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Inflation Beyond the Stars Thread for April 12
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2022 Apr 12, 12:49am 145,854 views 1,537 comments
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896
zzyzzx
2024 Apr 3, 10:36am
zzyzzx
2024 Apr 3, 10:36am
https://www.bloomberg.com/news/articles/2024-04-02/saving-for-retirement-americans-say-they-need-1-5-million
Americans Now Say They Need $1.5 Million to Retire
Retirement is becoming an even more distant goal as higher costs cut into American budgets.
A typical person now believes they need $1.5 million to retire comfortably, which is nearly 17 times more than the $88,400 savers have set aside on average, a Northwestern Mutual study shows.
The gap, up 16% from last year, highlights the challenges coming into focus as the over-65 population in the US increases and Americans face the prospect of financing longer life spans and potential cuts to Social Security benefits.
“People’s ‘magic number’ is now 50% higher than it was during the pandemic,” said Aditi Javeri Gokhale, chief strategy officer at Northwestern Mutual. “Soaring costs are putting more pressure on consumers to plan and be disciplined savers, and everyone knows they will need more money as they live longer.”
Gen Z and millennials set the bar for a comfortable retirement the highest, at more than $1.6 million. Gen X was close behind. And the generation closest to retirement, the baby boomers, set the bar lowest, at $990,000. “Boomers have a better feel for their numbers and they don’t believe they will live as long as Gen Z, which expects to retire at 60 and live to 100,” said Javeri Gokhale.
Breaking out the size of current retirement accounts by generation reveals the daunting obstacles for savers of all ages. The average amounts saved were $22,800 for Gen Z, $62,600 for millennials, $108,600 for Gen X and $120,300 for boomers.
Tax Planning One way to help bridge that gap is through advanced tax planning to spread assets among accounts that are taxed differently.
“Many people put money in 401(k)s but don’t realize that in retirement that income will likely be taxed at about 20% or 30%,” said Javeri Gokhale. Withdrawals from traditional 401(k)s in retirement count as ordinary income so that can push retirees into a higher tax bracket.
Of the 30% of Americans surveyed who did have a plan to minimize taxes on retirement income, about a third said they would make strategic withdrawals from traditional tax-deferred and after-tax Roth retirement accounts in order to stay in a lower tax bracket.
Americans Now Say They Need $1.5 Million to Retire
Retirement is becoming an even more distant goal as higher costs cut into American budgets.
A typical person now believes they need $1.5 million to retire comfortably, which is nearly 17 times more than the $88,400 savers have set aside on average, a Northwestern Mutual study shows.
The gap, up 16% from last year, highlights the challenges coming into focus as the over-65 population in the US increases and Americans face the prospect of financing longer life spans and potential cuts to Social Security benefits.
“People’s ‘magic number’ is now 50% higher than it was during the pandemic,” said Aditi Javeri Gokhale, chief strategy officer at Northwestern Mutual. “Soaring costs are putting more pressure on consumers to plan and be disciplined savers, and everyone knows they will need more money as they live longer.”
Gen Z and millennials set the bar for a comfortable retirement the highest, at more than $1.6 million. Gen X was close behind. And the generation closest to retirement, the baby boomers, set the bar lowest, at $990,000. “Boomers have a better feel for their numbers and they don’t believe they will live as long as Gen Z, which expects to retire at 60 and live to 100,” said Javeri Gokhale.
Breaking out the size of current retirement accounts by generation reveals the daunting obstacles for savers of all ages. The average amounts saved were $22,800 for Gen Z, $62,600 for millennials, $108,600 for Gen X and $120,300 for boomers.
Tax Planning One way to help bridge that gap is through advanced tax planning to spread assets among accounts that are taxed differently.
“Many people put money in 401(k)s but don’t realize that in retirement that income will likely be taxed at about 20% or 30%,” said Javeri Gokhale. Withdrawals from traditional 401(k)s in retirement count as ordinary income so that can push retirees into a higher tax bracket.
Of the 30% of Americans surveyed who did have a plan to minimize taxes on retirement income, about a third said they would make strategic withdrawals from traditional tax-deferred and after-tax Roth retirement accounts in order to stay in a lower tax bracket.
904
AD
2024 Apr 6, 5:20pm
AD
2024 Apr 6, 5:20pm
HeadSet says
anyone who does not trust the economic stats being fed to the public ?
.
Who is the intended audience of this article?
anyone who does not trust the economic stats being fed to the public ?
.
909
AmericanKulak
2024 Apr 8, 10:51am
AmericanKulak
2024 Apr 8, 10:51am
One of the solutions is to make more shit from scratch. Better anyway, and many things aren't that big of a PITA, esp. if you prep several portions at once.
910
HeadSet
2024 Apr 8, 1:07pm
HeadSet
2024 Apr 8, 1:07pm
Think people will start getting thinner now that food costs have shot up?
914
richwicks
2024 Apr 9, 9:24am
richwicks
2024 Apr 9, 9:24am
zzyzzx says
What a bizarre advertisement "better butter taste". Why do people continue to eat this fake garbage?
What a bizarre advertisement "better butter taste". Why do people continue to eat this fake garbage?
916
zzyzzx
2024 Apr 9, 10:42am
zzyzzx
2024 Apr 9, 10:42am
richwicks says
Because they are too lazy to pop their own popcorn.
zzyzzx says
What a bizarre advertisement "better butter taste". Why do people continue to eat this fake garbage?
Because they are too lazy to pop their own popcorn.
918
HeadSet
2024 Apr 10, 5:55am
HeadSet
2024 Apr 10, 5:55am
Patrick says
The price of generics, like Walmart "Great Value" bread, water. milk, and meats, have doubled. The generics are still cheaper but had higher price increases. Such as Great Value Bread going from sixty cents to $1.40, while the brand name on that chart went from $1.49 to $1.99. Around here though, name brand bread anywhere is around $3.50.
The price of generics, like Walmart "Great Value" bread, water. milk, and meats, have doubled. The generics are still cheaper but had higher price increases. Such as Great Value Bread going from sixty cents to $1.40, while the brand name on that chart went from $1.49 to $1.99. Around here though, name brand bread anywhere is around $3.50.
923
HeadSet
2024 Apr 10, 8:45am
HeadSet
2024 Apr 10, 8:45am
zzyzzx says
Wow, that is lazy on the same level as buying those pre-made PB&J sandwiches.
Because they are too lazy to pop their own popcorn.
Wow, that is lazy on the same level as buying those pre-made PB&J sandwiches.
925
AD
2024 Apr 10, 11:06pm
AD
2024 Apr 10, 11:06pm
.
thanks to Mister Mish: https://mishtalk.com/economics/the-cpi-rose-sharply-in-march-led-by-shelter-and-gasoline/
annual CPI or inflation is 3.5% for March 2024
the annual CPI was 3% in June 2023 and it has remained within the range of 3% to 3.5% up to March 2024
.
thanks to Mister Mish: https://mishtalk.com/economics/the-cpi-rose-sharply-in-march-led-by-shelter-and-gasoline/
annual CPI or inflation is 3.5% for March 2024
the annual CPI was 3% in June 2023 and it has remained within the range of 3% to 3.5% up to March 2024
.
926
AD
2024 Apr 10, 11:28pm
AD
2024 Apr 10, 11:28pm
The Wolfman at Wolfstreet reports that accordingly interest rates have increased : https://wolfstreet.com/2024/04/10/treasury-yields-spike-3-year-by-25-basis-points-inflation-in-services-smacks-down-rate-cut-mania-mortgage-rates-hit-7-34/
10 Year Treasury is around 4.6%.
That is what I expected as its usually around 1.5% above annual inflation. It should be 5% since annual CPI is 3.5% now up from 3.2% in February 2024.
Will see at end of this month what the PCE is, since the Federal Reserve relies on that more to gauge inflation.
.
10 Year Treasury is around 4.6%.
That is what I expected as its usually around 1.5% above annual inflation. It should be 5% since annual CPI is 3.5% now up from 3.2% in February 2024.
Will see at end of this month what the PCE is, since the Federal Reserve relies on that more to gauge inflation.
.
927
AD
2024 Apr 11, 1:06am
AD
2024 Apr 11, 1:06am
.
https://www.usatoday.com/story/money/2024/04/09/states-highest-lowest-inflation/73184932007/
See above. Inflation is the highest in Florida at 3.91% and lowest in Rhode Island at 1.78%.
.
https://www.usatoday.com/story/money/2024/04/09/states-highest-lowest-inflation/73184932007/
See above. Inflation is the highest in Florida at 3.91% and lowest in Rhode Island at 1.78%.
.
929
Patrick
2024 Apr 11, 12:39pm
Patrick
2024 Apr 11, 12:39pm
https://www.coffeeandcovid.com/p/going-on-offense-thursday-april-11
On nearly every front in domestic policy, Joe Biden is failing, especially the economy. In a rational world, that would be a terrible sign for his re-election. It’s the economy, stupid. Yesterday, media broadly covered a story that popped up in Yahoo Finance under the headline, “Inflation comes in hotter than expected in March.” Unexpectedly! Contrary to Biden’s many lies about the economy, inflation is blasting into orbit, even according to highly-manipulated official data.
... Name one domestic area where normal citizens are better off than they were in January 2020. I dare you.
For your amusement, here’s a fun compendium of Biden officials denying that inflation exists or calling it temporary or “transitory”, meaning oh, it’s just a transition. True. It’s a transition from bad to worse...
931
AD
2024 Apr 11, 12:59pm
AD
2024 Apr 11, 12:59pm
Patrick says
If the economy is that bad over the next 6 months , then the media will try to not ignore it but say its not as bad as people think.
And their script or narrative will be that Trump cannot be President at any cost, even if there is a perception that Biden is terrible for the economy.
They'll just very subtly and sophisticatedly lower the bar.
Joe Biden is failing
If the economy is that bad over the next 6 months , then the media will try to not ignore it but say its not as bad as people think.
And their script or narrative will be that Trump cannot be President at any cost, even if there is a perception that Biden is terrible for the economy.
They'll just very subtly and sophisticatedly lower the bar.
932
Blue
2024 Apr 11, 5:14pm
https://www.livemint.com/economy/uday-kotak-of-kotak-bank-shows-this-wild-card-as-he-warns-to-be-ready-for-turbulence-11712816658708.html
Sounds like inflation is underreported because of the election year.
Sounds like inflation is underreported because of the election year.
933
stereotomy
2024 Apr 11, 5:39pm
stereotomy
2024 Apr 11, 5:39pm
Asset price inflation precedes consumer/producer price inflation. Once all the ZIRP money taps out assets, the only place it can go is commodities or the basics required for living. This is ref to post 929.
Case in point, for the last 5 years:
Now just look at gold from 2024:
Case in point, for the last 5 years:
Now just look at gold from 2024:
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https://patrick.net/post/1344548/2022-04-11-putin-s-price-hike-failing-administrati
Frankly, I prefer my spaceship to have big tits and not fake inflated ones.
EDIT - numbers drop:
America goes back to the 80s: Surging gas prices and higher rents push inflation to 41-year high of 8.5% as White House blames it on Putin invading Ukraine
The consumer price index rose 8.5% in March from a year ago, the fastest increase since December 1981
Housing costs, which make up about a third of the index, have escalated and show no signs of cooling
Gasoline prices soared 49% in March from a year ago as the war in Ukraine rocked energy markets
Biden's administration tried to get ahead of the dire inflation news by blaming Russian leader Vladimir Putin
But Republicans place the blame for soaring prices on 'Democrats' reckless spending and failed policies'
https://www.dailymail.co.uk/news/article-10711311/Inflation-soars-new-41-year-high-8-5.html?source=patrick.net