The Great American Do-It-Yourself Retirement Fraud, Brought to You By Big Finance & Co.

[Nay]

44. Yes, but saving 15% of yr $20,000 per yr income is infinitely more difficult than saving 15%

of your $50,000 per yr income. People making low incomes generally have to use nearly all their money just providing basics for themselves and their families, and savings are usually kept in cash and used up in crises, such as car repair, medical emergencies, etc. To expect such marginal earners to reliably save 15% of their income for 30 years in a 401K is, in my mind, an unreasonable expectation. Why do I consider it unreasonable?

First, average people are infinitely programmable by the society/culture they live in. They absorb culture's lessons as babies and children, and don't often challenge them in any visible way. Generally, this is a GOOD thing, because such solidarity and cultural 'glue' helps the human race survive. However, in the last hundred or so years, the engines of commerce have hijacked culture and turned it to its own end, which is to GET EVERY LAST DIME OUT OF EVERYBODY, no matter the damage to society as a whole. Now, the average guy on the street isn't going to be able to parse out every last move by the advertising industry, so he goes along with what his culture demands as far as what he/she must do to 'be a man/woman,' 'be a success,' etc. As I said, this is a good impulse in general, but in a technically-advanced society, it can be hijacked for use by the 1% to legally steal from us.

Second, we cannot refer to the tiny minority of super-savers (of which I am one) and say, "SEE?? You could save if you WANTED to!!!11!!!" There is a minority of super-savers for a reason: see previous paragraph. Before and shortly after WWII, there was a majority of super-savers because society taught them to be that way, through experience with the Great Depression, a societal ethos of hatred of debt, AND the lack of any financing other than major financing for houses or such. It may surprise younger folks, but when I was growing up in the 60's, 1) only some highly-paid businessmen had credit cards, 2) you could only go into debt for stuff like houses or new cars, and 3) you had to be in a GREAT job or have collateral to even get those loans. IOW, society's financial setup and guidelines for banks and lenders were pretty strict and were adhered to. It would be disingenuous to claim that these moral and formerly-legal strictures should be adhered to by the poor when no one else is adhering to them and when, in fact, the poor are actively herded into shady financial decisions by supposedly standup members of the financial community.

My and Mr Nay's experience throughout our 35-yr relationship is mostly one of serious saving whenever possible. The corollary to that philosophy is to not want every gewgaw that is waved in front of your face (we've found that is very hard for most people to ignore). We never bought new cars or houses. Neither of us could care less about fancy clothing, accessories, electronics, etc. One of our main expenses was private school for Sonny Nay during most of his school years. When he decided not to go to college, we did not have to fund that. We only had the one child. And, for the last 20 years of our working lives, we had steady jobs in corporations that had small pension systems and very decent 401Ks to contribute to. Because we were settled in one place and didn't have to chase around the country for jobs, we could pay off our house. IOW, we were savers (actually, non-spenders by nature) already, we didn't give a hoot about what society told us to buy, and in some respects, we were very lucky. But we were very unusual.