THANKS FOR THE TIP

Posted in Quick Hits on June 24th, 2013 by Ed

Over the weekend I was talking to some other thirty-somethings and, as it often does, our tenuous professional and financial lives became a topic of conversation. The strange part, I thought, is that all involved are doing alright on paper. We have lots of degrees. We're not in an unusual amount of debt. We all make closer to the average median income than the poverty line. Some of us even have health insurance. We're not exactly a group of people on the edge of the precipice.

And yet none of us have the slightest bit of confidence about the future. Our comfort and stability is entirely short-term. We are veterans of the world of at-will and temporary employment. We know the nine month contract, the "indefinitely renewable" temp work, the intermittent unemployment, and the 60 year old colleagues who secured for themselves a kind of security that we'll never have. Even if we don't think about it on a daily basis, we're aware that our saving for retirement is inadequate – our retirement plan contributions are modest (it turns out that 10% of Jack Shit is also Jack Shit) and what little we save is wiped out periodically by medical expenses, emergencies, and the aforementioned intermittent unemployment. Besides, at 0.9% interest, saving money doesn't really make any long-term sense; it will be eaten by inflation before we can spend it.

Thankfully we have the popular business media to chide and guide us. MSNBC chipped in over the weekend with "Spanked on Retirement, Gen X Still Doesn't Get It." In a genre of journalism that is well known for its spectacular stupidity, this stands out. The folks at Price Waterhouse (they've rebranded as "PwC" in the hopes that people will forget the unpleasantness) determined that Americans between 32 and 52 are more poorly situated for retirement than the older crowd. Shocking stuff, I know.

We're also saving less than the under 32 crowd – you know, the people who haven't had most of the things in life that cost money happen to them yet. Oh, and who live at home with their parents at alarming rates. Good work, PwC! In any case, the article clearly states that the problem is people of my generation getting creamed by the Mini Depression right at what is supposed to be the peak of our wealth-building years ("From 2007 to 2010, a recent Pew study found, Gen-Xers lost 45 percent of their net worth – about $33,000 on average.") We're also the most likely to preemptively tap into our meager retirement savings, mostly in 401(k) type plans, early.

The too long, didn't read version: Gen Xers don't make any money, and mysteriously aren't saving much for retirement. It turns out that when people have no security beyond paycheck-to-paycheck, planning for the future is pretty difficult. Also we are fancy accountants who can't figure out why people who don't make much end up borrowing money. In the end we are left with meager remedies, such as to "take full advantage of programs like health savings accounts, that are designed to help with expenses in retirement." Oh. That 'll help us save an additional, like, $75 per year by spending pre-tax dollars. Problem solved, motherbitches.