Live Longer, Die Broke
Michael Bloomberg, billionaire mayor of New York, famously described sound financial planning this way:
"The best financial planning ends with bouncing the check to the undertaker."
But for most of us, that's apparently not going to happen. From Business Insider:
Here is some good news from the Center for Disease Control: by 2050, life expectancy in the U.S. will be 87.5 years.
Or at least we thought this was good news. According to a Northwestern Mutual study, it turns out that only 56 percent of American are financially prepared to live to age 75, and even fewer are prepared to live to 85 or 95. Women are expected to live even longer than men but they're even more in danger of outliving their finances.
In fact, only 45 percent of those surveyed have any plan regarding their financial life, down from 72 percent in 2011.
Okay, so this comes from a financial planning services company. So maybe it's a little like looking to the Tobacco Institute for your information on tar and nicotine, but this all seems accurate. What will America look like when it's thronged with broke old people?
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Aug '10
Re: Live Longer, Die Broke
Don't worry. The robot uprising will thin out the herd.
Sep '10
Re: Live Longer, Die Broke
If Greece is any indication, the young will rise up, take to the streets, and demand that.. the government benefits for the broke old people continue?
Jun '10
Re: Live Longer, Die Broke
In the end it will come back to family (assuming you have one) and community (through church and community organizations--the small platoons, as de Tocqueville put it). They are the only reliable sources.
Sep '11
Re: Live Longer, Die Broke
Northwestern Mutual study:
If that sentence is true, there are two possibilities:
If the surveys done by Northwestern Mutual in 2011 and 2012 have even a trace amount of authenticity, this would indicate that 27% of Americans with retirement plans either cashed them in, or watched them go up in smoke in the past year.
The vast majority of people with retirement plans have 401(k) plans from work--they're likely to be older workers, in their 30s, 40s, 50s, and later. If 27% of those people are having to cash in their 401(k) funds, that's a looming financial disaster--as those people will be far more dependent on government assistance (not just Social Security--public welfare) than anybody is anticipating.
That's a devastating number: 27% of people with retirement plans cashed them in within the past year?
Dec '10
Re: Live Longer, Die Broke
How can this and all the obesity stuff be true? I thought everyone was going to die from being too fat?
Re: Live Longer, Die Broke
I was thinking the same thing! Maybe the strategy is this: eat hog-wild until you are 60, then slowly shrink of starvation (but not die) for 15 or so years.
Off to get the Mint Milanos....
Aug '10
Re: Live Longer, Die Broke
No, no, no. You're confused, poor thing.
The claim is not that they're going to die.
The claim is that it's a "health crisis" and that they are a "burden to the health system."
Gosh, dying would do the system a big favour!
Sep '10
Re: Live Longer, Die Broke
I don't think there's any fear of me not living long enough to die broke.
May '10
Re: Live Longer, Die Broke
True or not, it raises a good question. What longevity estimate do Americans typically plan for? Or is it even considered?
Around what age do you plan / hope to retire?
I've known a few people who made it into their 80s and worked until they died. But most modern Americans seem to believe retirement is a God-given right. At 32, I find it impossible to believe that Social Security will still be around when I'm 60.
My grandma hates to spend money because she wants to leave it all to her children and grandchildren, but she might live to 100. God laughs at our attempts to plan our futures.
Edited on May 8, 2012 at 7:49pmApr '11
Re: Live Longer, Die Broke
Aaron Miller: Around what age do you plan / hope to retire?
I've known a few people who made it into their 80s and worked until they died. But most modern Americans seem to believe retirement is a God-given right. At 32, I find it impossible to believe that Social Security will still be around when I'm 60.
My grandma hates to spend money because she wants to leave it all to her children and grandchildren, but she might live to 100. God laughs at our attempts to plan our futures.
I echo this sentiment. At 29 I don't expect to see Social Security and have been dutifully shoving money into IRAs and company retirement plans for 9 years now (not that it has done me all that much good).
At the same time I don't see why I should plan to retire at 65 if I am going to live to 85 (or well into my nineties as is the tendency in my family). Besides, many of the retirees I see aren't truly enjoying themselves. I may not stay at my current job forever but I think I will have some job.
Apr '12
Re: Live Longer, Die Broke
I plan to be like my mother. She's still working and enjoying a very prosperous lifestyle in what many would continue her retirement years.
May '10
Re: Live Longer, Die Broke
Does working until I fall over dead count as a plan?
Oct '10
Re: Live Longer, Die Broke
God is where we will place our dependency, and paying attention to the Biblical model, we expect and have taught our children and hopefully grandchildren that we are their responsibility once we are unable to meet our own needs. At present I collect SSI, and Linda is on SSI, SDI and now Medicaid. That helps with the finances, and I still work some, so we are OK.
It isn't, however, the finances that are the issue. When we reach the age when we can no longer care for ourselves, we want the loving hands and hearts of our children to be our care givers, not some $8 per hour attendant in an institution.
Aaron Miller posted the ideal we hope to see fulfilled in our own old age.
Northwestern Insurance cannot measure the value of that, and mere physical provision is totally inadequate for human life.
God grant that all of us at Ricochet have someone like Aaron Miller.
Apr '11
Re: Live Longer, Die Broke
Europe
Re: Live Longer, Die Broke
This is really distressing. Well-Aged Soylent Green® is way too tough and chewy. Buy stock in A-1.
Aug '10
Re: Live Longer, Die Broke
Soylent Green: The Breakfast of Champions
Edited on May 8, 2012 at 10:15pmJul '11
Re: Live Longer, Die Broke
Very few people would even conceive of what is coming our way in 100 years regarding the impoverished elderly. It will not be pretty.
I am not in favor of awesome housing, food, health care, and awesome nursing home care all paid for on my dime. What a dilemma though, but don't worry, Sebelius and Berwick have a great answer for you, just step in to the showers first and then they'll talk to you later.
Oct '10
Re: Live Longer, Die Broke
About a year and half ago, Meredith Whitney appeared on 60 minutes predicting hundreds of billions of dollars in municipal bond defaults in the next 12 months. This never happened.
The flaw in her analysis was that she never accounted for the fact that municipalities also saw these problems and many of them made adjustments - they cut spending and looked for way to raise revenue.
Whitney saw a car headed off a cliff and never took into account the fact that the driver may start applying the brakes.
I think this kind of analysis makes the same mistake. It does not take into account people changing their behaviors. Some people will adjust their lifestyles and slow their spending down to account for the fact that it's not likely to last until their life expectancy.
So, yes, there is a problem, but perhaps not as significant as this study implies.
May '10
Re: Live Longer, Die Broke
Just in time for this thread, a couple days ago my wife's elderly (both aged 93) parents came to live with us. This following a 6-week scramble to convert a couple rooms on the 1st floor to a bedroom and bathroom.
What I've found interesting is the reaction from people (including church people, and we belong to a conservative evangelical church) to whom I've mentioned this in passing has been almost uniformly one of astonishment (on the order of the reaction we get when people learn we homeschooled 5 children).
Reliance on family is apparently not yet quite as common as one might think.
Having had over 30 years to wrap my head around this, this is just like "OK, it's time, let's do it." Now if I could only get everyone to pitch in on getting rid of about 3 cubic yards of clutter.
Apr '11
Re: Live Longer, Die Broke
Time to buy stock in some cat food manufacturers. Sounds like it'll be a growth business.