
Rich Retirees Are Hoarding Cash Out of Fear - JumpCrisscross
https://www.bloomberg.com/news/articles/2017-05-16/rich-retirees-are-hoarding-cash-out-of-fear?cmpid=BBD051617_BIZ&utm_medium=email&utm_source=newsletter&utm_term=170516&utm_campaign=bloombergdaily
======
dsmithatx
My grandfather worked at Exxon Mobile for 60 years and retired around 1988
with a few million dollars in stock. I remember my dad saying he had about 3
Million in stock he purchased as his retirement plan.

He built a house and bought a couple of nice cars living on about 100,000 a
year. About 12 years ago he had a heart attack and stroke and was bed ridden.
12 years of doctor bills and hospice ate through almost every dollar he saved.

My grandmother sold the house and now lives on her social security. Maybe
people 60 should not be so fast to go spend their cash. He was 72 when he got
sick and 84 this year when he finally passed away. If something happens to our
grandmother there wont be a nice $3 million to cover 12 years of
hospitalizations and surgeries.

~~~
ransom1538
Whatever you save with your blood, sweat and tears (if you are lucky) will be
blown on medical expenses. The trick is to convert to cash (literal), then
give it to your wife, convert medical expenses to debt and die.

~~~
reustle
The trick is to move to a country with proper healthcare

~~~
imgabe
Or just die when you're old? Maybe that sounds harsh, but being bedridden for
12 years doesn't sound like any idea of a good life to me.

The old die to make way and free up resources for the young. That's the way
it's supposed to work.

~~~
astrodust
Someone's a fan of _Logan 's Run_.

Enjoy your manadatory execution when you're forty you old bastard.

~~~
imgabe
False dichotomy. There's a pretty big difference between dying after having a
stroke that leaves you permanently disabled in your 70s vs. mandatory
execution of healthy 40-year-olds.

~~~
undersuit
And you're trusting someone else to make that decision.

~~~
r00fus
We should enable a culture where people are free to make that decision for
themselves. California and several other US states allow for this - not sure
about internationally.

I wouldn't want to live on life support. I'd rather my wife/kids get a nice
(well managed) trust fund for the remaining savings and just go in peace
early.

------
gedy
Fear? Seems more that there are simply no safe investments with decent
returns, interest rates are abysmal. I think folks are 'hoarding' simply to
not run out by the time they die.

Low interest rates are painted as great for the economy, but they amount to a
war on savers and fixed incomes.

~~~
msabalau
Oh, if we had high interest rates and inflation, people with fixed incomes and
savers would be feeling horrible too.

The idea that there would be safe investments with decent returns is
inherently ridiculous. The closest one can come is oligarchs buying tax
policy, or baby boomers making sure that housing stock is inadequate so the
prioe of the their home goes up artificially at the expense of the young and
poor.

~~~
incompatible
To me it seems that getting a decent return was a lot easier prior to 2007.
Banks would pay interest rates of 6% or so and inflation was low. The stock
market only gradually became overvalued.

~~~
kasey_junk
Citation needed. In 2007 a 1 year cd was paying about half of that.

Savings account rates have not kept up with inflation in my adult life time
and I'm middle aged.

~~~
icedchai
I remember having a savings account at Emigrant Direct that was paying
somewhere around 5%, back in 2006 or so.

See
[https://www.fatwallet.com/forums/finance/579954](https://www.fatwallet.com/forums/finance/579954)

------
Gustomaximus
I feel this is another down-stream effect of weak social support. If a country
offers reasonable basic pension and healthcare, retirees will spend because
they know if they run out of cash they have their basics covered. Without this
support of course they will hoard money.

I saw this living in Norway where people in general tend to save less
aggressively because they know if things go bad they are covered. And it
worries me in my country of Australia where we are following the US model of
ever reducing social services. It makes great short term savings but I feel
there are these kind of longer term effects we pay the price for. And these
effects are hard for many people to consider when its that far ahead so
politically it is unlikely to change.

~~~
CydeWeys
Healthcare is still so terrifying that I feel like I have to have millions of
dollars saved up just in case. And the insufficient coverage we have now might
not make it through the next two years unscathed.

------
drblast
This is a really good argument for subsidized medical care. This fear of not
having enough for medical expenses is perfectly reasonable, and I wouldn't
fault sometime for hoarding cash for a second.

Solve the inherited inequality problem with inheritance taxes or guarantee
medical care. Otherwise of course people will save for medical expenses. And
they should, it's prudent.

~~~
cylinder
Retirees do have Medicare though, but with any socialized medical system you
won't be covered for everything

~~~
incompatible
Where I live, you still have to pay for opticians and dentists, and perhaps
other medical treatments if you don't want to stay in a queue for a year or
so.

------
RangerScience
Fuck. I'm 30, and I just went through this. I quit a bad job to try to do my
own thing; after a few months without a paycheck - despite having plenty of
saving six ways from Sunday - I clammed up almost completely, not wanting to
spend a dime. I was miserable. It's the same feeling as item hoarding in
CRPGs.

Seems like I either need to never retire, or set up a trust for myself so I
have a guaranteed allowance. (Or deal with the implicated fear....)

~~~
blhack
This is tough, man. Some things I did when I was younger that helped me with
this:

1) Go for a period of time (I did a month) living off of rice and beans (as
far as I can find, the cheapest way to get close to a complete meal)[1]

2) Pare down everything in your life that isn't absolutely necessary. I put my
bed in storage and lived in a hammock for a year. Cut out hot water for a
period, stuff like that.

Once you do some of those things and realize that you _can_ do it, living on a
small income (or savings) in order to work on something becomes a lot easier.

I'm _really_ lucky in that my runway is infinite, and a big part of it is
because of the things that I listed. I know exactly how much the minimum I
need to live off of is, I know what its like to live on that amount of money,
and I know that it isn't scary.

[0]: A lot of the world lives off of this. I'm not saying that this is a path
to complete nutrition. It isn't. Everyone should eat a balanced diet.

~~~
meddlepal
Question... how did your back feel sleeping on a hammock for a year?

~~~
nwatson
In hammocks from Brazil you sleep diagonal to the "axis" of the hammock and
your body is almost rod-straight. Your back will feel just fine after a night
sleeping like this.

~~~
DashRattlesnake
> In hammocks from Brazil you sleep diagonal to the "axis" of the hammock and
> your body is almost rod-straight.

Can you find a pic demonstrating what you mean?

~~~
aashishkoirala
[http://www.treklightgear.com/treklife/hammock-
angle/](http://www.treklightgear.com/treklife/hammock-angle/) ... skip to
where it talks about the angle.

~~~
DashRattlesnake
That's some website, forcing me to enable javascript so I can use their
"totally necessary" custom scrollbar </getoffmylawn>

Anyway, that's interesting. Thanks!

------
ChuckMcM
As your parents age you get a chance to see how they handle retirement. You
may also get to see their critical thinking facilities deteriorate which, I
can tell you, is very sad.

One of the things my parents get exposed to fairly heavily are stories that
our entire financial system is teetering on the brink of massive depression.
Often times it comes with an offer for a 'sure fire' investment that will ride
out this calamity. Well if you're parents are still clued in enough to not buy
the snake oil, they might miss that their future outlook is being swayed by
these pitches even if they don't buy into them. My great aunt, before she
passed, had a suitcase in her closet with lots of cash in it to survive the
coming collapse of society.

It can be very sad to watch.

That said, a number of financial planners have moved their estimates of the
'safe withdrawal rate' from 7% down to 4% or sometimes lower. This based on
the anemic rate of returns over the last decade. As a result if you reduced
your withdrawal rate to 4% and you were still getting returns that could have
supported 7% your retirement funds will in fact grow by 3% per year.

And finally there is the whole inheritance thing. When you have kids, anything
you leave them when you pass will help, except if you live in the US your
"kids" will be retired already when you die. So perhaps you leave your estate
to your grandchildren, or your great grandchildren. Then the kids who chose to
lower their carbon footprint by not having kids themselves get angry that they
don't get any of your inheritance. That causes a family dispute and all your
children stop talking to each other. It isn't a laughing matter, although it
is predictable. Sometimes I think it is better to leave nothing but memories,
at least everyone gets to keep all of those.

~~~
tnecniv
> My great aunt, before she passed, had a suitcase in her closet with lots of
> cash in it to survive the coming collapse of society.

This in itself is poor preparation because it assumes the currency will still
be worth something should some financial calamity on the purported scale
occurs.

~~~
ChuckMcM
Agreed, I've had a couple of fun discussions with friends over what might be
the "best" post apocalyptic future currency. Cigarettes were a popular
suggestion, as was whisky, I thought perhaps medical supplies might make the
cut, or bolts of canvas. What would you consider to be the 'best' barter
currency, assuming cash had no specific value?

~~~
ingenuous2
Guns, ammo, and whiskey. I don't expect humanity to stay civilized or play by
the same rules.

The whiskey gives you something to trade. Guns & ammo make sure the trade
isn't a robbery.

------
djrogers
There are a lot of reasons why retirees could wind up spending less money
aside form 'hoarding'. For one thing, retirees often have paid off their
homes, and have no mortgage payments. In addition to that, having a daily job
entails a lot of soft costs that often go unnoticed - without your daily
commute, your car (and tank of gas) will last a lot longer, you won't eat out
for lunch as often, and even your wardrobe will likely stretch further.

If my grandfather and father in law are any indication, the extra time around
the house also mean that you can do a lot of work on your house yourself that
you may have had to pay a plumber, carpenter, or electrician to do before.

Basically, a retired person can generally maintain their lifestyle on less
money than a working person...

~~~
vkou
Unless they need health insurance. Employer plans often won't discriminate
against you for your age, but on the public market, you will be taken for all
you're worth.

You're also more likely to need medical care.

------
charlieflowers
> "As a result, millions of Americans are living too frugally"

WTF, really? Reminds me of Edward Bernays [1], the "father of public
relations", who set out to help Americans become materialistic (and
succeeded!).

If someone is enjoying their life without blowing all their money, that person
is BETTER off. It's just corporations that want to suck the money away from
them that need to "train them to spend."

[1]
[https://en.wikipedia.org/wiki/Edward_Bernays](https://en.wikipedia.org/wiki/Edward_Bernays)

~~~
bradleyjg
Optionality has value but it decays over time. If you forgo consumption in
favor of savings up until the very end then you haven't been better off,
you've been worse off. The dead can't benefit from spending money.

~~~
djrogers
The benefit of leaving my heirs a legacy far outweighs any 'benefit' I'd get
from spending money needlessly...

~~~
bradleyjg
Consider, it's up to you but consider, that you might get more joy out of
gifts while you are alive to watch the recipients benefit from them than you
do out of imagining how much they'll benefit from bequests you intend to leave
when you die.

~~~
Erik816
A valid concern. But estate planning lawyers like to remind people that it's
quite possible you will get more love and attention from your relatives in
your old age while they are still expecting an inheritance than when they know
you have already given it to them. A bit cynical, but relevant to consider.

~~~
zeroer
I sincerely hope that when I'm that old, I'll be above such pettiness.

------
frogfuzion
Read "Sending Jobs Overseas" and it makes sense.

1\. Their children and their children's children are competing with 100s of
millions that they didn't have to. They are worried about them. There is no
guarantee that the quality of life of their family will be like their own.

2\. They are worried about destabilization that could occur as the west
declines.

------
MrGrillet
Maybe these people are well off because the developed the habit of saving over
a lifetime and they are simply continuing the habit. If they were spenders,
they wouldn't have the reserves to speak of.

It might not be fear but simply a practical habit that there is no real reason
for them to break.

Keep in mind many people will have purchased items or experiences they desire
throughout their life, rather than simply waiting for retirement.

------
kanetkarster

      “We have to get people comfortable with enjoying their retirement and spending their money,” Fellowes said.
    

Implying that the only way to enjoy retirement involves spending money

~~~
gedy
I'd be comfortable 'spending my money' in a future retirement if the
retirement could generate decent passive income. As it stands, though, it's
looking like many folks like me will have to work until we die and/or save
enough to burn with just living and healthcare costs.

~~~
djrogers
Do you foresee medicare failing?

Also, what's stopping you from setting up your retirement such that you do
have passive income?

~~~
__jal
> Do you foresee medicare failing?

I see a non-zero chance that it won't be there when I reach retirement age in
~20 years.

These days, the US political climate is looking far friendlier to those who
want to destroy wealth transfers that benefit the non-rich.

Also, the US political establishment in general is looking substantially less
stable than it did 20 years ago. That's not to say it is going to break down
in a year or five. But I do think making bets on it should only be done with
money you don't need.

------
jhulla
Unexpected healthcare costs keep seniors nervous. Although Medicare and
Medigap insurance plans offer good coverage, long term care and home health
care is dauntingly expensive. Many rely on a mix of family + caregivers. Even
then, the hourly/weekly/monthly costs are quite high.

------
Merad
Surprised no comments that I've seen have mentioned the Great Recession. There
were many, many stories in 2009 such as [0] about retirees forced to return to
work due to decimated 401k's and investments, or people on the verge of
retirement who saw their hopes vanish. Considering that the economy is likely
due for another recession at any time, it doesn't seem surprising that many
people are terrified.

[0]: [http://www.cbsnews.com/news/retirement-dreams-disappear-
with...](http://www.cbsnews.com/news/retirement-dreams-disappear-with-401ks/)

------
carsongross
_> After a lifetime of saving, it requires some psychological gymnastics to
start spending your nest egg. Browning’s suggestion is that financial planners
urge their thriftiest clients to make big purchases–like a second home or a
fancy car–before they retire, out of their pot of savings. The idea, he said,
is “training people to spend.”_

And that right there is where the article tipped over from "dumb" to "evil".

------
hkmurakami
Just another way in which "the world is becoming more like Japan" (wrt to its
demographic and economic woes).

(The generaltional wealth gap is such that corporations have been shifting
product strategy away from the youth and towards the elderly)

~~~
djsumdog
Japan has real health care

~~~
digikata
For the most part, US retirees have health care too.. more so than the rest of
the population at younger ages.

------
psyc
Excuse me while I align my values with the needs of the US economy.

------
1001101
FTA, the value of the average retiree's estate is ~300k in the 60s, 70s, and
80s. Using the 4% rule (make your money last 30 years), that's 12,000 a year,
and that's probably skewed upward by the compounding of the super wealthy (20
richest people worth more than bottom 50%, 150 million people). The median is
probably much, much lower (I'd wager 50k). That's living off of cat food in
both cases, and if you're worried about social security or your pension... Did
I miss something?

~~~
djrogers
That's how much they had left when they died - not what they had when they
retired. So that's _after_ the 20-30 years of living off those savings...

~~~
drew1492
Spending down your principal may not be a smart idea though, especially if one
is in good health. It runs the risk of them outliving their savings. Spending
4% or less of your assets annually is sustainable indefinitely, statistically
speaking.

~~~
TheCoelacanth
That's optimal from an individual perspective, but not necessarily from a
societal perspective. The author suggests it might be better if people had
insurance which paid an annuity after reaching a certain age (say 80) and then
people could plan to have their savings run out at 80 instead of everyone
having to plan to live until 100 with only a tiny fraction making it to that
age.

------
jorblumesea
It really comes down to healthcare. It's the one thing in the US that can
completely bankrupt you in your later years.

~~~
zenpaul
Yes. Knowing that risk, it is completely rational to oversave.

------
calvinbhai
Surprising that cost of healthcare, especially for those who are 60+ is not
factored in. If the same rich retiree lives in a country with same cost of
living (but with super cheap/affordable healthcare), spending behavior would
probably be very very different.

------
nradov
Interesting choice of words to frame the discussion. When it comes to cash,
hoarding is no different than saving. But hoarding has a negative connotation
and saving is positive.

~~~
graedus
Absolutely. Also hilarious to me when a bunch of economists start whining
about "stingy consumers" when inflation numbers aren't ticking up as much as
the central bank hoped for. Meanwhile over half of Americans don't have enough
savings to cover a $500 emergency car repair[0], but apparently they need to
stop being so stingy and get out spend more to help the economy.

[0] [http://www.cbsnews.com/news/most-americans-cant-
handle-a-500...](http://www.cbsnews.com/news/most-americans-cant-
handle-a-500-surprise-bill/)

~~~
Armisael16
That's a pretty willful misrepresentation of his position. He acknowledges
that many people don't have any savings; and makes it pretty clear that he
isn't talking about them.

------
WalterBright
Nobody hoards money. The money is invested into stocks and bonds where it
flows back into the economy. Even bank deposits get loaned out, and people who
borrow money spend it.

------
bjd2385
Funny. In other words, we're not making enough people rich through our
overspending already - those in retirement, who are supposed to feel security
in their old age, should overspend too.

------
ppurka
On one hand there are articles saying young people don't have enough savings,
and on the other hand there are these articles ruing that the older generation
don't spend more.

Maybe we need to check which kind of industries are sponsoring the respective
articles.

------
Artlav
Why is it painted as a problem? Why should you spend more than you need? Why
is "enjoying a retirement" supposed to only be achieved by spending more
money?

I don't get the point of the article.

~~~
stupidhn
Why should you save more than you need? What good does it do?

~~~
Artlav
Why are buildings built with 3 times the structural integrity than they need?

Why are wires several times thicker than they need to carry the power the
house needs?

Why are hammers much harder than nails?

It's called redundancy - you can never predict exactly what the needs would
be, so you leave a healthy safety margin.

~~~
stupidhn
Overdoing any of each of your examples is a waste of resources, just like
dying with a pile of cash.

~~~
kevin_thibedeau
You can engineer wiring to be the right size for the 99% use case. You can't
do that with savings.

~~~
stupidhn
> _You can engineer wiring to be the right size for the 99% use case. You can
> 't do that with savings._

This is not remotely correct.

------
squozzer
Apparently the author thinks transferring wealth to one's heirs is a bad
thing, but transferring it to insurance companies and nursing homes is not.
But let's continue.

"What can get rich elderly Americans spending more? One way is to reassure
them they’re not going to run out of cash. Tools such as annuities and bond-
ladders can turn a retirement account into a regular stream of income,
mimicking a paycheck. Insurance products could also protect retirees against
huge, late-in-life expenses from medical care—a dominant fear. Browning likes
longevity insurance, an annuity that kicks in only if you live to 80 or 85.
Other options are reverse mortgages or long-term care insurance."

With only a brief comment on health care costs (>10% yearly increases), let's
discuss the various solutions --

Annuities - take your nest egg that rode decades of market fluctuations, and
give it to another company to ride another decade or two of market
fluctuations in exchange for a fixed monthly distribution. Never mind that
every 401(k) plan I ever had would start paying you out of your acct after you
reached 59.5 if you wanted it, and HAS to pay you out of your acct once you
reach 70.5.

The various forms of insurance noted have a couple of things in common -- 1)
they are overpriced relative to the benefit provided; 2) The benefit will be
known and factored into the cost of your healthcare, thanks to the miracle of
the SSN.

The best deal mentioned might be the reverse mortgage, but only if your heirs
wouldn't need your house - which in my experience, they don't, but in 20
years, with current employment and social trends, who knows?

------
ilamont
I know a couple in their 70s, moderately successful entrepreneurs, who not
only hoarded millions in cash but also refused to put any in the stock market
since the early 2000s. They have kept it in ultra-safe, ultra low yield bank
and bond accounts, with a relatively small investment in a Florida condo.

Their fear, borne from experiencing repeated stock market and real estate
bubbles over many decades, is that yet another crash will decimate their
savings.

------
tanilama
Maybe the government should consider spend more on public healthcare, so there
is less fear

~~~
neolefty
I like that argument. It seems tangential at first, but it would make a lot of
retirees much more comfortable and willing to spend their money.

That line of reasoning sounds similar to the establishment of the FDIC bank
account guarantee that helped end the Great Depression by alleviating people's
fear of failing banks.

------
MisterBastahrd
Have you watched television or listened to radio aimed at older viewers /
listeners? If it isn't about the upcoming apocalypse and how you need all the
gold in the world that you haven't spent on supplies for your armageddon
shelter, it's about Fred Thompson selling you reverse mortgages. Nobody's
easier to scare than people who feel their vitality slipping away from them
day by day.

~~~
droidist2
Haha true, Fox News and fear-mongering gold ads seem to go hand-in-hand. I
remember seeing them during Glenn Beck's show and thinking "wow, this is so
right for his audience."

------
mvindahl
Maybe some kind of inverse life insurance. Give pile of cash to insurance
company and receive monthly paycheck for the remainder of your life.
Essentially you are betting on a long life and they are betting on you driving
your golf cart off the edge of a cliff. I think products like this exist in my
country of residence; I'd be surprised if there is not a similar thing in the
US.

On a side note, I read at one point that in France there is a tradition (not
sure how widespread) of selling your home with the condition that the buyer
must wait for you to move out, whether for health reason or because you die,
and that you pay no rent while staying. Of course, the price is adjusted
accordingly. Again, both parties are making a bet on the duration of your
lifespan.

~~~
jaclaz
JFYI it is a rather common contract in Italy too, besides France, basically
"full" property is divided into two parts:

1) "Nuda proprietà" (literally "Naked Property" but actually "bare ownership")

2) "Usufrutto" (usufruct or "life interest")

Selling the bare ownership is a rather convenient way to monetize your house
when you are old and need some money (for medical expenses or whatever), while
retaining the usufruct, which resolves _usually_ to the right to live in it
(but could be also be pocketing the income from renting the building). The
buyer of the bare ownership, on the other hand, pays in advance a (reduced)
amount of money for the asset, but essentially "bets" on how soon it will
become available.

It is often used also to reduce the amount of taxes payed to the state by the
(future) heirs.

It isn't really applicable to the US, mainly for taxation reasons:

[http://publications.ruchelaw.com/news/2016-09/Usufruct-
Code-...](http://publications.ruchelaw.com/news/2016-09/Usufruct-
Code-2036.pdf)

The above article includes a French table of the percentages attributed to the
two parts and here are the same valid in Italy (they are not much different):

[http://www.tonalini.it/resources/pdf/Usufrutto-vitalizio-
Tab...](http://www.tonalini.it/resources/pdf/Usufrutto-vitalizio-
Tabella2017.pdf)

------
stuffedBelly
_too frugally_

hmmm...spending habit established over decades is not an easy thing to change,
no matter how much money one has. I am not convinced _FEAR_ is a dominant
factor. It could simply be that people think there is no need to spend much in
order to have a decent life after retirement.

~~~
kartan
> spending habit established over decades is not an easy thing to change

I think that you are right. A lot of people is arguing about investments,
health care, etc. like if human beings where "Homo economicus". We are not. We
are not immune to rational arguments, but we take a lot of decisions based in
what we learned in our youth. "Homo economicus" was an interesting way of
thinking about humans, it is no more.

* [https://en.wikipedia.org/wiki/Homo_economicus](https://en.wikipedia.org/wiki/Homo_economicus)

------
georgeecollins
There are two tracks in America. On one track are people with almost no net
worth who will depend on social security and their homes, if they own one, for
retirement savings.

The other track is people who actually read articles about retirement savings.
They are a smaller group, often getting the advice meant for the former. They
constantly hear that Americans don't save enough for retirement. The financial
industry is constantly saying people aren't saving enough, in media venues
that appeal to the affluent who don't really need that advice. But the more
those affluent invest the more commissions they collect. So they stoke the
anxiety to those who shouldn't feel anxious.

~~~
droidist2
That's very interesting. I think this happens a lot (people getting advice
meant for other people). The ones who care enough to hear the advice aren't
the ones who typically need the advice.

------
tobyjsullivan
This graph in particular left me confused.

[https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ib_EJj3p7cW...](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ib_EJj3p7cWQ/v1/800x-1.png)

So, in 1974, Americans didn't have retirement savings? Or the total sum was
just too small to display on the graph?

Or is this just graphing one particular type of easily measurable asset which
was introduced around then and has grown in popularity...

~~~
trynumber9
Pensions before. 401K and IRA now.

------
dxhdr
> On average and adjusting for inflation, retirees are entering their 80s
> richer than they were in their 60s and 70s.

This is a misleading interpretation of data. On average, yes, but at the
median, no. The median retiree's net worth is less than $100k at 60 and
continues to decline with age.

[https://unitedincome.com/documents/papers/LivingTooFrugal.pd...](https://unitedincome.com/documents/papers/LivingTooFrugal.pdf)

------
pimlottc
This is a really sloppy headline. "Cash" implies moving money out of stocks
and into actual hard currency, which is not what they are talking about at
all.

------
duderific
I found the tone of this article somewhat obnoxious. "Why aren't these old
codgers getting out there and spending like they should? We gotta find ways to
make them feel more comfortable!" As someone whose father is 75 and doesn't
have a dime, because he didn't watch his spending or have a savings plan, I
find this attitude rather disconcerting.

------
volune
The money is being used productively in their various retirement investments.
It's not like this is just cash under the bed.

------
justforFranz
Haha, the owners of this economy are looking at the last, great reserve of
consumer cash they can suck dry.

Labor has no pricing power. People working real jobs won't be spending wild
dollars anytime soon. They've been neutered by wide-open valves of cheap
imports.

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g123g
Maybe there is need for a startup that can pool the retirement money from
retirees and assure them of a comfortable life style till the time they die. I
think this will allow the retirees to enjoy their life much more rather than
worrying about "what might happen...".

~~~
JumpCrisscross
You're thinking of an annuity [1], or more directly, government bonds.

[1]
[https://en.wikipedia.org/wiki/Annuity_(American)](https://en.wikipedia.org/wiki/Annuity_\(American\))

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kazinator
Okay so:

\- They think they are gonna live long, and need money.

\- They are confident cash is gonna be worth something. (They aren't getting
rid of cash and hoarding gold, for instance).

Fear? I'm getting intoxicated with the sheer optimism of this.

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tutufan
This is entirely rational behavior. Without credible ironclad insurance to
backstop one's risks, "hoarding" assets is the proper path to take.

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loco5niner
> The average American over the age of 60 cuts spending 2.5 percent per year,
> or about 20 percent over a 10-year period

That's not how math works...

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dmh2000
a table in the article implies that $300,000 nest egg makes you rich. Lol.
that's not rich. that's marginal retirement.

~~~
TheCoelacanth
$300k at the end of retirement not at the start. Having $300k more than you
actually need isn't what I would call rich, but it's also not marginal.

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grizzles
This shows why the inheritance tax is so important. It's that or a stagnant
economy.

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hamami
I suspect the biggest reason this is happening is there's no healthcare in
U.S. and retirees simply have to account for that. Who will help pay the
hospital bills of the "educated spenders" with no money when they get a
serious disease?

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uptownhr
Who makes money of the retiree spend more money?

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uptownhr
This is some crazy shit.

