As Americans' retirement nest eggs shrink, cost of retirement goes up

Originally published at: As Americans' retirement nest eggs shrink, cost of retirement goes up | Boing Boing


Anthony Anderson Abc GIF by HULU


Again, If you can swing it [not in $California$] pay down or pay off your mortgage, you need a place to live, that never changes.

BTW: Still deals to be had in the high desert up Joshua Tree way where Dear Wife & I reside…


What is this retirement people speak of?


No retirement costs if one never retires!


My niece has been working as a realtor there for the past year or so. She’s been doing really well but says things are a little slower right now.
I’m so glad my wife and I have good pensions from our previous employment plus Canada Pension Plan and OAS. We’d be in somewhat tighter circumstances if the mortgage wasn’t paid off.


The Covid real estate gold-rush is well over in the high desert, good time to buy, if you can stomach the 7% interest rate…


The appreciation-adjusted equity in the house has itself become the sole nest egg for a large number of Americans , who don’t have 401ks or defined benefits plans (which, if one is lucky enough to have one, may not come anywhere near that $1.25-million figure* in terms of income-generating principal).

This has unfortunate externalities for young people, because older people can now be convinced that housing prices (owned and rented) must keep going up-up-up to preserve the value of the nest egg. And when the time comes to retire, the reverse-mortgage vultures (and their friendly and re-assuring celebrity spokespeople) are circling above everyone.

I’ll leave it as an excercise to the reader as to who in America benefits from this situation (which also includes the large health care and long-term care costs that can wipe out those savings in a few weeks). Hint: they’re not worrying about having enough to retire.

[@shichae : in answer to your and others’ understandable WTF, they’re probably working off the “Rule of Four” and are hoping not to “Die Broke”]


Side Bar: We’ve noticed retirees bunking up/rooming with others to stretch the cash, I’d be surprised if they weren’t actually. If they want to stay in California, that may be their only option…


It’s far from a bad option, especially for elderly people without spouses or immediate family to care for them. I’ve heard of what are effectively co-ops, usually for women, where everyone has a private room but shares common spaces and looks out for each-other.


Just saw this today…

…and noticed warehouse jobs weren’t on the list. The promotion of “work until you drop” (even in stages) needs to die in a fire:


That - and renting out rooms in a house - are two favorite targets for zoning changes (from NIMBY and pro-business groups). Regulations against multiple unrelated people sharing a dwelling and rentals in residences using services like Airbnb or Vrbo have prevented a lot of seniors from using those options to offset higher taxes and other costs of living.

These policies are pushing seniors into homelessness:


California is a mixed bag in that it’s super expensive to buy, but if you somehow do manage to pay off your house Prop 13 means you’ve got relatively certainty on what your property taxes will be for as long as you live there, even if the neighborhood property prices continue to skyrocket further.


Necessity combined with demographics may force change on the NIMBYs. As I mentioned elsewhere:

And, of course, that the K-12 public schools will continue to be underfunded. But yes, if you’re old enough and fortunate enough to have won in the California housing casino and also burned the mortgage it’s true you have that certainty in terms of planning for retirement.


Umm, yeah.
I’ve been working (mostly) since I was 14 years old, and am a great saver, but the idea that I’ll have $1M + in the bank is kind of a pipe dream.
Is this type of advice really aimed at “regular” people?


“As Americans’ (any kind of benefit) goes down, (cost of everything) goes up”: Every financial-related headline since I was a teenager.


Greed works in predictable ways.


I’ve never thought so, and look more at alternative sources than retirement advice and calculators created by investment firms or financial publications which profit from people desperately trying to reach unrealistic goals.


There are quite a few countries (including some genuinely nice places) with lower cost of living that offer retirement visas allowing pensioners to live there indefinitely.

I’ve never understood why people would retire to Florida or Arizona when they can retire to Thailand and live like royalty on the same pension.


This is really my plan. I have no qualms about fleeing to a cheaper place with low cost healthcare if staying here can’t work out.


Besides good old fashioned racism, a lot of people don’t want to deal with learning a different language. These issues are often settled by creating little white, English-speaking expat enclaves (there’s a big American one in Panama, for example. The Brits had their own ones in Spain).

There are other issues related to being far from family, dealing with the unique American tax regime and tax treaties, and of course transferring private healthcare insurance benefits overseas.

Retiring abroad is not impossible but it requires a lot of planning and an open mind.