Shift in Social Mood Among Investing Public
Much of the investing public understand that low returns require much lower spending and much higher savings levels. Social mood has shifted from greed to fear, from wanting an early retirement, to wanting any retirement at all. Generation X experienced two stock market crashes and is generally more practical than the Boomer generation. The Millennials watched parents and friends lose their homes during the financial crisis. These are not temporary shifts in attitude. People who lived through the Depression never changed their ways even into the boom years of the 1980s and 1990s.
I’ve written a lot about the gap between public opinion on issues such as immigration and nationalism versus the established political powers in many Western countries. There’s also a massive gap between public understanding of finances and the behavior of the establishment. This could lead to major political upheaval when pension funds fail, or worse, bond markets and currencies, because the public will not accept excuses having adjust their own behavior.
He got his answer. Reddit users took to the platform reminding him of other expenses he’s not considering, such as possible illness, job loss, divorce, a stock market crash, health care and other long-term care planning, and even taking care of parents when they get older (caregiving is not just a physically demanding role, but a financially demanding one).
“Your calculations are figured for perfection,” one user wrote. “Also remember your kids can borrow for college but you can’t borrow for retirement.” They also tore into his estimations — explaining that interest rates are just coming from all-time lows and that there is no guarantee he will see a 6% annual return for the next 40 years. “How does your planning work out if the market returns 3% per year in real terms?”
Other commenters added that there are so many unknowns in the next four decades. “I think it’s good to maximize retirement savings when you can as there may be periods of your life where you’re unable to do so for one reason or another,” SpidermansMom said. People shared personal stories: that user said her husband fell ill and lost his job, and they suddenly went from two salaries to one. He was too sick to watch their son, who stayed in day care, and she couldn’t save as much for retirement, but felt comforted by the fact they had been maxing out their retirement plans for years before.
Another user said his perception of his retirement changed after his dad died at 69 and he realized he’d personally rather have 15 solid years of retirement compared with his father, who only had three. Another shared that his father made $150,000 a year but today is unemployed with no money. “Fortunes change,” user palsh7 wrote. “Don’t assume anything. If you’re still feeling good at 55, by all means, cut back, but right now you want to invest.”