Quote: Originally Posted by mentalfloss
Based on the huge increase in housing prices and seniors getting richer, it looks like adults will have to start living with their parents. What's worse is that the housing bubble is taking effect again and houses are actually 25% overvalued because of artificially low interest rates. Come five years from now, current house owners will have to downgrade if they can't afford the interest rate hike.
With the interest hike and high prices, no amount of 'money managing' will afford this..
You would have to add some other criteria
Size of a house in the 50's was approx 900 sq ft
Presently a higher density of population raises the cost of land
Services to that subdivision
Material costs and building codes
Percentage of income to service a mortgage
Percentage of income spent to provide food, gas, car etc
Newer homes, many want all the fixings as they say.
We now are a 2 car or more generation - needed as the souse often works.
But last and most importantly is that credit is cheap - people buy on the pay later plan. That can be good on occasion but also leaves you in the constant position of owing forwards.
Turnover in cars. Average time a car is held - Every time you trade and but it costs. That adds up after 2 or 3 upgrades.
Driving a car till it is 8-10 or years old. After it is paid it is an asset. Instead of using that payment as saving many use it to consume.
And last but not least - personal debt ratios are at approx 150 % - Cheap borrowing costs is one reason - But as we all now interest rates change. Low now - Higher later.
Wants and needs - Are different now than they were 50 years ago.
Going without is also not common.
Education costs have risen - But if you spend all that money on an education and their is no demand for it, then who has the problem.
Skilled trades - Shortage -
People. many do not have an emergency fund set aside. 3 months is the recommended amount.
We can all go into specifics on what we encountered and how we led our lives, but they really do not apply.
I agree that the claw back of pension should be lower than the 65 or 75 k mentioned.
Public service pensions are the best in the country - That also has to be addressed.
Same with salary for Govt jobs -higher than the private sector. Some estimates are 20 % or more than the private sector - Why??? Unions that are to strong - Govt that are to weak. That is Prov and federal.
Yet we have many that will never have such a pension.
The Govt will gradually raise the age from 65 over a defined period.