The Death of Retirement

Chickereeeee

uk1 wrote: »

Didn't that trend start with the baby boomers rather than now? The last generation I recall that mum stayed at home would have been mum's in the 50's rather than late 60's onwards.

Jeff

Started maybe in the '60's, but only much more recently with full time jobs, for a significant proportion of their life, and at comparable salaries to men.

C

Chickereeeee

Malthusian wrote: »

It's not at all compulsory. It's because expectations have been raised. People now expect the kind of house and luxuries which require a dual income to pay for.

You are still perfectly free to have one income and one housewife/husband as long as you don't expect the same size house / number of kids / Sky TV / broadband speed / holidays abroad etc etc etc as a family where both parents choose to work.

Yes not strictly compulsory, but often required if you want a house anything like comparable to e.g. what your parents had at the same age. (Talking the SE here).

And as per the thread subject, you wil need two pensions (or a pension each) in the future...

C

Chickereeeee

saver861 wrote: »

Its all about image today .... much more so than the past .... and image is costly!

Even with two incomes it still does not suffice for many ....

I think you may be out of touch, or do not live in the SE....

The lowest price 2 bed flats need two substantial incomes in London, and not much less outside.

C

westv

Come the global zombie apocalypse annuity rates will rocket.

jamesd

kidmugsy wrote: »

It's the old problem, then, that companies are run in the interests of the bosses not of the shareholders. Throughout my life I have never seen the company-hating side of politics put forward any intelligent suggestion for reform of corporate governance. Instead they repeat nineteenth century non-solutions to non-problems.

To some extent but the share price is also likely to change in response to the results so the shareholders are also likely to be better off from dumping the defined benefit pension.

RickyB2000

saver861 wrote: »

Its all about image today .... much more so than the past .... and image is costly!

Even with two incomes it still does not suffice for many ....

Hmm, but how much did people in the past need to pay for their pensions? I used to be in a CARE scheme. 5% of salary. Now I am in a DC scheme. To get the same income I have to pay in around 20%+ of salary.

My parents bought a house in the eighties and within a couple of years, inflation had made the payments go from very difficult to very easy. Today, inflation is no help to those with large debts.

Is it costly. My parents bought a computer in the late eighties. I bet as a proportion of salary I could buy 5 computers today. There is more stuff around, but it is a lot cheaper than it used to be. So of course people have more of it.

I struggle to buy into the idea that 'image' is the cause of 30/40 somethings still living at home with their parents.....

saver861

RickyB2000 wrote: »

My parents bought a house in the eighties and within a couple of years, inflation had made the payments go from very difficult to very easy. Today, inflation is no help to those with large debts.

Many bought houses in 80's and 90's and found themselves with negative equity. Unemployment in the 80's hit 12%. A lot of people without a job, prospects and a dire outlook. Current unemployment rate 4.9%. I'd rather be looking for a job now than in the 80's.

Anybody telling you it was rosy back then, check em out!

RickyB2000 wrote: »

I struggle to buy into the idea that 'image' is the cause of 30/40 somethings still living at home with their parents.....

Disposable income has risen steadily since the 80's. Many are indeed stuck with parents though which will be largely geographical based. However, equally it depends to what extent 30 somethings are prepared to give up to get their property. There are many who's priority is the car, holidays etc etc.

RickyB2000

saver861 wrote: »

Many bought houses in 80's and 90's and found themselves with negative equity. Unemployment in the 80's hit 12%. A lot of people without a job, prospects and a dire outlook. Current unemployment rate 4.9%. I'd rather be looking for a job now than in the 80's.

Anybody telling you it was rosy back then, check em out!



Disposable income has risen steadily since the 80's. Many are indeed stuck with parents though which will be largely geographical based. However, equally it depends to what extent 30 somethings are prepared to give up to get their property. There are many who's priority is the car, holidays etc etc.

My parents would never claim it was easy for them, they were hit with negative equity and it was hit or miss some years whether they would be able to pay their morgatage due to lack of work. So I am not trying to claim it was 'easy' for them compared to today. But if you did hang on (and many did) then it didn't take long for 'huge' debts to become worthless. Of course it all depends on where you are in the economic cycle as to whether you 'win' or 'lose'. My point is I think it is more complicated than to claim that everything is so much better today and the reason young people don't have houses and a pension is simply because they won't save like their parents did.

Where is this disposable income? Who has it? According to HSBC, 18-30 year olds have the least disposable income and are saving the most, many towards a house. My parents bought a house on a single low income in their early twenties. It was tough, but they could borrow enough to buy a house not long after starting work. So for them 'saving' for a house was enforced on them by virtue of the fact they could buy a house straight up. If they had to save 10 years salary for a deposit up front, watching prices constantly spiral up at the same time, I wonder what they would have done.

Both had it hard, my main point is that I think the 'they bought an iPhone last year that is why they don't have a house or a pension' is for me a simplistic way of (usually older people who are already in a comfortable position) explaining something that in reality is much more complex.

EDIT: of course, young people why say they don't want a house and spend their money travelling - and I do know some of these - they do make that choice. I do wonder though if they could buy a house within a year or so of starting work their attitudes would be different (or they would do the travelling and then come back and fairly quickly buy a house)

saver861

RickyB2000 wrote: »

Both had it hard, my main point is that I think the 'they bought an iPhone last year that is why they don't have a house or a pension' is for me a simplistic way of (usually older people who are already in a comfortable position) explaining something that in reality is much more complex.

Nothing is ever that simple.

However, 'older people already in a comfortable position' got there usually by their own means - it did not happen by accident!! That's my point.

A few might have been born with a silver spoon but the rest grafted for it - if they a) got older and b) are in a comfortable position. It was no easier then than it is now. The number of 30 somethings still living at home might be roughly comparable to the number of people who lost their house and landed with a load of negative equity in the 80's. The difference being at least those still living at home did not suddenly find themselves with a big balloon of debt with nothing to show for it.

It ain't meant to be easy. That's not how it works. Creativity is born from necessity.

RickyB2000

saver861 wrote: »

Nothing is ever that simple.

However, 'older people already in a comfortable position' got there usually by their own means - it did not happen by accident!! That's my point.

A few might have been born with a silver spoon but the rest grafted for it - if they a) got older and b) are in a comfortable position. It was no easier then than it is now. The number of 30 somethings still living at home might be roughly comparable to the number of people who lost their house and landed with a load of negative equity in the 80's. The difference being at least those still living at home did not suddenly find themselves with a big balloon of debt with nothing to show for it.

It ain't meant to be easy. That's not how it works. Creativity is born from necessity.

I'm not sure I agree. I think most people get there by accident, either today or yesterday. Sure, some people plan and ensure they are ready to retire early. I very much doubt this is a majority of people (including old, comfortable people). For example, most people I know just pay what their employer suggests they should pay into a pension. Yesterday that offered a 2/3 final salary pension. Today it may do if growth returns, but most indicators is it will fall far short. The same with housing, just sitting on a house has paid hamsomley for those who bought pre-2000 (at least to date, who knows what will happen - and I know you have to sell it to realise the gain).

We have yet to see what will happen this time around. Those young people who have taken on a massive amount of debt over the past 10 years may yet get their comeuppance.

Ultimatley, it wasn't easy for either generation. It is the view that it is so much easier today if young people just saved a bit more that annoys me. It is not as simple as that, just like it was not as simple as that in the 80s.