THANKS FOR THE TIP

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.

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36 Responses to “THANKS FOR THE TIP”

  1. The Mad Dreamer Says:

    "But PwC's study starkly shows how those in middle-middle age have failed to adapt to the economic storms as well as other groups. "Generation X overextended themselves" in the good times, said Allison. "They bought what they could afford, not what they should afford, and the economic downturn hit them hard." The damage done, "they are often making choices they shouldn't be making," said Allison, citing paying for their children's educations and continuing to spend on credit."

    What the fuck are they even trying to say with the "bought what they could afford, not what they should afford" line? The whole piece reads like a bunch of people being amazed at a terrible smell, but completely oblivious of the explanation of the smell – the guy standing there, with his ass around their noses, farting ecstatically.

  2. Mike S. Says:

    The 'plight' of gen-X is just the result of the invisible hand, nothing to see here folks, move along w/o complaint, amirite? These things couldn't possibly have anything to do w/policy (especially the rent-a-congresscritter approach to campaign finance) could they?
    Current congressional approval rating is about ten percent, is that compatible with 'the consent of the governed'?

  3. Bosh Says:

    It's times like this that I'm happy I live in Korea. My family (me, wife, two kids) saves nearly 10 times what we pay in health insurance.

  4. middle seaman Says:

    Temporary jobs is what we voted for for at least the last 40 years. The old way, I.e. unions, higher minimum wage, single payer health, was ridiculed by us, was rejected off hand, considered the enemy of the American way of life.

    We voted in the last two presidents who smiled back at us and gave us the finger. We voted down much better candidates who we shouldn't.

    We are a rich country that decided, with our full support, to use riches just for the rich. Now you are crying?

  5. Xynzee Says:

    The wretched thing is that the malaise that came w/ "Gen-X" (the book) has never seemed to have left us.
    A) We started to graduate into the Bush recession so we missed out on the opportunity to get into a groove.
    B) The social compact was being used as toilet paper — invest in yourself (read student loan debt as prices started to climb), study hard and you'll get a good job to pay back said investment.
    C) We came through as tech caused a huge shift. We were schooled in the old ways of doing things, but it does you no good to know how to run a Letraset(TM) machine when PageMaker and Quark have made your job obsolete. Now it's all digital, and screw print how're you with video? Scramble, scramble, scramble!
    D) All of the roles were filled by Boomers in their prime — not assigning blame, just a fact — and manufacturing was being murdered in the States.

    Then when we finally start getting our s#|+ together and how to work as "consultants" along comes the GFC.

    So yeah. Fuck you PcW! You don't know shit and you still don't. Just pisses me off that you and your ilk — Andersons anyone — are still allowed to walk free.

    I'm thankful that I've finally landed a gig that looks like it has real potential for me. That even though it's a total career shift, I finally feel I've found my place. Now I want to work out how to make it happen for others. Because if others are successful too, then I can continue too.

  6. paintedjaguar Says:

    I'm 60. During my entire adult life, the economy has been deteriorating for the average US worker and plenty of Boomers don't have a pot to piss in. It really isn't about age or sex or race – it's just life in Reagantopia.

  7. wetcasements Says:

    The 90's were kind of a sweet-spot, no? There was a tech bubble, but it went hand-in-hand with the actual development of the internet as an economic force. Law degrees were a guarantee of an upper-middle class lifestyle, at worst. Need a job? If you had a college degree from anywhere and knew how to type any temp agency could set you up within an hour.

    So for the first time in a long while the US was actually running a fucking _surplus_, and real wages were going up, and regular Joe's and Jane's could make some decent extra income investing in stocks.

    Oh, and you bought a house because when it came time to retire you could just sell it and make a killing and get a nice condo.

    Yeah, thanks Supreme Court. The Bush tax-cuts and two un-winnable wars on brown people pretty much broke America forever.

  8. Monkey Business Says:

    Welcome to The New Normal.

    7+% unemployment, with the actual number being closer to 20+%. "Saving" is dead; the rich invest, and everyone else is living paycheck to paycheck. Retirement will go from voluntary to forcible as people hold on to their jobs long after their bodies and minds aren't up for it. Wait until the 70 and 80 year olds start dying at their desks, trying to scratch out one more month or week or year of pay. The government is paralyzed, unable to take even the slightest action, trapped between extremist GOPers and spineless Democrats.

    We've seen revolutions and mass protests around the world over the past few years. The Middle East. China, Africa, even Europe. How long before it comes to American shores? How long before the poor run out of other poor to eat and turn on the rich? What happens when some Know-Nothing Governor calls out the National Guard on a bunch of middle aged or old white people protesting? How long before some fat, balding, conservative, middle-aged white guy pulls out his gun because some Fox News talking head told him to, some undertrained Guardsman freaks out, and makes an otherwise peaceful rally into a massacre?

    Gangs of late teens, early-20 somethings roaming the streets at night, too broke or too dumb to go to college but no jobs without a degree, undereducated by a failing public school system cut to the bone, with no social safety net to keep them from a life of crime.

    All the while, the rich putter between their palatial exurban estates and their downtown offices in armor plated cars with private security, never having to even look at someone that makes less than seven figures a year if they don't want to.

    That may not be the New Normal yet, but you can see it from here.

  9. Suttree Says:

    Makes me feel better having spent every cent I made in the last eighteen years on liquor and hookers. With any hope I'll die young and not have to worry about that pesky retirement.

  10. Major Kong Says:

    I for one like Suttree's plan.

  11. c u n d gulag Says:

    I'm 55, and I third Suttree's plan!

    Except I couldn't afford the hookers over the years.

    But the liquor I could afford has always been cheap – the cheapest sh*t possible.
    So, while I haven't gotten any STD's, I'm pretty sure that my liver looks like Swiss Cheese.

    My alternate retirement plan, if I don't die early, is to commit a crime that lands me in jail for the rest of my life – hopefully, without hurting anyone.
    And fortunately, I live in America, which has the worlds largest per-capita prison population. When it comes to jails – WE ROCK!!!

    "Three-hot's-and-a-cot," beats "bum-fighting" every evening over an appliance box under the overpass – after a hard day begging drivers at the intersection for change.

    But the 'pricks-that-be' are privatizing prisons, so it'll probably end up being 'one-warm-and-gooey-one-one-cold-and hard-'n-stale-and-a-newspaper-on-the-floor-to-sleep-on.'

    So, in retrospect, if it involves hurting some rich prick, I may not be able to help myself.

    We are a country of "Morans."

  12. Major Kong Says:

    If I have to work 'til I die don't count on your kid getting my job anytime soon. Hope you like having them around the house.

  13. sluggo Says:

    @cu

    I predict an uptick in senior crime in a few years for that very reason.

    And, yes, we are a country of morons. If you want to see our future, I highly recommend a documentary named "Idiocracy".

  14. Anubis Bard Says:

    Tsk-tsking at the younger generations manages to magnificently miss the point. This is what economic contraction looks like. But no one wants to even imagine what the end of economic growth means, so we keep pretending to each new generation that they can have it as good or better than earlier generations. If that's not working out, then there must be some mysterious flaw in them or their strategies. They're not working or they're complacent or they're not as assertive as the union-members of the past. ( more rant here)

  15. Anonymouse Says:

    @xynzee; that was a GREAT summation! I am at the forefront of Gen X, and graduated college at the end of Ronnie Ray-gun's era. You know, when "we're living here in Allentown, & they're closing all the factories down". It wasn't any better if you had a college degree; I majored in Computer Science, but all the jobs were held by Boomers, so it was crappy temp job after crappy temp job for years until I got my "big break" into the world of Eating Three Meals a Day and began to dream of Living in a Studio Apartment by Myself Instead of With Three Other Roommates!

  16. Anonymouse Says:

    Additional comment: my father retired before the collapse with a boatload of money he made from the stock market, and promptly moved it to a safer place. Gen X was sold the myth of 401ks, but the bottom line is that it depends on what investment firm your company picks as to what stocks you'll have available to invest in, and in the last 20-some years, I've gotten a better ROI on the bit of money in the bank in my emergency fund than I've ever gotten from the stock market.

  17. Dave Dell Says:

    Yes, Anubis and others. Economic contraction. I don't know if there is a good school of economic thought that isn't premised on growth as both good and necessary. I know what I've done during times of poor or non-existent job opportunities… 9 people (four couples and an extra) sharing rent on a two bedroom one bath house. It wasn't quite communal living but it was close. Even part time poorly paid work covered your share of rent and utilities. A variety of job skills kept our used cars running.

    Of course, we didn't have huge individual phone/connectivity bills to pay. Dental work did suffer. No health insurance meant bad times if you needed to go to the emergency room.

  18. maurinsky Says:

    My father started working when he was 12 (Ireland in the 50s) as a carpenter. He came here in the 60s, got married, he and my mom had 5 kids, she was a SAHM, and we had a pretty good life. No fancy vacations or trips to Disneyworld, but enough to eat, clothes to wear, a nice if not huge house. He worked until he was 68, and he's having a mostly comfortable retirement – gets to go home to the Auld Sod every other year, 3 meals a day, hot and cold running water, good enough.

    I'm 43 and I'm not sure I'll ever retire. I don't make as much money as my father did in 1975. I didn't go to college because my parents thought that was something rich people did, which sucks in some ways, but at least I started saving for retirement in my early 20s instead of in my 30s. However, I'm in school now, because I'd never get another job as good as the one I have now without a degree, if anything happened to my job. I hit up my 401K once, to buy a house, and paid myself back in a year. But the magic of compound interest doesn't mean much when rates are <1%.

  19. Big dog Says:

    I think you've all said pretty much what I feel about the plight we are in. The dance between labor and capital took maybe a death spin with the onset of globalization. We were promised we would be able to sell our stuff all over the world, and gloriosky, the stuff production moved overseas. Corporations that used to work in our national interest as well as that of their stockholders became international profiteers, avoiding every responsibility to the country that provides their necessary infrastructure. The inevitable result of this is that most of us are getting poorer and less secure about our future. It will only change when the great majority of us fight through the be clouding mythologies we are constantly fed and demand that our government respond to our critical needs. Heads on pikes indeed.

  20. Big dog Says:

    I think you've all said pretty much what I feel about the plight we are in. The dance between labor and capital took maybe a death spin with the onset of globalization. We were promised we would be able to sell our stuff all over the world, and gloriosky, the stuff production moved overseas. Corporations that used to work in our national interest as well as that of their stockholders became international profiteers, avoiding every responsibility to the country that provides their necessary infrastructure. The inevitable result of this is that most of us are getting poorer and less secure about our future. It will only change when the great majority of us fight through the beclouding mythologies we are constantly fed and demand that our government respond to our critical needs. Heads on pikes indeed.

  21. M. Says:

    Born in 1981, I'm never quite sure which generation I'm in, but it has to be whichever one is most screwed financially. I'm just mad at myself these days for having bought into the then-still-prevalent idea in the early 2000s that it was a valid lifestyle choice to dick around after getting a humanities BA and then go to law school, just in time to graduate into the financial collapse of 2008. I wasn't making shit after college and I still wouldn't be able to buy a house, but at least I didn't owe any money back then, thanks to taking a scholarship at a mediocre state school. 17 year old me made better decisions than 25 year old me, who knew.

  22. mothra Says:

    I love the advice of finance professionals to save at least $200 per paycheck. Oh, sure. No problem. I'll do that–and be homeless and not eat. But I'll have plenty o'money to retire on! My main regret is not jumping on the military-industrial complex train when I was in my 20's. What was I thinking?

  23. Anonymouse Says:

    @mothra: $200 per PAYCHECK? I agree, there would be a whole lot of Americans living in a cardboard box under the freeway eating bugs.

  24. lless Says:

    All this judgmental crap is designed to overcome a huge democracy problem. If only they can get you to cut off your nose to spite your faces, they can pull the rug out from under the defined benefit retirement package that remains your true chance to retire because those shaky jobs you occupy now will not carry you in your sixties. Social Security and Medicare will be there unless they can reverse the way these programs poll. The line that they are going broke is bullshit. There is an actuarial imbalance in the future, but your government prints money at present to fund agriculture subsidies, depletion allowances, the national security state and the war machine. With an electoral gun to their heads, they will print money to fund entitlements if they can't turn you. The eventual inflation is far more egalitarian than the you get nothing and the rich get it all alternative and it may be painful enough for progressive taxation to regain its following even among the well off. But if you masochistically larder self loathing onto the rest of your disadvantages and allow the evisceration of these programs on the premise that they won't be there, then that prophesy self fulfills and you retire destitute while the 10% prosper disproportionately.

  25. Arslan Says:

    "Corporations that used to work in our national interest as well as that of their stockholders became international profiteers"

    They were always international profiteers.

  26. ladiesbane Says:

    Congrats, Xynzee — great news on the job front.

    For the rest of us, how soon is it to stop clinging to false hope? Some of my friends were well-set-up by gifts from their comfy families — a car at age 16, paid-for college education, down payment on a house as a wedding present — especially if they never had to deal with vicissitudes such as divorces, health catastrophes, remarriage, legal problems, you get the picture. They mostly worry about their 401ks. Their lives are so solid their biggest threat is erosion.

    The rest of us scraped by on the DIY plan. Some of us are seriously talking, from all points across the country, about communal living as a survival strategy. Most of us have lived together on and off in the past and know how to carve out privacy, how to be fair house administrators, and how to make it work generally. It can be a hell of a lot of fun, and you can't argue with shared expenses.

    My relatives age into the triple digits. I hate to let the bastards win, but I also hate the idea of living off bulk legumes and a multivitamin for thirty years. Can I really abandon my dream of dying alone in a house I am no longer able to care for?

  27. Anubis Bard Says:

    @ladiesbane
    From an historical / anthropological point of view the nuclear family (much less the lone-liver) is a rare and even bizarre innovation. It may turn out to have been a temporary artifact of the 20th century's burst of prosperity and cult of independence – and it may pass soon enough. If it helps with your desire to not let the bastards win — here's a thought. Breaking people out of their social networks (and the normal, communal living) was hugely profitable for the sellers of consumer culture. (Does the average suburban block really need 15 lawnmowers and a dozen weed-wackers? It does if we've done away with the community.) Include a couple of good gardeners in your house and you'll be eating a hell of a lot better than bulk lentils. Probably better than the guy with the eroding 401K, too, who's down getting fleeced at WholeFoods.

  28. Brad Says:

    It's the boomers.

    Several times I've tried expressing dismay at the state of my over-65-parents' finances. The only reason they have any money is that they inherited a home from the Greatest Generation. Their response? Spend. Spend, spend spend.

    "What about saving for your retirement?" "(cheerfully) Oh, we won't live that long!" Three vacations a year, pleading ill-health as an excuse to hire helpers for basic personal services (when it's really just being hideously out of shape), taking their pensions early to pay for a lifestyle beyond their means. When pressed, it comes out the real reason for their profligacy: "It's ok, the government will take care of us." Seriously?

    They voted conservative.

    Multiplied times a few hundred million…

  29. Lizzi Says:

    I'm 50 and my BF is 61, he's had jobs with pensions and is also retired from state unemployment and has lifetime free health insurance.
    My experience has been that every company where I have worked has changed the rules just before I became eligible… pensions? Nope changed to 401k… Profit sharing? No had to be discontinued for the "health" of the company… Health insurance? Not anymore…. Employment until retirement age? Hah!
    He said to me the other day that he wished my circumstances were more stable and predictable. I responded that this is America in the 21st century, there is no stability and the only thing that's predictable is that it will all change again and not for the better.
    What a difference 10 years makes.

  30. Benny Lava Says:

    Sometimes I read these sorts of arguments as a way of understanding American culture better. Think of it this way:

    What if the concensus was that young people were screwed by outsourcing and new technology? What if the rest of better off society wrote articles about the poor youngsters and lamented their lack of opportunities? Imagine that, but the exact same public policy that we have now. Imagine how you would feel if you read articles about how your plight was a tragedy of our times and most people voiced their sympathy.

    It's just a thought. Most of what I've read and heard from 2008 onward is much like this article, lamenting how awful young people are for not having made more money. Sometimes I wonder if their goal is to foment a youth rebellion.

  31. moderateindy Says:

    The question is; How long will the populace at large take it. At what point does the unending greed of part of the one percenters kill the golden goose? Will they recognize that the present economic model is un-sustainable, and slowly let the rest of us play? Or, do they whistle past the graveyard until the option becomes a drastic change, including violence. They cry about paying the modest amount of taxes that they incur now? How will they feel if they actually have to pay tax not only on what they earn, but on what they own?
    I'm sorry to say thi,s but a huge part of our problem is rural America. The irony, of course, is that nearly all red states suck from the gov't teat, getting back from the Federal government more than they send in. It is this same demo that constantly votes against their best economic interests. The same people that loathe unions, not bright enough to understand simple history, and recognize the multitude of benefits that were derived by unionization.
    I fear a large part of the problem lies with the religious leaders in this country. You hear about prosperity gospel, how god wants you to be rich. Which basically translates into, if you are rich it's because God has deemed you worthy. But do you ever hear any of them speak on economic justice? A handfull of nuns, and the ocassional African American reverend, that's about it. It is why religion is the opiate of the masses. It keeps them dumb and docile. Don't question how the rich got that way, it was Jeebus who dun it, besides you'll get your reward when you're dead, so don't fret getting screwed now. All very convenient for those in power to keep the status quo.

  32. Bitter Scribe Says:

    At age 56, I was thrown out of work two months ago. My publishing company, which is going down the shitter, closed a bunch of magazines and gave my job to one of those editors because 1) he's been with the company longer and 2) he's 20 years younger and makes, I'm guessing, at least 30% less than I did. (Bonus points for figuring out which factor is more important.)

    This week I start a new job, at $10K per year less than my old one. Oh well, when it comes to making one of those cost-benefit analyses, now I'm lower on the scale and so might last longer.

  33. TakomaMark Says:

    Way to blame the victim PwC. I'm sure they can find anecdotal evidence of people who lived beyond their means chronically, because you can always find people who do that, but the big issue is the increasing income disparity, which leaves the vast majority of GenX with insufficient funds to pay for everything they "should" do. And I'm not talking luxuries, but stuff like house payments or rent, food, paying for kids' educations, etc. PwC apparently can't point out the larger economic forces or what can be done to mitigate them, so they just lament the fact that GenX isn't doing what they "should" without acknowledging that they aren't because their incomes aren't sufficient.

  34. Doctor Rock Says:

    Living in an expensive as fuck place like New York, I think about this a lot. I miss the days where you could lead a decent lifestyle in manhattan without being an investment banker or law firm partner. Id take more crime in exchange.

    Now. I'm not the kind of New Yorker who misses the grittiness. I don't. But I'll gladly take Bernie goetz New York if it means I can stop being priced out of my home borough by overpaid paper pushers.

  35. Jane Says:

    Xynzee, good stuff, and Bitter Scribe… :((.

    There is a very fun right wing video about how even and therefore Godly the income and wealth distribution is in the USA. Filmed in1955. It's great :) Though it is funny how there are no blacks or asians in sight. http://www.youtube.com/watch?v=B5P7MBUyKiQ

    USA median wealth 27th in the world: http://www.middleclasspoliticaleconomist.com/2013/06/us-median-wealth-only-28th-in-world.html

    The inequality might not be because of globalization; we have the same pressures here in Sweden but inequality is much lower. The Japanese, ditto. It's just the states and the UK who have made strange policy choices. http://www.nationalmemo.com/inequality-rising-all-thanks-to-government-policies/

    /Jane

  36. DrS Says:

    PwC should be laughed out of existence for publishing such crappy analysis.

    Why would anyone talk consulting or accountancy advice from people with such an obviously tenuous grasp on reality?

    Oh yeah: Upton Sinclair – "It is difficult to get a man to understand something, when his salary depends on his not understanding it."