I saw a report that someone my age will need $3m to retire at 65. The average total income from 22-65 for people my age is around $1.4m. So I guess we never get to retire.
just_ducky_in_NH@lemmy.world 8 months ago
Maybe, just maybe, Gen-Z is not saving as much for the future because (1) they have less money to save due to inflation, and (2) they don’t foresee a viable future. These reasons can also explain the parenthood rate dropping lately.
audiomodder@lemmy.blahaj.zone 8 months ago
dgriffith@aussie.zone 8 months ago
I saw a report that someone my age will need $3m to retire at 65. The average total income from 22-65 for people my age is around $1.4m. So I guess we never get to retire.
Compound interest might get you to that goal, maybe, if you start saving now.
The “start saving now” part is the bit that fucks most people.
sqw@lemmy.sdf.org 8 months ago
savings interest rate was less than 0.1% for about the last 10 years so even thats not looking too solid
M0oP0o@mander.xyz 8 months ago
If inflation is as high as it currently is compared to the collected interest it does not matter how much compounding is done, the buying power of that savings will flatline. Add to this equation the need to eat and live now, the amount most put away is minimal and when something comes up even those meager savings are wiped out.
The math in most households is not working out. Debt is becoming peoples rainy day fund, people are unable to even pay their property taxes with the now insufficient government minimum pensions (and a lot of people don’t think these pensions will even be there when they are eligible). This leaves people selling things (reverse mortgage, downsizing, moving to lower COL areas, etc) taking on debt to live now and generally giving up.
If you put away $50 a week for 10 years you end up with (based on a generous average 2% rate) $28,554.34. This seems like a good amount but keep in mind that you put $26,000 into this. That $2554.24 does not beat the loss of buying power over 10 years. You need much closer or better returns vs inflation for this to work in your favour. I was once told that you would be better off buying some raw metal like lead, or copper as the return on simple materials at least keeps up with costs.
dgriffith@aussie.zone 8 months ago
You’re absolutely right, but I’ll just point out that superannuation (pension) funds in Australia are hitting 8 percent annual returns over a 30 year timeframe. You need a broader investment base to do that, and that’s hard for individuals to do by themselves. How do you diversify your $50 a week investment to maximise return? You can’t.
Here, superannuation funds do all the heavy lifting for you, it’s mandatory for employers to put a nominal amount of each pay into one. There are no minimum investment amounts with them and fees are waived if the balance is below a few thousand, so even if it’s $10 a week you get something back eventually.
So it’s possible to have it work if your government sets things up right.
FlyingSquid@lemmy.world 8 months ago
When over half of Americans live paycheck-to-paycheck, saving is not even a possibility.
dgriffith@aussie.zone 8 months ago
Is there any form of “mandatory” saving in the US? I know you guys have company pension plans of some sort, is there a government version?
Eg where I live, Australia, employers are required to put in 10 percent of an employee’s wages into a superannuation fund. This is basically “invisible” to workers, it’s a cost that’s factored into the cost to have an employee basically. The superannuation fund can be a “default” one selected by the business, or an employee nominated one, and you can transfer/roll over your accumulated funds between any superannuation fund you like as you hop between jobs. You can draw from it in some specific dire circumstances, but usually you can only access it at retirement age.
It seems that a lot of things in the US are carefully designed to keep you in servitude to your current employer, which I find a little ironic coming from the land of the free.
bluGill@kbin.social 8 months ago
There is no magic number you need. $3m will get you some lifestyle. You could retire at 40 with only $300k if you want to live the lifestyle that means (move to very low cost of living area where you walk to groceries). And there is a good chance social security will continue to provide a minimal income once you reach whatever age.
captainlezbian@lemmy.world 8 months ago
Not enough income to live indoors, but income nonetheless
bluGill@kbin.social 8 months ago
I know places in the us where it is enough. Towns with populations of 500 are generally cheap. Not much to do in them.
bluGill@kbin.social 8 months ago
Historically no young generation has saved a lot. It is when you get older you realize how much it matters.
squiblet@kbin.social 8 months ago
People who grew up in the Great Depression did. Silent generation remembers that...
drphungky@lemmy.world 8 months ago
Also Millennials are (historically) huge savers from living through multiple downturns.
squiblet@kbin.social 8 months ago
Main reason I never had kids was I was screwed over by just about everything financially. Student loans, housing/“financial crisis”, medical system, deck stacked against self-employment, predatory credit cards. Great job, USA. Then the same cunts who did that bemoan low birth rates and cry about immigrants.
Acters@lemmy.world 8 months ago
There are TOO MANY procedures/fees/tax/unsafe ways to lose everything you have or be in a position where you will never be able to live without constantly being demanded to provide more work/cash/time.
squiblet@kbin.social 8 months ago
Agreed, life wasn't this shakey in the past. Depression era: certainly, but it was caused by the same BS we are dealing with now. For example, it's amazing that medical bills are a leading cause of bankruptcy and thus degradation of quality of life in the US, and there's no will among politicians or citizens to do much about.
Maggoty@lemmy.world 8 months ago
Even if you make it to 65 Medicare Hospice at the end of your life is designed to wipe you out. So no inheritance…
bluGill@kbin.social 8 months ago
Despite all that, things are overall better than previous generations. There is and always has been bad news. Life has always been a constant string of disasters, yet when you pause for a moment to reflect you realize that despite the bad news, overall it wasn't that bad.
squiblet@kbin.social 8 months ago
In many countries, yes. People in India and China for instance are on average more likely to not be in severe povery and subsistence vs 40 years ago, though western-style modernization has caused it's own problems. However most people are less well off in the US than we were in the 50s-90s. Reagan economics seems to have been 'wait, why are we letting the middle class exist? We could just keep all their money'
bluGill@kbin.social 8 months ago
Most people in the Us are better off than the 50's-90's. They may feel worse off, but that is not an objective measure.