Not so golden: Wealth gap lasting into retirement

With traditional pensions becoming rarer many older workers don't have enough money to retire
Associated Press
Aug 4, 2014

 

William Kistler views retirement like someone tied to the tracks and watching a train coming. It's looming and threatening, but there's little he can do.

Kistler, a 63-year-old resident of Golden, Colorado, has been unable to build up a nest egg for himself and his wife with his modest salary at a nonprofit. He has saved little in a 401(k) over the past decade, after spending most of his working life self-employed. That puts him far behind many wealthier Americans approaching retirement.

"There is not enough to retire with," he said. "It's completely frightening, to tell you the truth. And I, like a lot of people, try not to think about it too much, which is actually a problem."

With traditional pensions becoming rarer in the private sector, and lower-paid workers less likely to have access to an employer-provided retirement plan, there is a growing gulf in the retirement savings of the wealthy and people with lower incomes. That, experts say, could exacerbate an already widening wealth gap across America, as more than 70 million baby boomers head into retirement — many of them with skimpy reserves.

Because retirement savings are ever more closely tied to income, the widening gulf between the rich and those with less promises to continue — and perhaps worsen — after workers reach retirement age. That is likely to put pressure on government services and lead even more Americans to work well into what is supposed to be their golden years.

Increasingly, financial security for retirees reflects how much they have accumulated during their working career — things like 401(k) accounts, other savings and home equity.

Highly educated, dual income couples tend to do better under this system. The future looks bleaker for people with less education, lower incomes or health issues, as well as for single parents, said Karen Smith, a senior fellow at the Urban Institute, a Washington think tank.

"We do find rising inequality," said Smith, who added that it's a problem if those at the top are seeing disproportionate gains from economic growth.

Incomes for the highest-earning 1 percent of Americans soared 31 percent from 2009 through 2012, after adjusting for inflation, according to data compiled by Emmanuel Saez, an economist at University of California, Berkeley. For everyone else, it inched up an average of 0.4 percent.

Researchers at the liberal Economic Policy Institute say households in the top fifth of income saw median retirement savings increase from $45,539 in 1989 to $160,000 in 2010 in inflation-adjusted dollars. For households in the bottom fifth, median retirement savings were down from $8,433 in 1989 to $8,000 in 2010, adjusted for inflation. The calculations did not include households without retirement savings.

Employment Benefit Research Institute research director Jack VanDerhei found that in households where annual income is less than $25,000, nine in 10 saved less than $10,000, up slightly from 2009. For households with six-figure incomes, 42 percent saved at least $250,000, up from 34 percent five years earlier.

The days of retirees being able to count on set monthly payments from pensions continue to fade among non-government workers. Only 13 percent of private-sector workers now participate in "defined benefit" plans, compared with a third of such workers in 1985. They've been eclipsed by "defined contribution" plans, often 401(k)s, in which employers match a portion of employee contributions.

Americans know they need to save for retirement. The trick for many is actually doing it. It's estimated that about half of private-sector workers don't take part in a retirement plan at their current job.

"Over the years, all I've been able to do, especially as a single parent, is just pay your bills every month," said Susan McNamara, a 62-year-old adjunct professor from the Boston area. "Anything that's left over is used up when your car breaks down or when the furnace breaks down. ... There's never anything left over, ever."

McNamara is divorced and her son is now grown. But she has had heart issues linked to cancer in 2004 and related financial worries. She sold her home to meet expenses. McNamara has a defined contribution plan from past stints as a full-time professor, but its balance is under $50,000.

Or consider Kistler, who makes $41,000 a year working as a benefits counselor for a nonprofit health care provider. He has no substantial savings beyond the 401(k) worth roughly $19,000, and he has debt. He plans to keep working.

Kistler is philosophical about being on the short end of a retirement gap, though he wonders what will happen when boomers in his financial situation begin retiring by the millions.

"This next 10 to 15 years is going to be quite interesting," he said.

EBRI, a Washington-based nonpartisan research group, projects that more than 55 percent of baby boomers and the generation that follows them, Generation X, will have enough money to last through retirement.

But EBRI also found the least wealthy boomer and Gen X households are far more likely to run short of money in retirement. Under some models, 43 percent of those in the lowest quarter run short of money in the first year of retirement.

VanDerhei, EBRI's research director, said members of that group are relying mostly on Social Security and lacked consistent access to retirement plans over their careers.

Many of those retirees will find that it won't be enough, David John of AARP's Public Policy Institute said, noting the average monthly Social Security retiree benefit last year was about $1,300.

"In the long run, if we have significant numbers of people retiring on Social Security and very little else, there's going to be a tremendous pressure on state and local governments for additional services, ranging from health to housing to libraries," John said. "There's going to be significant pressure on the national government to provide additional support."

John said a good first step would be to ensure more workers have the ability to save through employer-sponsored retirement plans.

For many, it will mean working to a later age and cutting back.

In Brooklyn, 60-year-old Madeline Smith is already thinking about a modest future. While she has no illusions about living the "little fairy tale" of a cushy retirement, she also is confident she can get by, maybe working part-time, living simply or even renting out her house.

"Sometimes you have to learn to be a little bit more conservative," she said. "I think a lot of people are learning that now as they get older."

 

Comments

The Big Dog's back

The 1% took that away from us. Work till you die.

The Hero Zone's picture
The Hero Zone

Hi Big Dog. I'll reply to you since coasterfan hardly ever replies when someone wants to talk to him. I'm hoping you'll do me the favor instead. Besides, you also at least try to cite some of the things you say which puts you above him in my book.

Anyway considering that Congress is made of these "1%-ers" I presume to an extent they did. While SS was never meant to be the sole income source of retirees, here we see it has become as much and it will be officially dying out in 20 years. As long as Congress doesn't allow you or me the option to privately invest our SS money, the average citizen will NEVER see the returns that a "1%er" does.

They must enjoy keeping people poor and reaching their potential? Or, since this article brings up the topic of "inequality", they are never allowed to invest equally as those with more money.

Many citizens are forcibly kept out of the stock market because of outdated thinking. Meanwhile, many in the same party (http://www.ontheissues.org/celeb...)that does that leap for joy and point to DJIA and other index numbers when many citizens aren't even invested in it.

You should join me in allowing every citizen the option of investing their money in regulated mutual funds so that ALL can enjoy the prosperity of the stock market and not just "the 1%". I can't fathom why you would want people to be kept from such opportunity especially when it is Federal tax money, our money, being pumped into it in order to keep it going for the select few you bemoan so often.

As a resident of your city, would you like to be legally forced to only use the sidewalks to go past the park your money pays into because you don't have enough - according to the city - to enjoy the park yourself?

"The sidewalks will take you to where we tell and think you should go. The park is an option we don't trust you to enjoy responsibly even though it is monitored. Just use the sidewalks, sir, and stop being fussy."

The Big Dog's back

Do you know pay and benefits were higher in the early to mid 80's? That was until reagan started his war on unions and gave big incentives for corporations to move their jobs overseas. Pay cuts became the norm. If you didn't like it they would close and outsource the jobs to Mexico and then overseas. I'm not quite sure why you don't comprehend what happened to workers pay and benefits.

The Hero Zone's picture
The Hero Zone

Competition, efficiency, technology, and societal advancement is what is happening. I'm not saying it is bad to ask for as an employee, but when a company must supply a human employee with pay, insurance benefits, retirement, promotions/raises, payroll tax matching, various other services like training, an OSHA and EPA-compliant environment, as well as account for possible lawsuits coming from worker's compensation and other liabilities it would seem that the gradual replacement of humans with machines (or the phasing out of the jobs/products/services entirely) becomes both humane and economical.

Speaking of progress, here is an interesting seven minutes you may enjoy and from a hardly-right-leaning PBS source: http://youtu.be/95KhuSbYJGE?list...

I would argue that part of the reason the labor force is seeing such disparity is because in broad cases it is getting dumbed-down and less "skillful" because of technology. Yet technology and industrial standards are being ratcheted up in order to not put humans in harm's way. If humans don't work, they can't get hurt and companies don't have to pay up front or on the back end with the above.

This didn't just start with the '80s and at President Reagan's orders. It is an inevitable path humanity has taken throughout its entire history. We are just seeing an exponential increase in technology now and thus a decrease in employment. Fast food workers demanding $15/hour may soon see that they won't even make minimum wage being unemployed and replaced by terminals and robots.

From CNN, a source I presume you'd trust over others:
Robots will replace fast-food workers
http://money.cnn.com/2014/05/22/...

Economic Policy Journal:
Battling Higher Minimum Wages: McDonald's Just Bought Touch Screen Cashier Kiosks for Its 7,000 European Locations
http://www.economicpolicyjournal...

If you want to increase employment, simply outlaw technology. Tell miners they aren't allowed to use mechanical drills and instead must use pickaxes. Crane operators and construction workers should be forbidden from using electric or gas-powered tools. Require more manual labor to break more backs and you'll see employment rise as we need more people to do these tasks. That would be inhumane though, wouldn't it?

You want to know what happened to pay and benefits? They are going the way of the dinosaur because in many cases they are being replaced. It's not just poor, either, but "white collar" workers/managers will certainly feel the pinch.

You say you are a student of history, as I will say to you, so take my words here as a historical and non-partisan in terms of framing an answer to your question.

The Big Dog's back

hz, wanna know why coaster and the rest of us don't like to carry on a conversation with you? You act like you were born last night and read only right leaning accounts of history because you didn't live thru those eras. That's why in the past I've called you naive. I'm joining Coaster and the rest and will wait for you to diversify and get a grip. And by the way, Just because PBS has something doesn't mean they are correct. I've used the WSJ and fux news as examples, doesn't mean they're leftist organizations. Bye.

The Hero Zone's picture
The Hero Zone

Now that's not fair. You can't just say because I wasn't alive during a certain point in time that there's no way I can't know about it. Heck, even for people who are alive in a certain time there is enough ignorance and blinders put on to not be able to tell the full story. I research things I don't know (which is a lot) carefully and don't just bring up the first "right-leaning" article I find. I'm a bit insulted you think I do.

What do you want me to "diversify" into regarding my responses? I cite and quote from a variety of places and almost never Wikipedia. In addition to my breadth of sources I also go out of my way to provide context for the point it is making (or I by saying such things).

I don't think you realize that some of the things I write in response to you and others take 30-60 minutes of writing and researching to ensure I am delivering to your doorstep a complete thought. I don't just Google a phrase and look for a headline that strikes my emotions as "Yeah, that'll show 'em!" only to come back and have it bite me because the unread body of the text counteracts the sensational headline/hyperlink.

I've asked you before what history books you want me to read. Which philosophical tomes you want me to absorb as you did? Yet you never responded despite me - "negotiating in good faith" - to read what you read to meet your ideas as you poo-poo my sources consistently as somehow not being credible. That offer is still on the table.

vcreed123

don't forget it was every democrats favorite person that sold out America with NAFTA but I guess it's a lot less embarrassing to just gloss over that and blame republicans. Painful knowing old Billy Clinton sold out the middle class isn't it

anthras

Re:"The 1% took that away from us. Work till you die."

The top 1% attend Obama's fund raisers and pay $10,000 to $30,000 a plate to eat. Have you ever figured what they are receiving in return???????

Contango

Re: "He has saved little in a 401(k) over the past decade,"

The education level of personal finance and economics is abysmal in the U.S.

America: A nation of spenders.

coasterfan

Oh baloney, Tango. Employers provide far less in retirement pension - if they provide a pension at all, and far less in medical benefits - if they provide medical coverage at all. People are working harder than ever, and for less pay. I recently read that worker productivity is up 80% since 1980, but wages have only risen 8%.

Just another example of how the 1% are sticking it to the rest of us.
Meanwhile, profits are UP UP UP for companies, AND they pay less and less in taxes.

According to Nobel Prize winning economist Paul Krugman, in the early 1950's the U.S. used to get a third of its revenue from corporate taxes. Today it's about 1/10 of the revenue, and guess who gets to make up the difference: U.S. taxpayers. Much of this is due to the fact that many U.S. companies dodge taxes by switching their citizenship to other countries, to avoid paying taxes on products they manufacture in America, and sell in America to Americans.

This problem is caused by the 1%, NOT by overspending, irresponsible American citizens. I would think that Contango would already know that, since he has griped about the economy and how SPENDING WAS DOWN incessantly for the past few years. It really irks me when people STILL stick up for Wall Street and the 1% who STILL haven't had to answer for the problems they caused and continue to cause. Meanwhile, Contango blames the victim.

Donegan

It still sickens me that you defend a admin that is bought lock stock and barrel by wall street and refuse to even for a second realize that your god does not even like you.
Oh look another 65 billion just went to Wall street.....

Justme...

Worker productivity is up because of technology. We aren't working 80% more. We're getting 80% more done. This is definitely true for me in my field of employment. I am doing the work of three people when I started - not working 3 times as hard, but getting 3 times as much done because of improved technology. I am with you on the pension issue. We now have to save it ourselves with a small corporate match (unless you work for the gov't). But I disagree that companies pay less in medical benefits. The cost of insurance has skyrocketed (and not just since Obama - it started way before that), and the amount employers pays is way higher than it used to be.

knowitall

(1) Americans work on average more than most in the industrialized world.
(2) Overspending..... Doesnt consumer spending keep the economy moving? Just call it spending.
(3) insurance has skyrocketed. Companies pay more but so do individuals. Companies dropping people's imsurance when they retire. So, work till ya reach Medicare or longer. And some in congress want to reduce Medicare???
(4) Companies are dropping pension plans. Why? Cheaper for them means not as good for the employee.

Contango

Re: "Companies are dropping pension plans,"

Most have terminated or frozen defined benefit (DB) plans, but have added defined contribution (DC) plans.

Why? Needless govt. regulations add to complexity and expense.

It's also difficult to project future benefits in this economic environment.

knowitall

Yes, I know. Point being it is less beneficial to the employee than previous pension system. Companies are not funding the plans....many are past due. That is against the law BTW. Lol

Contango

Re: "Companies are not funding the plans...."

Wrong. The IRS and the DOL have strict guidelines.

You should be more concerned about the massively underfunded state and local public DB pension plans and health benefits.

Constitutionally they are guaranteed and backed by taxpayers.

knowitall

Yes sir strict guidelines that are not enforced. I know for a fact that the old GM and Delphi plans were underdunded....GM more than Delphi. Delphi got an OK to not fund some of it during the Bush years. Yes, the public funds are in bad shape too. The PBGC takes over pension plans from bankrupt companies but what they pay is sometimes a lot less than what was earned by law.

Contango

Re: "strict guidelines that are not enforced."

So according to you, the IRS and DOL are complicit?

Yes, there are guidelines. See: ERISA

FYI: 'Technically' the PBGC is bankrupt.

DB plan benefits are based on a 'promise' to pay a specific monthly amt. at some future date, they are not guaranteed.

If cos. go bankrupt, what do you expect?

The Big Dog's back

They were suppose to have money put in a separate account for the pensions regardless if they went bankrupt or not. These corporations raided the pension funds.
http://en.wikipedia.org/wiki/Cor...
http://online.wsj.com/news/artic...

knowitall

You are correct Big Dog.

Nor'easter

You failed to mention that ERISA as passed and started in 1978 (Jimmy Carter) exempted the medical, charitable and non-profit as it was designed to get union support. Unfortunately in 1993 (Bill Clinton) there was an executive order to include these industries and require full funding by November 1993 even though the union had had 15 years to fund their plans. The result was loss of health insurance for most of the ordered industries. There are extreme consequences to bad decisions. Look at Ukraine, Afghanistan, Iraq, Mexican Border, ACA, Immigration .... just to name a few.

knowitall

If their pension funds were fully funded then employees would still get their pensions. The funds would be transferred to the PBGC for management. Underfunded plans are the problem.

The Hero Zone's picture
The Hero Zone

As we explored in another topic, it seems our own government is underfunding SS and mismanaging it. Unfortunately for us, there is no government program to fall back on when things collapse. It's quite unfortunate!

The Big Dog's back

If the Gov collapses what do you think will happen to private firms? Put on your thinking cap for this one.

Contango

Re: "If the Gov collapses what do you think will happen to private firms?"

Those that are heavily dependent upon govt. spending will either fold or be downsized.

Those that didn't will survive and maybe even thrive.

Capital tends to flow to where it will be most greatly rewarded.

More like a sovereign debt crisis, e.g. Argentina, Greece, et. al.

The Big Dog's back

If this country's Gov collapsed capital won't mean diddly squat. I think I told the wrong person to put on their thinking cap.

Contango

Re: "If this country's Gov collapsed,"

Sovereign debt crisis, NO 'collapse'.

Contango

Re: "Underfunded plans are the problem.

Nope.

Again: The IRS and DOL are very strict on funding requirements for private pensions.

Public pensions are a MUCH larger and MORE serious issue. See: Illinois for one.

FYI: My spouse was a VP of a pension admin. network for a S&P 500 co. I picked up quite a bit of info along the way.

----------------

"Delphi & GM"

Pensions were "plundered" during the Obama admin.:

http://www.frontpagemag.com/2012...

The Big Dog's back

Re: "Underfunded plans are the problem."
Pooh - nope. Fact- yes they are.

Contango

Nope.

See: Public ee. pension plans - WORSE shape.

Contango

Re: "baloney,"

Salami.

Got any financial investments or are you intending on living your senior years on govt. provided handouts?

"Barack Obama: The new trickle-down president?"

http://www.cnbc.com/id/101892595

pntbutterandjelly

If we allow the Republicans (corporate America) to win the House of Representatives...you'll see an even more diabolical war on the middle class and poor. Wages will fall, job opportunities will diminish, personal rights with evaporate, Wall Street profits will grow for the well-to-do, pensions and unions will disappear, our infrastructure will be in worse shambles, the environment will suffer and large corporations will get even fatter at our expense.
vote
Vote
VOTE

Fromthe419

Unfortunately, the same Wall Street tools that back the Republicans also back the Democrats. Plutocrats all of them.

anthras

Coasterfan says" I recently read that worker productivity is up 80% since 1980, but wages have only risen 8%."

Is anyone actually foolish enough to think that the workers are working 80% harder and faster or maybe the manufacturers have invested a few billion dollars on upgrades computerized machines, robotic assembly etc. actually with many of the new improvements the work is actually much easier than in the past.

Obama digitally printing 60+ billion a month does keep Wall Street strong to help the 1% and anyone else that has any mutual funds or other investments but is a great advantage for the 1%. If he was not actually aiding the 1% then why would the 1% pay $10.000 to $30,000 a plate to attend one of his many fundraiser dinners?

He is responsible to guard the nations boarders however he has opened them. The illegals will need food, shelter. clothing, medical care and more. If paid by the tax payers it will increase the already high national debt and I don't know what the figure is however I do think that we can not continue the way we are as we will reach the figure that will bankrupt this country.

In lieu of the tax payers supporting the illegals they could seek employment and I do not think they would compete with the 1% for jobs they will compete with the middle and lower class. Ergo the solution to helping the already shortage of jobs for the middle and lower class is to import more workers?

The Big Dog's back

People are working harder and SMARTER, despite management, than ever before. And oh gee, Obama this, Obama that, this clusterphuch started in the 80's.

Dr. Information

You got that right. People are working harder......harder at doing nothing. Obama = 45% welfare in this country.

Donegan

Repeating the same actions expecting different results is a sure sign of insanity.
You want others to re-elect the same party that is in office that has the worst record of income inequality in the history of the country expecting it to get better? Liberalism is a disease, A mental one.
http://money.msn.com/investing/p...

The Big Dog's back

The article proves our point. Should Obama mandate these 1%ers to pay more?

Donegan

Obama cannot mandate ANYONE to pay more, He is not a king. Besides what do you care, you want the money to go to foreign illegals? You scream about raising taxes but say nothing of ther trillions sent to wall street for the QE deals, Why is that Dog?
Oh look another 65 billion just went to Wall street.

The Big Dog's back

I scream about raising taxes? You have me confused with yourself. Classic Projection.

Donegan

That's all you Libs do is want to throw money at problems because you have no real long term solutions. "Tax the 1%" Its like a broken record with you people.

Contango

Re: "Wall Street profits,"

Got any financial investments or are you intending on living your senior years on govt. provided crumbs?

knowitall

If I look at my check sfub I see deducfions for social security and medicare. Does that mean I am paying in to it?
I have been lucky to have worked during the good years and did also have a 401k. But, with wage growth stagnant, people cannot save like I did. Some do have to live on those crumbs. In most cases I imagine that is all they really have.

Contango

Re: "also have a 401k."

So you've profited from Wall St. investments?

Why did you bother?

knowitall

Lol. Did not want just SS and pension. Pension got frigged up. So, good thing had 401.

Contango

Re: "good thing had 401."

So you LOVE Wall St.?

knowitall

Love is not the word.

Contango

Re: "Love is not the word."

But you're 'pleased' with the appreciation of your invested assets, yes?

knowitall

Lmao. Yes I am. But Wall St does not correlate with Main St. It ain't all about me!

Contango

Re: "But Wall St does not correlate with Main St,"

Ultimately they do; the "streets" intersect.

knowitall

Republicans want you to keep your guns but want to take away your medicare and social security. We will need those guns if SS and Medicare are gone!

Contango

Re: "take away your medicare and social security,"

Fallacious straw man argument.

There are no 'trust funds,' they are accounting fictions.

knowitall

Your point? And what do republicans want to do.....strengthen it? Lol

Life is an accountimg fiction. Just keep supporting both of them whether accounting fiction or not.

Contango

Re: "republicans want ro do.....strengthen it?"

Some what to give citizens choices, not the one-size-fits-all socialist approach.

Medicare and SS are pay-go systems. The money comes in, the money goes out.

Again: There are NO trust funds.

Both have assets held in non-marketable securities redeemable only by the U.S. Treasury Dept.

knowitall

Yes, I pay in, my parents take out. My kids pay in, I take out.

Contango

Re: "my parents take out. My kids pay in, I take out,"

Fewer number of workers paying in than in the past.

"How Many Workers Support One Social Security Retiree?"

http://mercatus.org/publication/...

Financially Medicare is in even worse shape than SS.

10K of the approx. 78 million baby boomers turn 65 every single day.

Total transfer of payment earned and unearned entitlement programs are the fastest growing portion of the fed budget.

http://www.usnews.com/opinion/ar...

It is financially unsustainable.

Nor'easter

There was a trust fund. Lyndon Baines Johnson decided to replace the trust fund with an IOU to fund his war on poverty to buy the low income vote. After 50 years, we have the highest level of poverty ever, but they still vote Democratic to expand a severely failing program. Go figure.

anthras

Mr Knowitall says "Republicans want you to keep your guns but want to take away your medicare and social security. We will need those guns if SS and Medicare are gone!"

Do you mean like Obama cutting medicare $500 billion to use it for Obamacare. I do think the Sandusky Register did print an article that Stein Hospice was forced to cut some of their personnel because of the cuts in medicare.

knowitall

Not sure if those cuts were the result of Medicare. That was their excuse though.

Contango

Re: "cuts were the result of Medicare."

Double counted to make the ACA look like it was saving money.

http://dailycaller.com/2011/03/0...

The Big Dog's back
Dr. Information

Obama has cut medicare more than any previous president.

knowitall

Yep. Just think how much a republican would cut!

Darwin's choice

If your aunt had nuts, she'd be your uncle. Just think....

obama/failed

The Big Dog's back

If your aunt had nuts goof they would be your uncles. Runs in your family.

knowitall

Lol

knowitall

Not necessarily. There are genetic problems that arise where people get six toes or other types of abnormalities. So, why can't my aunt have nuts?

sugar

I'll just have to die, or live off my kids.

knowitall

That is another alternative. I knew a person who said the reason they had kids was to support them in old age. Not a bad idea.

ohioengineer

I must admit that I am getting tired of reading articles like this. I am 65, my wife is 60 and we have been retired for seven years. We are not rich, but we live quite comfortably, travel the world, enjoy our hobbies and volunteer a lot. In short, we are living the American dream.

And how did we do it? One word: savings! While our neighbors were buying boats and visiting Disney World every summer, we plowed money into our 401k's and other investments. We bought "handyman specials" and fixed them up and sold them at a profit. We took courses about investing and subscribed to the Wall Street Journal. We developed a plan for retirement and we stuck to it. Oh, and while all this was going on, we put three kids through college - but expected them to work and earn a good chunk of the cost of this education.

And here is another shock: we are not unique. We know many fellow-retirees who are living as well or better than we are. And no, none of us were members of that "1%" club everyone likes to blame for their troubles. We were average people, who had the same ups and downs and problems during their working careers as anyone does.

A successful retirement requires hard work, planning and most of all discipline. No other country in the world gives you the opportunity that America does; all you have to do is be willing to reach out and take it. Sure, it is easier to sit back and whine and blame the 1%, but at the end of the day it all comes down to you and what you want to do with your life.

The Hero Zone's picture
The Hero Zone

Thank you for sharing your story! Reminds me a lot about this book:

The Millionaire Next Door
http://books.google.com/books/ab...

The Big Dog's back

Well, if you were an operating engineer you made good money thanks to the union.

knowitall

We part ways on this one Big Dog. The unions in the past have done a lot of good for its workers. I believe in the union movement, as it has done a lot of good for the country in a lot of ways and I was not a union worker.
The engineer earned his money himself. Good for him. Engineers have usually been a commodity that companies want to pay for. Gotta give credit where credit is due.

The Big Dog's back

At many companies engineers were part of the union.

The Big Dog's back

hz, one question. Why do you readily accept what a right winger tells you without asking questions?

The Hero Zone's picture
The Hero Zone

Several reasons I accepted his story while I reject "left winter" and even other "right winger" stories here:

1. He didn't call anyone names nor make blind, partisan claims.
2. His story is not unique, and that's not said in insult. It is true and happens all around us constantly. It was a story about empowerment, education, tough choices, and reward at the end. Not victimization, blame, and a cry for someone else to run your life for you because you can't.
3. It is his story, his opinion. It was delivered well and was meant to improve the lives of those who read it. Thus, I thanked him for sharing it. I didn't validate its authenticity. I simply said "thanks for a good story". He very well could have lied, but if he did, he did a magnificent job that is meant to help people more than hurt.

My pattern of what I thank and shoot down is fairly consistent, so I hope this helps clarify things. You'll see what I supported here was included in my advice to you after someone in another thread called you a moron and you called ME out on it. Did you see where I rejected Dr. Information's inappropriate comments? How about seeing where a lot of what Darwin's Choice says is made irrelevant because he can't help but call people names or do driveby political one-liners. I reject most of what coasterfan says not because it isn't delivered well or is devoid of name-calling, but rather he doesn't seem to bother to cite his sources on things he states as fact (not opinion) and as well is openly and unabashedly partisan in most of what he says. Knowing both he and AJ were at one time educators and post that way really disappoints me. But they're welcome to their methodology. I'll question it, but I won't quash it.

But, despite that, you'll also see where I have agreed with him on points. I have done so with you, Pter, Peninsula, Bizness, and others who may generally be considered "left wing" here. I'm not a cherry-picker. Heck, you'll see where I have both thanked and praised the Register while civilly disagreeing with Mr. Westerhold's opinions on the border kids (the latest actually was agreeing with Licorice, who you may know has no love of me). Call that a twofer if you want, but just because he doesn't like me doens't mean I can't support an opinion of his that I like and/or can get behind.

I thank Babo for contributing information on local legal stuff, yet disagree with him/her on the border kids. I overlap with knowitall in some ways and in others I don't. I've thanked Contango for some truly fascinating links while lamenting his snippy nature. Nemesis has my respect for arguing pure logic, yet I find myself at odds at times despite the fact he and I could both be called "right wingers" because his logic is true but very cold and blunt. Not that I can contest it per se, but it really seems offputting at times personally.

I dunno what else to say. I've pretty much laid everything out for you to see my consistency and reasoning. If it still doesn't make sense, let me know, but I'll stop the name dropping for now.

The Big Dog's back

So hz, did you know he had a good paying union job? Of course you didn't because you didn't ask. And did you know he is now against unions? Of course you don't because you didn't ask. ohio engineer is a typical teabagger, I got mine the heck with you.

The Hero Zone's picture
The Hero Zone

Sounds like he's in even better a position to criticize unions than I would be (if I were to do such a thing) as I've not been in one. By being in a union, and now being out of one, it seems like he made his decision on which offers a better form of employment and life. I can tell you from talking with my community that there are other union members who see their organization as politicized, uncaring, a waste of dues, or promoting a sub-standard workforce (and having its own lazy union reps instead of lazy managers) and wish they could get out of it like ohioengineer and others have.

But the things you are saying to me have nothing to do with my statement of thanks for someone sharing their story here. Just because it shows that - gasp - unions aren't paradisaical entities guaranteed to make you happy and fulfilled doesn't make unions bad on the whole.

Not everything is black-and-white. Not all unions are good. Not all right-wingers are bad. I'm not always wrong and you aren't always right. That is a way too simplified view of life that, in my opinion, has led to many of the contentious responses you get from others.

You take the good
You take the bad
You take 'em both
And then you have
The facts of life.

I will add, too, that I didn't ask because I pay attention to what he has said before and knew these things as, broadly, he has talked about this stuff before in replies. Same with grumpy. I know some about many posters here because I read what they write about themselves. I am not as presumptive of them and their life's circumstances as you are, either.

KURTje

Ohio engineer, in what capacity were you employed before retirement?

AJ Oliver

It's much worse than the article portrays. The banksters and their cronies in both parties (but led by the GOPpers) have their eyes on pillaging all three pillars of the retirment system - defined benefit plans (looted, as in GM), 401K's (exorbitant fees and shady investments like ENRON), and social security (privatization scams).
This is a key part of a deliberate assault on the middle class.
And you know, the partisan hackery on display here contributes nothing.

Donegan

"And you know, the partisan hackery on display here contributes nothing."
"(but led by the GOPpers)"
Yep no partisan hack writing this post.........
Wanna see a deliberate attack on the middle class? http://marathonpundit.blogspot.c...
Yeppers you read it here Obama and the left HATES everyday coal workers! You should feel proud AJ, Those miners all voted Democrat, You and your party took advantage of them before screwing them over!

The Big Dog's back

Yeppers, john ruberry, no partisan hack there right done again? Why do you right wingnuts keep posting bullspit from these right wingnuts?

Donegan

Aww cannot argue with it huh? Go camp in a park, Your mom probably wants her basement back.

Contango

Re: "social security (privatization scams)."

What privatization of SS?

More like: A pyramid scheme larger than anything that Bernie Madoff could dream of.

KURTje

This article is valid for most. Ohio engineer I think Bigdog called it. You had a good Union job. 30 & out? Great medical. Plus more. I know that Ohio law mandates prevailing wage regarding roadwork & related areas of state property. Many old folks are not willing to listen to present scenarios.

knowitall

Many old folks would struggle today too. Much tougher.

knowitall

I also bet ohioengineer had a good job. Maybe union, not sure. I wonder if ohioengineer's wife worked. It sounds like she did. Being 60 and 65 and retiring 7 years ago, probably was a union job. Much easier to do that savings plan back then when good paying jobs were to be had. It is much tougher to put money in 401k or any other savings if you just make enough to pay rent or mortgage, car payments, greater percentage of health care. Ohioengineer was lucky to live in the era he did. Good for him.

Informed

Some people are forgetting all the money people lost in their 401K during the bad crash several years ago. I know of people that lost almost two-thirds of their retirement savings. So, saving for retirement in the stock market (i.e. 401Ks) comes with much risk, and can be lost at any time. You can do all the reading and attend all the workshops you want, but no one can predict the stock market.
If people are barely getting by when they are working, how on earth can they save for retirement?

Contango

Re: "money people lost in their 401K,"

One only loses when one sells. Those who stayed in were more than rewarded.

Most investors are ignorant; they tend to buy high and sell low.

Best advice: Have a diversified portfolio of stocks and bonds (I prefer 60/40) and rebalance when either percentage is > 5-10% in either asset class. (I check quarterly.)

With that in mind: We've taken 'change off the table' in stocks the last two yrs.

The S&P 500 has been up some 200% since Mar. 2009. It ain't gonna last forever.

Informed

Well, if one was approaching retirement when the crash occurred, then they would have to postpone their retirement. That happened to many people. Even when a portfolio is diversified, one can still lose quite a bit of money.
One's retirement shouldn't be dependent on something as unpredictable and risky as the stock market.

Contango

Re: "One's retirement shouldn't be dependent on something as unpredictable and risky as the stock market."

So tell me: What asset class is guaranteed and secure?

Contango

Re: "approaching retirement when the crash occurred,"

If one had periodically rebalanced, the effect of the downturn was more than recoverable.

I write from experience, not theory.

ohioengineer

To set the record straight:
- Education helps. I have a BS in Mechanical Engineering. I paid for this degree by working in a steel mill and student loans (which I have long since repaid.)
- Every generation has it's ups and downs. When I graduated the moon program was ending, the Vietnam war was winding down and Congress had just voted to end the SST (supersonic transport) program. In other words, even experienced engineers were driving cabs and parking cars; green kids like me were laughed at when we applied for jobs.
- Labor union help? Except for my stint in the steel mill, I have never belonged to a labor union, nor would I want to. I prefer to be judged by what I do, not how much seniority I have.
- Go where the work is. During my career I worked for five different companies in five different states.
- Make the most of what you have. My wife, who doesn't have a college degree, still worked her way into management in a Fortune 500 company.
- Have faith in the Capitalist system. Thanks to the housing debacle (that's a subject for another day), my investments took a huge hit in 2007 like everyone else's. But today my portfolio is larger than ever, not because of government bailouts, but because even the idiots in Washington can't keep a good economic system down.
- Finally and most important, remember to give credit where credit is due. I cannot claim responsibility for my good fortune. Rather my wife and I know that we have been blessed by God in many ways; not the least of which was to have been born in the United States of America, where anything is possible.

Fromthe419

I stand behind my comments posted earlier, they are all Plutocrats, beholden to the powers that get them re elected. Vote them all out D or R

The Big Dog's back

EXCEPT for your steel mill union job which put you thru college. Teabagger.

The New World Czar

Um...no valid argument, must name call...broken record.

The Big Dog's back

Does name calling bother you too? We used to call you guys sissys in school. Toughen up a little bit.

The New World Czar

...and then you'd run and hide behind your Mommy.

Informed

You do realize that things are very different now? College tuition alone has increased tens of times more than most everything else. Imagine having to spend at least $80,000 per child for college. There is no way a high school student can save even close to that, nor can someone who works during college.
Your wife was able to retire at 53? Good for her. For most people, that isn't remotely feasible. Many people that age still have teenagers at home to rear. If your wife were trying to get that management job now, she most likely would never get it without a business degree. Even receptionists often need degrees nowadays. How was she able to keep that job if you had to move to five different states for work? Did she not live with you?

ohioengineer

You are right, things are different now. In my first job as a degreed professional I earned less than $5 an hour - not even minimum wage by today's standards. Inflation works both ways.

How about a community college or even on-line courses? Unless you plan to be a Wall Street banker, what counts to an employer is what you know; not how fancy the college degree hanging on the wall is. I speak from personal experience, having hired many people during the course of my career. What college they attended was always near the bottom of my list.

Actually my youngest child was in college when we retired. Since we had previously planned and saved for college costs, this was not an issue. It is amazing what forethought and planning can accomplish.

I disagree with regards to a management position. If anything, employers today are less interested in a fancy degree and more interested in what you bring to the table in the way of life experiences. Also, my wife settled for a poor paying entry level position in order to get in the door. Once inside she worked to show her value to the employer. On the other hand, it seems many of today's job seekers turn their noses up at entry level jobs, rather than seeing them as an opportunity.

Bottom line, the more things change the more they stay the same. If you are willing to work, plan and save this nation offers you tremendous opportunities - that was true in 1971 and it is true today. Will it be easy? No. Are there any guarantees? No. Does that mean we shouldn't try? You have to answer that one.

Informed

Okay, even with community college for two years, people will still spend $50,000 or more for a bachelor degree. Most online colleges are for-profit scams that cost as much if not more than traditional college.
Yes, inflation goes both ways, but not in terms of college tuition. It has increased something along the lines of 500% just in the past 30 years, far beyond the pace of income and the cost of living.
Having an adult child who happens to be in college when you retire is not the same thing as having a 13-year-old junior high kid that still needs several years of support. Many people have kids in their late 30's, early 40's. Retiring at such a young age is just not realistic.
You can disagree all you want about needing a degree, but you would be wrong. Everyone wants a degree or certification for almost anything other than food service and retail industries. Name me one job seeker who has turned their nose at an entry level job where they would have room for advancement without a degree. You are basing that opinion on something that is simply not true anymore.
You are missing the point--you cannot save enough when despite working 50 hours or more per week you can barely pay basic living expenses, which is what many people are experiencing. It is hard to save for retirement when you are trying to raise a family on $40,000 a year, the salary so many jobs today provide.
You need to remember, just because it was possible for you doesn't mean it is possible for everyone else. We will not be able to retire until close to 70, not because we are frivolous with money, but because by the time we paid for two kids' braces ($10,000), a modest home, decent vehicles to drive (notice I said decent, not brand new or top of the line) and two kids' college educations (even with scholarships, private grants, and kids' jobs), it's just not possible. Our income is too high to get a significant break on college tuition, which is costing us way more than our house. But we feel it is our responsibility as parents to assist with our kids' college expenses as much as we can. If you had to send a kid to college now, you would see exactly of which I am speaking.

The Big Dog's back

$5.00 an hour in 1971 was pretty good.

KURTje

Standards are changing. Have experienced 1rst hand many cycles of up & down. Old axioms like don't spend more than you make. Buy stocks you believe in & don't invest more than you can lose. That stated have been fortunate to make gains; yet I've lost much too. Privileged to be schooled by my relatives that gave up all in Nazi Germany to come. (They laughed @ America's depression). hint...Tata Motors & Auto Zone have been good to me. That stated I feel this country has seen her best......hope I'm wrong but the past to me indicates differently.

Dr. Information

And to think I put myself through college for 7 years on my own and retired the ripe old age of 62 with no company investments or benefits. Savings.....a word people do not know these days.

The Big Dog's back

Do you feel better when you lie?

knowitall

Why did it take 7 years?

Dr. Information

College, then grad school.

The Big Dog's back

"This season's hot new tax dodge for corporations is a loophole known as corporate inversion, which sounds like the equivalent of gender reassignment, and it kind of is. It's a liberating procedure for corporations that were raised American but know in their hearts they're really [foreign]."

Here's the way inversion would work in this case:
Walgreens is trying to merge with Swiss corporation Alliance Boots, for one big reason: It can then change its headquarters address to Switzerland -- a known tax haven -- and get out of paying as much as $4 billion in United States taxes over the next five years.
Meanwhile, all Walgreens' corporate leaders will still be here in America.
While not paying taxes, Walgreens will still depend on things American tax dollars support, like our roads and bridges, our educated workforce, our legal system -- and, crucially, the Medicare and Medicaid dollars that provide one quarter of Walgreens' sales.
This is the latest corporate action that will drive inequality in America, and we need to stop it now.

Contango

Re: "corporate inversion,"

Nuthin' new; it's been goin' on for decades.

The daffy Democrats need yet 'another' issue in order to try to hold onto the Senate in Nov.

If it's prevented, it'll just give U.S. corps an incentive to be bought out by foreign corps.

Chrysler's new HQ is London. Where's the outrage?

knowitall

Chrysler is now owned by a foreign company. So, they are no longer an American company.

Contango

Re: "owned by a foreign company"

Point: CEO Marchionne had choices, he chose the UK.

knowitall

UK....the bastion of capitalism. Great health care though.

Contango

Re: "Great health care though,"

So why the need for a two tiered system?

Speakin' of the UK:

"Obama Let Delphi Avoid Taxes in Tactic President Assails"

http://www.bloomberg.com/news/20...

knowitall

I agree with you that a single payer is the way to go. Delphi, GM, the US treasury (under Obama) did a lot or unscrupulous things they should be ashamed of. Just ask bond holders, small unions and the salary people.

Contango

Re: "single payer is the way to go,"

Unworkable in a highly racial and ethnically diverse country of 300 + million like the U.S.

An HDHP & HSA as Dr. Carson recommends is a good start to return some control to the individual.

That combo has worked for us.

ohioengineer

The United States, the so-called bastion of free enterprise, today has one of the highest corporate tax rates in the world. So it makes sense that corporations are going to do what they can to lower that tax rate and thereby remain competitive and stay in business. Coincidentally, by staying in business they will be able to continue to employ people.

So if you want to keep more tax dollars in America, lower the corporate tax rate so that it no longer makes financial sense to do the inversion thing. In fact, while we are at it, lets lower all the tax rates - income, estate, sales, etc. Tax loopholes (by the way, my neighbor uses tax loopholes; while I use legal tax deductions) only exist because high tax rates make them worthwhile. The only people who benefit are by high tax rates are tax attorneys and the politicians who receive contributions from them.

knowitall

The effective tax rate, after using all the loopholes, is 12.6%.

Contango

Re: "The effective tax rate,"

After spending an est. $1 trillion on tax attys., CPAs, et. al.

The Big Dog's back

UAE tax rate is 55% and they are a mecca for corporations. Shoots a hole in your arse, I mean theory.

anthras

Mr bigdos says "This season's hot new tax dodge for corporations is a loophole known as corporate inversion, which sounds like the equivalent of gender reassignment,"

http://www.bloomberg.com/news/20...

KURTje

Article related item. As stated before: a flax tax is sorely needed. No loopholes all pay their fair share. Probably why Forbes dropped out of CIC race. He addressed the flax tax.

Dr. Information

Flat tax all the way. We have a national problem that cannot be fixed by letting a few try and pay for it all. Flat tax, its fair to everyone. No deductions, no loopholes and get rid of 90% of the IRS. Talk about saving this nation some money.

Contango

Re: "Flat tax,"

IMO, goin' nowhere.

The Fabian socialists who are fully ensconced in our bureaucracy (IRS) have a wholly vested interest in the Marxist progressive taxation concept and even have a desire to take it to confiscatory levels.

See: Sen. Reid's FATCA abomination.

It's the crazy worldwide hunt to track down every off-shore account and tax it.

It's a form of financial imperialism in order to wring out every possible cent from everyone possible.

Canadians with duel citizenship for example, are paying hundreds of dollars in order to give up their U.S. citizenship because they're afraid of possible taxation consequences.

http://www.cbc.ca/news/politics/...

The Big Dog's back

Even Standard & Poors disagrees with you pooh.

The Hero Zone's picture
The Hero Zone

I'd like to recommend the Fair Tax over the Flat Tax.

knowitall

No loopholes or deductions. Graduated rate, not flat!