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Re: Second wave of down economy

The US has something on the order of twice the retail square footage per capita compared to the runner up.

 

Massive overcapacity and the other huge problem for banks.

 

Not going away anytime soon.

 

Best, h

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Re: Second wave of down economy

What irks me most about his new parts is the surgeon's and hospital's take from the rest of us.  I have a doctor (orthopedist) who's been egging me on to get a new knee for almost five years. 

It is justifiable, but I feel not truly medically indicated.   I just tell him I do not think he can find me one bio-engineered better than the original.  He also has given me advice on taking out a disability policy before I get the replacement. 

 I told him I did not want to have to "play disabled" for the rest of my life...I love getting out and doing active things.  "Just help me stay as ABLE as I can be," is what I told him.  He replied that he has rarely heard that sentiment...usually, patients want him to declare them disabled.  It is that blatantly institutionalized. 

I agree that the WWII generation saved the world as we know it, and we owed them a debt of gratitude...I am just not sure it should have included what would have funded our own children's future. 

What is pulling down industry and government in this country today - along with overregulation compared to the competition - is a lot of pension funding, on top of Medicare and SS being paid to people who do not truly need it.  No one should be allowed to double dip.  Either a private, military or civil service pension, and only one per retiree. 

I do not want to put old people on an ice floe to strave and freeze to death - especially now that I am becoming one of them - but, I do think we need to stop this insanity.  Bill Maher did a funny routine last night on  a plate of food, showing three huge servings of fried chicken, mashed potatoes, and mac and cheese.  These represented defense, SS, and Medicare. 

These are apparently deemed untouchable...proposed program cuts are in the garnishes...a pea or kernel of corn, a slip of parsley: social and cultural programs and foreign aide.  It is a very apt analogy...we all know what we'd have to cut to lose a few pounds. 

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Reverse mortgages?

My husband had an idiot uncle and aunt who were bragging at a family event a few years ago about "getting approved" for a reverse mortgage.  To me, that was just pure evidence that they had nothing BUT their house, or some equity in it, to retire on. 

I am quite certain that there are many who took mortgages that extended on their initial terms well into the planned years of retirement...do the math and think.  How many mortgages were standard 30-year ones, and how many people qualified for them by age 25?  (Many people have re-defined retirementtage to 55, at least mentally...although I think those days are largely gone after the stock market meltdown.)  When you throw in ARMs, Alt-As and such, plus interest-only arrangements, that puts even more of them into their senior years for payoff. 

Wealth has simply been sucked out ot the dwindling middle class.  The divide between haves and have-nots is widening.  I am sure the ones buying up homes on reverse mortgages are not young homebuyers...aren't you? 

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Senior Contributor

Re: Second wave of down economy

Kay you said

Otherwise, let's stop blaming Boomers for being born...like we had a choice in the matter.  What will happen with houses is that the ones who cannot sell for their necessary asking price will stay in place and the neighborhoods will deteriorate. 

I think there will be different things occur in different areas and circumstances. Some will choose to do one thing others will be forced to make different choices.

Some of us have already moved into the retirement phase of our life at least by age.

The official start of the boomers is turning 65 this year so there will be more and more entering this phase each day and each year for a while.

 

Articles I have been seeing have been pointing out that not many have really prepared for this. Little savings and still lots of debt as in mortgages.

More and more there have been moves to delay retirement probably because people are not ready financialy but also because health wise they are still able.

While the Boomers forced retirement on people in years past they are now 'forcing' society to let them keep working. Some of the power of a group of people in the same age.

Like you we have prepared our house to live here into old age. Helped to house our parents when they needed it as my mother in law is still with us and it is designed to allow us to stay if we find it harder to do steps etc.

Some are in houses that will not allow them to stay as they age.  

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Re: demograpics


@hardnox604008 wrote:

Hi Canuck,

 

I am still awestruck at how stupid we are.

 

The fact that a great demographic turning was due to begin right about now has been known for decades.

 

After the end of the Cold War, we had as great of a setup to prepare for it as we could have ever asked for.

 

Instead, we continued to spend ourselves into oblivion to maintain empire. Instead of rewarding saving we rewarded borrowing and spending by creating phantom asset appreciation.

 

We did nothing to keep medical costs from making us uncompetitive at all levels (federal, state and local government, private enterprise, except for medical enterprises). We could have been laying in real surpuses for social security (not just the one or two years of phony unified budget surpluses).

 

We are a dumb bunch who deserve the politicians who got us here.

 

Best, h


It is amazing how people that think we are so smart to go to the moon and build all the amazing structure we live in can be so short sighted in some things.

Yes it has been a known that the Boomers were coming for many years and so amny are unprepared even those who knew they were coming to retirement.

Interesting article in Maclean's that touches on some of the problems that we will all see from the aging Boomers. It is titled

"What the boomers are leaving their children"

This January, the first baby boomers turn 65. The huge post-Second World War generation—which numbers 76 million in the United States, makes up almost a third of Canada’s population, and according to one estimate, controls 80 per cent of Britain’s wealth—will continue to enter their dotage at the rate of tens of thousands per day for the next 20 years. By 2050, there will be 30 million Americans aged 75 to 85, three in 10 Europeans will be 65-plus, and more than 40 per cent of Japan’s population will be elderly. In Canada, the ratio of workers to retirees—currently five to one—will have been halved by 2036. And despite the odd dissenter, the generation that still oddly finds Paul McCartney relevant has made clear its intention to take everything it feels it has coming. It will be up to all who trail in their wake to pay for their privilege.

Common sense, not to mention decency, wouldn’t call that just. But an outsized, over-entitled, and self-obsessed demographic is awfully hard for politicians to ignore. Take Britain’s example. In last spring’s general election, the most effective ad run by David Cameron’s Conservatives was also one of the simplest: a close-up of a newborn baby, wriggling in a bassinet as a music box tinkled in the background. “Born four weeks ago, eight pounds, three ounces. With his dad’s nose, mum’s eyes, and Gordon Brown’s debt,” intoned a female voice. “Thanks to Labour’s debt crisis, every child in Britain is born owing £17,000. They deserve better.” The point was impossible to miss: the time had come to stop mortgaging the country’s future.

http://www2.macleans.ca/2010/12/01/what-the-boomers-are-leaving/

 

 

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Re: Reverse mortgages?

Kay I found the info I was remembering about houses as their pension plan and that is what the reverse mortgage does but allows them to stay in their house for at least a few more years.

From Macleans as I linked to Nox

 http://www2.macleans.ca/2010/12/01/what-the-boomers-are-leaving/2/

But surely, the best-educated generation in history, not to mention the trailing Gen X, Y and the millennials, must understand all of this: how precarious the global situation already is, and the dangers facing Canada. How we all must prepare. Seemingly not. Household debt in this country reached $1.41 trillion last December, according to a study by the Certified General Accountants Association of Canada, about 2.5 times greater than the 1989 amount. The personal debt-to-income ratio reached a new record high of 144.4 per cent at the end of 2009. And 43 per cent of Canadians admitted to being concerned about their retirement, yet 32 per cent were committing nothing to savings or RRSPs. (Not surprisingly, young people, trailing school loans and other debts, save the least, with only 19 per cent putting 10 per cent or more of their earnings away, according to a different 2009 survey.)

And many of us are either too scared, or stupid, to even risk reading the tea leaves. Close to half of respondents to a new national retirement survey by Bensimon Byrne, a Toronto ad agency, said they had not yet calculated how much income they will receive when they stop working. But 86 per cent said they expected CPP, and 83 per cent Old Age Pension, to be crucial pieces of their financial puzzle. And 77 per cent are counting on eventually selling their house or condo to finance their golden years.

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A capital idea. But what happens when millions of boomers all start selling off their homes to the far smaller and less wealthy generations working their way up the food chain? The baby boom generation who “have driven up housing demand and prices for three decades” could have the opposite effect once their mass sell-off commences, Dowell Myers, a University of Southern California demographer, wrote in a 2008 examination of the “generational housing bubble.” Crunching the numbers state by state, he concluded that the current subprime-inspired meltdown may well pale in comparison to what lies ahead: lots and lots of sellers, far fewer buyers, and a two-decade long slump. “Whereas the major housing problem was once affordability, it could now be homeowners’ dashed expectations after lifelong investment in home equity.” The study won a prize from the American Planning Association.

Experts in Canada tend to be more optimistic about the fate of the domestic real estate market, but in a country where close to 40 per cent of personal wealth is now tied up in home ownership, even a small price drop could have drastic consequences. Boomers may have big dreams about retirement in sunny climes, or riding their Harley Davidsons into the sunset (the average age of U.S. motorcycle riders is now 47, up seven years since 2000), but they certainly haven’t figured out how to pay for it all. A recent TD Bank survey found that just 44 per cent of Canadian boomers have actually paid off their mortgages. And among those who haven’t, a quarter still had 75 per cent or more of the debt left to pay down.

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Re: demograpics

That is one scarry article Canuck!  I don't think I can produce enough topay for all that!

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Re: Reverse mortgages?

To be honest, I think there is a business opportunity, or at least perhaps a governmental avoidance of freefall opportunity, in this mess:  Make Social Security or public pension payemtns in the form of reverse mortgagges where possible.  Then, the house bought becomes public property, to utilize as housing - or more likely as subsidized housing  - for Gens X, Y and so on.  Sounds like two birds with one stone to me. 

We never bought into the while "house as nestegg" mentality.  Our first home is still in our collection, with one kid living in it, managing and maintaining the others in that state.  This one had "NV" (for "no value") on it when we moved here, and while it is worth considerably more now, everything we've done on it was without incurring new debt to fix it up.  

With all of our properties, we maintain the outside, and then we improve things on the inside, where the tax man does not go.  The outside is to impress others, while the inside is for creature comfort and personal pleasure.  Not very many people hold this philosophy. 

Given a modicum of privacy and peace, it's not where you live, it's who you live with that count. Too many people forget that....

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Re: Reverse mortgages?


@Kay/NC wrote:

 we maintain the outside, and then we improve things on the inside, where the tax man does not go.  The outside is to impress others, while the inside is for creature comfort and personal pleasure.  Not very many people hold this philosophy. 

Given a modicum of privacy and peace, it's not where you live, it's who you live with that count. Too many people forget that....


We understand your statement.

We started with an old house, now almost 150 years old, and started fixing as we could with the resources we had. We lived in a state of renovation for many years then when our oldest was 18 we managed to put an addition on which allowed our three daughters to each have a bedroom and then we had rooms on the ground floor as they moved out and parents needed help.

 

One thing I see coming is so many that have 'lived' all their money away will have little to live on in retirement and those of us who saved will still be saving as we are carried away. Saw it with my parents when they passed and we cleaned up their estate we found they had substantial savings.

Probably did not make any difference as they had all they needed and did all they wished and they probably felt more comfortable knowing they had some savings since they had lived through the 1930ies and knew what it was like to not have enough.

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Re: demograpics


@jrsiajdranch wrote:

That is one scarry article Canuck!  I don't think I can produce enough topay for all that!


It is kind of 'eye opening' isn't it?

And it is not just Canada or the US but right around the world.

Shrinking birth rates ( and I do think that is good and necessary for our over populated Earth) compounds the problem of having so many aging.

Boomers who either can not afford to quit working or wish to keep working because they are still able health wise are not making jobs available to younger people graduating from school and wanting to pay off school loans, start a family and buy one of those homes that the boomers have to sell to finance their retirement.

Vicious circle in many ways.

 

Many houses on our road when I was young held 3 generations, will we see this trend again?

Keep working JR, you younguns have a lot of people to support.

From http://www2.macleans.ca/2010/12/01/what-the-boomers-are-leaving/2/

Greying populations aren’t just a European or North American problem, they are now a global phenomenon. “You can’t escape from it anywhere in the world,” says Fishman. As boomers have gotten older, and more expensive to employ, our search for cheaper labour and goods has created a “feedback loop” in the developing world. China, with its “21st-century urban industrial wonderlands filled with young people siphoned out of the countryside,” is now aging faster than any place on the planet, he notes. The combination of rapidly growing cities, better wages and higher educational aspirations are shrinking families worldwide.

 

The real paradigm shift might be in learning to view this inexorable greying of the globe as a good thing, rather than a problem. “On balance it’s all overwhelmingly positive,” says Fishman. “An aging world happens because people live longer, and because women can achieve their aspirations and don’t have time for big families. We’ll be investing much more in the well-being of the kids we do have, their feeding and education. They’re the pillars for future economic development and prosperity.”

 

Now all we have to do is convince the boomers that it’s finally no longer all about them.

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