And that’s why pensions shouldn’t be able to be touched by corporations anymore than they can touch your 491k account.
It’s not rocket surgery.
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Im surprised you haven’t already heard that one. See also, ‘Cheeto Hitler’ and ‘Mandarin Mugabe’.
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Someone else coined it long before I used it, so feel free.
All he gave was a link to the report on costs from 1960 on. It’s not clear what he’s asking us to “read again”.
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So when does Gen-X get a turn? By the time house prices get back down to a reasonable level, we’ll be less than a mortgage-length away from the retirement home. Even if there were a sudden cascading collapse of prices today, older Gen-X’rs would be in their 80s by the time they paid off a house. We get skipped for everything.
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“All he gave was a link to the report on costs from 1960 on. It’s not clear what he’s asking us to “read again”.”
I think I just assumed there would be some sort of misleading graph, like a “percent increase in the cost of raising a child since…”. (which would naturally begin at zero).
The child tax credit started in 1997.
The cost of raising a child to adulthood in 1960 was around 25,000, which is 200,000 in today’s dollars…so kids are only 15% more expensive today?! (My nephew’s fortnite account would like to disagree)
Yeah I just don’t know what he was talking about, and thought the “citation” was something else when I pointed it out, sorry.
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On the plus side, unlike the Millenials we’ve known since we were adolescents that we’d be screwed over.
One thing we won’t be skipped for, though, is the increase in the age at which one can start collecting SSI. That’s going to kick in right on schedule as the last of the Boomers start dying off.
From what I’ve seen so far of his comments, not an unreasonable assumption.
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I predict a darker version of what your friends are doing as the fate of a lot of 4000 sqf+white-elephant McMansions in the exurbs. Slumlords will buy them up on the cheap, slap up drywall to subdivide existing rooms (including the garage), maybe put in some additional barely-up-to-code kitchens and bathrooms, and rent them out to the working poor who’ll commute hours each day to and from jobs in cities where they can’t afford to live. The cheaply purchased houses will get zero maintenance and will be operated until they either fall apart or (if the county can be bothered to inspect) are condemned.
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I obviously agree, but even so, my understanding is that a fair number of pensions have blown up because the actuarial tables didn’t predict the increase in people that would live 10 or 20 years longer in retirement than they were “supposed to.” The funding couldn’t keep up even if it wasn’t touched.
It is why many companies of that ilk now offer cash pensions that provide a percentage of salary in an account that is yours to take with you (separate from 401k).
Steering back towards the topic: I still think boomers had/have it better than the rest of us, and I also don’t believe that there will be any big shift in house affordability for millennials. For many reasons.
However, it is easy to generalize without remembering it is still about LOCATION LOCATION LOCATION!
There are plenty of places, at least in the U.S., that are way more affordable than the coasts. They even sell avocado toast in many of those places (/s). Moving to flyover country may have the added benefit of turning some red states purple.
because old Britons don’t want to downsize
I’m not sure ‘want’ is much of a factor here. Smaller properties to downsize to are basically nonexistant.
Which was one of the main reasons the Tories bedroom tax was so evil, it financially penalises people for not moving into the smaller properties that do not exist.
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When people say they had nothing to lose, they almost always vastly underestimate how much they still have to lose. Letting the 2008 economic collapse proceed without bailouts or anything would have wrecked the US economy completely; you’d been left with a rerun of the Great Depression, and likely pulled the rest of the world with you.
Now, I’m open to arguments that the bailouts were botched and that in the aftermath the government should have been much harsher on the bad actors and big banks. That’s reasonable! But the argument that “letting the whole thing blow” would have been a good thing for anyone is, IMO, dangerously wrong.
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But will SRO’s work in the suburbs?
Ah - elder housing.
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No - they were allowed to be raided.
But - good news! US lifespan is decreasing.
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I don’t think there will be much choice, what with people increasingly being priced out of the desirable cities where most of the employers will concentrate. And to be clear, those “single rooms” will often be occupied by roommates or by entire families. But hey, big yards, right?
Elder housing in the burbs, especially the shoddier examples, is a good point of comparison in terms of the business model at work here.
I am a homeowner. We bought a house in '92 for in a Boston suburb for 180k with 20% down. We sold it 20 years later for $525k. Which sounds fantastic, until you realize that (1) we put almost 250k into repairs and improvements in it during that time, and had to spend money and effort in the sales process (which cost about 30k). This does not, of course include the costs of insurance and taxes and interest on our mortgage. And we did not live in the Midwest or south, where (relative to inflation) real estate has not significantly appreciated over that time. And we were fortunate. My spouse and I lived in an location that was never really hit by a recession, so we never had to face the hard choices that others had to face in places like Nevada or Florida or Michigan during the economic downturns when their mortgages were under water and they could not move.
Yes, we built some equity over that time – about 300k, which we were able to throw into another home. But compared with my IRA/401k investments, I would been far better off economically renting and putting that initial 45k into a broadly diversified index fund and adding the additional 250k that went into the house for repairs and improvements.
There are absolutely benefits from home ownership, especially if you are raising a family and are already financially secure and want to put down roots in a community for many years. Home ownership may even be a good asset if (1) it’s part of a diversified portfolio, (2) you don’t mind having an asset that will not be liquidated, and (3) you want a general hedge against inflation. But remember that (after comparing rent vs. ownership expenses) after 30 years, your 40k invested in a diversified stock fund will almost certainly be considerably more than that 40k sunk into the purchase of a real estate.
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Same in Europe. There are plenty of places where old houses (I mean over 100 years old) simply collapse because nobody is interested in them. Rural areas without jobs are depopulating.
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Across a population of 325 million. Dig down deeper in the dataset. The decrease is due to younger Americans. The death rate is decreasing for people over 65.
Here is a cite if you need it:
https://www.google.com/amp/s/www.theatlantic.com/amp/article/548981/
But without stores to walk to - even just a coffeee shop - it’ll be a lonely existence.
Retiring to a small town with a little downtown that you can walk to would be nice - isolated when you may not be able to drive or even afford a car - that’s just awful.
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There will be all kinds of informal and unregulated local businesses that will spring up, favela style. The residents will just have to accept that the occasional fire or building collapse or mass food poisoning will be the price they pay for being able to socialise with their neighbours.
The hopeful aspect of that McMansion favela scenario is that some form of local self-governance usually takes hold and the absentee slumlords get pushed out of the picture. The homes in these cases are so distressed that they usually walk away from them rather than resorting to their usual Libertarian solution: calling in the government to protect their property.
Old-age retirement is a whole other issue. I love the idea of these self-run co-housing situations where old people have their own bedrooms and bathrooms or perhaps entire apartments but share common areas, have meals together, and split up the cost of homecare and healthcare workers.
This is an example from Paris, but something similar could work in a small town setting if that’s your bag:
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I like this local approach.
https://www.pennrose.com/apartments/pennsylvania/john-c-anderson-apartments/
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This quote hits a lot of true notes.
“Thérèse Clerc was in her mid-60s when she started to think about how women could grow into old age without losing autonomy. An energetic, passionate feminist living in Paris, she knew that her generation of French women had not been able to build up retirement funds to cover at-home care, because they had spent years caring for families. Older women in France, as elsewhere, are among the poorest segment of the population. And Clerc didn’t like what she saw when she visited state-run homes, where life was dull and regimented. Clerc knew that living by someone else’s rules or on their schedule was not in her future. A lifelong activist, she also was interested in demonstrating that old age can be a beautiful time of life.”
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