‘Generation Gap’ — Less is Worse

February 20, 2011

As life continues to unravel, peoples of my age have come to realize the lie of the so-called ‘Great American Dream‘ — the future looks like shit.
From the Wall Street Journal on Saturday:

The retirement savings plans that many baby boomers thought would see them through old age are falling short in many cases.
The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal.
Even counting Social Security and any pensions or other savings, most 401(k) participants appear to have insufficient savings. Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse.

And for those younger, worse than worse.

(Illustration found here).

In pressing for that dream, the reality of life has caused some problems way beyond the generational gap formulated by the riotous 1960s — now those under 30 can’t trust anyone, much less anyone over 30.
The spirit of that American-Dream-goal was the children should be in a better-off position than the parents.
Wrong!

A study in the UK found the coming generations are in for some hard times and the dream will most-likely result in a sleepless nightmare.
From the UK’s Daily Mail on Friday (h/t/ The Automatic Earth):

Young workers would need to earn twice as much to have the lifestyle their parents enjoyed at the same age, research reveals today.
The dramatic salary increase would make it easier for them to marry, buy a home and have children – choices within easier reach of earlier generations.
The report said the average twenty-something earns about £21,000 – but would require £40,000 to match their parents.

Three in four of the 3,000 polled for the study agreed with the contention that today’s young people ‘are the most financially pressured in history’.
One in five has postponed, or feels they should postpone, marriage plans. One in four is delaying having children.
Nearly a third are even considering not having children at all ‘because they cannot afford to do so’, according to First Direct which calls them ‘Generation Gap’.

The research also showed that a typical parent, aged over 45, would have married around the age of 26, had their first child at the same time and bought their first home at the age of 27.
Housing minister Grant Shapps said this week that he was shocked by the revelation that the average age of a first-time buyer stands at 37 for those who do not receive financial help from their parents.

One of the major reasons for this: Wall Street fantasy.
As Automatic Earth points out it’s the ‘buy everything’ concept: “I’ve never seen a market like this,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont, a market watcher for 35 years. “I’m showing, by every technical and quantitative standard I have, this market is at extreme levels. But no matter where we start out in the morning, buyers come in.”

And this kicker from the same piece: Stocks have been struggling to match last year’s trading levels, hovering in the 7 billion range this week. On Thursday, the volume was the second-lowest of the year at 6.7 billion shares, and Monday’s session was the lowest of the year with a mere 6.6 billion shares. “This is a sign that the market is tired, and unless we see an uptick in this volume,” the level of investor anxiety will not retreat, Detrick said.

What, me worry?

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