A recent Pew Research Center report titled The Rising Age Gap in Economic Well-being  contends that the old prosper relative to the young and they provide abundant statistics to prove their assumption. I’m tired of the constant subtle attacks on anyone that did the right things throughout their lives; saved, worked hard, spent responsibly, paid off their mortgages AND DID WITHOUT TO GET AHEAD.
Reports like this are referenced in studies and used by the media to support claims of inequality to foment discontent and resentment for those who have acted responsibly. Just look at the 99 Percent and the Down with Wall Street movements. Facts can be interpreted in many ways and when you don’t fully evaluate the root causes and underlying precepts you often come to partial truths or misinterpretations.
This report infers that retirees, and those over 65 still working, that paid off their mortgages, saved for a rainy day, and have an average net worth of $170,000 — this figure includes the value of their homes — have so much more than those under age 35 and the disparity is growing. They also mention that those over age 65 receive cost of living adjusted Social Security which puts the younger group at a disadvantage! Surely they know that the younger generation pays Social Security and FICA taxes so they too someday will have these same benefits assuming the President and Congress stop the excessive spending and balance the budget.
According to the Pew Report, “In 2009, households headed by adults ages 65 and older possessed 42% more median net worth (assets minus debt) than households headed by their same-aged counterparts had in 1984. During this same period, the wealth of households headed by younger adults moved in the opposite direction. In 2009, households headed by adults younger than 35 had 68% less wealth than households of their same-aged counterparts had in 1984.”
They go on to say, “ As a result of these divergent trends, in 2009 the typical household headed by someone in the older age group had 47 times as much net wealth as the typical household headed by someone in the younger age group–$170,494 versus $3,662 (all figures expressed in 2010 dollars). “
Why should any of this be news? Typically retirees had decades to build their nest egg and what business is it of anyone other than the person or persons who did what they needed to do to prepare for retirement… Today, those who prepared and sacrificed to secure their later years are now looked upon as greedy, selfish, and RICH!!! Instead of being admired for owning up to their responsibilities they are chastised for not sharing the wealth. When has owning property, honor, personal initiative, self sacrifice, hard work, and being responsible for your actions become something to loath? When did it become wrong or selfish to save for a rainy day and actually own property rather than have it mortgaged to the hilt?
Another article in the Wall Street Journal titled Aging and Broke  relays an often times more realistic picture of what many face in retirement and it isn’t pleasant. According to this report, “The problem has been building as more Americans age 55 and older have lost jobs or run through life savings.” The reasons for this are many and we in retirement face them daily. Even those who have retirement resources now because they prepared face the uncertainties of what lies ahead.” Today 20% of adults over 65 now live with relatives, up from 17% in 1990 due to the times.
The recession, housing bubble, student loans, credit card debt, and unemployment contribute to much of this inequity. It is reported that student loan debt has increased dramatically and one of the precepts of the Occupy Movement is to forgive the Trillion dollar student debt loans! I watched TV interviews where the Occupy supporters demanded free college tuition, housing, medical and everything else imaginable. Who will pay for this? You guessed it; anyone that has anything, and who are they saying has the most in this report? SENIORS and it will also be all those working hard in all income groups!
When my wife and I purchased our first home in Topeka Kansas in 1973 the banks refused to include my wife’s income to qualify for the loan. I was just discharged from the military working for the Department of Defense as an avionics repairmen and my wife was working for the State of Kansas. They advised us it was best to rely on one income for the home loan for obvious reasons. What if my wife would be laid off or stop working to be a stay-at-home mom? Now doesn’t that sound rational and reasonable? Didn’t many lose their homes just for that reason? They depended on two incomes and then borrowed irresponsibly, often up to 100% of the home’s value with no down payment. Then they obtained adjustable interest rate mortgages with payments that went through the roof when the bubble burst.
This same group took out second mortgages to buy home furniture they really couldn’t afford. Then they used easy credit to purchase cars, vacations, and luxury items that they didn’t really need. Too many lived well beyond their means simply because they had to have it all now. Yet, the NOW Generation is suffering. Shouldn’t they? If they spent recklessly and continue on this same path it is their problem to deal with not societies as a whole. If you live life irresponsibly you and only you are responsible for the consequences.
Many good hard working people lost their jobs and homes during the recession and I’m not berating them. It happens all of the time and it’s tragic under any circumstances. However, we seldom hear about the excesses and the many who acted irresponsibly. We too often are fed a diet of the responsible failures without any thought to all of the others who just did the wrong things for the wrong reasons.
This same carelessness extends to student loans. Many leave college with $60,000 or more in debt that won’t be paid off for decades. Unfortunately we own this debt through Sallie Mae, a government entity, and the debt is fast approaching 1 trillion dollars. Is it unfortunate or a blessing that they owe this money? Didn’t’ they get an education and a hand up, not a hand out? They lived on that money and used it for student housing, books, and tuition along with some living expenses for up to 4 years or more! They choose to go to school and in many cases attend additional semesters because they changed their major several times along the way or took too few credits each semester to give them more me time.
Many opt for college instead of community colleges and trade schools because they make it so easy today to get grants and tuition assistance. It’s almost a rite of passage today unlike in my day where the draft was our rite of passage with a staring pay of $98 a month, a two to four year commitment, and a path to Vietnam and other undesirable locations. We put our education and aspirations on hold for the greater good of our country and in most cases not by choice.
If graduates and students are upset about college expenses why don’t they picket the source of their discontent? It’s the universities; many publicly funded that charge outlandish tuition. There is little incentive to cut costs. Colleges pay professors huge salaries for working only a fraction of the year, offering sabbaticals at full salary, and they can’t be fired because of tenure. Then to add insult to injury they can often retire in their 50s with full salary and health care for life on our dime.
These same institutions charge tuition, take money from the states, federal government, and alumni and still can’t manage to control costs. What is particularly perplexing is the fact that government is always saying we have to improve education and they opt to throw more money into a system that is failing, and by failing I mean failing our children. Most of the additional money they receive goes for salary and benefits most everyone else would give their eye teeth for. Our entire education system must become student centered instead of teacher/administration centered as it is today.
There are many issues to consider when weighing this report and others like it and if you look under the surface and at the substance of these issues you come to a completely different conclusion.
The Pew report goes into great depth to show just how much wealthier the aged are today and how this wealth gap is growing at an alarming rate. I read the Pew report front to back and the more I read the more alarmed I became of the class warfare that is being waged today across this country. Our President constantly talks about everyone paying their fair share and asks audiences why the rich shouldn’t pay more. He never mentions that the top 10%, according to the Congressional Budget Office, pays more than half of all federal taxes and 70% of federal income taxes.
Redistribution of wealth doesn’t stop with what many of us consider rich. These contentious attacks ripple across all income groups. When did you ever consider that a retiree with a total net worth of $170,000 — including the value of their homes — to be excessive? The spreading of the wealth mantra, perpetuated through our tax code and under what they call social justice Initiatives, doesn’t stop at your neighbor’s door or in uptown communities. It eventually spreads to ALL groups and before you know it even what you considered to be sacrosanct; your home and retirement savings are at risk.
Property rights and free enterprise are the cornerstones of our republic and we should ALL be alarmed by those who espouse “Social Justice” and want to spread the wealth — especially when they are talking about YOUR ASSETS and not theirs.
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