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Social Security & "Beach time"

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Capricious

Beach Fanatic
Interesting opinion with lots of "beach" references:

http://tinyurl.com/2zctum


Oct. 18 (Bloomberg) -- High tide is a mystical moment for a lot of us. We actually stand on the beach hoping to capture that second when the foam reaches farthest up on the sand....
 
this plan could certainly immediately reduce future pension liabilities, but i am unsure that the author's statement:

"Real wages in the U.S. tend to rise over time -- dramatically, lately." is entirely accurate

- would have to do some research to confirm or deny my theory, but to my recollection wage growth has been relatively stagnant for several years (i know my wage growth has been largely negative in real terms).

but regardless of the pace at which wages have grown; removing this from the indexing formula will lower anticipated s.s. liabilities. s.s is still a major problem & as a relatively young individual I am not counting on, nor is anyone I know, having any type of s.s. or government support upon my retirement. the problem with this or any plan, however, is that the segment of the population which would be impacted most (say 40 yrs old +) is most certainly the most vocal & most likely to vote - this is presumably why no candidate has ever made any meaningful attempt at s.s. form as a part of their platform.

another question: when the baby boomers begin to reallocate their retirement funds to less risky securities (e.g. bonds) will that not require a large exodus of moneys from other financial markets (stock market) - what impact will this have on the value of the stock market? seems to me that this change in the flow of funds could cause a significant decline in the equities market. thoughts?
 
this plan could certainly immediately reduce future pension liabilities, but i am unsure that the author's statement:

"Real wages in the U.S. tend to rise over time -- dramatically, lately." is entirely accurate

- would have to do some research to confirm or deny my theory, but to my recollection wage growth has been relatively stagnant for several years (i know my wage growth has been largely negative in real terms).

but regardless of the pace at which wages have grown; removing this from the indexing formula will lower anticipated s.s. liabilities. s.s is still a major problem & as a relatively young individual I am not counting on, nor is anyone I know, having any type of s.s. or government support upon my retirement. the problem with this or any plan, however, is that the segment of the population which would be impacted most (say 40 yrs old +) is most certainly the most vocal & most likely to vote - this is presumably why no candidate has ever made any meaningful attempt at s.s. form as a part of their platform.

another question: when the baby boomers begin to reallocate their retirement funds to less risky securities (e.g. bonds) will that not require a large exodus of moneys from other financial markets (stock market) - what impact will this have on the value of the stock market? seems to me that this change in the flow of funds could cause a significant decline in the equities market. thoughts?
Nominal vs. real $'s on wage growth.
 
"...another question: when the baby boomers begin to reallocate their retirement funds to less risky securities (e.g. bonds) will that not require a large exodus of moneys from other financial markets (stock market) - what impact will this have on the value of the stock market? seems to me that this change in the flow of funds could cause a significant decline in the equities market. thoughts?..."




As with all things, one can find opinions "both ways" on this issue.
The internet is loaded with them.


Possibly more pertinent to this board is the question of retirees
buying coastal retirement homses vs. less well-heeled retirees needing to liquidate coastal vacation homes, and the ultimate effects of those
transactions
 
another question: when the baby boomers begin to reallocate their retirement funds to less risky securities (e.g. bonds) will that not require a large exodus of moneys from other financial markets (stock market) - what impact will this have on the value of the stock market? seems to me that this change in the flow of funds could cause a significant decline in the equities market. thoughts?

I think many boomers will continue to be invested in the stock market (perhaps shifting focus to blue chips and funds for more stability) as part of a balanced portfolio.
 
"Possibly more pertinent to this board is the question of retirees
buying coastal retirement homses vs. less well-heeled retirees needing to liquidate coastal vacation homes, and the ultimate effects of those
transactions"

Now is that funny? Why would one care if someone has to liquidate their home?
 
"...Now is that funny? Why would one care if someone has to liquidate their home?.."




Note that I said their "coastal vacation homes," not their "homes."


Apparently a large segment of the population is planning on financing their retirements with the equity in houses:

http://www.smartmoney.com/consumer/index.cfm?story=20070907&src=fb&nav=RSS20


The question is whether a large segment of the population looking to sell at the same time will depress prices, just as many are concerned that a large segment of the population looking to sell stocks in order to finance retirement
might depress stock prices.

Countering those that need to sell will be those retirees looking to buy retirement homes.

Which group will be larger?





Oh, and I think everything is funny.
 
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