The Financial Crisis NO ONE Is Talking About
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THE FINANCIAL CRISIS NO ONE IS FIXING:
Watch the original video from DW News:
All of this starts with Retirement.
On the surface, there are 3 major issues that need to be addressed:
1. Poverty.
According to Census Bureau data, it's reported that “43% of 55-to-64-year-olds had no retirement savings at all and 30% of people over 65 are economically insecure, earning less than $27,000 for a single person.” On top of that, “the median retirement account for that age group is only $200,000 — meaning half of 65- to 74-year-olds have even less saved up” – and that’s not nearly enough.
2. A Savings Gap.
It was recently found that HALF of Americans have absolutely NOTHING saved for retirement, whatsoever and, for those between the ages of 50-54, only a THIRD have more than $100,000.
3. The Perfect Storm.
The fact is: People are living longer, health insurance costs are rising, there’s a lack of access to retirement plans, millennials are having fewer children – and, as a result – Retirees are forced to continue working later in life because what they’ve saved is insufficient to live on.
SOCIAL SECURITY RUNNING OUT: The Possible Solutions
One: Social Security Benefits will be reduced by the time all of us retire.
Two: They Increase The Retirement Age So That They Can Pay Out Less Money
Or, Three: The Government Increases Taxes To Pay For Higher Expenses.
The Social Security Board of Trustees says that we’d either need “an immediate reduction in benefits of about 13 percent, or an immediate increase in the combined payroll tax rate to 14.4 percent, or some combination of these changes, to allow full payment of the scheduled benefits for the next 75 years.”
THE BRIGHT SIDE FOR RETIREES:
Some outlets call Baby Boomers “the luckiest and wealthiest generation we have ever seen,” now sitting on roughly $78 TRILLION dollars. Since 1983, stocks have increased almost 8000%…home prices have appreciated 500%, and a 60/40 portfolio of stocks and bonds would have returned more than 14.5% per year.
We’ve also seen a history of incorrect calls for a “retirement crisis” dating all the way back to the 1960s when defined pension plans were cut from large corporations. After that, the 401k was introduced – but, once again – critics said this was an issue because the account lacked a guarantee. Then again, in the early 1990’s, it was published that “retirement as current retirees know it may be impossible for all but the most affluent."
From there, in 2008, ”experts were telling boomers they would have no choice but to delay retirement by five years, at least” – but since then, we’ve seen the strongest bull market – in history, with the Greatest Wealth Transfer – ever – just around the corner. All of THIS suggests that what we’re currently seeing is nothing out of the ordinary, it’s nothing to worry about, and it’s all overblown.
Although they do admit that a portion of the population won't be okay and the Retirement crisis is very real – but, that’s nothing new. Nearly a quarter of every generation has been without the means to retire. So these are my thoughts on how to make sure you don't end up in this category.
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Also – here is a link containing the source material for each piece of research cited. I do my best to make my videos as accurate as I can, and the additional resources should help anyone who wants to look into them further – enjoy! https://docs.google.com/spreadsheets/d/1-mlqMeTLCczeiEi0pp-Y5uf6Ui5lidWdTtyaZVacJsY/edit?usp=sharing
Have you been slowly over the years. Pitching your voice up higher? Just tuned back in and bro 😂
Unfortunately, it’s not shocking to hear this. Between lack of savings, increased spending, and inflation people in all age classes are finding struggles. I hope that the next generation can learn from videos like this and understand the importance of saving for retirement while they’re young. I’ve been working on videos like this as well. Trying to get the word out to whoever will listen! Great video Graham.
I’m 25 (so I think I’m the next generation you’re talking about), and I’ve been saving for retirement for a few years now. I’m operating under the assumption that social security won’t be available to me when I reach retirement age.
Unfortunately, I think I may be in the minority for people around my age.
@@cody7888 yes you are! Keep it going!
@@cody7888That’s a good start. If you have the option of a Roth 401(k), you ought to take advantage of it. Income tax rates will likely double around 2030. A Roth IRA can help but it has a lower contribution limit.
I hope they continue to struggle so that they’ll eventually stop spending like crazy and bring the inflation with prices down
In my late 30s and I just started investing aggressively this week to make up for all the years my money has been wasting away in my savings account. I’m above the average net worth for my age group so I thought I was ahead of where I should be, but as things were I most likely wouldn’t have been able to afford retirement once that came up. I realized just because I’m good now it doesn’t mean I will be good 20+ years from now so that’s something I wish I could go back in time and teach my 20-year-old self. 😂
Better now than never!
I am on the same boat.
I am 20 at the moment and I love seeing things like this because I get in so many arguments with my friends over how I don’t spend the money I work hard for. Which I do just not on food and parties. In my head I want to make sure 20 years into the future I don’t have to be in the same place I am today. It brings a lot of stress to me day to day wondering if I am making the correct decision to keep on making my money work for me. 18 I was worried about my credit so I got into debt then I learned about good debt so I quickly paid off the small 3k loan I had because at the time paycheck to paycheck was the life that scared me. now I’m making sure if anything goes wrong I have a cushion to sit on. And then also am going to be signing to the guard here soon to try and get my CPA license since I never had good grades in school and I want to make sure I don’t get into debt to gain a skill.
@@ashdinmilligan5373 You’re still very young so don’t think you CAN’T spend money on food and parties if that’s what you want. Like Graham has said, pretty much ANY investing and saving you do in your 20’s will go much farther than it would later in life so even though saving and investing is great don’t let it become an unhealthy obsession.
@@Atrus999 I appreciate this a lot, I have definitely cut off a few relationships because of the idea of money. Maybe I need to be a little more relaxed with how I view my finances and not let them control me. Thank you for your two cents and I will definitely be keeping this in mind day to day🙏
The reason for the development of social security was so this didn’t happen we just need to raise the cap on income that is seen by Social Security (SS has a taxable limit of $168,000). If we got rid of this we wouldn’t have a problem.
In 1982, 90 percent of earnings were subject to the Social Security tax, but by 2017 the share had decreased to 84 percent. Setting a target for the portion of aggregate earnings that are subject to the Social Security tax — for example, 90 percent — would increase revenues and help improve the program’s solvency while making the tax more progressive.
Yes!
Thank you. There are easy solutions to making social security solvent and you just stated the best one. Not to mention politicians spent social security funds on other purposes. I recall Bush gave extra tax refunds from social security. Pay off a small house (or find an inexpensive place to rent), buy a small reliable car and you should be okay with social security and Medicare. Be careful who you vote for tho cause some politicians plan to get rid of social security/Medicare/welfare. Lastly many states give extra financial aid to poor seniors. So live wisely humbly and you should be able to make it when you retire
What about railroad retirement?
I know some people who say “I’m going to work until I die because I dont retirement money” yet they don’t realize that you can’t physically work when you’re elderly.
@@Deathkon1 I’ve been saving for retirement (53 years old), I have less than 1MM which is probably not enough but I dunno, if you get sick the money doesn’t really matter that much. I’ve had so many people around me just die suddenly, both rich and poor.
@@Deathkon1How is a price of a gun versus the price of rent equate to a messed up society?
Certainly some people can’t work due to illness or work in physically demanding jobs. But white collar and professional types can work right to the end. I have a yard guy in his 70s that can out work you and me. To be honest, all the people I know that retire at normal retirement ages die. I can’t imagine retiring I would not know what to do.
You must be forgetting you don’t have to earn money being physical in 2024😂
Stay in shape so you can work in your old age? Even part time. You live longer and better quality of living if you are busy when older
Here’s my grim reality, as a viewer in his 40s.
I was quite poor for the first 15-20 years of my adult life. Half or most of that time, I was below the poverty line.
Things improved, quite a bit, in my mid-to-late 30s, and I started saving the year I turned 40.
I’m probably not going to be able to retire, ever. The bar is just too high.
That doesn’t stop me from doing the things I’m supposed to do, maxing out my 401k and such…
But it means that for me, that money’s more likely to be income supplementation. Maybe I go on nicer trips for my PTO. Maybe I pay off my kids’ student loans. Maybe I opt for a little nicer vehicle.
But I’m just learning to make peace with the reality that I’m going to work until I die.
Maxing out your 401(k) (like you said you’re doing) for the next 25 years will certainly be enough to retire when you’re in your 60s.
Ditto, I’m in my 40s, earning well but realistically only working to maybe making my kids life easier. But my life won’t be easier
The problem is that you don’t always have the choice to work until you die. Your body wears out, as does your value to employers.
@@user-gq2vn1xj2r When that day comes, I’ll just run for Senate.
Maxing out you 401k is over 20k a year most working age adults only earn 40k a year? Math isn’t mathing or your rich but tells everyone your not.
I have the opportunity to max out my 401k with a $4k match at age 21. The tough part for me is balancing between that and establishing an emergency fund, and saving for a down payment on a house
Don’t worry about saving for a down payment right now. You are 21. Get the emergency fund up and smash your 401k with the match. Your retirement amount will be worth a ton later on and you can always back off that then if you hammer it now.
You can withdraw $10k from a 401k for a 1st time house penalty free. Some plans also let you borrow funds from your 401k which could be an option for and emergency fund. (You pay interest to yourself BTW)
The employer match is free money so don’t miss out on that to bulk up your savings
Do you need to max out your 401k to get that 4K match? In many plans you don’t. I would put just enough to get the match. Then I would put in the emergency fund, and the rest in a non retirement brokerage account. Once you grow that amount to allow you to buy real estate, I would do a house hack at least until I started a family. Keep investing in the stock market and use it to acquire more rentals until the cash flow from them equals your annual household income aka financial freedom. Since you are starting early this should be achievable by the time you are between 35-40. Then stop purchasing more properties until you save up for your kids colleges. Once they leave home, you can choose to enjoy early retirement at 55ish. It may be that you’ll never need to tap into your 401k, except for the 10k for your first property, but it’s there just in case.
All good points. I need to put in 5k for the 4k 401k match which I have it configured to do right now. I think I’d be comfortable contributing 10k to start and just saving what is left to build an emergency fund, especially seeing as I will be able to take 10k out for a first house some time down the road
You’ve got plenty of time/ get a house the down the road and invest till your 30 – you’ll be way farther ahead!
One of the major issues is that boomers were lead to believe that they didn’t need to save because social security would take care or them when it was never meant to do that
And all the rest of the generations, most aren’t saving a damn thing. ‘Spend everything, you might die tomorrow.’ The problem is only going to get worse.
I’m a boomer and the Social Security Administration clearly laid it on the line in virtually every written communication they sent me. This is a typical quote from one letter (I’ve saved a lot of those letters and statements, and they almost always included this statement or a variation): “Social Security benefits are not intended to be your only source of income when you retire. On average, Social Security will replace about 40 percent of your annual pre-retirement earnings. You will need other savings, investments, pensions, or retirement accounts to live comfortably when you retire.” They warned me at least once a year. I realized that Social Security “would not take care of” me “because it was never meant to do that.” But I’ve talked with other boomers who were surprised when I explained this (they obviously didn’t bother to read their letters and statements). They were suffering from terminal YOLO!
People just need to remember that no one cares about you more than you. You can’t 100% rely on others to help you. Whether it be a friend, or your government.
not only that but retirement reform as a whole. people used to work for the same company for a long time, then they would pay them in retirement but they slowly switched to the 401k system which was meant to be supplemental to company pension. they did it in order to save money. there were even people who had been promised pensions they were never paid because laws didn’t protect them, even if they were contractually obligated.
@@johnc2438Terminal YOLO😂
Imagine trusting the government to do anything, let alone imagine trusting them to take care of you when you get old.
Graham Stephan you changed my life from a young age. I’m 21 years old, in the trades, house hacking a duplex, maxing out Roth IRA and 401k, and living like i’m broke. i never learned about money from my parents or school… so you ARE my parents and school that i’ve never had. Thank you
You are the one that makes it. It’s tough when your friends are partying now. But they’ll be working long after you have the choice whether to work or not.
I’m a bit older, but roughly in the same position. Parents and schools never taught me about money (besides the basics). Youtubers like Graham showed me how to handle it. Just bought a nice apartment and looking forward to a comfortable retirement now.
I’m 60 & have been working over 35 yrs paying into SS w/o a choice. I do have a small retirement that I’ve made a lot of sacrafices for & paid into myself. My problem is, they can always come up with money for everything else (like millions of illegals, life time welfare for many people that can work but choose not to). So, when it comes to us ones that pay in all our working years, they come up with all kinds of excuses. All I can say is, they money better be there for everyone that has & is paying in.
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