America’s 60-Year-Olds Are Staring at Financial Peril

[easyrider]

The Fourth Turning for a generational analysis of modern history - that's where these concepts are detailed out

I watched a video on the 4th turning concept. The ideas seemed like fiction but looking back to other generations the ideas seem sound with the exception of the idea that millennial's will be the "hero" generation.

Did you read the book ? I saw it on Amazon the other day and almost bought it.

Bill

 

[WaikikiFirst]

government expenditures - massive deficit spending - most all of which occurred under Boomer leadership

So much misinformation in such a short paragraph. Such density.
The biggest lovers of big govt are the younger generations.
The pols who love to spend the most get the most votes from the younger generations.

 

[easyrider]

My comments were more about changing corporate pensions and then corporate pensions disappearing

I remember buying a house and people saying congrats on getting a 10% mortgage rate !

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I remember the high interest rates. Our first property purchase had a loan rate of 12%. About 6 months after buying that house Mt St Hellens covered it with ash which ruined the roof. I had some friends help me clean the roof off, tear the roof off and replace the roof. This was the beginning of my contracting career.

Bill

 

[WaikikiFirst]

beginning of my contracting career

making lemonade.
After graduating undergrad, I got a car loan at 22%. You betya I ate sandwiches and paid that $&!% off in record time.
Oh, and nobody forgave my student loans. Course, I majored in something useful so I survived.
Poor poor whatever they call themselves, the # & the breadth of govt giveaways today is beyond belief ... and then they whine.

 

[HitchHiker71]

I watched a video on the 4th turning concept. The ideas seemed like fiction but looking back to other generations the ideas seem sound with the exception of the idea that millennial's will be the "hero" generation.

Did you read the book ? I saw it on Amazon the other day and almost bought it.

Bill

I’ve read all three books. The first book called Generations was first published in 1993 IIRC, then the Fourth Turning was published in the late 1990s, and the final book, The Fourth Turning is Here, was published this year.

To the best of my knowledge I’ve not found anyone else that has dedicated their life’s work to this type of analysis, and I’ve looked quite a few times over the years.

To be clear, when I use terms like the Moralist Boomers - that’s a reference to the generational archetype, it’s not my term in other words. There are four archetypes: Artists, Prophets, Nomads, Heroes. The Boomers are the Prophet (Moralists) archetype. The silent generation were the artists, Gen-X are nomads, and GenZ are artists. The entire series is worth reading, but you don’t really have to read the earlier books to read the current book either. They are long reads with a lot of textbookish information - not exactly fun reads in other words - but it makes you think.


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[HitchHiker71]

You might also read Spengler's Decline of The West . There are bigger cycles than the Turning cycles.

P.S. Spengler is a very difficult writer to assimilate. They were written initially in 1913, published in 1918 (in German).

It’s in my Kindle queue - however my free reading time isn’t what it used to be like in times past. I used to read late into the evening before falling asleep, nowadays I’m asleep after about 10 minutes of night reading unfortunately.


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[jp10558]

making lemonade.
After graduating undergrad, I got a car loan at 22%. You betya I ate PB&J sandwiches and paid that $&!% off in record time.
Oh, and nobody forgave my student loans. Course, I majored in something useful so I survived.
Poor poor whatever they call themselves, the # & the breadth of govt giveaways today is beyond belief ... and then they whine.

You miss the point that cars are averaging $60,000 new today. Loans are over 84 months on average to make the monthly payment even possible. Clearly purchasing power hasn't kept up, if it had, we'd still have the 24 month car loan, but no one can make those payments now.

Houses that Boomers were buying at $75,000 are $500,000 now. The interest isn't the issue, it's the principal.

Have you looked at the budget? ~38% is Social Security - that isn't going to Millennials and Zoomers today. Another ~ 35% is the military, also not widely loved by the younger generations.

Most people are pushing for *different* government spending, and raising taxes to make up for shortfalls from all the tax cuts over the last 40-50 years.

There's also plenty of younger people who want government out of their lives - just in different areas.

 

[HitchHiker71]

So much misinformation in such a short paragraph. Such density.
The biggest lovers of big govt are the younger generations.
The pols who love to spend the most get the most votes from the younger generations.

Past presidents from 1992-2020 were all Boomers - during all of the years the national debt has exploded. Same with the vast majority of Congress. Biden just sneaks into the Silent generation by the numbers. Boomers have by and large been at the helm of both corporate America and the state and federal governments during the debt explosions, and have voted for legislation and corresponding repetitive debt increases that have produced the debt problems we will now be left to resolve, and resolve them we will, but it won’t be easy by any means. These are facts that cannot be disputed.

Moralists by and large tend to care more about the relative ethics of what is right as opposed to what is needed or practical. Practical solutions will become the rule for the next generation of government leaders and corporate America, since the debt bubbles will eventually burst, after which practical solutions become necessary by design since all other choices (the choices we have made for the past 25 years and continue to make today) will no longer be available to us.


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[jp10558]

I’ve read all three books. The first book called Generations was first published in 1993 IIRC, then the Fourth Turning was published in the late 1990s, and the final book, The Fourth Turning is Here, was published this year.

To the best of my knowledge I’ve not found anyone else that has dedicated their life’s work to this type of analysis, and I’ve looked quite a few times over the years.

To be clear, when I use terms like the Moralist Boomers - that’s a reference to the generational archetype, it’s not my term in other words. There are four archetypes: Artists, Prophets, Nomads, Heroes. The Boomers are the Prophet (Moralists) archetype. The silent generation were the artists, Gen-X are nomads, and GenZ are artists. The entire series is worth reading, but you don’t really have to read the earlier books to read the current book either. They are long reads with a lot of textbookish information - not exactly fun reads in other words - but it makes you think.


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The summaries of "The Fourth Turning" make it sound like bunk to me. The idea that there's some grand generational cycle that is going to happen would need to somehow show a predictive ability that just... has never been shown. Also, for "reasons" they compare WW1 to the 90s - as less of a crisis than WWII which... I would call pretty controversial myself. So there's also some evidence of massaging the framing of facts to fit the narrative they want rather than just looking at what happened.

When futuring flops: the case of The Fourth Turning

It’s important for futurists to examine flawed futuring work and learn from it. I’ve said this before, reflecting on my own forecasting misfires. I haven’t offered many criticis…

bryanalexander.org

is a seemingly excellent critique any paragraph of which kind of makes me discount the book and ideas.

 

[kanerf]

Turn 65 next month. Still working full time. Lead engineer so the pay is good. Have a large IRA, a pension, and current 401K from my job. Planning on working until 66 and 10 months which is full retirement for me.

 

[WaikikiFirst]

cars are averaging $60,000 new today

In large part because the younger gens demand that cars do all kinds of useless stuff. Do you know the weight of the avg car that goes to providing completely unnecessary (oh, HIGHLY optional) functions? And they want cars to "save the world", "save the whales". Cars aren't cars anymore. They are political statements, as is pretty much everything the younger gens get their mitts on.
The car I bought in 1982 could probably be built for < $25000 today.

try asking Detroit how much they could build a car for if you rolled back the GOVERNMENT REGULATIONS to what existed in 1980 or '85 or '90? Go ahead.
There was this thread recently about inflation and someone actually asked "How does GOVERNMENT cause inflation?" OMG. it is beyond belief. They vote FOR inflation in almost everything they do and then they complain about inflation.

 

[WaikikiFirst]

Past presidents from 1992-2020 were all Boomers

You repeat the same ill-informed thing over and over. I sure as bleep wish the presidents were younger, but guess what, the younger gens vote for the pol with the highest spending ticket in almost every election, federal or in most parts of the country, so learn how to separate outcome from process.

Who do you think would be elected in 1992? How old does a potus have to be? Repeating the same specious stuff doesn't win points

 

[WaikikiFirst]

and resolve them we will, but it won’t be easy by any means. These are facts that cannot be disputed.

Resolve them we will. Sure. LMAO. Whenever I see a bumper-sticker praying for more govt spending, it is always one of you "we" driving or getting in or getting out. It is painful to see the specious slogans the younger gens actually believe. (Or DO they believe them? Or is it just "tax and wealth transfer"?)

Facts? "We will resolve them" is a fact? LMAO. Half of what you say are "facts", and those are poorly analyzed. The other half is just some strange soap-box rant. LOL.

 

[WaikikiFirst]

Practical solutions will become the rule for the next generation of government leaders

Do you even live in the USA???????????????????????????????????? It has been going the opposite direction for quite a while now.
Practical????????????? The US govt????????? State govt?????????????? Is this thing on????????????? Is there a full-moon and a super earthquake causing a time-flux to some alternate reality?

"Facts" ...

 

[heathpack]

I’m 58. I’m not sure I’ll remain working for another 10 years, but if I do, I get a nice university pension. I’m required to contribute 6% of my salary. The amount I’ll get monthly if I get the pension, is equivalent to an $860,000 401k if I were taking 4% out per year. That will be a very sweet return on my investment if it happens!

 

[Ralph Sir Edward]

Ladies, gentlemen, and others - please remember why this thread exists. It is to discuss investing, not political philosophy. I don't want it shut down because of "scope creep"!

 

[travelhacker]

There's a lot of generational conflict going on in this thread. I'm a millennial for what it's worth so feel free to ignore me.

The general rule is that you need to save enough money so that you can live off 4% of the amount that you save for retirement. Right now, I have to plan as though Social Security won't be available for me when I retire in 25-30 years. With the birth rate plummeting, Social Security in a deficit in less than a decade, it's just not something I can plan on.

I feel like my wife and I could live on $80,000 per year in today's dollars. That means if I were 65 and wanted to retire, I'd need $2,000,000.

If inflation is 5% per year, to match the same standard of living I'd need to have $6.45M saved at retirement (and live off of $258,000 per year).

I'm on track to qualify for max social security which is currently $3822 (it's more if you wait for full retirement age) per month or $45,864. Using my example, I'd need to have just $682,720 so that I could withdraw the remaining $34136 per year.

In short, if we don't figure out social security, retirement will be a luxury that most people won't be able to afford within a generation.

 

[am1]

In short, if we don't figure out social security, retirement will be a luxury that most people won't be able to afford within a generation.

What jobs will there be for people of that age if most people are looking for the and if more are holding back their spending due to lack of funds?

 

[stmartinfan]

One of the changes that puzzles me is the escalation in home size that is happening in my suburban area. There is still quite a bit of open land here, but the majority of homes going in are selling for well over $1 million. They are lovely homes, with indoor sport courts for kids, 4 or more bedrooms, massive master suites, etc. But I can't figure out where all the buyers are coming from. Even if you're trading up from another house, the mortgage payment, taxes, etc. has to be a high number. I suspect that means there's no money going into long term savings.

 

[Ralph Sir Edward]

One of the changes that puzzles me is the escalation in home size that is happening in my suburban area. There is still quite a bit of open land here, but the majority of homes going in are selling for well over $1 million. They are lovely homes, with indoor sport courts for kids, 4 or more bedrooms, massive master suites, etc. But I can't figure out where all the buyers are coming from. Even if you're trading up from another house, the mortgage payment, taxes, etc. has to be a high number. I suspect that means there's no money going into long term savings.

Reminiscent of the 1970's housing era. It also makes me think about restaurant meals - more food to justify the higher overhead prices.

In the 1970s, buying as expensive of a house as you could buy was considered savings, as house prices were rapidly escalating. It was called "house poor". Basically a bet against inflation. This caused land prices to escalate, which required a high price to recoup the lot price. The way to justify that was to build an expensive house on the land. A vicious circle.

 

[travelhacker]

What jobs will there be for people of that age if most people are looking for the and if more are holding back their spending due to lack of funds?

Most of the people that I talk to my age (which is admittedly a pretty low sample size) are planning to work as long as they can.

The math works a lot better if you can work until you are 72-75 (and the 4% rule doesn't matter nearly as much at higher ages since you have less life left).

Who knows if they will be able to work until that age though.

 

[DrQ]

Most of the people that I talk to my age (which is admittedly a pretty low sample size) are planning to work as long as they can.

The math works a lot better if you can work until you are 72-75 (and the 4% rule doesn't matter nearly as much at higher ages since you have less life left).

If yo work to 69 or 70, you are increasing your benefit by 7% per year beyond your FRA AND you can salt more money into your retirement accounts. The additional Social Security takes pressure off your nestegg.

 

[joestein]

You miss the point that cars are averaging $60,000 new today. Loans are over 84 months on average to make the monthly payment even possible. Clearly purchasing power hasn't kept up, if it had, we'd still have the 24 month car loan, but no one can make those payments now.

Houses that Boomers were buying at $75,000 are $500,000 now. The interest isn't the issue, it's the principal.

Have you looked at the budget? ~38% is Social Security - that isn't going to Millennials and Zoomers today. Another ~ 35% is the military, also not widely loved by the younger generations.

Most people are pushing for *different* government spending, and raising taxes to make up for shortfalls from all the tax cuts over the last 40-50 years.

There's also plenty of younger people who want government out of their lives - just in different areas.

Cars do not average $60K today. I am looking for a car for my daughters to share.... There are plenty of decent cars in the mid to upper 20s.

Subaru Impreza/Cross Trek
Hyundai Elantra/Kona

Just to name a few.

There are also some in the low to mid 20s. like the Chevy Trax - which is well received - but my kids didn't care for it.

Plus homes that were $75K in the 80s are generally not selling for $500K. Home inflation has averaged around 4% annually historically. Look at the highs in 2006 and look at now - prices have risen about 4% annually over that time. The problem is perception. Housing dropped in price significantly in 2008 and then stayed flat for a while and then rose fast.

I grew up in a 3 bedroom garden style Co-Op in Howard Beach, Queens (a VERY good part of NYC). Value of home fluctuated between $100K and $65K for most of 80s and 90s. Today that apartment is selling in $300 - $350K. Yet many of the stand alone houses sell for over $1 million.

The problem is that many young people (obviously not all) want everything right now and expect it to be easy. Plus they are addicted to convenience, which is expensive, and love to play the victim. All things that are not helping them to grow financially.

 

[travelhacker]

If yo work to 69 or 70, you are increasing your benefit by 7% per year beyond your FRA AND you can salt more money into your retirement accounts. The additional Social Security takes pressure off your nestegg.

Yep -- but I'm 30+ years away from retirement...not sure we can count on any social security.

 

[Tia]

One of the changes that puzzles me is the escalation in home size that is happening in my suburban area. There is still quite a bit of open land here, but the majority of homes going in are selling for well over $1 million. They are lovely homes, with indoor sport courts for kids, 4 or more bedrooms, massive master suites, etc. But I can't figure out where all the buyers are coming from. Even if you're trading up from another house, the mortgage payment, taxes, etc. has to be a high number. I suspect that means there's no money going into long term savings.

two of those homes belong to relatives adult children in their 30's, both married and all making over 100K+ each . Corporations are the employers and they grew up in MSP area