I can understand why you don’t dwell on the coming crisis but it is coming.
Regarding the Student loan crisis. You said:
We all know student loans are unsustainable and crippling an entire generation before they’ve staggered out the gates. But by focusing solely on repaying student debt, there are countless other consequences, and one of them is retirement.
What Loan Officers, Post Secondary Educational Institutions and Student Advisers did is criminal. I see it like selling vape pens to 13 year olds. Their needs to be more criminal prosecutions.
We now have an unavoidable moral hazard of student loan forgiveness. We have to do it and move on but some heads need to roll. My first impulse was to blame the students but I see it was a big conspiracy and they were conned.
I don’t see why anyone would pay anymore on their student loan than they have to to stay out of jail. They are going to be forgiven.
A lot of boomers are going to be living on little more than their Social Security, I hope they paid off their homes. With a paid off home you can live on Social Security in a low cost of living community. My Mom did it comfortably and left her children most of our Dad’s retirement savings and the paid off house.
When I started work my employer match 100% of up to 6% of our salary in 401k contributions for quite a few years and we had a pension. I now have a nice 401K rollover IRA, a Pension and Social Security and a bunch of savings, two paid off houses. I am one of the lucky boomers, I did some right things and got lucky on others. Oh, I am 62 and still working so I have not started collecting my Social Security but I did have to start collecting my pension as delaying did not increase my payments once I turned 60. In 1981 I did have a 6% student loan with a $1,500 balance. My entry level engineering job paid $20,000 a year and my rent was $250 a month. I did not get married for 10 years. In that time I saved the down payment for my first house.
I know this might seem like a fantasy world for Millennials and Gen X,Y,Z.
The miracle of compound interest. After working for 20 years I was talking to my Director and he mentioned that his 401k contributions seemed meaningless. The returns on his current balance dwarfed his contributions including the company match. Seriously his 300 thousand dollar balance was returning 30 grand a year. The company match had dropped to 50% of up to 3 percent and I think at the time the contribution limit was something like 15 grand anyway. The account earnings were more than twice the max contribution he could make. This past year if his 300 thousand dollar balance was in an S&P 500 index fund instead of return just 30 grand it would have returned 100 grand.
I mentioned it took me 10 years to save the down payment on my first house. Well, I did get a windfall (18 months of expense paid business travel) but I was contributing 6% to my 401k. I lived in cheap apartments and drove second hand cars. I lived in low cost of living places. Instead of living in Orlando or Daytona, I lived in Titusville. Instead of living in Santa Barbara I lived in Lompoc. Instead of living in New Orleans I lived in Slidell. I lived less than an hour away from Orlando, Daytona, New Orleans, or Santa Barbara my whole adult life. The attraction of living “downtown” was weak when I could visit easily when I wanted too and I avoided the cost and hassle of city life. My commute to work was never more than half an hour.
The modern conveniences I lived without were numerous and I did not miss them. I did not own a TV until I was 23 years old. I did not get cable until I was 26 and then it was sans HBO/Showtime etc. We did not have computers until I was over 30 and it was dial-up, I still use my AOL e-mail address. I did not get a cell phone until I was in my late 40’s. I got the wife a Trac phone for emergencies a little before my employer gave me a Blackberry. The only food we got delivered was Pizza, maybe twice a month. Fast Food or eating out about the same frequency, a couple times a month. Subscriptions were only for magazines.
I don’t understand how young people can afford streaming services, cell phones, eating out, delivery, high speed internet, student loan payments and high rents no less save for retirement. Everyone seems to start adult life with these luxuries/burdens/pseudo-necessities instead of growing into them.
TEK
