a savings account and a retirement plan. "Saving needs to happen before you pick up your paycheck." Bankrate's Financial Security Index, which surveyed 1,000 adults in the U.S., also showed consumers are feeling better about their debt and financial situation compared to a year ago, which could actually be bad news for savings accounts. "People get frugal fatigue, as the economy improves I think a lot of people will fall back into familiar habits ... more spending, more debt, less savings." Link to comment Share on other sites More sharing options...
WalterWhite Posted March 30, 2015 Report Share Posted March 30, 2015 Nobody can save shit. The government has spent it all and we continue to pay them so they can pay the federal reserve. Link to comment Share on other sites More sharing options...
Chicopee John Posted March 30, 2015 Author Report Share Posted March 30, 2015 Nobody can save shit. The government has spent it all and we continue to pay them so they can pay the federal reserve. What happens when we continue to live longer and the population on non-savers continues to sky-rocket? Does Capitalism collapse under its own 'regulated' weight? What are some SOLUTIONS? Link to comment Share on other sites More sharing options...
DieHardBrownsFan Posted March 30, 2015 Report Share Posted March 30, 2015 I started IRA's when they first came out. That, along with the military pension and thrift savings plan from civilian government work. I'd advise any 20/30/even 40 something year old to start now. The longer you save, the more you will have. You'd be surprised at how you don't even miss it after you contribute for awhile. I'm also going to start early social security next year (god willing). Link to comment Share on other sites More sharing options...
StinkHole Posted March 30, 2015 Report Share Posted March 30, 2015 What happens when we continue to live longer and the population on non-savers continues to sky-rocket? Does Capitalism collapse under its own 'regulated' weight? What are some SOLUTIONS? The solutions are to redistribute and force people to save. This article mentions forcing people to save. http://www.forbes.com/sites/lawrencelight/2013/11/21/warning-cash-strapped-feds-want-to-tap-your-ira/ Link to comment Share on other sites More sharing options...
LogicIsForSquares Posted March 30, 2015 Report Share Posted March 30, 2015 I started saving in my early 20s. I don't expect to see a penny of what I paid into social security. Link to comment Share on other sites More sharing options...
MLD Woody Posted March 30, 2015 Report Share Posted March 30, 2015 People are stupid Link to comment Share on other sites More sharing options...
calfoxwc Posted March 30, 2015 Report Share Posted March 30, 2015 Well, ermergency saving of money isn't the only answer. If some calamity hits, like a tornado, giant storm/flood, the grid collapses (like in NY city, for example), or the economy crashes, whatever...water sources get corrupted by nuke test gone wrong......pandemic.... putting aside healthy foodstuffs, and good water, and even a bugout stash... would be a great idea, at least in a small way. Because if the unthinkable ever actually did happen..... why not have a backup plan? and a way to defend yourselves and your survival stuff. (well, at least I didn't mention the un little stupid blue helmets and martial law .) Link to comment Share on other sites More sharing options...
MLD Woody Posted March 30, 2015 Report Share Posted March 30, 2015 I agree, the 4th savings hub should be seeds and fresh water... Link to comment Share on other sites More sharing options...
Chicopee John Posted March 30, 2015 Author Report Share Posted March 30, 2015 The solutions are to redistribute and force people to save. This article mentions forcing people to save. http://www.forbes.com/sites/lawrencelight/2013/11/21/warning-cash-strapped-feds-want-to-tap-your-ira/ Good article. Thanks for digging it out. In terms of 'feeding the insatiable appetite of the Federal Government, I believe the current tax deduction for mortgage interest fading away. Of course, it won't be 100% at first but, the frog-in-a-pot-of-boiling-water approach will be used to faze out this middle-class break. With historically low interest rates, combined with the very cheap cost of money, I continue to pre-pay on my mortgage principal in anticipation of this 'non tax increase'. I continue to do the right thing for my family, but I sometimes wonder if all this toil and savings will be wiped away with one Tsusami by our elected officials. Can Socialism be the, ultimate, end of this highway to hell? Is this the obvious end-game of our Capitalist society? Link to comment Share on other sites More sharing options...
Westside Steve Posted March 31, 2015 Report Share Posted March 31, 2015 Actually whether or not the road leads to hell socialism is most certainly the final destination as society ages. Socialism grows by dribs and drabs, you know the old frog in the pot syndrome. One new benefit every so often and so it goes. I don't know how long it will take for things to get so bad that people actually revolt, throw off and chains and start over like they are doing in China now. But it's a natural progression. WSS Link to comment Share on other sites More sharing options...
LogicIsForSquares Posted March 31, 2015 Report Share Posted March 31, 2015 Actually whether or not the road leads to hell socialism is most certainly the final destination as society ages. Socialism grows by dribs and drabs, you know the old frog in the pot syndrome. One new benefit every so often and so it goes. I don't know how long it will take for things to get so bad that people actually revolt, throw off and chains and start over like they are doing in China now. But it's a natural progression. WSS When the birth rate crisis hits more countries, socialism will not be as appealing. We will be top heavy with older folks wanting the benefits that they paid into for years and not enough new tax payers due to lower birth rates, welfare moochers, etc. and social programs will have to go. You are already seeing socialist countries having to raise government sponsored retirement age and people were wanting to riot. At a certain point, they will no longer be able to keep raising the retirement age. Reforms will have to come and those programs will be very different or not exist at all. Link to comment Share on other sites More sharing options...
Chicopee John Posted April 1, 2015 Author Report Share Posted April 1, 2015 People are stupid Don't be one of those, Woody (I'm sure you're not). Even if your current company does offer a Defined Benefit Pension, you will likely work for a handful - or more - of companies during your career. Start young and let the beauty of compound 'interest' work for you. Link to comment Share on other sites More sharing options...
Westside Steve Posted April 1, 2015 Report Share Posted April 1, 2015 When the birth rate crisis hits more countries, socialism will not be as appealing. We will be top heavy with older folks wanting the benefits that they paid into for years and not enough new tax payers due to lower birth rates, welfare moochers, etc. and social programs will have to go. You are already seeing socialist countries having to raise government sponsored retirement age and people were wanting to riot. At a certain point, they will no longer be able to keep raising the retirement age. Reforms will have to come and those programs will be very different or not exist at all. Not so fast there sir. The birth rate is already slowing in many formerly civilized countries and that in itself demands immigration from third world shit holes. Thanks to medical science the elderly will be around for a lot longer and will need someone to mow the lawn etc. The American poor won't do those jobs they've been on disability or welfare for generations. (sure we will need to raise the retirement age but that's just to keep the status quo. its not logical to pay retirement for 15 or 20 years from a system that was meant to go 5 or 10) The immigrants will be happy to vote for more and more benefits and that leads to more and more socialism. remember that influx of voters will be in the 47 percent that don't pay income tax so why would they care? Also keep in mind that it's much easier to give a benefit than to curtail one. Look at the riots in France and elsewhere. Link to comment Share on other sites More sharing options...
LogicIsForSquares Posted April 1, 2015 Report Share Posted April 1, 2015 They will learn when they can no longer borrow anymore money. Link to comment Share on other sites More sharing options...
MLD Woody Posted April 1, 2015 Report Share Posted April 1, 2015 Don't be one of those, Woody (I'm sure you're not). Even if your current company does offer a Defined Benefit Pension, you will likely work for a handful - or more - of companies during your career. Start young and let the beauty of compound 'interest' work for you. I'm saving up money in my retirement fund. Most of my extra money goes to student loans right now though. Paid off car Almost through student loans Next up, furniture Link to comment Share on other sites More sharing options...
htownbrown Posted April 1, 2015 Report Share Posted April 1, 2015 Disregarding gov. spending, inflation, etc., my generation and the younger ones have fell under the spell of unnecessary spending. When I got my first place it was just me, my 15yo TV, and a plastic pool raft for a couch. Nowadays you can't leave the nest without an ipad, iphone, flat screen, high speed, satellite, on and on and on. They put themselves in such debt that wasn't even available to you 20 years ago. I think thats why they can't afford razors anyway. Link to comment Share on other sites More sharing options...
calfoxwc Posted April 1, 2015 Report Share Posted April 1, 2015 I started a 401K several decades ago, and those things grow like you wouldn't believe. Most of the time, it was 50 cents on the dollar that I contributed. later, a company I interviewed for didn't have any matching. I got it, then they changed company policy a half year later. Just take it with you, if you leave your company, and roll it over into your new company 401K, or something. When I retired, I cashed it in, wasn't 65 so paid a little penalty, and my Wifie cashed in an investment, and we paid off our house, our 28 acres we just bought, and paid for our new barn we had built. Those savings added up to a LOT. Link to comment Share on other sites More sharing options...
MLD Woody Posted April 1, 2015 Report Share Posted April 1, 2015 Disregarding gov. spending, inflation, etc., my generation and the younger ones have fell under the spell of unnecessary spending. When I got my first place it was just me, my 15yo TV, and a plastic pool raft for a couch. Nowadays you can't leave the nest without an ipad, iphone, flat screen, high speed, satellite, on and on and on. They put themselves in such debt that wasn't even available to you 20 years ago. I think thats why they can't afford razors anyway. That being said, you can be young and have those things, but not be in debt. I have a $200 phone, bought a $1500 TV, 50mbps internet,etc etc. I mean, I'm very fortunate, but you can also just be smart with your money. Link to comment Share on other sites More sharing options...
htownbrown Posted April 1, 2015 Report Share Posted April 1, 2015 I wasn't speaking on you Woody and I get your point, but generally speaking you would have more money as a generation without them. Link to comment Share on other sites More sharing options...
MLD Woody Posted April 1, 2015 Report Share Posted April 1, 2015 Probably. But, based on past financial fallouts, we aren't the only generation to have our fair share of people buying things they can't afford. Link to comment Share on other sites More sharing options...
WalterWhite Posted April 1, 2015 Report Share Posted April 1, 2015 Probably. But, based on past financial fallouts, we aren't the only generation to have our fair share of people buying things they can't afford. Okay Woody Link to comment Share on other sites More sharing options...
MLD Woody Posted April 1, 2015 Report Share Posted April 1, 2015 Aren't you in this generation too? Link to comment Share on other sites More sharing options...
The Cysko Kid Posted April 1, 2015 Report Share Posted April 1, 2015 What happens when we continue to live longer and the population on non-savers continues to sky-rocket? Does Capitalism collapse under its own 'regulated' weight? What are some SOLUTIONS? Logan's run Link to comment Share on other sites More sharing options...
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