Time to Retire the Idea of Retirement

[Dion]

Originally Posted by MarchHare

Good for you. Unfortunately, the same cannot be said about the majority of your generation.

I was merely responding to the generalisation of baby boomers by blanknall. People have to be responsible with thier money and in a lot of cases you won't find that in the 20-30 age group. Retirement seems so far away when you're in your 20's and often the response to is put off setting up an RRSP plan. Too many are living for today with their money and it's become a huge problem in today's generation much like it was in mine.

[Dion]

Originally Posted by The Yen Man

Is it that bad to work past 65? I guess it depends on the job, but I would think it'd be terribly boring to go from having a regular job to just being at home all day. Sure you can go travelling, but there's only so much travel you can do (well, at least for me anyways).

I wouldn't be surprised to be working past 65. Of course, I would hope that its out of preference rather than neccessity.

My father took early retirement at age 58 and soon afterwards found life was boring. He ended up doing contract work where he could pick and choose what he did.

[Buff]

I know a guy who "retired" at the age of 54. He sold his business and was able to live off the profits for the rest of his life. He got bored quickly and less than a year later he was working for a friend. Then he tried to retire again a couple of years later but was still bored, so back to work he went. Then his daughter got into massive legal battles with her ex over custody and visitation rights over her kid. She didn't learn a damned thing about money management from her parents so daddy paid for all her legal fees. The guy is now 70 and still working because he needs the money. He has paid every single legal fee for his daughter. Bought her a house and car and anything else she needs because she doesn't know how to budget money.

In the end, a financial responsible person made a lot of bad decisions with his money to help out his daugher, and now he is broke and living payday to payday probably never going to retire, because he actually wants to be retired now, but can't afford to.

[missdpuck]

it's hard to say but I guess it's more expensive being young now than it used to be.
Does that make sense?
When I was a kid I just needed a notebook and a cheap calculator for school.
Now it's a different kind of Notebook, laptop, tablet whatever.

I have no idea how the two economies of the times compare.
My parents would buy me 3 new school outfits. The rest I bought myself with babysitting money.

I guess you'd have to do a lot of babysitting to buy stuff now.

[dissentowner]

I still have 29 years of service to go, puts me at 68 before I can retire with full pension.

[missdpuck]

Originally Posted by Dion

I was merely responding to the generalisation of baby boomers by blanknall. People have to be responsible with thier money and in a lot of cases you won't find that in the 20-30 age group. Retirement seems so far away when you're in your 20's and often the response to is put off setting up an RRSP plan. Too many are living for today with their money and it's become a huge problem in today's generation much like it was in mine.

Most of the people I know in this group blow their money faster than I ever did- and I was bad for a while.
New cars, designer purses, best phones etc etc. I know one who plans to live in an efficiency apt for the rest of her life. because she is always broke.

[Phanuthier]

Originally Posted by missdpuck

it's hard to say but I guess it's more expensive being young now than it used to be.
Does that make sense?
When I was a kid I just needed a notebook and a cheap calculator for school.
Now it's a different kind of Notebook, laptop, tablet whatever.

I have no idea how the two economies of the times compare.
My parents would buy me 3 new school outfits. The rest I bought myself with babysitting money.

I guess you'd have to do a lot of babysitting to buy stuff now.

I have no interest in Gen X vs Gen Y argument again... but this post I found interesting. Are all these gadgets et al really the cause? If you get a new laptop/tablet every 18 months (i.e. the lifecycle of these electronics, by design) that is $1000 per year. You pay that on a month's worth of rent.

Is $1000 per year the make or break? You spend more then that on a cell phone contract. Is it cell phone contracts that are killing you?

So where do you leak money?
- rent (~40% of expenses?)
- car maintainence and usage (far more per year then electronics). Even a Honda Civic or Toyota Corolla costs between $0.42-0.51 per mile, all factors included assuming average milage and factors.

Between living and commuting, you are blowing over half of your expenses. And those are just built in cost of living that you have no control over. It has nothing to do with being entitled or having too many angry birds apps or whatever.

[MarchHare]

Originally Posted by missdpuck

it's hard to say but I guess it's more expensive being young now than it used to be.
Does that make sense?
When I was a kid I just needed a notebook and a cheap calculator for school.
Now it's a different kind of Notebook, laptop, tablet whatever.

You don't even need to consider incidentals like that. The biggest reason it's more expensive for young people today than it was for the baby boomers is because the cost of two of the biggest expenses facing 20-somethings, post-secondary education and their first home, have increased far more rapidly than the rate of inflation.

[Phanuthier]

Originally Posted by missdpuck

Most of the people I know in this group blow their money faster than I ever did- and I was bad for a while.
New cars, designer purses, best phones etc etc. I know one who plans to live in an efficiency apt for the rest of her life. because she is always broke.

Another interesting comment. Walk into an Apple store. Or a (designer) store. What is the % of people you see standing in line buying these cosmetics? Range it from 20-35, 35-50 and 50-75.

Honestly, I see a split between 20-35 (40%)... 35-50 (40%) and fewere in the 50-75 (20%). Though in fairness, I've been to a mall 5x in the past 3 years. All 5x were weekends.

Funny thing is, I'm trying to convince my parents what a waste it is to get the newest iPhone and iPad. He likes to buy the newest widgets (and he can afford it, which is fair). I usually try to get the one for free, while my girlfriend is using a pay-as-you-go phone. And I work in an industry that is driven by these stupid widgets.

[RW99]

I'm still working on Freedom 35.

[MarchHare]

Originally Posted by Phanuthier

So where do you leak money?
- rent (~40% of expenses?)
- car maintainence and usage (far more per year then electronics). Even a Honda Civic or Toyota Corolla costs between $0.42-0.51 per mile, all factors included assuming average milage and factors.

Between living and commuting, you are blowing over half of your expenses. And those are just built in cost of living that you have no control over. It has nothing to do with being entitled or having too many angry birds apps or whatever.

You're assuming that owning a vehicle is a necessity, but that's not the case for anyone living in a large city. I didn't own a car for the first five years that I lived in Calgary. I'd still prefer not to own a vehicle even now, but my wife and I were forced to buy one a few years ago as it was a requirement for a new job she was offered.

[Phanuthier]

Originally Posted by MarchHare

You're assuming that owning a vehicle is a necessity, but that's not the case for anyone living in a large city. I didn't own a car for the first five years that I lived in Calgary. I'd still prefer not to own a vehicle even now, but my wife and I were forced to buy one a few years ago as it was a requirement for a new job she was offered.

Yes very true. On my end, we actually cut that expense as well and consolidated to 1 car.

Its interesting, look at USA's household finance problems. Why is it bigger then other countries? Where are the expenses going? Its not like people in those countries don't have an iPad or iPhone.

[Rathji]

I plan on working until I am physically or mentally incapable.

If I spent all day at home with the wife, I think she would file for divorce.

[missdpuck]

Phan, the people I'm talking about are not in your financial bracket.
These are blue-collar people who really need to realize their financial limits.

[Northendzone]

Originally Posted by Slava

...now people have this ridiculous idea of retirement at 55, and living (and living as well or better than when they worked in many cases!) until 95. In other words, they will work say from 20-55 or 35 years, and support themselves for 40 years while not working.e.

This is my plan for retirement, except I plan on doing the deed daily and continuing to listen to rap music.......

[missdpuck]

Originally Posted by Northendzone

This is my plan for retirement, except I plan on doing the deed daily and continuing to listen to rap music.......

If one of the Young Cannibals doesn't kill you off first.

Just kidding people!

[missdpuck]

Originally Posted by MarchHare

You don't even need to consider incidentals like that. The biggest reason it's more expensive for young people today than it was for the baby boomers is because the cost of two of the biggest expenses facing 20-somethings, post-secondary education and their first home, have increased far more rapidly than the rate of inflation.

Yeah well how do you think I feel when hear oldtimers talking about paying 37 grand for a really cute house, 500 bucks for a top of the line car.

I guess it's just human nature to kill the previous generation off lol
while they make it miserable for the next one

[RougeUnderoos]

Originally Posted by Buff

I know a guy who "retired" at the age of 54. He sold his business and was able to live off the profits for the rest of his life. He got bored quickly and less than a year later he was working for a friend. Then he tried to retire again a couple of years later but was still bored, so back to work he went. Then his daughter got into massive legal battles with her ex over custody and visitation rights over her kid. She didn't learn a damned thing about money management from her parents so daddy paid for all her legal fees. The guy is now 70 and still working because he needs the money. He has paid every single legal fee for his daughter. Bought her a house and car and anything else she needs because she doesn't know how to budget money.

In the end, a financial responsible person made a lot of bad decisions with his money to help out his daugher, and now he is broke and living payday to payday probably never going to retire, because he actually wants to be retired now, but can't afford to.

So I take it the daughter is single?

[Dion]

Originally Posted by MarchHare

You don't even need to consider incidentals like that. The biggest reason it's more expensive for young people today than it was for the baby boomers is because the cost of two of the biggest expenses facing 20-somethings, post-secondary education and their first home, have increased far more rapidly than the rate of inflation.

I wonder if today's generation will ever have to deal the housing market collapsing and boomers losing thier homes. Or the double digit interest borrowing rates boomers faced in the 80's.

My parents first home cost them $7,500 and my father had to borrow money for a down payment while making a good income as a project manager of a construction company.

[MarchHare]

Originally Posted by missdpuck

Yeah well how do you think I feel when hear oldtimers talking about paying 37 grand for a really cute house, 500 bucks for a top of the line car.

The difference is that the prices your generation paid for vehicles and housing were roughly in line with your parents' generation when adjusted for inflation. The prices 20-somethings are paying today for housing and education are much greater than what was paid by previous generations, even after inflation is taken into account.

Source: http://www.theglobeandmail.com/globe...rticle4105604/

All young adults who think they’re getting a raw deal in today’s economy, let me tell you about how it was back in my day.

In 1984, my final undergraduate year of university, tuition cost more or less $1,000. I earned that much in a summer without breaking a sweat.

When I went looking for a new car in 1986, the average cost was roughly half of what it is now. It was totally affordable.

The average price of a house in Toronto back in 1984 was just over $96,000. I wasn’t buying just then, but it’s worth noting that the average family after-tax income back then was close to $50,000. Buy a first home? Easy to imagine for new graduates of the day.

I had it easier than today’s twentysomethings, and I have no problem saying so. But quite a few others can’t see what all the fuss is about when it comes to the financial concerns of today’s young adults.

[...]

Today, financial self-sufficiency is impossible without taking breaks from school to work. The Bank of Canada’s handy inflation calculator tells us that my $1,000 tuition back in 1984 would cost $2,028 today if it increased just by the inflation rate annually. But according to Statistics Canada, the latest read on average tuition fees is $5,366.

In Ontario, the minimum wage is $10.25. A student who puts in a 40-hour work week for 12 weeks would stand to make about $4,900. That’s a sizable shortfall on tuition, never mind the cost of student fees, books and living expenses. As a parent of an 18-year-old heading to university out of town next year, I can tell you that budgeting $18,000 to $20,000 per year is prudent.

Buying a house is another point where the experience of older Canadians is unlike what today’s younger generation faces. Canadian Real Estate Association data show the average national price of a home in mid-1984 was $76,214. If houses kept up with inflation – and that would be a pretty good result all on its own – the average house would now cost $154,587. In April, the actual average was $369,677.

That’s an annualized gain of 5.8 per cent across the country. In cities like Toronto and Vancouver, the yearly increases are even more pronounced.

House prices themselves are an abstract number – the real question is how affordable a home is. Data from a 2011 Conference Board of Canada study on income inequality shows the average family after-tax income in 1984 was $48,500. In 2009, the latest date included in the study, income levels had risen to $60,000. In 1984, a house might have cost a family 1.6 times its annual income. Today, we’re looking at a multiple of something around six.