Portland, Oregon

Portland, Oregon

Monday, May 23, 2016

Better Not To Know

I glanced through the paper this afternoon and decided it was better not to know what's going on in the world.

I read that few people have an emergency fund, and that 65% of Americans say they would have some difficulty covering an unexpected $1,000 bill. Please tell me that isn't so, surely Americans are not living that close to the edge.

Reading about funding retirement I was in for more surprises.  People born between 1936 and 1945 typically had enough savings, home equity, pension income and Social Security benefits to replace 99% of their annual incomes in retirement.

Early boomers, born between 1946 and 1955 can typically be expected to replace 82% of their income in retirement.

Late boomers, born between 1956 and 1965, are on track to replace 59% of their incomes.

Gen X, born between 1966 and 1975, could see their incomes cut in half in retirement.

Then there's the havoc divorce plays on finances.

I didn't need to know all that. Do you think this could be true? What will the future hold for Americans? Surely it can't be this bleak.

What do you think?

13 comments:

  1. I saw that about so many people not having $1,000 even in an emergency fund or savings and found it hard to believe, too. If true, that's very sad! But even people with good intentions and through no fault of their own can end up with financial difficulty.

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    1. Sad but true. We have family who have a child that's had two kidney transplants. They struggle.

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  2. Actually, I thought it was worse. So many have neither a pot nor a window these days.

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    1. We certainly have family like that but not our immediate family so I suppose I turned a blind eye to the problem.

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  3. I absolutely believe that many could not handle an unexpected $1000 expense. We never could have until after we get our kids through college. We ran out of money at the end of each month. It was pay as you go. What saved us in our retirement was our mandatory contributions to our pensions.
    Now for most people pensions are a thing of the past. That is going to lead to extreme hardship in the future.

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    1. Bob has two pensions. I knew a pension check was what saved my parents so I was very careful to get as much set aside as possible in those pension plans. Today I am extremely thankful. I have no idea what young people will do now that pensions are gone. You have to be very disciplined to set aside money when you have a growing family and can use money in many directions. Better it never pass through their hands. Not many will have the disciple to save or know how to invest.

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    2. When GM went through their bankruptcy we didn't know if we'd still have a pension or not. It was a very scary year and if for nothing else, I thank the Obama administration for helping to save our pensions.

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    3. I thank the Obama administration for a lot of things and I think in the days to come others will join me in that. Our retirement pensions are all from different areas of the federal government. I think they're as stable as you can get in a pension. I can't imagine the sheer terror of working your whole life only to see your pension evaporate in front of your eyes. Devastating.

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  4. I'm a saver. Always have been. While we use credit cards, we pay them off in full at the end of each month. I think way too many people today have charged their cards to the max. I'd be scared to live like that. I'm glad I'm not a young person in today's world, with the need for a Starbucks double-latte in my hands, manicured nails, tickets for a week in the Bahamas, etc., living way beyond one's means and not realizing it.

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  5. I think your last statement is the key, "living way beyond one's means and not realizing it." I really think many people know no other way to live and have not a clue on how to get a handle on their finances.

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  6. When I heard about the large percentage of Americans who are one paycheck away from being homeless I pretty much realized that there isn't much saving going on for the future. I am OK unless a long term major illness strikes. I have seen those wipe out pretty impressive savings and mine aren't that impressive.

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    1. A very good reason good healthcare is so important in this country. Our nephew who's daughter has had two kidney transplants would have been wiped out were it not for good insurance. Healthcare is extremely expensive in this country, something few can afford out of pocket.

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  7. It's really scary to think of all those people who are one major illness away from destitution. I know divorce causes havoc having seen it first hand in our family.

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