Lack of Retirement Savings

And using the 4% rule, at $29,000 they'll be pulling in a whopping $100 per month in retirement income!

dont worry, big government will save them

Whatever happened to the tradition of the children taking care of their elderly parents?

http://www.businesswire.com/news/home/20101206007213/en/American-Families-Financial-Safety-Net-EARN-Research

knowing this, all my retirement monies are invested in cat food.

> knowing this, all my retirement monies are invested in cat food.

and rameen noodles, guess many of them will qualify for food stamps, hope gov doesn't cut it (michelle obama's school lunch improvements was going to be fund with a cut on food stamps).

I'm not sure how people believe $300K is enough to fund retirement unless they plan on being dead within five years after retirement.

> I'm not sure how people believe $300K is enough to fund retirement unless they plan on being dead within five years after retirement.

by relocating to a super cheap area?

The first response when someone doesn't have enough for retirement is that they won't. The simple truth is that people in their 60's and 70's today are more capable of work than 30-40 years ago. Also, much of the jobs available today are not as physically difficult as the jobs of 30-40 years ago.

Folding sweaters at The Gap in La Jolla might actually be kinda fun at age 65.

west34, i don't disagree. but that will be one less job for someone younger. as we age and are increasingly unable to retire i can't think that this will bode well for employment conditions generally.

Relocate to India.

AR - that is essentially the same argument as the French employment program of limitation of people to 35 hour weeks so there would be more work for others. It doesn't work that way. If people are being productive and not too much of the economies capital is sucked away by the government then available labour will find jobs.

And do you really want careers for the young as clothes folders? Wouldn't it be easier and more beneficial to train the young than the old to use any upcoming technologies?

AvUWS, i'd be happy with training the young to read decently and balance a checkbook, at this point.

if the economy's capital is devoted to developing technology and production overseas, i'm not sure where that will leave many.

10023, india is too hot.

The sad fact is people in their 20's and 30's often don't believe they will turn 50 or 60. Power of compound interest is HUGE. Start early and you don't need to contribute so much later. Does anyone recall reading, "The Wealthy Barber"?

An increase in cheap senior citizen labor pool might bring the call centers back to the states.

Speaking of retirement savings and the elderly. David Einhorn makes a great point about the dangers of the Ben Bernan's policy of zero rates. The Ben Bernank may want people to invest in risk assets, but the elderly don't have the luxury of time and can't take those risks, so they suffer greatly and earn nothing. There's a very good argument which I subscribe to that rising rtes would benefit the economy.

When I was in 11th grade, I sat in on a non-college bound math class (also 11th grade). To my horror, most of the class couldn't understand compound interest.

To bring this back to real estate, it may be that an entire generation was led to believe that their home was part of their retirement funding. Some time in the distant future they would cash out paid-for homes and retire off the HUGE profits. Thus the three legged stool of pension/social security/personal savings acquired a fourth leg -- home equity.

Perhaps many of those 50 somethings with avg $29,000 in retirement cash would say wait a minute I also have this house worth x times what I paid for it and it's paid off. So now the question becomes -- with long term real estate deflation, how shaky will that forth leg ultimately be? And of course, how many of those paid off homes were actually used instead as ATMs through helocs, etc?

Thus, what is the collateral damage on the whole retirement contract of the housing bubble...?

AvUWS -- If you are suggesting that living in France is worse than living in the US for the average person, I beg to differ. Once you count healthcare, etc. as part of the standard of living and you factor in the fact that the French have handled the "decline of empire" years better than we have, France is a much better place. I know you might not accept this because you spell "labor" with a "u," which suggest that you might be British and therefore programmed to despise the French.

it may be that an entire generation was led to believe that their home was part of their retirement funding.

Translation: I don't have to save, My house will do it for me. We're not even talking building up equity by paying down the mortgage, we're talking HPA pure and simple. There's no law that says house prices must go up. I think you are on to something. And the one thing worse than delusion, is self-delusion.

Of course this is exactly the thinking behind the Ben Bernank's QE2. Just spend lots of money buying bonds, stocks and real estate go up, and people will believe they are richer and just spend money they don't have.

I was thinking Goa for the beaches, and hill stations.

Re: Just spend lots of money buying bonds, stocks and real estate go up, and people will believe they are richer and just spend money they don't have.

or as the Krugman said in 2005...we will "make a living selling each other houses, paid for with money borrowed from the Chinese" (every once in a while he's right!)

And when the music stops blame the chinese for riggiing the currency markets.

And who/whom do we have to thank for the scenario that RS spelled out? Bush. The Obama administration is just continuing what the Bushies let loose, which was taking the worst of the Chicago school of the Clinton years.

Clinton.

> Folding sweaters at The Gap in La Jolla might actually be kinda fun at age 65.

taking care of other elderly will be a growth area, the very elderly usually get along better with other elderly than with young employees.

> An increase in cheap senior citizen labor pool might bring the call centers back to the states.

they will provide better service if so, the elderly are known for being good customer service providers. when it comes to working during what it would be retirement, broadening availability of part-times jobs might be a good idea, even job sharing. they need extra income but they might not be willing to put all day long into that job.

> Perhaps many of those 50 somethings with avg $29,000 in retirement cash would say wait a minute I also have this house worth x times what I paid for it and it's paid off.

true, but if they don't have good pensions, then they will not have enough $ to maintain the house and pay property taxes. guess that reverse mortgages are going to become more popular.

>Relocate to India.

it is as expensive as here

Middle class can fund their retirement by the profit they make when they sell their real estate to the next middle class

Re: guess that reverse mortgages are going to become more popular.

Bingo! But of course how much equity will there be to suck out? The whole beauty of ultimately paying off your mortgage was that it lowered your cost of living in retirement. The typical defined benefit pension after a full career, plus soc sec, used to cover about 30-40% of final earnings, which was fine, but now those db plans are dropping like flies.

Older people were encouraged to overleverage and trade up just like the young, people are using their dc (401k) plans as christmas clubs, and home equity is evaporating. A perfect storm for a future retirement crisis.

I think we need to include retirement savings into house maintenance.

Except HUD keeps reducing the principal limit factors on the product.

"Middle class can fund their retirement by the profit they make when they sell their real estate to the next middle class"

Sorry Pitchfork but i'm not buying at overinflated price just so a babyboomer can enjoy his retirement on my account. Fvck that! I hope there are millions more thinking the way i do right now, so this freaking bubble deflates away faster.

As a matter of fact, because i know that millions of these baby boomer are retiring soon and many will put their house on the market, i may just buy more pop corn and watch them all compete down between each other. This factor mixed with the Foreclosuregate flood of houses coming soon promises to be exciting. It's like making money doing just nothing.

being trolled, very liberating.

W67 and others: it is incredibly hard to persuade those of the boomer generation and older that when you retire, your biggest asset should NOT be your house. First order of business should be to purge, purge, purge your stuff (to make it easier for your family) and rent or buy a cheaper place.

If those in my family would listen, they would be out ahead of everyone else, and sit back & relax.