I have seen a surprising number of ultra successful people with kids who were not. Wasn’t the kids didn’t have the opportunities. What they lacked was drive. Several never went to college and one never graduated high school. In some cases, substance abuse was an issue. Family no doubt had many more resources to address.
Also have worked with a number of family owned businesses over the year where the second generation did not inherit the business skills of the first.
Steve Jobs was probably plain middle class. He got to finish only a year in college.
I left my home state 26 years ago right after college. Got married a year later and have been in the same area ever since. Before kids we would try to make it back home once a year. Once the kids came along getting back was tough. Time was always an issue and cost became an issue. My folks early on traveled up to see me but Dad stopped wanting to travel.
It was tough because my kids don’t have much of a relationship with my parents. But I always said they were the ones with the extra funds and extra time. They should have been visiting more often than they did.
My wife and I already can’t wait to downsize and eventually move out of state when we retire. We will move someplace that is cheaper to live. That will help a ton for retirement funds.
I am realistic that my daughters will probably end up in different cities and a good chance not the one they grew up in. We are not going to let where the kids live influence where we live.
One retirement plan has my wife and I living in a RV tooling around the country. I know I could do it just not sure my wife could handle it.
It has to be said, regardless of whether it’s fair or not, that kids with a family safety net are more able to get involved with startups or other “swing for the fences” kinds of jobs.
ETA: essentially what BlueBayou posted as I was slow typing into an iPad ?
My wife thinks this could be fun, until I tell her she has to do half the driving. Then it’s “nevermind…”
The type of RV would make a big difference, and whether you are willing to tow another vehicle if it is a large RV.
I don’t know if it’s evidence that The Matthew Effect.is Insidious, but my Yale student said to me, “I know you hate most hooks, especially legacy, but let’s see how you feel about it if your grandchild applies.”
I don’t think the legacy admit rates are happy accidents.
@saillakeerie, I see some of the same with kids from ultra successful parents – they don’t need to work. However, I also see a number of said kids do great stuff in not-for-profit/political sectors because they don’t have to worry about a paycheck.
What I was talking about were upper-middle to bottom of top 1% kids whose parents can’t afford to bankroll them into do-gooder jobs or lounging around but graduate with minimal debt. These kids can be hungry and benefit, if they are entrepreneurial, from a backstop if their ventures fails.
^ I heard a very capable applicant for one of those NGO jobs say “you can’t get one of those jobs if you need to have a job.”
Ok, I am no expert, but here is a day to day example of the Matthew Effect. My kid is painfully aware of her privilege. She gave me this real life example of the Matthew Effect:
Person A: D19 actually, got hit with a traffic ticket that has 3 citations before she turned 18:
Because we live in an affluent area, and we are being who we are, D has friends of similar status. Her friend’s father works for the court house who are also our good friend. The prosecutor is also his good friend. My friend is also a friend of the judge. Because we have the money we paid the fine without any issue. Because we our friend knows prosecutor and the judge, he talked to them and D got off with no points. Because our friend is also a friend of the clerk’s court, D was able to get a real license without any trouble when she turned 18. The clerk told her she won’t put D’s record into the system until AFTER D got her real license. If the clerk didn’t do this, there was a good chance that D still doesn’t have her driver license. So basically, D walked away with zero negative impact to her future, because of who she is, of whom her parents are, of whom her friends are.
Person B – her friend from next town, who wasn’t born with money, who didn’t have friends who know friends in higher places – the exact SAME “crime” as above happened to him (except they weren’t coming back from a concert), and resulted in :
It’s not about tech jobs vs. non-tech job, it’s not about the economy being good – it’s about a series of events that are in your favor because of the circle that you are in. It’s who you know because of who you are. That’s my understanding of the Matthew Effect as explained to me. Of course there are exceptions to the rule, many many exceptions, there are millions of stories starting with “I came from nothing”. No one is disputing that (My sister and I were homeless for a long period of time so I know all about the exceptions).
When similar topics like this come up (privilege, white privilege, etc), people get very sensitive and feel like they are entitled to their success and no one is going to take away the credit for their well-deserved hard work. It’s not meant to devalue one’s hard work, or de-value anything. HARD WORK has to be a pre-requisite for most successes. I didn’t mean to start a debate. It’s mean to recognize that when others aren’t successful as some, it’s not necessarily because it’s their fault that they are in the slum. And it’s not always because you worked hard that you are wildly successful. There might be other factors in play and it’s important to recognize them. Only when we recognize them that we can have compassion for others.
Maybe we can take the Matthew and privilege discussion to another thread?
Sorry to get off topic, if i could i would delete it. I don’t want to start a new thread, though. Feel free if anyone interested.
Thanks @MomofJandL. Agreed. Definitely off-topic – unless we are thinking about kids supporting us in our retirement.
Of course, one is better off coming from a well to do family, better support in general. But for tech jobs, I am guessing success is more on merits than pedigree compared to other fields. From the description, it looked like @LxnayBob’s son is in tech field. I didn’t understand why “rich kid gets richer” comes in here. Isn’t it more like “booming tech field makes success easier”? If so, it is more due to the current economic circumstance not any “effect”…
Is anyone aware of any big changes in the recent bill that passed with budget that will affect retirement in any big way? So far from what I’ve read, no major changes other than for non spousal heirs of traditional IRAs having to take all the distribution within 10 years.
Am I missing anything?
RMDs now will start at 72, not 70.5.
Elimination of stretch IRAs is a pretty major deal for some people, particularly if you were planning on leaving a large Roth balance to your heirs.
The other major provision is raising the age when you have to start taking RMDs from 70.5 to 72.
Ok—thanks. H already had to start withdrawing from his but I guess it will be even longer before I start taking from mine.
I understand they’ll also be issuing new charts for withdrawals, taking into account longer life expectancies, which will only be helpful for the few who are taking the RMDs currently.
What we plan to do is take the RMD and put that in retirement accounts or even just savings counts for our kids. That way, they will have their lifetimes to use the money.
Or advise them that when the time comes, they should put their distributions into savings or retirement accounts…again for use over a longer time.
Or we can withdraw larger amounts if we want to…right?
It’s a Required Minimum Distribution.
You can take it all out in one year of you want.