Boomers reaching the end of their financial lines

[fintstone]

I don't know the answer. If you live big while young and experience everything (sex, drugs, rock & roll) or live frugally and work long hours. One that lives large may struggle later but one that does not may feel they missed out on a lot of fun/good times.

It is pretty nice to be able to do or buy whatever you want in your retirement years...but it seems that there are a lot less fun things that you are able/want to do. Being broke and having to worry about making ends meet in retirement where your options/ability to work are limited would be brutal. Especially if health is an issue or you need special assistance. Eventually mowing the grass and cleaning out the gutters will be something you will need help with if you live to a ripe old age.

I guess the best we can do is try to balance things as best we can.

[rwest]

Originally Posted by fintstone

I don't know the answer. If you live big while young and experience everything (sex, drugs, rock & roll) or live frugally and work long hours. One that lives large may struggle later but one that does not may feel they missed out on a lot of fun/good times.

It is pretty nice to be able to do or buy whatever you want in your retirement years...but it seems that there are a lot less fun things that you are able/want to do. Being broke and having to worry about making ends meet in retirement where your options/ability to work are limited would be brutal. Especially if health is an issue or you need special assistance. Eventually mowing the grass and cleaning out the gutters will be something you will need help with if you live to a ripe old age.

I guess the best we can do is try to balance things as best we can.

Well written, the important thing for young people to know is how important compounded interest is and putting a little away every check when you are starting out won’t hinder your fun and trying to play catch up when you’re older takes a ton more money and still doesn’t get you there. I knew better, but still didn’t invest until way later in life and now will retire less secure than ideal.

[NY65912]

My elementary school had a savings program with a local bank. I started in the first grade, (1961) saving birthday, holiday, etc. money. A dime here a nickel here sometimes just a few pennies, but every week I deposited something in the little envelope, saw the deposit stamp and watched the $ grow.

I bought my first blue-chip stock at 13 with money from my confirmation. It was Brooklyn Union Gas co, a utility that paid a great dividend quarterly.

I have never lived large, not for a lack of funds it just isn't me.

I'm getting ready to retire soon and am now starting to think about retirement finances.

I'm 100% debt free. I will be living off of SS, a old union pension, rental income and interest on investments. I doubt I will ever have to touch the principle. I hope to leave a nice nest egg to my kids and grandkids.

I love me compound interest.

[john70t]

They used to teach home economics, something kids might not have learned from parents.
Valuable for a lifetime. Through thick and thin.

[Seahawk]

Originally Posted by NY65912

I love me compound interest.

There are so many nuggets in your post I just left the last...which is the key.

[wdfifteen]

The local council on aging delivers over 450 meals a day to county residents 60 and older. This is in a county with only 40,000 residents. Our food bank has a line across the parking lot on the days the truck pulls up and they distribute food. I can't get my head around the number of people of all ages who don't have enough to even feed themselves.

[McLovin]

Originally Posted by wdfifteen

The local council on aging delivers over 450 meals a day to county residents 60 and older. This is in a county with only 40,000 residents. Our food bank has a line across the parking lot on the days the truck pulls up and they distribute food. I can't get my head around the number of people of all ages who don't have enough to even feed themselves.

But maybe they spent all their money on Porsches and travel experiences when they were younger, so they’re now in the food line happy they lived life right.

[jhynesrockmtn]

I have a good friend who has always based his "budget" for buying a house, car, etc. on what payment he could afford. I assume that came from his Dad as his mother would be destitute if it wasn't for her grandson stepping up and building and apartment in his home for her. I think his wife finally talked some sense into him. They sold their big house several years ago and bought a smaller fixer.

I was worried about my son when he was younger. I thought he might end up the same. Nope, He's 30, in the military, both he and his wife make good money. They own 2 homes (one rental) with good equity, drive paid for used cars, put a good amount away for retirement. My daughter and her husband are in a similar boat. It's a relief to have kids who I don't worry about wanting to move back home in their 30s.

[Crowbob]

Well, IMO, the writing is on the wall for all to see.

Two things are gonna happen, I think.

Boomers are gonna be meeting their demise under unusual circumstances (single vehicle crashes, OD,s, etc) by the millions and the government is gonna be confiscating money one way or the other with either huge tax increases, forcing unimaginable inflation or digital currency.

Very terrible outlook, I think.

[911 Rod]

The part that caught me off guard is how fast life has gone by the last 15 years.
I have lots off assets, cash not much.

[Crowbob]

Yeah agree 100%, Rod.

I’ve been cashing-in piece by piece because I think nobody is gonna have money to buy stuff. The only things I’m keeping are the very utilitarian stuff: small home, small car, tools, diesel tractor, generators and a good relationship with my sister who is sitting on 100 acres of prime farmland.

I may be alarmist but I think we are teetering on calamity. Might also be a good time to max-out on loans-they can’t repo everything from everybody everywhere. Interesting dilemma we’re in right now. The biggest factor in deciding what to do is one’s age and how much you can support your kids and grandkids. They may end up saving you!

[David]

I save for retirement but I save just enough to live the same as I live now.

My father died at 43 of a heart attack. He was a doctor but had to spend all his income on his medical care since he was uninsurable in the early 70's.

I'm in much better health than my dad but if keel over today at 55 at least I enjoyed cars, vacations, and good food and drink!

One thing I've never felt the need to do is spend excess money on a house. We live in a paid off house that's barely worth what our annual income is. This means pretty low property tax too.

[hcoles]

Leading cause of boomer death is heart disease.

[Zeke]

Originally Posted by hcoles

Leading cause of boomer death is heart disease.

Well, now there's a revelation.

[cockerpunk]

i mean sex, drugs and rock and roll are all super cheap entertainment. that's why they ravage small town america.




one needs to balance living in the now, versus living for the future. if you dont love your life now, you are wasting it. and if you are not planning for a future, you wont have one. both must be maintained to be a happy and fulfilled person.

what will kill boomers financially isnt having done sex, drugs and rock and roll, it will be healthcare costs that they refuse to socialize.

[fintstone]

Originally Posted by 911 Rod

The part that caught me off guard is how fast life has gone by the last 15 years.
I have lots off assets, cash not much.

Life does seem to go by faster as you get older. I would have thought the opposite.

We started out very poor and after about 10-12 years, we hit a point where we were comfortable and pretty much lived at that level (other than housing which kept improving each time we moved). I have always been big on assets...and never really spent money on "experiences" which are the norm now. Expensive vacations, eating out, or regular new cars were never in my budget...but we always tried to buy the most expensive home we could afford in the best areas/best schools. The best "experiences" seemed to come along with life and were pretty much free.

I have little problem pouring money into things that retain their value or increase in value. It is sorta like forced savings...and has a compounding effect over time. This eventually paid off as we moved often and typically kept our home and rented it out when we moved on (letting renters pay most of the mortgage) and the better schools ensured we did not have to pay for kid's colleges (as they were able to get scholarships that covered all their costs) allowing us to save more.

Quality cars, furniture, dishes, silverware, knives, hand tools, etc. last a lifetime...so they are a pretty good investment too. Only having to buy them once and getting to enjoy the high quality is pretty good deal.

401Ks are great too...because the money comes out before you see it and compounds without being taxed. Treasury Bills (3 month are well over 4% with no state or local tax) and I Bonds are pretty great for excess cash.

What does seem strange to me is that while I continue to live pretty frugally...shop sales, travel cheap, etc... I am much more able to part with money for nice things that I do not really need now (but still mostly finite assets). My kids are doing OK on their own, I have no future college or wedding expenses...and have a pretty finite number of years to support my wife and myself. I am pretty sure that I neither of us will live much more than another 20 years or so...so it is pretty easy to plan the spend side.

Things like a vacation house or furnishing/maintenance/update of my home (or vacation home) seem logical. Although a vacation home costs more than a couple of vacations at a nice hotel would each year, but the investment is an asset and the value seems to keep climbing (much like the rental houses which eventually are paid off). I still cannot bring myself to buy a new $100K car even though I can afford one...as they seem to depreciate quickly. The last almost new vehicle I bought is almost 20 years old now and has over 200K miles. It seems just fine. I guess if you never try filet mignon, round steak tastes great.

[fintstone]

Originally Posted by cockerpunk

i mean sex, drugs and rock and roll are all super cheap entertainment. that's why they ravage small town america. ...

They are only temporarily cheap (except for actual rock and roll). I still have/listen to the music I bought in the 80s (from the '50s-the '80's) almost every day.

I guess sex is pretty reasonable too...if you are monogamous. In my case, happily married since 1976. Two contributors/shared income and expenses instead of one can make for a financially rewarding partnership (in addition to more obvious benefits).

[aschen]

I sort of get the sentiment, "you only live once". My single friend uses this to try to talk me into extravagance occasionally.

Economic collapse does not scare me in my live time. However I worry about longer term prosperity for my 3 small kids. "you can't take it with you" goes away when you have kids. Id like to leave them a bit of a safety net.

[Crowbob]

Originally Posted by aschen

I sort of get the sentiment, "you only live once". My single friend uses this to try to talk me into extravagance occasionally.

Economic collapse does not scare me in my live time. However I worry about longer term prosperity for my 3 small kids. "you can't take it with you" goes away when you have kids. Id like to leave them a bit of a safety net.

Bingo!

Usually, if normal, one gets less and less enamored of bling now and more enamored of survival of legacy.,

One theory of the elasticity of time (it speeding up as one ages) is that our minds interpret time as a function of new knowledge. When younger, everything is new and needs to be learnt. When older, most everything becomes noise and is ignored. Very little changes (knowledge-wise) so that one day become two, then two becomes a week, then a year and eventually, a decade.

[Rick Lee]

I was in Puerto Rico last week on a carrier convention (insurance award trip), talking with a co-worker from OH who's 56 and starting to worry about retirement. He's been selling final expense life insurance for a while. We get big upfront commissions and low renewals or residuals. He said his retirement plan is to immediately start selling Medicare. The commissions on that are generally $600 for the first year and $300 per year thereafter for as long as the person stays in the plan. He has a pretty big book of life business now, so those are all free leads for selling Medicare. Doing the back of the envelope math, if he spends a few years on Medicare and builds up a book of 1000 customers and maintains it, he'd have a $300k recurring annual income before he gets out of bed in the morning. All he'd have to do is write enough new business to offset the churn. I have another co-worker from PA who's still in his 40s and is already there. And he totally kills it with final expense sales too. I'm 51 and need to start doing Medicare soon.