Still Working (and winning) at Age 82

[denverd0n]

Originally Posted by Mike OReilly

It is the privileged few who have any real choice.

I agree completely with everything you said in the above post, except for this last sentence.

I haven't had any great privileges in my life. I've worked for middle-class salaries for 40+ years now. I had never had a salary that got into the 6-figure range until last year. I have been the sole income for my family of three for more than 30 years now.

Despite that, I have IRA and 401k accounts that amount to almost 18 times my current annual salary. That is what is going to allow me to retire before 65, and enjoy a very comfortable lifestyle for the rest of my years.

How do we come by the ability to make this choice? Simple. We live within our means. We have always enjoyed comfortable homes and reliable cars, but we have never stretched our budget so far to get these things that we had to compromise on our savings goals. We have never lived an extremely frugal lifestyle, but we have also never let ourselves get into the mindset that we need to "keep up with the Joneses."

To quote the character of Wilkins Micawber, from Charles Dickens' "David Copperfield"...

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty nought and six, result misery."

Dickens had it figured out 170 years ago, and it still applies today. Live within your means and set aside what you can, and it's not that hard to have a real choice. If that makes you one of the "privileged few," my advice is to wear the badge with pride. I do.

[Mike OReilly]

Originally Posted by denverd0n

...I haven't had any great privileges in my life. I've worked for middle-class salaries for 40+ years now. I had never had a salary that got into the 6-figure range until last year. I have been the sole income for my family of three for more than 30 years now.
...
Dickens had it figured out 170 years ago, and it still applies today. Live within your means and set aside what you can, and it's not that hard to have a real choice. If that makes you one of the "privileged few," my advice is to wear the badge with pride. I do.

I agree with most of what you say, but your income already puts you in the "privileged few" category. I bet this is the case for most people here.

You'll get no argument from me regarding frugality and living within one's means. It's the only way I can afford to live the lifestyle I have, and my top earning days weren't even 1/2 of yours .

Choices matter, but some of us have fewer options than others. The reason most people are working longer is because they have to.

[Lake-Effect]

Originally Posted by Mike OReilly

Choices matter, but some of us have fewer options than others. The reason most people are working longer is because they have to.

You do have to wonder a bit about a world where "progress" has resulted in two incomes being required to raise a family when it used to only take one, and where suggesting the retirement age should be raised is considered a reasonable idea.

[denverd0n]

Originally Posted by Lake-Effect

You do have to wonder a bit about a world where "progress" has resulted in two incomes being required to raise a family when it used to only take one...

The difference is what people WANT, not what they NEED.

40 years ago the average starter home was around 1,000 square feet. Now it is over 2,000. 40 years ago you had one telephone in your house, and one TV. The TV service was free, over the air (which is still available in most places). 40 years ago it was a rare family that owned two cars. Now it is a rare family that doesn't (often more, with kids being given cars when in their teen years).

Any family that is willing to live without all of the modern accoutrements, live in a small house, one car, TV over the air, no internet, no cell phone with unlimited data service, could very easily live on one income. You wouldn't be keeping up with the Joneses, but you would still be living a perfectly comfortable life.

It is only our desires for all of the luxuries, all of the latest conveniences and gadgets, that force families to need two incomes.

Edit: Obviously ol1970 and I were posting at the same time!

[ol1970]

Originally Posted by Lake-Effect

You do have to wonder a bit about a world where "progress" has resulted in two incomes being required to raise a family when it used to only take one, and where suggesting the retirement age should be raised is considered a reasonable idea.

Yes, but we all make the decision that get us there. 50 years ago the average size of a family home that was considered normal was 1200 sqft, now the 2,500 sq/ft homes are considered a "starter" house. There were not $1,000 cell phones to replace every 2 years and $200/month cable and internet to pay.

I have to say the notion of a 2 income family being necessary is total bs, people feel they cannot get by without all the "stuff" so they have somebody else raise their kids. Thankfully I grew up in a 1,200 square foot home family of 5 where my mother stayed home with the kids and we had dinner as a family every night and were happy as can be.

I drove my first few cars to 200,000+ miles each and never saved less than 50% of my income. I used the money to invest instead of taking the same vacations and having all the "stuff" my friends had in their 20's and early 30's. Now, 30 years later people I graduated with are panicked thinking about retirement and have next to nothing to show for it, but I was able to retire over a decade ago because of a little delayed gratification, avoiding lifestyle inflation, and discipline.

I've had this conversation with a number of people who disagree, and I've offered to review their budget and show them exactly how they can get there. Nobody ever takes me up, because they really would just rather bitch about it than actually do the heavy lifting.

[denverd0n]

Originally Posted by Mike OReilly

I agree with most of what you say, but your income already puts you in the "privileged few" category. I bet this is the case for most people here.

Of course, it depends on how you define "privileged few." For most of my life my income has been just barely above median for the United States. Median income is currently $60k per year. Back when the median was around $30k I was making about $32k. By the time the median got up to $40k, I was making about $45k. In the last 10 years of my career my income has climbed higher. Right now I am at about the 70th percentile. Meaning, of course, that 30% of the people in the U.S. make more than I do. So, I guess, if you define the "privileged few" as being the top third, I will accept that, and remind myself that I have a whole lot of company there with me.

[barnakiel]

Originally Posted by Lake-Effect

You do have to wonder a bit about a world where "progress" has resulted in two incomes being required to raise a family when it used to only take one, and where suggesting the retirement age should be raised is considered a reasonable idea.

Hmmmm. imho:



INCOME



When a person lives alone, one income (one job) should be all it takes. Y/N

When we form a couple, there should be 2x1=2 jobs required. Y/N

By a family I understand you mean a couple and a kid or more kids. Well then 3 and more incomes should be required. Y/N


So in many states, the government (taxpayers with no kids) provide the 3rd, 4th and 5th income to families - by funding schools, hospitals, grants, cash and other forms of support to very many families. (In some states - to all families).



Now when you ask for one income to be enough - I am afraid this is not in line with how the vast majority of people today live. And I think it is vastly unfair to taxpayers who elected to have no children.



Also, one income implies one person (nearly always the man) is economivally privileged, which is a known reason to the infamous "women in church and kitchen" that marred so much of our earlier history. It is also one of sources of men-women pay inequality.



RETIREMENT



Since we now live to (US data) 78.93 vs 68.14 back in 1950, retirement age should be raised accordingly. Although, this is further complicated by two facts:
- men benefited from LOWERING retirement age in years 1960-1990,
- women kept on going longer and longer in their jobs thru the whole 62-2020 period.
(sic!)



Image attached.


I do not think we are, except for the elected affluent few, to have one income families or early retirements.



http://squaredawayblog.bc.edu/wp-con...rement-age.png


To achieve what you long for, and keep it all a fair game, we would need to transit into 'no income tax, full consumption tax' models. Something that, although fair (or just fairer) and simpler, is feared if not hated, by most politicians the world over.



Stay safe,
b.

[Mike OReilly]

This discussion will quickly lead to the closure of this thread, because it inevitably becomes political. I'll just say that there is acres of research to show the basic cost of living in our societies has become more costly. Here's just one overview article from Investopedia -- certainly not some left leaning publication.

I'll quote the intro and the extro, but you should read the whole article. It specifically addresses claims made here.

https://www.investopedia.com/ask/ans...-years-ago.asp

Many people feel that, even with full-time work, they simply don't have the income necessary to live the lives they want. Even when it comes to just the basic essentials such as food, rent, car payments, or tuition fees, it can often seem that a dollar today just doesn't buy what it should. As it happens, this isn't just economic paranoia. In fact, the prices for daily goods have increased considerably since 1998, above and beyond what can be accounted for by inflation, giving the dollar much less buying power than it had just 20 years ago.

...
The Bottom Line

Taken together, these figures indicate that, while the average person is still making the same amount of money when accounting for inflation, prices for many of the daily necessities have gone up considerably, which means that each dollar earned does, in fact, buy less than it did 20 years ago.

[Mike OReilly]

Originally Posted by denverd0n

Of course, it depends on how you define "privileged few." For most of my life my income has been just barely above median for the United States. Median income is currently $60k per year. Back when the median was around $30k I was making about $32k. By the time the median got up to $40k, I was making about $45k. In the last 10 years of my career my income has climbed higher. Right now I am at about the 70th percentile. Meaning, of course, that 30% of the people in the U.S. make more than I do. So, I guess, if you define the "privileged few" as being the top third, I will accept that, and remind myself that I have a whole lot of company there with me.

I think you're quoting median household income, not personal (individual) income. The median personal income in the USA is around $33K today. The median household income is about $63K.

https://fred.stlouisfed.org/series/MEPAINUSA646N

https://fred.stlouisfed.org/series/MEHOINUSA646N

denverd0n, it's OK to be wealthy. I bet most CFers are. It's just something we should all remember when making claims about others. Not all are as privileged as most of us here.

[denverd0n]

Originally Posted by Mike OReilly

Not all are as privileged as most of us here.

I can most definitely agree with that!

[thomm225]

So, in my head I was able to "retire" in 1996 when I moved back to the coast. This time it was the Gulf Coast and I lived on the water

It was a dream come true that I had planned to do in retirement mid 60's.

All I had to do at my day job was run a contract with usually around 35-44 employees that I hired. (electronics/computer techs, electricians, and fire fighter trainer techs)

The rest of the time I sailed or raced my sailboats and was a single parent.

I got to observe the cruisers. Hang around at all the docks, etc and check out the monohulls rather than wait until I was in my 60's to do all that. We even had a dock at our apartment where we'd all (the sailors) meet and talk sailing. Even though I was a beach cat racer guy, I was accepted and learned quite a bit from these guys

So now there is no rush is the way I see it.

I maintain the family home and have family living there now and have an apartment close to work.

When I retire, I'll be on the boat a lot and probably head South after a few shakedown cruises around the Outer Banks and back up here

I use this boat until it gets too small then I'll look for another one and stay at the house for a few months while I prep it and test it again up here in the bay and ocean.

[Lake-Effect]

Originally Posted by denverd0n

The difference is what people WANT, not what they NEED.

40 years ago the average starter home was around 1,000 square feet. Now it is over 2,000. 40 years ago you had one telephone in your house, and one TV. The TV service was free, over the air (which is still available in most places). 40 years ago it was a rare family that owned two cars. Now it is a rare family that doesn't (often more, with kids being given cars when in their teen years).

Any family that is willing to live without all of the modern accoutrements, live in a small house, one car, TV over the air, no internet, no cell phone with unlimited data service, could very easily live on one income. You wouldn't be keeping up with the Joneses, but you would still be living a perfectly comfortable life.

Observations:

• People can get by without indoor plumbing as well. Many of the things you're mentioning, like Internet, are NOT frills, they're pretty much mandatory, to be efficient and to get ahead. Cellphones are in that category too. In most of the world, you're disadvantaged if you don't have Internet or a cell phone. And how many places in the US can one get to work without a car?
• One average middle-class income might support a small family, but not further down the ladder, or near a big city. Outside of unionized workplaces, most manufacturing jobs won't support a family. Gig-jobs - you need more than one to support ONE person...
• The western economy is still mainly a consumer economy. If people don't buy stuff, your stocks won't earn dividends. Listen to everyone singing the blues if car sales sag by 5+%.
• And finally, progress. NEEDING two salaries to raise a family, paying someone to watch your kids, working longer hours, and waiting longer to retire, aren't what I'd call progress.

This is not to fault those who want to keep working, for whatever reason. More power to them, especially if they're also mentoring and teaching the young.

/derail

[ol1970]

Originally Posted by Lake-Effect

Observations:

• People can get by without indoor plumbing as well. Many of the things you're mentioning, like Internet, are NOT frills, they're pretty much mandatory, to be efficient and to get ahead. Cellphones are in that category too. In most of the world, you're disadvantaged if you don't have Internet or a cell phone. And how many places in the US can one get to work without a car?
• One average middle-class income might support a small family, but not further down the ladder, or near a big city. Outside of unionized workplaces, most manufacturing jobs won't support a family. Gig-jobs - you need more than one to support ONE person...
• The western economy is still mainly a consumer economy. If people don't buy stuff, your stocks won't earn dividends. Listen to everyone singing the blues if car sales sag by 5+%.
• And finally, progress. NEEDING two salaries to raise a family, paying someone to watch your kids, working longer hours, and waiting longer to retire, aren't what I'd call progress.

This is not to fault those who want to keep working, for whatever reason. More power to them, especially if they're also mentoring and teaching the young.

/derail

I think a big part of the problem is that there is no system in place to teach kids about financial literacy, it falls upon the parents or if lucky a mentor in their life. With 70% of the people in the USA having less than $1,000 in savings it is not hard to understand why the cycle continues.

We teach fluffy bs classes in high school that are mandatory like home economics, but nobody ever explains to a kid the concept of compound interest, budgeting, or any of the basics of how to succeed financially. Instead we tell them they need to get into college and get a degree. Not how to look at it as a return on investment. We probably all know people who have $100k in student load debt that they incurred to get a $40k/year job and then say they can't afford to save. It is hard to totally blame the kid, because adults were the ones that should have guided them. But now we are bailing out universities with tax dollars that have 10 billion dollar endowments, and have raised their tuition at a pace 3 times that of normal inflation. The value proposition is no longer there...but there are people clamoring for the forgiveness of student loans instead of solving the problem and putting it back on the universities that sold a product that isn't worth what they charge, but the sheep keep coming to slaughter.

Thankfully I have mentored a few families and young men and women along the way and its always nice when they reach back out like when the COVID stuff started and say..."wow, thank you so much for slapping some financial sense into me. This situation is no big deal because I'm debt free and can handle anything life throws at me."

[valhalla360]

Originally Posted by Lake-Effect

Observations:

• People can get by without indoor plumbing as well. Many of the things you're mentioning, like Internet, are NOT frills, they're pretty much mandatory, to be efficient and to get ahead. Cellphones are in that category too. In most of the world, you're disadvantaged if you don't have Internet or a cell phone. And how many places in the US can one get to work without a car?
  
  In the western world, the transition from outhouse to indoor plumbing never forced dual income households.
  
  As far as internet and cellphones...there are much cheaper options. Average cell phone bill for a family is north of $150/month with $300-500 for per phone every 2 years. You can get a basic smart phone for $20 with a $30 pay as you go plan. Cell phone for kids are simply not necessary (or make them get a job and pay for it if they want one).
  
• One average middle-class income might support a small family, but not further down the ladder, or near a big city. Outside of unionized workplaces, most manufacturing jobs won't support a family. Gig-jobs - you need more than one to support ONE person...
  
  Lower income families have always struggled (go back to the industrial revolution times and stories of the poor had both working).
  
  Also, the data can be a bit misleading. Back in the day when farmers made up a big portion of the population, women did a lot of work on the farm but since they never got a paycheck, so they never showed up as working. Similarly, in urban areas, poorer women would pick up cleaning, sewing and similar jobs, often paid cash to bring in some extra money but wouldn't show up officially as working.
  
  With $10/hr minimum wage in most areas, that translates to around $40k/yr if working full time. While we make more, that's about what we spend for a very comfortable lifestyle.
  
  Also, most couples, one of them makes significantly more than the other and at least in the USA, taxes get progressively higher the more you make as a couple, so loss of an income doesn't typically translate into anything close to a 50% reduction in available money for the family.
  
  Don't live in expensive areas if they aren't paying you enough.
  
• The western economy is still mainly a consumer economy. If people don't buy stuff, your stocks won't earn dividends. Listen to everyone singing the blues if car sales sag by 5+%.
  
  If tomorrow, everyone switched and became fiscally responsible, the economy would crash.
  
  But once the transition is made, you would find people have more money to buy stuff and the economy would prosper as a result. Only the loan industry would suffer in the long run by people being more fiscally responsible. Since an overnight change is highly unlikely a gradual transition to fiscal responsibility, isn't a real threat to the economy.
  
• And finally, progress. NEEDING two salaries to raise a family, paying someone to watch your kids, working longer hours, and waiting longer to retire, aren't what I'd call progress.
  
  Agreed, it's not progress...its' a choice.
  

This is not to fault those who want to keep working, for whatever reason. More power to them, especially if they're also mentoring and teaching the young.

/derail

If it makes someone happy continuing to work, agreed, more power to them but the majority of families can get by just fine on a single income and that hasn't really changed.

[valhalla360]

Originally Posted by ol1970

I think a big part of the problem is that there is no system in place to teach kids about financial literacy, it falls upon the parents or if lucky a mentor in their life. With 70% of the people in the USA having less than $1,000 in savings it is not hard to understand why the cycle continues.

We teach fluffy bs classes in high school that are mandatory like home economics, but nobody ever explains to a kid the concept of compound interest, budgeting, or any of the basics of how to succeed financially. Instead we tell them they need to get into college and get a degree. Not how to look at it as a return on investment. We probably all know people who have $100k in student load debt that they incurred to get a $40k/year job and then say they can't afford to save. It is hard to totally blame the kid, because adults were the ones that should have guided them. But now we are bailing out universities with tax dollars that have 10 billion dollar endowments, and have raised their tuition at a pace 3 times that of normal inflation. The value proposition is no longer there...but there are people clamoring for the forgiveness of student loans instead of solving the problem and putting it back on the universities that sold a product that isn't worth what they charge, but the sheep keep coming to slaughter.

Thankfully I have mentored a few families and young men and women along the way and its always nice when they reach back out like when the COVID stuff started and say..."wow, thank you so much for slapping some financial sense into me. This situation is no big deal because I'm debt free and can handle anything life throws at me."

Actually, Home Economics is exactly what would cover budgeting and finances. But I don't think it's been mandatory for a very long time (at least it wasn't for me back in the 1980's). Unfortunately, I think it became a cooking and sewing class that became a kind of pre-MRS degree program so it fell out of favor.

I agree whole heatedly, if you got debt free with an emergency fund, this whole covid thing is a concern but you are left in a much better position to weather it.