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A nation of miserable, old and very poor people...
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Lord Beria3



Joined: 25 Feb 2009
Posts: 4098
Location: Moscow Russia

PostPosted: Wed Aug 29, 2012 8:24 pm    Post subject: A nation of miserable, old and very poor people... Reply with quote

http://blogs.telegraph.co.uk/finance/ianmcowie/100019682/life-expectancy-increases-but-few-have-funds-to-pay-for-it/

Quote:
The reason is that most people fail to fund the extra years, as Vince Smith Hughes, retirement expert at Prudential, explained: Unfortunately, many people arent taking the necessary steps to ensure that they will have enough money to fund a comfortable retirement, either through not saving enough or through opting for retirement products that wont protect them against inflation.

The average person retiring in 2012 expects an annual income of 15,500, which is 42 per cent less than UK average earnings. Retired people are more vulnerable to squeezes on their incomes. They face higher than average rates of inflation, as a result of spending a higher proportion of their outgoings on goods which are significantly impacted by inflation. Over the course of a 17.8 year retirement, typical pensioner inflation rates could reduce their spending power by 55 per cent, if they dont inflation-proof their incomes in retirement.


As, over 90% of people who retire don't inflation-proof their incomes, even under modest assumptions of inflation going forward, much of their income will collapse in real terms.

If you factor in the possibility - due to money printing and rising costs of food and energy due to Peak Oil - of higher inflation in the years ahead, then the collapse of purchasing power will be even more severe... more like three quarters of income.

What we are looking at, apart from a golden elite, is a vast mass of poor elderly people strugging to survive in the coming decades.



The future, I suspect, will be similar to Russia... lots of old people strugging on a basic state pension and growing their own food to avoid starving.
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JavaScriptDonkey



Joined: 02 Jun 2011
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Location: SE England

PostPosted: Wed Aug 29, 2012 8:26 pm    Post subject: Reply with quote

Retire?

Not going to happen for most people currently under 40.
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snow hope



Joined: 24 Nov 2005
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Location: outside Belfast, N Ireland

PostPosted: Sun Sep 02, 2012 1:52 pm    Post subject: Reply with quote

I wouldn't even put an age limit on it, probably won't happen for most people under 60, we are that close to things going tits up..... Sad
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SleeperService



Joined: 02 May 2011
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Location: Nottingham UK

PostPosted: Sun Sep 02, 2012 4:04 pm    Post subject: Reply with quote

snow hope wrote:
I wouldn't even put an age limit on it, probably won't happen for most people under 60, we are that close to things going tits up..... Sad


+1 I was told by a colleague a few years ago that those not retiring within the next five years wouldn't ever be able to retire completely. He knew nothing about Peak Oil but was aware of ever diminishing returns on investments.
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emordnilap



Joined: 05 Sep 2007
Posts: 13956
Location: Houǝsʇlʎ' ᴉʇ,s ɹǝɐllʎ uoʇ ʍoɹʇɥ ʇɥǝ ǝɟɟoɹʇ' pou,ʇ ǝʌǝu qoʇɥǝɹ˙

PostPosted: Sun Sep 02, 2012 7:05 pm    Post subject: Reply with quote

It points up the unique aspects of the last fifty years. The 'benefits' accruing to a tiny minority of a single species will never be repeated.

My father-in-law built houses - high-quality, one- or two-offs, and put a substantial proportion of each sale price into pensions, from 1955 to 1995.

Result: very high pension pots into annuities at exactly the right time. Sadly, he died last night and so is not able to enjoy it. Crying or Very sad Crying or Very sad Sad Sad
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snow hope



Joined: 24 Nov 2005
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Location: outside Belfast, N Ireland

PostPosted: Sun Sep 02, 2012 9:02 pm    Post subject: Reply with quote

Sorry to hear that em.

Nothing in life is certain and you can't take it with you. Sad

As I have said before on here, we have made life too precious in some respects.....
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leroy



Joined: 09 Oct 2007
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PostPosted: Sun Sep 02, 2012 10:31 pm    Post subject: Reply with quote

Quote:
My father-in-law built houses - high-quality, one- or two-offs...


Condolences. A good legacy.
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nexus



Joined: 16 May 2009
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PostPosted: Mon Sep 03, 2012 10:22 am    Post subject: Reply with quote

Em, sorry for your loss.
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Tarrel



Joined: 29 Nov 2011
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PostPosted: Mon Sep 03, 2012 12:48 pm    Post subject: Reply with quote

Also sorry to hear of your loss, Emordnilap.

I wonder whether part of the problem with retirement funding is an over-reliance on the financial system for a secure retirement, whether this is through trying to build up a pension fund at the mercy of the markets, or hoping that savings will not be eroded by inflation or wiped out by a bank crash.

Maybe part of "preparation" could include reducing one's reliance on inflation-prone commodities such as personal transportation, energy, mortgage rates and maybe even food. This could mean directing money away from "retirement pots" and into projects such as insulation or off-grid energy, paying down debt, re-locating to an area where one is less reliant on transport, down-sizing, developing the skills and facility to grow some low-maintenance, low-effort foods (e.g. fruit trees). This won't remove the need for an income, but it can reduce it significantly. The less one needs to spend, the less sensitive one is to inflation.

Perhaps the whole concept of retirement planning needs to broadened to include the wider family. Many middle-aged people are dealing with the unfamiliar challenge of housing their adult children who are unable to get on the property ladder. Those children will, at some stage, struggle with child-care costs as they seek to make a living through an increasingly unstable, part-time job market. So why not decide collectively, at an early stage, to create a family home that will house parents, adult children and grandchildren. In this environment, the grown children will be freed to make the best of a difficult labour market while the older parents continue to contribute via informal child-care and household tasks, even though they may have fully or partially exited the formal labour market. The role of family "leader" gradually and organically transfers to the grown child/ children, while the older parents take an increasingly back seat. The older parents eventually die, leaving their adult children to take their place as their children become the adult earners. Increased life-expectancy might require such a household to encompass four generations.

Many Asian families demonstrate that this model can work in a range of environments, both urban and rural.
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ceti331



Joined: 27 Aug 2011
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PostPosted: Mon Sep 03, 2012 1:11 pm    Post subject: Reply with quote

Tarrel wrote:
So why not decide collectively, at an early stage, to create a family home that will house parents, adult children and grandchildren..


I always thought this during the property bubble. if population was stable, property would just be handed down from generation to generation. People could see how much "carrying
capacity" there was. (empty rooms..).

This is exactly how I became a Malthusian thinker;

I've always been puzzled as to why parents would want their offspring to leave home and become rent/interest paying cattle for someone else... I really dont understand why it's considered normal.
you could still "trade" rooms of course, rented out when people move around, it was just the glaring aspect of people being born AS ponzi-fodder that always seemed strange.

(For me it was an obvious massive dis-incentive to settle down and produce offspring myself.. )
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Catweazle



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Location: Little England, over the hills

PostPosted: Mon Sep 03, 2012 2:50 pm    Post subject: Re: A nation of miserable, old and very poor people... Reply with quote

Lord Beria3 wrote:
The future, I suspect, will be similar to Russia... lots of old people strugging on a basic state pension and growing their own food to avoid starving.


I think the people growing their own food will be the lucky ones. I'm nearly 50, by the time I qualify for a state pension there won't be one, I am at an age that makes a new career difficult. For me, moving to a smallholding is a no-brainer. I don't mind being poor, but I hate being hungry.
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featherstick



Joined: 05 Mar 2010
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PostPosted: Mon Sep 03, 2012 2:58 pm    Post subject: Reply with quote

"the only pension worht a dam is a machete, a kalashnikov and a whole heap of kids ready to defend you..." [/jonny2mad]


Thought I'd save him the trouble.

Yep, the new austerity is going to look a lot like the 1920s. Multigenerational households, no luxuries, scrimping for the essentials, paying the doctor before he treats you, and allotments as an absolute lifeline (for those of us that can't afford a small-holding, Catweazle). Location will be important. I love having a car, but we could access all services without one if necessary. I'm not sure though how we're going to be able to accomodate our kids and their kids, even though I'm convinced I'd be a great patriarch.
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DominicJ



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PostPosted: Mon Sep 03, 2012 6:35 pm    Post subject: Reply with quote

You cant store nurses in the bank.
Since theres going to be more old people than nurses, it doesnt matter how much everyone saves, theres more old people than nurses.
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snow hope



Joined: 24 Nov 2005
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PostPosted: Mon Sep 03, 2012 10:46 pm    Post subject: Reply with quote

Tarrel wrote:
The less one needs to spend, the less sensitive one is to inflation.

Perhaps the whole concept of retirement planning needs to broadened to include the wider family. Many middle-aged people are dealing with the unfamiliar challenge of housing their adult children who are unable to get on the property ladder. Those children will, at some stage, struggle with child-care costs as they seek to make a living through an increasingly unstable, part-time job market. So why not decide collectively, at an early stage, to create a family home that will house parents, adult children and grandchildren. In this environment, the grown children will be freed to make the best of a difficult labour market while the older parents continue to contribute via informal child-care and household tasks, even though they may have fully or partially exited the formal labour market. The role of family "leader" gradually and organically transfers to the grown child/ children, while the older parents take an increasingly back seat. The older parents eventually die, leaving their adult children to take their place as their children become the adult earners. Increased life-expectancy might require such a household to encompass four generations.

Many Asian families demonstrate that this model can work in a range of environments, both urban and rural.


Great post Tarrel. I concur.

Without consciously realising it, I think this is what I am doing to an extent. We have a fairly close family and whilst we are not without our difficulties (whose fanmily isn't?) we have managed any problems and come out the other side with everybody compromising to some degree and all accepting that to live comfortably together, we all have to give and take a bit..... this is undoubtedly shown by the parents leading by example! Yes we have compromised the most, but thats the way it is.....

I have three adult boys living at home at the moment. One went away to Uni for 4 years and then came back for a year. He is about to leave the nest having got himself a very good job with Apple and is setting up home in rented accomodation (an apartment) with his gf in his posted city - for 2 years as he will likely move on thereafter.

The other two adult boys show no sign of fleeing the nest and to be honest, provided they contribute to the house (which they do), I don't have a problem. I am happy for them to stay although it certainly costs me more than they contribute, but that is not the crux of the issue. In the current circumstances they are better off in my house than paying a biggish rent for not very much and lining somebody else's pocket. We have the space which provides the privacy and freedom and the "closeness" of family life. I would be quite happy if this were to continue and would be happy to accomodate partners as that situation presents itself, as it has in the past on a temporary basis with all of them! If this became more permamnent I don't think it would be a problem.

I am sure things would be very different if we lived in a 3 bed semi, but we are fortunate enough to have the space, so it works more easily. Smile
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Tarrel



Joined: 29 Nov 2011
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Location: Ross-shire, Scotland

PostPosted: Mon Sep 03, 2012 11:06 pm    Post subject: Reply with quote

Quote:
I am happy for them to stay although it certainly costs me more than they contribute, but that is not the crux of the issue.


Yes, it only becomes a big issue if all contribution is measured monetarily. But members of the household can contribute in many, sometimes subtle, ways.

I also have three boys. The two older ones are paddling their own canoes but the younger one (18 yrs) came with us when we relocated to Scotland. He is going through the application process for the Ambulance Service at the moment, and working a range of short term manual jobs in the meantime. We are supporting him (i.e. not taking any rent) so he can build up a fighting fund for when he goes away for training. So, he's not contributing financially, but he has built me a great woodstore and, because of his natural outgoing approach and range of interests, has done more than any of us to get us known locally. (Plus, when TSHTF, having a paramedic around could be dead handy!)
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