My Wife is Getting a Big Raise!

[QUINNSCOMMENTARY]

Are you getting a raise in 2009? Large employers have cut their budgets for raises in 2009 so that the average is about 3% while many have gone further and 2.5% in a raise for next year is quite common. On the other hand, smaller employers are unlikely to provide any increase in pay for their workers.

But my wife, well my wife is getting a 5.8% raise in her income and for that I want to thank you all (at least those of you in the US). You see my wife receives Social Security and even though she has not worked since 1970 (that is in a job outside the home), her rather generous Social Security benefit goes up each year and thanks to the inflation calculation used by Social Security her benefit (and all other beneficiaries) is indeed increasing by 5.8% on January 1, 2009. Nice deal huh?

Is inflation 5.8% or anything near to that? Do seniors on average have to deal with many of the increasing costs that are faced by younger families? Have seniors had their entire lives to get ready for retirement? Does Social Security in any way consider the assets accumulated by many seniors over their lives and which can be drawn upon for living expenses (well at least before the market crashed)? :-5

It seems to me that the fundamental question is where should society be placing its limited resources? Today in America the answer is that a disproportionate percentage of those resources is spent on the elderly or as I call us the Seasoned Citizens.

So as the young family in America struggles to buy a home or simply make ends meet, pay day care expenses, save for college and retirement and pay health care bills and insurance premiums, the US mentality continues to automatically view all seniors as poor, fails to consider retirement income relative to working income (if you were low income while working you will be low income while retired) and creates greater and greater burdens on society for massive social entitlement programs¦and raises twice as large as those received by working people. :-3

For many seasoned citizens Social Security is their lifeline, for all younger Americans Social Security is a financial burden that will result is higher and higher taxes, higher interest rates and a burden that draws resources from society.

But thanks for the raise.

[CARLA]

I got a 2.5% raise whoo hoo!! My sister who works in the Health care field got a 5.5%. I'm going back into the health care field.

[QUINNSCOMMENTARY]

CARLA;1087534 wrote: I got a 2.5% raise whoo hoo!! My sister who works in the Health care field got a 5.5%. I'm going back into the health care field.


That's about the only field you can count on to keep growing, that and working for a government.

[Lon]

Thanks indeed------I will be receiving the 5.8% Social Security increase as well as a 2.9 % increase from a company pension plan that has a COLA provision.















c

[chonsigirl]

I get the raise from last year, a 2%, on May 1-a year after it was due. Big whoop, I'll get it for 4 paychecks.

[QUINNSCOMMENTARY]

Lon;1087668 wrote: Thanks indeed------I will be receiving the 5.8% Social Security increase as well as a 2.9 % increase from a company pension plan that has a COLA provision.:)c


You are indeed among the lucky ones, did you work for a government?

[wildhorses]

I vaguely remember hearing or reading about this. I thought that the larger increase was due to the fact that for several years social security did not keep up with the cost of living increases. At one time social secuirty was enough to pay for the basics of life. Somewhere along the line it fell behind. And I think they intend some currrent and future increases to "catch up" to the cost of living. When social security was first started, most workers did not get pensions and therefore it was meant to give the elderly at least shelter and food, light.....the basics. But as workers got pensions later on, I guess that they thought social security was not so necessary, so the increases fell behind. Now that so many have had their retirements threatened in one way or another, they will have to increase these social security payments to again support the basics.

[Lon]

QUINNSCOMMENTARY;1087897 wrote: You are indeed among the lucky ones, did you work for a government?


No ---- I worked for a large financial services company that fortunately was able to stay clear of the financial involvement that many of it's peers were into. I was in sales management and marketing.

[wildhorses]

Lon;1087925 wrote: No ---- I worked for a large financial services company that fortunately was able to stay clear of the financial involvement that many of it's peers were into. I was in sales management and marketing.


Then you were double lucky..... if you worked for a financial services company and they did not "partake" in the insanity, since so many did.

[Patsy Warnick]

I was pleased to see the raise in my SS...

Quinn

you ask if Seniors have a similar burden financially as a young family.??

I'd have to say yes.

good question

Patsy

[Lon]

Patsy Warnick;1087976 wrote: I was pleased to see the raise in my SS...

Quinn

you ask if Seniors have a similar burden financially as a young family.??

I'd have to say yes.

good question

Patsy


I am surprised that you say yes Patsy, but then it probably depends on the age of the seniors. Most of the seniors that I socialize with have their homes paid for and little or no debt. That in itself pretty well distances them from a young family.

[Patsy Warnick]

Lon

There are several levels of Seniors

just as POOR - low income - middle class - and the Rich...

Yes - many Senios are double or triple dippers - well off.

Then there are those Seniors living on their Fixed income SS @ average $800.00.

a month.

I deliver Meals on Wheels to Seniors - I've seen all brackets of income for Seniors.

I say YES

Patsy

[Lon]

Patsy Warnick;1087980 wrote: Lon

There are several levels of Seniors

just as POOR - low income - middle class - and the Rich...

Yes - many Senios are double or triple dippers - well off.

Then there are those Seniors living on their Fixed income SS @ average $800.00.

a month.

I deliver Meals on Wheels to Seniors - I've seen all brackets of income for Seniors.

I say YES

Patsy


I am certainly aware of the fact that not all seniors are well off Patsy, however your initial reply sounded like a generalization, that seniors in general have the same financial problems as young families. They don't in my opinion. The poorer seniors financial difficulties are not brought about by overspending, credit card debt, and financial mis management in general. Their problems are no Medicare Supplements , lack of sufficient income to maintain good diet and health & housing.

[Lon]

wildhorses;1087905 wrote: I vaguely remember hearing or reading about this. I thought that the larger increase was due to the fact that for several years social security did not keep up with the cost of living increases. At one time social secuirty was enough to pay for the basics of life. Somewhere along the line it fell behind. And I think they intend some currrent and future increases to "catch up" to the cost of living. When social security was first started, most workers did not get pensions and therefore it was meant to give the elderly at least shelter and food, light.....the basics. But as workers got pensions later on, I guess that they thought social security was not so necessary, so the increases fell behind. Now that so many have had their retirements threatened in one way or another, they will have to increase these social security payments to again support the basics.


Sorry------I disagree--------SS was never sufficient to take care of the basics of life, nor was it mean't to be, it was mean't to be a supplement. When I was a kid they talked about the Three Legged Stool Concept--------that SS, Private Pension, Savings/Investments were to make up our retirement. I am talking here about 1942, 43, 44 time frame, shortly after SS came into being. Many followed that Three Legged Concept (I did), and many just relied on SS (unfortunately). We can theorize why many did not save, but basically it was a choice to spend rather than save.

[wildhorses]

Lon;1087986 wrote: Sorry------I disagree--------SS was never sufficient to take care of the basics of life, nor was it mean't to be, it was mean't to be a supplement. When I was a kid they talked about the Three Legged Stool Concept--------that SS, Private Pension, Savings/Investments were to make up our retirement. I am talking here about 1942, 43, 44 time frame, shortly after SS came into being. Many followed that Three Legged Concept (I did), and many just relied on SS (unfortunately). We can theorize why many did not save, but basically it was a choice to spend rather than save.


It actually was Lon. Both sets of my Grandparents survived adequately on social security alone. Furthermore neither one of my Grandmothers ever worked, so they lived on only one social security check. In their working days there were not pensions. Social security was originally meant for support of seniors....that was the purpose of it. And many in their generation were unable to save much as the depression hit them hard. Now the next generation had pensions set up by their companies and things began to change as their generation had more resources. I am talking more about those who retired in the fifties and sixties. They received social security that paid for their basic support. It paid for their housing, food, utilities, gas....the basics. The three legged stool was developed for the next generation who retired....like in the 80's. My parents retired under this method...but not my grandparents. The original concept of social security was to provide the basic necessities of life to the elderly so they would not be homeless or hungry.

[Patsy Warnick]

Lon

the 3 legged thing/concept is the same as I refer to a double dipper/triple dipper..

Where you'd have military pay - pension - pension and many another pension.....!

Those 3 legged Seniors are dying and the 3 legged concept will be gone.......

Those in the 3 l3gged concept are @ 76 and + if not older..

So now the question - Do Seniors have the same financial strain as a younger Family.?? I say YES...

Patsy

[Lon]

Patsy Warnick;1087991 wrote: Lon

the 3 legged thing/concept is the same as I refer to a double dipper/triple dipper..

Where you'd have military pay - pension - pension and many another pension.....!

Those 3 legged Seniors are dying and the 3 legged concept will be gone.......

Those in the 3 l3gged concept are @ 76 and + if not older..

So now the question - Do Seniors have the same financial strain as a younger Family.?? I say YES...

Patsy


Yes some Seniors have a financial strain-------the same??? No ---Much different

As for double and triple dippers---------I personally know of 7 or 8 that are in their late 50's and early 60's.

[Lon]

wildhorses;1087990 wrote: It actually was Lon. Both sets of my Grandparents survived adequately on social security alone. Furthermore neither one of my Grandmothers ever worked, so they lived on only one social security check. In their working days there were not pensions. Social security was originally meant for support of seniors....that was the purpose of it. And many in their generation were unable to save much as the depression hit them hard. Now the next generation had pensions set up by their companies and things began to change as their generation had more resources. I am talking more about those who retired in the fifties and sixties. They received social security that paid for their basic support. It paid for their housing, food, utilities, gas....the basics. The three legged stool was developed for the next generation who retired....like in the 80's. My parents retired under this method...but not my grandparents. The original concept of social security was to provide the basic necessities of life to the elderly so they would not be homeless or hungry.


I still disagree-------the private pensions have been around for a long, long time.

American Express was one of the first in 1875. In the 1920's, 15 % of American workers were covered by private pensions and in 1970 45% were covered. Granted, that's not universal but there were many companies that had private pension and profit sharing plans even during WW 2. Don't forge military pensions, they have been around a long time. There were many people that sought out jobs with a particular company just because of their pension plan. Unfortunately, in the early years of pensions, they tended to favor the higher paid but pressure from Unions forced companies to include the rank & file or have unions forced on them.

[QUINNSCOMMENTARY]

Patsy Warnick;1087980 wrote: Lon

There are several levels of Seniors

just as POOR - low income - middle class - and the Rich...

Yes - many Senios are double or triple dippers - well off.

Then there are those Seniors living on their Fixed income SS @ average $800.00.

a month.

I deliver Meals on Wheels to Seniors - I've seen all brackets of income for Seniors.

I say YES

Patsy


$800 a month is not much that is for sure, but it is all relative. If their SS is only at that level then their income was always low so while they are clearly poor as seniors they were not much better off before they were 65. Plus income does not measure it all. I know of several people with low income, but who own two homes and have a significant amount of money in the bank.

In order to get an $800 monthly SS benefit today your inccome while working could not have exceeded $28,000 a year (still poor). So in effect the $800 a month is 34% of their working income and it increases each year.

[cars]

QUINNSCOMMENTARY;1087420 wrote: Are you getting a raise in 2009? Large employers have cut their budgets for raises in 2009 so that the average is about 3% while many have gone further and 2.5% in a raise for next year is quite common. On the other hand, smaller employers are unlikely to provide any increase in pay for their workers.



But my wife, well my wife is getting a 5.8% raise in her income and for that I want to thank you all (at least those of you in the US). You see my wife receives Social Security and even though she has not worked since 1970 (that is in a job outside the home), her rather generous Social Security benefit goes up each year and thanks to the inflation calculation used by Social Security her benefit (and all other beneficiaries) is indeed increasing by 5.8% on January 1, 2009. Nice deal huh?



Is inflation 5.8% or anything near to that? Do seniors on average have to deal with many of the increasing costs that are faced by younger families? Have seniors had their entire lives to get ready for retirement? Does Social Security in any way consider the assets accumulated by many seniors over their lives and which can be drawn upon for living expenses (well at least before the market crashed)? :-5



It seems to me that the fundamental question is where should society be placing its limited resources? Today in America the answer is that a disproportionate percentage of those resources is spent on the elderly or as I call us the Seasoned Citizens.



So as the young family in America struggles to buy a home or simply make ends meet, pay day care expenses, save for college and retirement and pay health care bills and insurance premiums, the US mentality continues to automatically view all seniors as poor, fails to consider retirement income relative to working income (if you were low income while working you will be low income while retired) and creates greater and greater burdens on society for massive social entitlement programs…and raises twice as large as those received by working people. :-3



For many seasoned citizens Social Security is their lifeline, for all younger Americans Social Security is a financial burden that will result is higher and higher taxes, higher interest rates and a burden that draws resources from society.



But thanks for the raise.
Not just "Young" Families struggling, "Seniors" may own their house, but they still must pay $5000, or 6,000 + propery tax on that house, (and since that house is likely old, lots of repair bills) with high heating bills cause seniors are always cold, as well as similar to youngsters, seniors must also pay for Car insurance, house insurance, & "life" insurance which costs 4 to 5 times higher then youngsters due to their advanced age! Also Seniors pay almost $100 month for their Medicare part A, as well as needing a supplemental plan (AARP) at around $200 a month, also many require exorbitant cost prescription meds that run 300 to 500 or more a month, all "dental" bills come out of senior's pocket, and in addtion many "seniors" must now "hire" contractors (youngsters) to do many of the chores/projects they themselves once did, (even something simple as just washing the cars) since they can no longer physcially do them! So many seniors are in fact finacially struggling just as hard along with the many youngsters! So . . . .





(I'm very thankful that I'm not a struggling senior! But I did in fact plan ahead!)

[QUINNSCOMMENTARY]

cars;1088393 wrote: Not just "Young" Families struggling, "Seniors" may own their house, but they still must pay $5000, or 6,000 + propery tax on that house, (and since that house is likely old, lots of repair bills) with high heating bills cause seniors are always cold, as well as similar to youngsters, seniors must also pay for Car insurance, house insurance, & "life" insurance which costs 4 to 5 times higher then youngsters due to their advanced age! Also Seniors pay almost $100 month for their Medicare part A, as well as needing a supplemental plan (AARP) at around $200 a month, also many require exorbitant cost prescription meds that run 300 to 500 or more a month, all "dental" bills come out of senior's pocket, and in addtion many "seniors" must now "hire" contractors (youngsters) to do many of the chores/projects they themselves once did, (even something simple as just washing the cars) since they can no longer physcially do them! So many seniors are in fact finacially struggling just as hard along with the many youngsters! So . . . .





(I'm very thankful that I'm not a struggling senior! But I did in fact plan ahead!)


A person 65 (such as I am) or older had 40 + years to plan for retirement. For such people to complain they do not have enough or deserve more (at the expense of other citizens) is in my view plain selfish. Sure Medicare cost over a $100 per month, plus supplemental coverage if you are not luck enough to have employer based coverage, but many younger people have no coverage or if employer based it is not unusual for a family to pay $300 per month or more for that coverage.

Life insurance if not purchased early in life does get expensive, but why would a person wait until they are older to buy something that is very inexpensive if purchased in their 20s or 30s?

I do agree that property taxes are unfair as they do not consider income levels.

Having just retired and starting that journey on a fixed income I do dread seeing my spending power decline and it does make me think twice about spending and I do worry about property taxes, but it is all no surprise.

[Lon]

QUINNSCOMMENTARY;1089370 wrote:

I do agree that property taxes are unfair as they do not consider income levels.

Having just retired and starting that journey on a fixed income I do dread seeing my spending power decline and it does make me think twice about spending and I do worry about property taxes, but it is all no surprise.


California took care of that Property Tax dilemma some years back with Proposition 13 which puts the tax at 1% of assessed value. For someone that bought a home for $75,000 in 1980 and the assessed valuation is $77,000, their tax would be $770 yearly even though that home is now worth $800,000. A new owner would pay the 1% on $800,000 ($8,000 yearly). There are controls on keeping that assessed valuation from jumping. Prop 13 came into being primarily to keep seniors from being taxed right out of their paid for homes.

[cars]

QUINNSCOMMENTARY;1089370 wrote: A person 65 (such as I am) or older had 40 + years to plan for retirement. For such people to complain they do not have enough or deserve more (at the expense of other citizens) is in my view plain selfish. Sure Medicare cost over a $100 per month, plus supplemental coverage if you are not luck enough to have employer based coverage, but many younger people have no coverage or if employer based it is not unusual for a family to pay $300 per month or more for that coverage.



Life insurance if not purchased early in life does get expensive, but why would a person wait until they are older to buy something that is very inexpensive if purchased in their 20s or 30s?



I do agree that property taxes are unfair as they do not consider income levels.



Having just retired and starting that journey on a fixed income I do dread seeing my spending power decline and it does make me think twice about spending and I do worry about property taxes, but it is all no surprise.
Actually the majority of Seniors I know (including myself) all have to "pay" $200/mo for the supplemental insurance. Very few are lucky enough to have any kind of employer based coverage!



Life insurance even when purchased early in life starts off being affordable, but starts to get expensive as a person gets older & older, & finally becomes a senior! The older one gets, the higher the insurance costs get, it goes according to the senior reaching another "age group" plateau! Up until I reached age 65 my life insurance cost me $1,200 a year. Last month, I just crossed that age plateau, & the same coverage skyrocketed to $5,244" a year!!! For the exact same coverage!!!



I wish that California property tax law became a nationwide law!!!



And oh yeah, contratulations on your retirement Quinn!!! Enjoy!!!

[QUINNSCOMMENTARY]

Lon;1089387 wrote: California took care of that Property Tax dilemma some years back with Proposition 13 which puts the tax at 1% of assessed value. For someone that bought a home for $75,000 in 1980 and the assessed valuation is $77,000, their tax would be $770 yearly even though that home is now worth $800,000. A new owner would pay the 1% on $800,000 ($8,000 yearly). There are controls on keeping that assessed valuation from jumping. Prop 13 came into being primarily to keep seniors from being taxed right out of their paid for homes.


But that does not solve the problem in many areas. There is a wide variation in how homes are assessed and how that assessment is changed. I paid $59,000 for my house in 1975, today my assessed value is now only $193,000 but the market value is about $500,000 and my taxes are $8,000 and go up nearly $200 a year.

[QUINNSCOMMENTARY]

cars;1089897 wrote: Actually the majority of Seniors I know (including myself) all have to "pay" $200/mo for the supplemental insurance. Very few are lucky enough to have any kind of employer based coverage!



Life insurance even when purchased early in life starts off being affordable, but starts to get expensive as a person gets older & older, & finally becomes a senior! The older one gets, the higher the insurance costs get, it goes according to the senior reaching another "age group" plateau! Up until I reached age 65 my life insurance cost me $1,200 a year. Last month, I just crossed that age plateau, & the same coverage skyrocketed to $5,244" a year!!! For the exact same coverage!!!



I wish that California property tax law became a nationwide law!!!



And oh yeah, contratulations on your retirement Quinn!!! Enjoy!!!


I think you may have bought the wrong type of insurance, there are policies that would have remained a set premium. While I am among the fortunate to have employer supplemental coverage, my premium is still $140.00 a month. Health care is one thing that gets to everyone sooner or later.

Studies have shown that a couple will need about $260,000 from age 65 on to cover premiums and out of pocket costs.

[cars]

QUINNSCOMMENTARY;1089930 wrote: I think you may have bought the wrong type of insurance, there are policies that would have remained a set premium. While I am among the fortunate to have employer supplemental coverage, my premium is still $140.00 a month. Health care is one thing that gets to everyone sooner or later.



Studies have shown that a couple will need about $260,000 from age 65 on to cover premiums and out of pocket costs.
Actually I had 10 year level Term insurance, where the premiums remained the same for 10 years. Then as I got older it increased every 10 years! Early on, it started off really low cost, but when it jumped to $5,244, I dumped that insurance co, & found another insurance company whose 10 year level Term preimum was only $1,700!! Huge reduction that made me happy!

[Bryn Mawr]

QUINNSCOMMENTARY;1089370 wrote: A person 65 (such as I am) or older had 40 + years to plan for retirement. For such people to complain they do not have enough or deserve more (at the expense of other citizens) is in my view plain selfish. Sure Medicare cost over a $100 per month, plus supplemental coverage if you are not luck enough to have employer based coverage, but many younger people have no coverage or if employer based it is not unusual for a family to pay $300 per month or more for that coverage.

Life insurance if not purchased early in life does get expensive, but why would a person wait until they are older to buy something that is very inexpensive if purchased in their 20s or 30s?

I do agree that property taxes are unfair as they do not consider income levels.

Having just retired and starting that journey on a fixed income I do dread seeing my spending power decline and it does make me think twice about spending and I do worry about property taxes, but it is all no surprise.


The main problem with this is that we're not clairvoyant.

Many people have planned and saved for their forty+ years only to have factors beyond their control rip out the underpinnings.

Most people over here have their pension invested in share based funds or have invested for themselves in bricks and mortar - both of those options now appear to be a mistake.

As an example, a friend of mine retired at sixty one with enough to last him his natural in a mixture of properties and shares. Now, at sixty three he's having to consider going back to work as his fund has not lost over £300,000 mostly due to government policy / action.

Given that he is one of the "lucky" ones who still has a nestegg I'd suggest that calling those who are not so "lucky" plain selfish is excessive and that some form of safety net is a social necessity.

Either that or the government should pay all those whose investments have lost out compensation for the results of their mismanagement of the economic system.

[QUINNSCOMMENTARY]

Bryn Mawr;1092024 wrote: The main problem with this is that we're not clairvoyant.

Many people have planned and saved for their forty+ years only to have factors beyond their control rip out the underpinnings.

Most people over here have their pension invested in share based funds or have invested for themselves in bricks and mortar - both of those options now appear to be a mistake.

As an example, a friend of mine retired at sixty one with enough to last him his natural in a mixture of properties and shares. Now, at sixty three he's having to consider going back to work as his fund has not lost over £300,000 mostly due to government policy / action.

Given that he is one of the "lucky" ones who still has a nestegg I'd suggest that calling those who are not so "lucky" plain selfish is excessive and that some form of safety net is a social necessity.

Either that or the government should pay all those whose investments have lost out compensation for the results of their mismanagement of the economic system.


While there is no way of avoiding some risk in the quest to keep up with inflation, the majority of people do not take the time to adjust their investment for age or to rebalance when they become too heavy in say stocks. This is no doubt a big problem, but the fact is a person who is 60 and retired should have a major portion of his money in some secure (as much as possible) fixed income instrument with minimal risk.

I am fortunate not to have to live on my assets as I have a company pension, but even so as I got older I moved more and more into fixed income with now about 70% in fixed income and the balance in stock funds. the stock funds are down about 30%, but the fixed income continue to appreciate each day offsetting some of the loss. My potential reward is less, but so is my risk.

Brick and mortar I assume is their home or an investment property and I would say that is not something that one would or should rely on for retirement income unless it is turned into a more liquid asset several years before the actual retirement date.

[Bryn Mawr]

QUINNSCOMMENTARY;1093084 wrote: While there is no way of avoiding some risk in the quest to keep up with inflation, the majority of people do not take the time to adjust their investment for age or to rebalance when they become too heavy in say stocks. This is no doubt a big problem, but the fact is a person who is 60 and retired should have a major portion of his money in some secure (as much as possible) fixed income instrument with minimal risk.

I am fortunate not to have to live on my assets as I have a company pension, but even so as I got older I moved more and more into fixed income with now about 70% in fixed income and the balance in stock funds. the stock funds are down about 30%, but the fixed income continue to appreciate each day offsetting some of the loss. My potential reward is less, but so is my risk.

Brick and mortar I assume is their home or an investment property and I would say that is not something that one would or should rely on for retirement income unless it is turned into a more liquid asset several years before the actual retirement date.


So in not predicting the crunch and realising all assets he is culpable? A harsh attitude if I may say so.

What would you do if the investment companies that hold your fixed income bonds go under? All of your hard work becomes toilet paper but it's your fault for not getting out in time? As I say, a very harsh attitude.

Bricks and mortar in this instance being his home and three investment properties which give a good rental income but, with the fall in the stock investment he either goes back to work or sells one at a knock down price.

At that, he's one of the lucky ones who has the choice - many people who've scrimped and saved for their retirement now find themselves reliant on their old age pension to survive. There are no certainties in life and Loki can bite even the best prepared in the arse.

[QUINNSCOMMENTARY]

Bryn Mawr;1093144 wrote: So in not predicting the crunch and realising all assets he is culpable? A harsh attitude if I may say so.

What would you do if the investment companies that hold your fixed income bonds go under? All of your hard work becomes toilet paper but it's your fault for not getting out in time? As I say, a very harsh attitude.

Bricks and mortar in this instance being his home and three investment properties which give a good rental income but, with the fall in the stock investment he either goes back to work or sells one at a knock down price.

At that, he's one of the lucky ones who has the choice - many people who've scrimped and saved for their retirement now find themselves reliant on their old age pension to survive. There are no certainties in life and Loki can bite even the best prepared in the arse.


I think you miss the point, I was not saying anyone should have predicted the crunch or economic downturn, but rather as a person gets older and hence closer to retirement they need to modify their investment mix and to balance it to avoid as much risk as possible. It has nothing to do with the current times. the market goes up and down all the time. A person needs a mix of investments to avoid as much risk as possible as one gets older and depends on the funds. In the US that means government bonds and treasury bills, savings bonds, mutual funds in an array of areas such as international, large and small cap and corporate bonds and plain old insured savings accounts.

There is no way to avoid risk, but too many people do not know how to manage it either.

As far as real estate goes, these times while very bad are not entirely new. I bought a house in 1987 for $159,000 with a 9.75% fixed 30 year mortgage. How does that mortgage sound today? On top of that it was at the peak of the real estate market in the 1980s and it was ten years before the house was worth what I paid for it. Today it is worth about $400,000 but that is down from $550,00o only a year or so ago. If I had defaulted on the mortgage then while I had no equity in the house how is that so different from today? So over the last 22 years one could say I made $250,000 or I lost $150,000 in the last 12 months.

[mikeinie]

QUINNSCOMMENTARY;1095121 wrote: I

As far as real estate goes, these times while very bad are not entirely new. I bought a house in 1987 for $159,000 with a 9.75% fixed 30 year mortgage. How does that mortgage sound today? On top of that it was at the peak of the real estate market in the 19080 ans it was ten years before the house was worth what I paid for it. Today it is worth about $400,000 but that is down from $550,00o only a year or so ago. If I had defaulted on the mortgage then while I had no equity in the house how is that so different from today? So over the last 22 years one could say I made $250,000 or I lost $150,000 in the last 12 months.


That is a good point as the measurement of money wins and losses are only from the perspective of the starting point and when you start measuring.

To support your argument, a guy goes to the race track and places a 10 bet, he wins $500. He puts that down and wins another $1,000, he puts that down and loses it all.

How much did the guy lose?

I would say $10.00, others would say $1,500, depends on where you start measuring.

This is one reason the economy is so screwed up. How can business expect year on year growth to he expectations of Wall Street. Like I said in a previous post, there was panic on the stock market because of the fear of an economic slow down in China.

Their growth has gone from 10% to 8%, and it is considered a recession. If our economy was growing at 8% it would be amazing.

[QUINNSCOMMENTARY]

mikeinie;1095123 wrote: That is a good point as the measurement of money wins and losses are only from the perspective of the starting point and when you start measuring.

To support your argument, a guy goes to the race track and places a 10 bet, he wins $500. He puts that down and wins another $1,000, he puts that down and loses it all.

How much did the guy lose?

I would say $10.00, others would say $1,500, depends on where you start measuring.

This is one reason the economy is so screwed up. How can business expect year on year growth to he expectations of Wall Street. Like I said in a previous post, there was panic on the stock market because of the fear of an economic slow down in China.

Their growth has gone from 10% to 8%, and it is considered a recession. If our economy was growing at 8% it would be amazing.


The so-called expectations of Wall Street are one of the biggest drivers of short term, short-sighted decisions. My own company is now cutting budgets like crazy, deferring investment, cancelling holiday parties, in general lowering morale simply because we may not be able to meet the earnings projections for next year. So, who cares? This company has paid a dividend every quarter for the last 105 years, and the dividend is not in jeopardy. The stock is down like virtually all stocks, so what; it will come back as will most other stocks so why dance to the expectations of Wall Street?

When I discuss this with people on Wall St I am told it is all about expectations, stocks trade and go up on expectations. That sounds like gambling to me because as a shareholder I get no more or less if a company meets its earnings target unless I am trading it to reap a profit from someone else bet. As long as the company makes a penny a share and I get a dividend who cares if the earnings target is missed by a penny as well?

True that if earnings keep going up my dividend may as well, but beyond that who care except the gamblers and traders?

[Bryn Mawr]

QUINNSCOMMENTARY;1095121 wrote: I think you miss the point, I was not saying anyone should have predicted the crunch or economic downturn, but rather as a person gets older and hence closer to retirement they need to modify their investment mix and to balance it to avoid as much risk as possible. It has nothing to do with the current times. the market goes up and down all the time. A person needs a mix of investments to avoid as much risk as possible as one gets older and depends on the funds. In the US that means government bonds and treasury bills, savings bonds, mutual funds in an array of areas such as international, large and small cap and corporate bonds and plain old insured savings accounts.

There is no way to avoid risk, but too many people do not know how to manage it either.

As far as real estate goes, these times while very bad are not entirely new. I bought a house in 1987 for $159,000 with a 9.75% fixed 30 year mortgage. How does that mortgage sound today? On top of that it was at the peak of the real estate market in the 1980s and it was ten years before the house was worth what I paid for it. Today it is worth about $400,000 but that is down from $550,00o only a year or so ago. If I had defaulted on the mortgage then while I had no equity in the house how is that so different from today? So over the last 22 years one could say I made $250,000 or I lost $150,000 in the last 12 months.


You miss my point - all through this you had condemned the concept of social support by the government for those in genuine need as paying for those without the foresight to provide for their old age.

Whilst you can mitigate risk you cannot eliminate it and you cannot prevent all exposure to external factors over which you have no possible control. There will always be those who are in genuine need of social support through no fault of their own.

I also got caught in the 80's bust (both ends - the interest spike in 82 - 83 and the downturn of 87 - 88) but a thirty year fixed at near 10%? History should have said that was a no-no.

ETA - up 250k - the extra 150k was potential and not real.

[QUINNSCOMMENTARY]

Bryn Mawr;1101537 wrote: You miss my point - all through this you had condemned the concept of social support by the government for those in genuine need as paying for those without the foresight to provide for their old age.

Whilst you can mitigate risk you cannot eliminate it and you cannot prevent all exposure to external factors over which you have no possible control. There will always be those who are in genuine need of social support through no fault of their own.

I also got caught in the 80's bust (both ends - the interest spike in 82 - 83 and the downturn of 87 - 88) but a thirty year fixed at near 10%? History should have said that was a no-no.

ETA - up 250k - the extra 150k was potential and not real.


Never have I condemned the concept of social support for those in genuine need. Any reasonable person knows there are those in society who simply do need social support and services, but there are far more who think they are entitled to that support and live their lives accordingly.

The key, of course, is defining "genuine." Today's society, at least some elements of it, have a very broad definition of that word. We tend to take the lowest common denominator and broadly apply it across large segments of society; minorities, the elderly, women, divorced people, etc.

A couple of examples, I have an aunt who is 90 years old. Her income is modest, and as a result she has taken advantage of a law that allows her to freeze her property taxes. At the same time she has no mortgage, substantial assets and has transferred many of her assets to her children (to take advantage of several laws providing benefits to low income people, which of course she is).

Because I am 65 I can get a discount on movie and other tickets, ride on public transportation at lower cost, go to national parks free, get 10% off my grocery bill on Tuesday at a local supermarket, get 20% off on Wednesday at a local bakery, etc. Why, because it is presumed by society in general that a "senior citizen" is poor. Nobody questions that assumption or its relevance to their pre-retiree state or its relevance to income needs, etc. I look at it this way, if a 65 year old can afford to travel perhaps thousands of miles to a national park as most people would do, then why the heck can't they pay the $10.00 admission fee?

My sister has a child with cerebral palsy, he is now 25, totally disabled, can't speak and for all practical purposes is an infant. Around the time of his birth there were major medical bills. the people in the town started fund raisers and raised $50,000 for his medical costs because it was perceived there was this need. In reality, there were no unpaid medical bills my sister had good coverage. Even thouhg the child was totally and permanently disabled, the local school board was required to pay for daily "education" services amounting to about $35,000 a year, far more than it spends on a normal child's education. Her husband voluntarily took an early retirement package about seven years ago because he wanted to. Today the child gets social security benefits, as do my sister and brother in law, he also gets a pension from the previous employer and works on the side declaring little of the money for tax purposes. So is all this a genuine need sufficient to warrant society footing the bill?

Human beings are, well human, and they will react to any set of incentive put before them. If those incentives collectively lower the personal responsibility level, then they will become more and more dependent on society and the balance of society will pay the cost.

In my examples, some family will pay higher property taxes because of the people who have them frozen, younger people going to our national parks will pay a higher fee because I get in free, school taxes are higher for this town.

Certainly we need to help those truly in need, but how do you define that and how do you objectively manage limited resources. In today's environment, those items seem to have gone my the wayside.