Whatever. Again, keep in mind reduced political clout and an electorate/legislative corps that doesn’t think much of that sort of thing.
I really don’t understand your point. Of course older people “in general” have more money than younger people, but there are many older people who have NOT done a good job of saving, including for retirement.
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The point is confirming what you said, in that most* would not consider $271,805 alone** to be enough to retire on.
*especially in the forum demographic
**without Social Security or Medicare
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And especially considering that most of that’s going to be in the form of home equity, so not something you can actually live on.
I’ll push back again on the “not done a good job saving” thing, which I recognize is a little ironic given that my HHI’s probably a quarter or less of the average CC parent’s HHI and I’m doing fine. Barring big bad things happening that are out of my control, I’ll get to retire nicely and live retired for a very long time without worry about money, because I’ve done an extraordinary job of saving and strategizing. But there are a few unusual things that go into that, especially at my (very ordinary) income level:
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I had a robust ed in personal finance and then in global affairs, a trade analyst’s education, and was reading annual reports and picking stocks at age 12. There was money talk all around me, growing up. I’ve always done my own taxes by hand, despite having situations complex enough to have to consult with IRS lawyers about rule interpretation (my takeaway was the same as theirs). It is not weird for me to think about these things, and I’ve got four decades’ worth of practice and perspective in thinking about them. That’s why I was able to come through the '08 crash with house, retirement savings, and college savings intact despite being a low-income freelancing single mom whose clients all went bust. Saw it coming years ahead, battened down when Bear went, came through. It’s also why my retirement savings is only partly in the account I’ve got from work, partly because I know enough to be able to see what a terrible setup it is; there’s also investment property and individual investing.
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Apparently I don’t need a lot of sleep, so even though I don’t make much, I’ve got time to stay cognizant of how the money works and keep up with rule changes that might affect me or my kid.
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I have an unusual degree of control over my own property. I don’t have anyone else trying to steer my money. And no husband is deciding on his own what to do with money that affects me. I don’t have to negotiate with anyone about how to direct my money. I also have almost no family obligations beyond my kid that oblige me to spend money. And because I know what the rules and numbers mean, I’ve never been susceptible to the idea of “good debt”, and have never allowed money boys to push me into playing financial games I can’t afford, including saving for college in a 529 with limited control and maneuverability.
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I’m nearly immune to a popular sense of what a middle-class life is supposed to look like, and I’m very obstinate about living like I live in a major city regardless of where I am: I’ve seldom been car-dependent and insist on being in a walkable, public-transit-rich place with good food and a lot of middle-class public amenities (parks, rec facilities, libraries, good public schools, etc). So my transportation expenses are almost nothing. While I don’t get my furniture off the curb anymore, I’ve never made the transition to the world of continuous renovations and consumption. If I’m traveling, I’m probably not paying, and I’m also not driving. Most of my clothing is at least 15 (looks down) 20 years old; I take care of it like people used to. I’m not bothered by the new: my iPhone’s 11 years old, there’s still a whole museum of old tech here back to the manual typewriter, rangefinder camera, landline phone and record player, all of which work. The world around me here is a normal high-consumption high-turnover American world, and it doesn’t bother me that this is not how I live.
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I have an incredibly stable job with excellent health insurance in an incredibly stable local economy, and I had no school debt till I went back to school for the fifth time, when I took out a few thousand. I haven’t moved house in over 20 years, the neighborhood’s been pretty stable the whole time, and I don’t have any debt beyond a mortgage which I expect will be paid off soon. I’m unlikely to get home maintenance surprises at this point, because I know the house pretty well. (I also have enough scientific background to understand the systems that make up a house. That was from return to school #4.
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I have a robustly professional-middle-class sense of my own time and future’s value and the need to plan longterm. Apart from cataclysms like war, revolution, and mortal illness, I see no reason why I shouldn’t be able to steer my own life and seek my own fulfillment.
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I happen to live in a place that’s fairly inexpensive propertywise, and I’ve got an arable backyard and no HOA telling me I can’t put up solar panels, devote the backyard to suburban homesteading, or line-dry my clothes. I have time and knowledge for these things.
None of this is usual for someone living at median HHI. If “a good job saving for retirement” requires things of an average person that the average person can’t reasonably have or do, then we’ve got a problem with the definition of “good job”. It’d be like demanding Linux skills of your appointment schedulers and saying that if they can’t build open-source scheduling software from the ground up, that’s their own fault and they don’t deserve to have the jobs.
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Keep in mind that there are also plenty of young people that have pursued very lucrative career paths too. There are many CS, engineering, finance, healthcare, legal, business employees, etc out there that are young and killing it. There’s a wide mixture of people and while I understand your position that things are changing it’s not like there aren’t also young adults that are going to amass wealth just like some in the older generations did. In fact it’s probably going to happen quicker and more easily for many young adults. Time will certainly tell how things do end up shifting. I wouldn’t say it’s a done deal though.
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I’m watching a long-term care webinar. Does anyone have something call hybrid LTC insurance?
Of course. In a population of 300 million, it’d be a terrible disaster if nobody was managing to do well. The question is how many of the young people and their parents, what proportion, are doing well. And the answer in the US, over the last 40 years, is “fewer and fewer”. That’s so well-documented from so many angles that there’s not really any point in debating it unless you’re also given to flat-earth and climate-denial debates. So when we’re looking at how things are likely to go in the next few decades, when we’ll be old, it’s wise to consider both the demographics and the center of gravity of the viewpoints and formative experiences of the people who’ll be running the institutions at that point.
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I’m not sure why you feel the need to bring up flat earth and climate situations while saying there’s no need to discuss successful young people further. Seems like a distraction or an attempt to just shut down my thoughts. We’re not supposed to be debating here anyway.
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However, it is possible and likely that the successful group, while becoming more successful than their predecessors a generation or few ago, is smaller in number, while the majority are less successful than the predecessors a generation a few ago. I.e. greater economic inequality than before. Greater economic inequality is not necessarily bad if it is personally earned (both in reality and perception) rather than inherited. But to the extent that capital can be bequeathed / inherited, and can be deployed by wealthy parents to purchase significantly better opportunities for their children, it is likely that economic inequality is increasing along with decreasing connection to personally earning it and increasing connection to inheritance and parentally purchased opportunity. That would be a trend toward societies that are generally less pleasant and less politically stable.
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That page notes that millennial households are more likely to have two people working for pay than previous generations.
https://www.stlouisfed.org/on-the-economy/2021/march/millennials-catching-up-earlier-generational-wealth indicates that millennials are behind on wealth accumulation (saving up for retirement, kids’ college, etc.) compared to older generations, despite some catch-up recently.
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Hybrid LTC generally means some sort of whole/universal base policy with a state approved LTC rider. Not accelerated benefit, not even critical illness rider, but true LTC.
Lincoln MoneyGuard used to be popular, now OneAmerica seems to be the best bang for the buck, if that is a buck you choose to spend.
Some people (Bogleheads) are very against any sort of whole/universal life plan, even this. I know people who have had this type of policy and been content.
How does it work? You buy a policy with a base life benefit, say $100k, but it also has an LTC rider of $100k, so you now have a $200k LTC benefit. You can also add an inflation rider which increases the LTC pool. What happens if you never make an LTC claim? You get that death benefit. If you pay a single premium up front, the death benefit is often a number close to the single pay premium. Effectively you get your money back in the form of the death benefit, but you lose out on all the growth that might have happened in the intervening years.
If you make an LTC claim, you have doubled your pool of money (or more with inflation riders.) Assuming you have some assets set aside for LTC and you reallocate them to the Hybrid policy, then you doubled your LTC pool. Great if you make an LTC claim soon. How long would it take you to double your pool of money? Are you an aggressive investor? What if you lose money in your pool via bad choices or a down market? What if you are super conservative and only feel good about CDs and bonds.
Why would you want this? You might want it if you have a family history that makes you think you’ll like you have a claim. You might want it if you think that claim will be soon. You might want it if you are not comfortable growing your LTC investment pool in a manner that outperforms the policy. Heck, you might want it if you think you are the kind of person who would spend the money! I have seen people in our parent’s generation who will NOT invest in equities or who will spend what they see, so stashing the LTC pool away is actually a smart/safe choice.
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I’m sure there are plenty of parents here that are going to be passing on an inheritance to their children. I don’t fault anyone for doing just that. I guess I don’t really look at someone wealthier, or poorer for that matter, than I am and think of them in a different way.
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The page also notes this:
“Millennial households have obtained these higher incomes even though the households are somewhat less likely to have two contributing spouses or partners. Today, 55% of young adult heads of a household have a spouse or cohabiting partner, down from 57% in 2000. The share of young adult households with two earners fell from 49% in 2000 to 44% in 2017.”
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It’s just underscoring how well-documented the change is, not meant to try to engage you in debate about the shape of the earth. I mean that there isn’t any point in debating the change.
That said, the Pew report you cite explains that the households are doing better because more women are working more hours and not being exploited as badly as they had been. It doesn’t mean that individual young people are overall doing better wagewise on average, and it doesn’t mean that the households are wealthier. They aren’t. The income story doesn’t take into account debt and increases in basic living expenses: housing, education, healthcare, transportation.
I keep going back on this thread to the complexity of things. There’s a lot that has to be considered simultaneously.
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One female income earner households probably account for the improvement, due to greater social limitations on women’s employment choices a generation or few ago.
Interesting discussion on Hybrid LTC. Is this the kind of thing sold by financial planners with commission incentive? Or insurance agents? (I ask because we went to a financial planner seminar where the instructor was a big advocate of couples at least considering LTC coverage, but he did not sell it. It did make us research the topic, and we ended up taking advantage of a deal through employer.)
An insurance agent with LTC licensing could sell it. A CFP might also be insurance licensed and process that as part of a much larger plan.
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@bennty - very interesting analysis re: the difference between generations and expectations as to equity. Thought-provoking.
I find these discussions (and the various perspectives!) fascinating & informative. Hope there is nothing considered negative about ‘debate’… 
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Although inequality has increased, the chances of those in the lower ranks succeeding (economic mobility) has not declined. See https://inequality.stanford.edu/sites/default/files/SOTU_2015_economic-mobility.pdf
“The rungs of the ladder have grown farther apart (inequality has increased), but children’s chances of climbing from lower to higher rungs have not changed (rank-based mobility has remained stable).”
What is striking is how different economic mobility is by region of the US: “Salt Lake City, Boston, and San Jose have rates of mobility similar to the most upwardly mobile countries in the world, while other cities—such as Charlotte, Atlanta, and Milwaukee—offer children very limited prospects of escaping poverty. The odds of moving from the bottom to the top are two to three times larger for those growing up in Salt Lake City or San Jose as compared with those growing up in Milwaukee or Atlanta.”
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@Twoin18 those statistics are interesting - and just a thought on ‘departing from this thread’ - you hear of success stories who had options with relatives in other places/cities/states. If one is in a ‘locked in’ sort of economic mobility situation due to little opportunities or bad influences, moving away and a fresh start.
I have HS classmates that stayed around hometown area or state. I see some of my peers where our children grew up staying in this area. Since the area we are in is a high growth/high tech area, it is not a bad choice. However going different places has expanded getting with different people with different backgrounds, acclimating to new areas.
In some areas of the country it is more difficult to get into one’s own home – and it seems to be getting more difficult in more and more places. So we will be focusing on how to help get our DDs into home ownership as soon as is feasible.
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