Money / budget expressions that bother me

[luuknam]

His private pension, though, from his work, is fixed, and there is nothing he can do about that.

 

Yeah, but would you call that investment income though? I thought investment income was basically money you take out of investments - which would be variable, dependent on the stock market etc, and with choice as to how much to take out/leave in.

[Bluegoat]

This isn't something that bothers per say, but I am just trying to figure it out. 

 

People I come in contact now refer to themselves as a low income family.   What does that mean?  These are big families (meaning at least 3 kids).   Do they mean they are really low income and struggling? 

Or is it just because when you divide 60k by 7 people then that is a smaller a mount of money? 

 

It just confuses me.  These are people that still have their kids in lessons and activities.

 

There are designations for low income, that differ depending on what body is making the designation.  But family size is part of the calculation, so larger families are more likely to qualify.

[poppy]

So it is still fixed, relative to their outflows. My dad's housing cost increases by a little more than his SS each year. He has, in practical terms less to live on than he had 5 years ago.

 

I'm not sure why it's worth the time to be bothered by common euphemisms people use to describe their financial situations.

How is it different if an employed person gets a COLA raise vs a retiree? They're both behind ...

 

As to your second point, is any pet peeve worth the time? :) It is NOT that I don't have sympathy for those on social security / SSI... More of a 'let's acknowledge that it is tough all over' .

 

This thread was prompted by my MIL. She asked us to give our washer / dryer to her friend because her friend's washer died and 'she doesn't have a lot of extra money'. It was a weird request really. I don't know much about the friend and am not passing any judgement against her at all , it just got me to thinking about how money is talked about.

[LucyStoner]

This isn't something that bothers per say, but I am just trying to figure it out.

 

People I come in contact now refer to themselves as a low income family. What does that mean? These are big families (meaning at least 3 kids). Do they mean they are really low income and struggling?

Or is it just because when you divide 60k by 7 people then that is a smaller a mount of money?

 

It just confuses me. These are people that still have their kids in lessons and activities.

People say low income rather than poor because we live in a culture where we basically pretend no one except the most visibly poor are poor. To be poor is considered embarrassing or without dignity. While that attitude may be wrong, it is omnipresent. Also, because using the term poor, even if you are comfortable with it, makes other people uncomfortable and often leads to a word salad of assurances that you aren't "really poor."

 

I grew up poor. I will just say it, plainly. To this day, some people will argue with me if I say that. Because no one is poor here. Um, if sleeping in a van or living in a motel paid for by a homelessness shelter program (designed to let families all stay together rather than seperating the fathers and older boys from the women and children) isn't poor, then I guess poverty really doesn't exist. If they don't do that, they will say they also grew up poor because their lawyer father only ever had one new car. So a lot of times, I don't say anything about it because I don't want to bother with the hassle of people's reactions.

Edited September 28, 2016 by LucyStoner

[Bluegoat]

Yeah, but would you call that investment income though? I thought investment income was basically money you take out of investments - which would be variable, dependent on the stock market etc, and with choice as to how much to take out/leave in.

 

Yes, most pension income comes from investments.  As would something like a trust fund where only a certain amount could be removed to give an annual income.  People aren't in many cases taking from the principle, they take from the income generated.

 

ETA - lots of pensions are indexed, but they aren't always.

Edited September 28, 2016 by Bluegoat

[slackermom]

Due to lower gas prices, there was no increase in Social Security Disability income based on COLA for 2016. My medicare deduction went up though, so I get less each month. 

[luuknam]

Yes, most pension income comes from investments.  As would something like a trust fund where only a certain amount could be removed to give an annual income.  People aren't in many cases taking from the principle, they take from the income generated.

 

Well, yeah, I get that pension funds use investments. I just wouldn't see it as my investment income, if that makes sense, if it's not up to me what to do with the investments.

[LucyStoner]

How is it different if an employed person gets a COLA raise vs a retiree? They're both behind ...

 

As to your second point, is any pet peeve worth the time? :) It is NOT that I don't have sympathy for those on social security / SSI... More of a 'let's acknowledge that it is tough all over' .

 

This thread was prompted by my MIL. She asked us to give our washer / dryer to her friend because her friend's washer died and 'she doesn't have a lot of extra money'. It was a weird request really. I don't know much about the friend and am not passing any judgement against her at all , it just got me to thinking about how money is talked about.

My husband is an employed person. He's been with his employer 9 years. He is earning quite a bit more than he did, and is getting another bump this month. In the next year or so he expects to change departments and that will significantly increase his income. If we needed more money, I can work more. If an employed person doesn't like their slow rate of colas or raises, they have the option to not just look for a different job but to change careers altogether. It's not the same thing as my dad seeing $17 more a month in his SS check. His purchasing power is less than it was a decade ago.

 

Also, retirees may have fixed annuities and pensions, which are actually never going to adjust.

 

Another consideration for workers, when our income dropped, we could move to a cheaper place. We cut our housing outlay by nearly 1/2 but moving from a house in the city to an apartment in a suburb. If we needed to, we could move from our 3/2 to a 2/1 or a 1/1. For those retirees who have already downsized to the cheapest place, there's no choice to save money on housing available to them. My father lives in basically the cheapest place he can (a subsidized 1 room apartment). So no, $20/month in income and $25/month in expenses is not the same for him as the fairly large fluctuations in my husband's and my income.

 

If I didn't want to get rid of my washer and dryer, I would say no. If I was replacing my washer and dryer, I would give my older but still functional ones away, probably to someone who couldn't buy one.

[Arcadia]

This thread was prompted by my MIL. She asked us to give our washer / dryer to her friend because her friend's washer died and 'she doesn't have a lot of extra money'. It was a weird request really. .

My in-laws will say something similar. Basically my in-laws mean their friend does not have the emergency funds to buy a replacement and would need to pay by installments if the friend buy a replacement.

 

My in-laws also did not realize some items have trade in value and thought that if we are going to dispose even something faulty like laptops, someone else can fixed it and use. My hubby had to explain trade in program to his parents.

[Seasider]

Wait... Do you have an extra w/d available, or does your mil just think you are in a better position to replace yours because you do "have the extra money"? Because if you don't have a spare w/d to give, that would be an odd request no matter how she phrased it.

Edited September 28, 2016 by Seasider

[poppy]

My in-laws will say something similar. Basically my in-laws mean their friend does not have the emergency funds to buy a replacement and would need to pay by installments if the friend buy a replacement.

 

My in-laws also did not realize some items have trade in value and thought that if we are going to dispose even something faulty like laptops, someone else can fixed it and use. My hubby had to explain trade in program to his parents.

I don't mind helping a lady out and I'm not looking to make a buck but I still do (unfortunately!) need to do laundry myself .

 

 

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[poppy]

Due to lower gas prices, there was no increase in Social Security Disability income based on COLA for 2016. My medicare deduction went up though, so I get less each month.

But your expenses went down (theoretically). I don't know your situation at all ! I just bet there would be quite a stink from some political groups of increases were guaranteed annually -

 

 

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[LucyStoner]

I think this is the root of why the expression bugs me so much . With today's lack of income mobility and wages being fairly stagnant, there are very few people who can 'easily' bring in more income.

 

Plus my parents both have fairly sizable pensions that will last until they die - something very few people under age 50 will enjoy thanks to the 'freedom' we all got with 401ks.

Your parents are part of a shrinking group over 50. For roughly 66% of American retirees, SS is more than 1/2 of their annual income. For nearly 1/3 of American retirees over 65, SS is 90% of their income.

 

I am not unsympathetic to how much harder things are getting for younger Americans, being one of those younger Americans myself. And I get that for some employees, their incomes are more or less fixed and the options for changing that are not always feasible. But trust me, elderly Americans are losing ground fast, particularly women. And for those who were approaching retirement as the market crashed and saw the 401ks that replaced the pensions their parents got nosedive, retirement has been getting off to a rougher and rougher start. Assuming it starts at all. There arepeople over 65 holding onto jobs they would have hoped to give up by now. Let's not even get started on retirees who are losing their pensions to company bankruptcies.

Edited September 28, 2016 by LucyStoner

[LucyStoner]

But your expenses went down (theoretically). I don't know your situation at all ! I just bet there would be quite a stink from some political groups of increases were guaranteed annually -

 

 

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In reality though, how much gas is an elderly person with less than $15K buying? My dad doesn't really have a vehicle. I gas the car he parks here on the rare occasions he uses it. Sure, lower gas prices should be seen in lower prices elsewhere but I haven't noticed that to be the case for anything my father actually buys.

[Arcadia]

I don't mind helping a lady out and I'm not looking to make a buck but I still do (unfortunately!) need to do laundry myself .

That is a weird request. I thought you were replacing yours which was why your MIL ask if her friend could have the old ones.

We are thinking of replacing our washer and dryer so it wouldn't be weird if a friend who had seen us comparing washers and dryers at Best Buy were to suggest her friend gets our old ones if we replace.

[SKL]

Many retirees don't have to pay rent / mortgage because they have a paid-off home or live with relatives for free.  Many others live in subsidized housing.  Those who are homeowners often enjoy a senior break in property tax, among other things.  So many are not affected by housing market fluctuations in retirement.

 

There are expenses that go up, of course - health / mobility related costs that aren't covered by Medicare, needing help with stuff you used to be able to do yourself.  There is so much variability, I don't think we can generalize, but I do think that average purchasing power has not decreased for retirees as much as for employed people in recent decades.  I do think the economy is anxiety-producing for folks in all age groups.

[ChocolateReignRemix]

I wouldn't think those would be called "fixed incomes" in that case, unless the application of the expression has been broadened. They aren't nearly as much of a concern as actual fixed incomes.

 

The implementation of the increases represents a modification to a fixed income system that compensates for its most obvious flaw, but it might still be thought of (linguistically) as some kind of 'modified fixed income system'. It might imply that such increases are currently expected but it's not guaranteed to always work out that way?

 

There are definitely more forms of "fixed income" than government pensions.

They are fixed in real terms, not nominal terms. In theory their buying power doesn't change over time (which isn't entirely true but is true enough to use the term).

[poppy]

In reality though, how much gas is an elderly person with less than $15K buying? My dad doesn't really have a vehicle. I gas the car he parks here on the rare occasions he uses it. Sure, lower gas prices should be seen in lower prices elsewhere but I haven't noticed that to be the case for anything my father actually buys.

The other poster said the amount didn't increase because gas prices stayed down, but really , the calculation involved more factors than that. Cost of living overall has not increased.

 

 

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[EmilyGF]

Many retirees don't have to pay rent / mortgage because they have a paid-off home or live with relatives for free.  Many others live in subsidized housing.  Those who are homeowners often enjoy a senior break in property tax, among other things.  So many are not affected by housing market fluctuations in retirement.

 

There are expenses that go up, of course - health / mobility related costs that aren't covered by Medicare, needing help with stuff you used to be able to do yourself.  There is so much variability, I don't think we can generalize, but I do think that average purchasing power has not decreased for retirees as much as for employed people in recent decades.  I do think the economy is anxiety-producing for folks in all age groups.

Where I live, a lot of retirees live in old condominiums. A significant portion of retirees living in friends' buildings are in poor health (not spry 65-year-olds). I usually hear the term "fixed income" when a younger family refers to why a large contingent of the owners refuse to do necessary upkeep of the buildings. 

 

A friend's building may lose its insurance next year if the $$$ upkeep continues to be refused. :-( 

 

Emily

[EMS83]

I've used the "don't have a lot of extra money line" at times to downplay our situation.  "We're a little tight" might well mean we have less than $300 to our name at that particular time, and 5 grand in debt (clothing and medical), are riding the poverty level pretty closely, and refusing to use government aid.  But I do think about people in third world countries, and know we have so much more than the bare necessities (I'm using the internet; case in point).  So while yes we have had nerve wracking weeks, we have our needs met plus extras, and I don't want pity.  Or help.  Or a brush off.  I figure also that as indicated, many people feel stressed over money, so I also don't want to assume I feel more stress than someone else, regardless of how the numbers would stack up.  That often doesn't make anyone feel better.

 

So to everyone who has to manage money in any way...   :grouphug:

 

 

Edited September 28, 2016 by CES2005

[LucyStoner]

The other poster said the amount didn't increase because gas prices stayed down, but really , the calculation involved more factors than that. Cost of living overall has not increased.

 

 

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That's just not the case over the long haul for retirees in my dad's situation. As he has aged, his expenses have increased but his income has not kept pace. Of the things he needs to buy, he's paying a bit more for everything except food.

 

The phrase "fixed income" is in wide usage and has a generally understood definition. Regardless of your feelings on the matter, it generally refers to the income on pensioners or that are collecting some sort of retirement or disability benefits.

Edited September 28, 2016 by LucyStoner

[LucyStoner]

It just confuses me. These are people that still have their kids in lessons and activities.

Why would low income kids not be in some recreational activities or lessons? The Y and often municipal recreation centers and even private leagues often have scholarships or sliding scale rates. Or a family makes sacrifices elsewhere to cover something.

[mommyoffive]

Why would low income kids not be in some recreational activities or lessons? The Y and often municipal recreation centers and even private leagues often have scholarships or sliding scale rates. Or a family makes sacrifices elsewhere to cover something.

 

that isnt the part that confuses me.

 

sorry.  typing with a baby is hard.  

 

what the distinction of what low income really is, that is my confusion 

[pinkmint]

Most of the people I hear complaining about finding it "impossible" to get a better job are simply unwilling to take the steps necessary to do so. They don't want to go back to school/vocational training. I sympathize with it being hard to go back when you're middle-aged and have family responsibilities. But with so many legitimate online programs now, it's a LOT easier than it was in the past when to get a degree meant having to take B&M classes that were primarily offered in the late morning or early afternoon M-Th.

 

Nobody's going to hand you a better job on a silver platter just because you think you deserve one. You need to improve your marketability and that's going to take effort on your part.

I wish it were really this simple.

 

And at some point in my life I thought more this way. "You have no excuse not to be in a better situation." I am not advocating for a victim mentality however real life has delivered some complicated realities.

 

And I want to add that some of the comments in this thread are part of the reason people use vague language to refer to their financial situation.

[poppy]

That's just not the case over the long haul for retirees in my dad's situation. As he has aged, his expenses have increased but his income has not kept pace. Of the things he needs to buy, he's paying a bit more for everything except food.

 

The phrase "fixed income" is in wide usage and has a generally understood definition. Regardless of your feelings on the matter, it generally refers to the income on pensioners or that are collecting some sort of retirement or disability benefits.

 

I understand the generally accepted definition, I just find it inaccurate. It implies the elderly are poor (many aren't) and that there is nearly limitless mobility for young and middle aged people (there isn't).

[LucyStoner]

I understand the generally accepted definition, I just find it inaccurate. It implies the elderly are poor (many aren't) and that there is nearly limitless mobility for young and middle aged people (there isn't).

I think you are reading a lot into it to reach that conclusion. I certainly don't think that nor do the vast majority of people whom I know think that.

[poppy]

that isnt the part that confuses me.

 

sorry.  typing with a baby is hard.  

 

what the distinction of what low income really is, that is my confusion 

 

I assume low income generally means below the median for the region. 

 

The median family ncome in my state is about $67,000.   Someone making $50,000 here could be reasonably considered low income, with access to reduced lunch.

 

In the state I grew up in, the median family income is $39,000.  Someone making $29,000 would certainly be low income.  

 

I am very aware that many people live on less than that.  My mom worked in SSI for 30 years. 

My dad works in a tax office, where -- he reports -- the tax refund is the biggest income of the year (considered child tax credit &  earned income tax credit).

It is very, very hard for many folks out there.

[poppy]

I think you are reading a lot into it to reach that conclusion. I certainly don't think that nor do the vast majority of people whom I know think that.

 

The vast majority of people you know think all elderly are poor and all non-elderly could easily increase their income?

[LucyStoner]

that isnt the part that confuses me.

 

sorry. typing with a baby is hard.

 

what the distinction of what low income really is, that is my confusion

There are a lot of metrics. I tend to like HUD tables because they consider the local cost of living and median incomes, whereas at least within the lower 48, hh income expressed as a percentage of the poverty level is not, because the poverty line considers only hh size and not cost of living. Data gleaned from the IRS is also very illustrative. Most people for instance overestimate the median income for a hh nationally. IRS figures are generally reported in quintiles, so five brackets from lowest to highest, though they now pull out the top few percent for a more realistic picture of the top quintile.

 

Many federal programs like health insurance subsidies, food stamps, WIC and free/reduced lunch define their eligibility in terms like 100% of FPL (federal poverty level), 130% of FPL, 180% of FPL or 200% of FPL. For the lower 48, the FPL for a family of 4 is $24,300. In my area, those at 200% of FPL are living pretty tight.

[QueenCat]

Another favorite of mine is "We're a one income family so we can't really afford to do "that"". That could be almost anything..... Having one income does not determine if you are lower income or higher income......

[LucyStoner]

The vast majority of people you know think all elderly are poor and all non-elderly could easily increase their income?

No, they do not draw the conclusions you do.

 

Most grasp that elderly people can be at all income and wealth points and that there are barriers (different ones for different people) for working young people in reaching any level of upward mobility.

 

Basically, IME the people I know don't jump to a big conclusion from a small phrase. When I say fixed income, I am not implying what you've decided to read into it. I don't think most people do.

[RoughCollie]

What's to stop any 65 year old retiree from doing the exact same?? Any able bodied retired person is just as capable as someone working 40+ hours to improve his or her income.

 

 

Sent from my iPhone using Tapatalk

 

#1 Age discrimination - against the law but nearly impossible to prove.

 

#2 In my area, at least, very few jobs that aren't part-time *and* require the employee to be available all hours the business is open. This prevents people from getting 2 part-time jobs in many, many cases. Also, these part-time jobs come without benefits, such as insurance.

Edited September 28, 2016 by RoughCollie

[Arcadia]

People I come in contact now refer to themselves as a low income family. What does that mean? These are big families (meaning at least 3 kids). Do they mean they are really low income and struggling?

Or is it just because when you divide 60k by 7 people then that is a smaller a mount of money?

 

It just confuses me. These are people that still have their kids in lessons and activities.

It depends on agency and county.

 

For a household of five, low income in my county as defined by California's Department of Housing is $91,650 annual. In other counties, the limit would be higher or lower. (Figures from http://hcd.ca.gov/housing-policy-development/housing-resource-center/reports/state/inc2k16.pdf). So my family could be low income in my county but moderate income in another county.

 

For CalFresh, the limit for a household of five is monthly gross of $4,736, so less than $60k annual. (Figures from http://www.cdss.ca.gov/foodstamps/PG3628.htm)

[Reefgazer]

I believe fixed income means with no ability to get a job or work to earn more.

"They are on a fixed income".

 

So is everyone! Well, almost everyone.  Being on a variable income is usually worse.  And having NO income is obviously worse.

 

"They don't have a lot of extra money to spend".

 

??????

This just means they are in the same boat as the vast majority of Americans. Close to half of people with six figure incomes have less than $1000 saved.....

If the top, what, 20% doesn't have "a lot of extra money", who does?

 

[LucyStoner]

I assume low income generally means below the median for the region.

 

The median family ncome in my state is about $67,000. Someone making $50,000 here could be reasonably considered low income, with access to reduced lunch.

 

In the state I grew up in, the median family income is $39,000. Someone making $29,000 would certainly be low income.

 

I am very aware that many people live on less than that. My mom worked in SSI for 30 years.

My dad works in a tax office, where -- he reports -- the tax refund is the biggest income of the year (considered child tax credit & earned income tax credit).

It is very, very hard for many folks out there.

Free/reduced lunch income limits are the same across the lower 48 and DC and the limits are set according to family size. Some local districts expand that themselves at their own expense but the federal limits are the same (except in Hawaii and Alaska).

 

A family making $50k could qualify based on family size. A smaller family would not in the lower 48 with that income point. Some children are eligible by statute regardless of family income- foster children and homeless teens.

 

ETA- I confirmed that free lunch is still 130% of FPL and reduced is 185% of FPL. For this year, a family of four earning $50k would qualify for reduced lunch but not a family of 2 or 3. In some areas, a family could qualify but really not need to use it unless they opted to, in other areas, families just outside the income limit could be really struggling.

Edited September 28, 2016 by LucyStoner

[mommyoffive]

It depends on agency and county.

 

For a household of five, low income in my county as defined by California's Department of Housing is $91,650 annual. In other counties, the limit would be higher or lower. (Figures from http://hcd.ca.gov/housing-policy-development/housing-resource-center/reports/state/inc2k16.pdf). So my family could be low income in my county but moderate income in another county.

 

For CalFresh, the limit for a household of five is monthly gross of $4,736, so less than $60k annual. (Figures from http://www.cdss.ca.gov/foodstamps/PG3628.htm)

 

 

Yeah see the different ideas on what low income was what was confusing me.   I guess I would need to find one for our state or town.  

[mommyoffive]

For several years my kids activities were what their grandparents gave them for Christmas and birthdays. I couldn't afford nice things for myself but my kids had nice things because my in laws and my parents wanted to give them to my kids. I don't think that's too unusual, actually.

 

I wish people would give my kids that as a gift.  

[TechWife]

 

 

But the reality is that many retired people actually have more flexibility than younger people when it comes to supplementing their income.  Like single moms - they can work the shift when the kids are in school / daycare, but beyond that, there are significant limits.  Can't just leave your young kids home for a few hours while you go serve lattes.  Also, after age 65, employer-provided health insurance is not an issue.

 

Retirement isn't very flexible. 

 

Do you realize that the vast majority of retired people are not healthy enough to work? People now live well into their nineties. There is no way my parents could have worked even part time at any point past the age of 73 or so. Arthritis alone makes it difficult to do many kinds of jobs as various positions can be painful for long periods of time. We won't get into various, common digestive issues that make bathroom needs difficult. Then, there is the whole issue of driving safety as well has whether or not one needs to be home to provide care for an elderly spouse. 

 

There may not be employer based health insurance, but those Medicare premiums come out of that SSI check and there are still life insurance premiums to pay as well as supplemental insurance premiums to pay.

 

Retirement income also affects the amount of money that is paid out in the monthly SSI distribution. People who are retired, under "retirement age" and drawing on SSI can't work an unlimited number of hours making an unlimited amount of money without it affecting their overall income. In many cases, there is a point at which is doesn't pay to work. 

[TechWife]

What's to stop any 65 year old retiree from doing the exact same?? Any able bodied retired person is just as capable as someone working 40+ hours to improve his or her income.

 

 

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Age discrimination is a real thing, though. Employers aren't generally out looking for grey headed employees, much less grey headed employees over the age of 65. 

Edited September 28, 2016 by TechWife

[LucyStoner]

Have you ever heard of age discrimination? It's real. Employers aren't generally out looking for grey headed employees, much less grey headed employees over the age of 65.

A-yup. My dad was downsized at 61ish. He looked everywhere. No one was hiring guys his age. He tried to retrain. His short term memory skills weren't up to snuff to finish the program. Once his unemployment benefits ran out, it was take early (and thus permanently lower) SS benefits or...have no income whatsoever. He has MS and went without medical insurance until he reached the age for Medicare. And that was BEFORE the great recession.

 

Let's not pretend younger working people are the only Americans facing financial hardships. There's enough hardship for most everyone.

[EMS83]

The "don't have a lot of money" sort of goes back to the idea that everyone (in our culture anyway) seems to feel less wealthy than they are.  I mean I had a boss who was a millionaire, and his wife was making her own millions.  He used to talk about how unfair it was that he had to pay taxes when all those richer people should pay more instead.  Really?  I guess as long as there is anyone richer than you, you are on the poor side.

 

"We don't have a lot of extra money" also seems to come up when people are guilting folks into spending on things they don't want, e.g., fundraisers.

 

I prefer to say "I choose to do other things with my money" vs. "we can't afford it."  Well, there are things I can't afford, but even if I could, I probably wouldn't do most of them.

 

I do use a variation of this: I try to say, "We don't afford that."  Because usually, we are making conscious decisions based on a steady income.  It's what we're favoring instead of the "that" that makes a difference in the conversation.  Then the opinions go all over the map as to what people should and shouldn't afford at the expense of whatever else.

[Reefgazer]

That, and the likelihood of infirmities that prevent working more or getting a job at all, mean the elderly can't increase their income.  I can't believe we're debating that the elderly are far less likely to be capable of work of any type than younger people. 

Age discrimination is a real thing, though. Employers aren't generally out looking for grey headed employees, much less grey headed employees over the age of 65. 

 

[SKL]

Yeah see the different ideas on what low income was what was confusing me.   I guess I would need to find one for our state or town.  

 

Who told you they were low income?  Maybe they are basing that on the tables used to determine subsidized school lunches.  Those definitely vary by family size.

 

Depending on many factors, a family could be low-income and still have enough free cash to pay for modest extracurricular activities.  Some people also get a deal by doing some work for the provider etc.

 

For certain purposes in my job, low income means below 80% of median income. I've also seen it meaning 2x poverty level.  Each figure varies by family size.

[SKL]

Retirement isn't very flexible. 

 

Do you realize that the vast majority of retired people are not healthy enough to work? People now live well into their nineties. There is no way my parents could have worked even part time at any point past the age of 73 or so. Arthritis alone makes it difficult to do many kinds of jobs as various positions can be painful for long periods of time. We won't get into various, common digestive issues that make bathroom needs difficult. Then, there is the whole issue of driving safety as well has whether or not one needs to be home to provide care for an elderly spouse. 

 

There may not be employer based health insurance, but those Medicare premiums come out of that SSI check and there are still life insurance premiums to pay as well as supplemental insurance premiums to pay.

 

Retirement income also affects the amount of money that is paid out in the monthly SSI distribution. People who are retired, under "retirement age" and drawing on SSI can't work an unlimited number of hours making an unlimited amount of money without it affecting their overall income. In many cases, there is a point at which is doesn't pay to work. 

 

I am aware that there are limits, but I am also aware of many people over retirement age who can and do work, both part-time and full-time.  My grandmother worked part-time into her 80s.  On her feet, as a retail sales clerk.  She never had a driver's license, but she walked to the bus stop.  She loved her job.

 

It's actually very good for people's physical and mental health to get out and do stuff.

 

[Greta]

I know this isn't really the point of the thread, but if I may ask...

 

Close to half of people with six figure incomes have less than $1000 saved.....

 

 

Could someone enlighten me as to what's going on here?  From what I can tell, the study just asked how much money people had in their savings accounts.  So retirement accounts, 401k, etc. would not be included in this figure.  But I'm still not understanding if this study means that people are saving their money in other ways besides the classic savings account, or if it really means that even most Americans earning six figures could not get their hands on $1000 in cash in a crisis (without borrowing it).  Anyone know?

 

[TechWife]

I know this isn't really the point of the thread, but if I may ask...

 

 

Could someone enlighten me as to what's going on here?  From what I can tell, the study just asked how much money people had in their savings accounts.  So retirement accounts, 401k, etc. would not be included in this figure.  But I'm still not understanding if this study means that people are saving their money in other ways besides the classic savings account, or if it really means that even most Americans earning six figures could not get their hands on $1000 in cash in a crisis (without borrowing it).  Anyone know?

 

i followed a link back in the article to this article. Based on these statements, I think they are referring to easily accessible savings for an emergency fund, not other types of saving or investing for college or retirement. 

 

"Americans are falling short when it comes saving money — specifically, setting aside money in savings accounts — to create a financial cushion."

 

and

 

“Most people have not saved nearly enough in their emergency or reserve account.â€

 

 

and

 

"Gen Xers might have less money in savings accounts because they have more demands on their budgets and are prioritizing other types of savings. â€œMany people save too much for things like retirement, college savings or investments and squeeze themselves too tightly financially, leaving little room for spending or building of their emergency fund,†said Hardy."

[Greta]

 

"Gen Xers might have less money in savings accounts because they have more demands on their budgets and are prioritizing other types of savings. â€œMany people save too much for things like retirement, college savings or investments and squeeze themselves too tightly financially, leaving little room for spending or building of their emergency fund,†said Hardy."

 

Ah, thank you!  That answers my question.   :001_smile:

[LucyStoner]

I know this isn't really the point of the thread, but if I may ask...

 

 

Could someone enlighten me as to what's going on here? From what I can tell, the study just asked how much money people had in their savings accounts. So retirement accounts, 401k, etc. would not be included in this figure. But I'm still not understanding if this study means that people are saving their money in other ways besides the classic savings account, or if it really means that even most Americans earning six figures could not get their hands on $1000 in cash in a crisis (without borrowing it). Anyone know?

In some HCOL areas, some people making just a bit into the six figures are practically living paycheck to paycheck. Much of this is the high cost of housing but for parents, the cost of childcare (which rivals or exceeds the cost of instate public college tuition!) is a huge factor. Many people I know are very tight budget wise until they no longer require FT childcare. These are professionals with degrees. It's hard to save because of the high outflows, just to cover "the basics". The basics being: housing, healthcare, transportation, childcare, food, utilities. And for a lot of those young professionals: student loan payments.

 

Another factor is that in some professions, layoffs are frequent. I have friends (a couple) where he makes a very good income and hers is not shabby. They don't have much liquid savings and have way less in retirement than they need but the primary breadwinner has seen multiple periods of unemployment due to layoffs (he's not getting fired or anything like that). He always finds something, but it takes a bite. Add in having two kids and a dependent elderly parent, they are a classic sandwich generation case study. They aren't living lavishly- but many people don't understand what the mortgage on a 1000sf house looks like anywhere near where he can find work.

Edited September 28, 2016 by LucyStoner

[Greta]

In some HCOL areas, some people making just a bit into the six figures are practically living paycheck to paycheck. Much of this is the high cost of housing but for parents, the cost of childcare (which rivals or exceeds the cost of instate public college tuition!) is a huge factor. Many people I know are very tight budget wise until they no longer require FT childcare. These are professionals with degrees. It's hard to save because of the high outflows, just to cover "the basics". The basics being: housing, healthcare, transportation, childcare, food, utilities. And for a lot of those young professionals: student loan payments.

 

Another factor is that in some professions, layoffs are frequent. I have friends (a couple) where he makes a very good income and hers is not shabby. They don't have much liquid savings and have way less in retirement than they need but the primary breadwinner has seen multiple periods of unemployment due to layoffs (he's not getting fired or anything like that). He always finds something, but it takes a bite. Add in having two kids and a dependent elderly parent, they are a classic sandwich generation case study. They aren't living lavishly- but many people don't understand what the mortgage on a 1000sf house looks like anywhere near where he can find work.

 

Thank you for sharing this.  I honestly wasn't sure if the study was just revealing that people were saving money in other ways/places, or if it was more about the kind of factors that you mention here.  I've never lived in a high COL area, nor have I ever had to fund full-time child care.  I do know those things can add up FAST and that $100,000 per year doesn't go as far as it sounds like it would!  Also, my husband and I graduated without any debt, back in the old days when college didn't cost an arm and a leg.  I really don't know how young couples do it!

[idnib]

i followed a link back in the article to this article. Based on these statements, I think they are referring to easily accessible savings for an emergency fund, not other types of saving or investing for college or retirement. 

 

"Americans are falling short when it comes saving money — specifically, setting aside money in savings accounts — to create a financial cushion."

 

and

 

“Most people have not saved nearly enough in their emergency or reserve account.â€

 

 

and

 

"Gen Xers might have less money in savings accounts because they have more demands on their budgets and are prioritizing other types of savings. â€œMany people save too much for things like retirement, college savings or investments and squeeze themselves too tightly financially, leaving little room for spending or building of their emergency fund,†said Hardy."

 

 

I wonder why they don't mention that interest rates on savings account specifically are very low right now. That's not the only explanation, but I'd bet you see more money in saving accounts of they were paying 5%, for example.

Edited September 29, 2016 by idnib