Excellent analysis. One point in your Final Takeaway really stuck with me: most people won’t be able to survive what’s coming alone.
In many other countries — and in the U.S. until the 20th century — it was common for extended families to co-habituate. The idea of young people buying their own homes and living alone was alien to early Americans. They all needed to work together to support the “homestead” and to also care for one another, especially as family members aged.
I believe it will be imperative for us to return to this model. This could be a blessing in disguise, as cohabitation (assuming your family isn’t bonkers) can be healthy emotionally and beneficial financially.
I think Gen Z and Boomers (and Gen X, btw — we are coming up for retirement in a few years, whereas most Boomers have already retired) are going to need each other, in more ways than one.
I didn't include Gen X in this but you're right Gen X is right behind. My mom is on the cusp and is part of the older cohort of Gen Xers who plan to retire in the next few years. Even though I framed it as a Gen Z vs. Boomer problem, it truly is much bigger than that.
I do believe community is the solution, both on the family level and at the small town/Main Street level.
I think individualism has caused us to think we need to do things alone to have worth and value in society, but the economic game has changed. Continuing to go down that path just doesn't work.
I haven't written too much about what I think comes after the disruptive transition but you point out one possible upside. Being more family/community oriented may prove to be a blessing in disguise in the long run.
This hits on so many concerns I've been mulling—my head is spinning. My kids were born in '92, '94, '97, '99, '02, so this is all about their futures and that of my two granddaughters, born in '15 and '22. Our two youngest, both sons who completed only a couple years at community college, still live with us and pay rent to cover our costs. The oldest is married with kids, and the other two share an apartment in a duplex one of them owns. My husband is 64 and still runs his small engineering company and we just had a conversation the other day about whether it would be a good financial decision to have him start drawing his SS early—get some value out of it before its potential (likely?) collapse. Only two of our kids are currently working full-time (the oldest and youngest), the rest are working part-time by choice, for various reasons, but in jobs they enjoy, and with a cushion of savings (they're all pretty good with money and no debt (besides mortgages)). And luckily we all live within 15 minutes of each other and get along well, because for a while now I've been imagining a future in which we end up in some kind of multigenerational living situation. I've always liked the idea anyway, and now it seems that society may shift towards that of necessity. Thanks for this series. I'm interested in everything AI and economy related, so I'm getting much value out of your stack. Please keep on with the cogent takes.
I'm in a similar situation but reverse -- my dad is turning 65 and retiring this summer. He plans to draw on SS but I'm skeptical how long that will actually last. He'll likely have to get a part-time job (which is probably a good thing, he can't sit on the couch all day).
There are members of my family who are living intergenerationally. They're doing it out of necessity to pool resources. I think this is a good thing for families who get a long and live close to one another. And I think it's something young people should really consider more deeply.
This is a pretty good synopsis of the Social Security/Medicare landscape. The math is a problem. SS has always depended on current workers paying for retired workers. It's a government income redistribution schema to move money from currently productive people to people who are not currently productive (retired or disabled). The specific maths are predicated on growth: Higher wages, and more workers over time. It fails with lower wages or smaller/declining quantity of workers. We all need the system to match receipts with expenditures. And the best way to to do that, for a lot of social reasons, is for us to have current workers be as productive and as wealthy as possible. That's certainly what "Boomers" want for their personal offspring, and generally what we want as a society. We want our kids to be rich and successful.
The USA has had similar problems a couple of times in the last 100 years. When the troops came home after WWII, there weren't enough domestic jobs to employ the. The factories that had been making weapons were closed or closing. There simply weren't enough private sector jobs. The government instituted GI bills for veterans, and gave them free healthcare and low interest, low downpayment mortgages. The gov paid for vets education, healthcare and housing (in part, not in total). The result was a "hand up" , not a hand out. Those vets started working, opening businesses across the country. They didn't take jobs, they created jobs.
In the late 60s to early 70s, the Boomers hit the job market. There were declining jobs in manufacturing (due to manufacturing productivity improvements) and there were huge numbers of new teenage and 20 year old new people trying to join the workforce. Because supply of labor was high, but jobs were not, wages were kept very low. But Boomers had the advantages of cheap education (college was dirt cheap) and generally cheap housing, rent or buy. There was a huge shortage of jobs, so Boomers made new jobs. They created new companies large and small. And during that process "pensions" went away and people had to plan on using SS and their savings for retirement. SS was a base, and you were supposed to to make up the rest with your own savings (IRA, etc.)
I think the Gen Z of today, like all past generations, is responsible for finding their own way. I do think we've put some serious and unnecessary impediments on them (taxes, including SS, high housing costs and predatory education costs). Addressing those three key issues would do a lot to level the playing field for Gen Z.
AI is a wild card. But economic activity is at its core people's labor being transferred around. The core value is still people to people, people trading their work for the results of other peoples labor. I don't think AIs trading with other AIs is a thing (yet anyway). AI will certainly change what jobs may be available from current employers, but will aso certainly result in the creation of new jobs and new types of jobs as people seek new ways to trade their labor for the creations of others.
I really appreciate you outlining some of the history Boomers have faced. For a while, I was angry (like most most Millennials and now Gen Z) but I've come to appreciate the hardships that shaped how Boomers came into the world.
I recently read a book that covered the GI Bill. I had no idea America was technically still in a depression and if something wasn't done, to your point, all these returning vets were coming home to no jobs. The GI Bill gave them an education and creditworthiness so they could buy homes.
I'm interested in studying the 1970s/1980s more, during what I would consider America's deindustrialization period. My dad graduated high school in 1979 and did some community college but didn't get a 4-year degree. I never appreciated how hard it was for guys like him who were teenagers during stagflation and trying to become young adults during the 1980s when interest rates were sky high.
I think Gen Z is facing a huge problem but at the same time, they aren't unique. Every generation has faced hardship. I think the game is rigged but it's up to them (and honestly, the rest of us) to choose a new game to play. If enough of us play that new game, the system will change as a result.
Your analysis, Amanda, seems very well thought out if not distressing. I am weeks away from turning 70. Due to needing SSDI in my 50’s, I have no savings for my retirement. Thankfully, I have recovered enough to work again and now teach ESL part time to supplement my retirement SSA income. I have been planning on quitting my job and living off the SSA check in a cheaper state near one of my daughters and her family. But your piece today is giving me second thoughts. Any reaction?
While I'm nowhere near retirement yet, all of this is quite distressing for me too. And I wrote all of this -- go figure! My income has dwindled and while I'm hoping to grow Substack, it's not quite where I need it to be yet. I've had to start drawing on my retirement savings to cover my expenses.
The thing I keep thinking about is how do I get more life out of life?
Or put another way how do I maximize the things that are important?
Most of us have become cogs in an economic machine. We waste away our lives working. On the one hand some work is necessary, but is 50+ hours a week for 40 years necessary? I'm beginning to doubt that.
I obviously don't know your personal financial situation but if I had the option to move closer to family, I would choose that option.
I'm reading a book now called Die With Zero. It's an interesting perspective on how to manage money and risk in retirement. It raises some really good points I hadn't considered before. Given what I wrote here, it's honestly making me reconsider the whole idea of retirement to begin with.
Excellent analysis. One point in your Final Takeaway really stuck with me: most people won’t be able to survive what’s coming alone.
In many other countries — and in the U.S. until the 20th century — it was common for extended families to co-habituate. The idea of young people buying their own homes and living alone was alien to early Americans. They all needed to work together to support the “homestead” and to also care for one another, especially as family members aged.
I believe it will be imperative for us to return to this model. This could be a blessing in disguise, as cohabitation (assuming your family isn’t bonkers) can be healthy emotionally and beneficial financially.
I think Gen Z and Boomers (and Gen X, btw — we are coming up for retirement in a few years, whereas most Boomers have already retired) are going to need each other, in more ways than one.
I didn't include Gen X in this but you're right Gen X is right behind. My mom is on the cusp and is part of the older cohort of Gen Xers who plan to retire in the next few years. Even though I framed it as a Gen Z vs. Boomer problem, it truly is much bigger than that.
I do believe community is the solution, both on the family level and at the small town/Main Street level.
I think individualism has caused us to think we need to do things alone to have worth and value in society, but the economic game has changed. Continuing to go down that path just doesn't work.
I haven't written too much about what I think comes after the disruptive transition but you point out one possible upside. Being more family/community oriented may prove to be a blessing in disguise in the long run.
This hits on so many concerns I've been mulling—my head is spinning. My kids were born in '92, '94, '97, '99, '02, so this is all about their futures and that of my two granddaughters, born in '15 and '22. Our two youngest, both sons who completed only a couple years at community college, still live with us and pay rent to cover our costs. The oldest is married with kids, and the other two share an apartment in a duplex one of them owns. My husband is 64 and still runs his small engineering company and we just had a conversation the other day about whether it would be a good financial decision to have him start drawing his SS early—get some value out of it before its potential (likely?) collapse. Only two of our kids are currently working full-time (the oldest and youngest), the rest are working part-time by choice, for various reasons, but in jobs they enjoy, and with a cushion of savings (they're all pretty good with money and no debt (besides mortgages)). And luckily we all live within 15 minutes of each other and get along well, because for a while now I've been imagining a future in which we end up in some kind of multigenerational living situation. I've always liked the idea anyway, and now it seems that society may shift towards that of necessity. Thanks for this series. I'm interested in everything AI and economy related, so I'm getting much value out of your stack. Please keep on with the cogent takes.
I'm in a similar situation but reverse -- my dad is turning 65 and retiring this summer. He plans to draw on SS but I'm skeptical how long that will actually last. He'll likely have to get a part-time job (which is probably a good thing, he can't sit on the couch all day).
There are members of my family who are living intergenerationally. They're doing it out of necessity to pool resources. I think this is a good thing for families who get a long and live close to one another. And I think it's something young people should really consider more deeply.
This is a pretty good synopsis of the Social Security/Medicare landscape. The math is a problem. SS has always depended on current workers paying for retired workers. It's a government income redistribution schema to move money from currently productive people to people who are not currently productive (retired or disabled). The specific maths are predicated on growth: Higher wages, and more workers over time. It fails with lower wages or smaller/declining quantity of workers. We all need the system to match receipts with expenditures. And the best way to to do that, for a lot of social reasons, is for us to have current workers be as productive and as wealthy as possible. That's certainly what "Boomers" want for their personal offspring, and generally what we want as a society. We want our kids to be rich and successful.
The USA has had similar problems a couple of times in the last 100 years. When the troops came home after WWII, there weren't enough domestic jobs to employ the. The factories that had been making weapons were closed or closing. There simply weren't enough private sector jobs. The government instituted GI bills for veterans, and gave them free healthcare and low interest, low downpayment mortgages. The gov paid for vets education, healthcare and housing (in part, not in total). The result was a "hand up" , not a hand out. Those vets started working, opening businesses across the country. They didn't take jobs, they created jobs.
In the late 60s to early 70s, the Boomers hit the job market. There were declining jobs in manufacturing (due to manufacturing productivity improvements) and there were huge numbers of new teenage and 20 year old new people trying to join the workforce. Because supply of labor was high, but jobs were not, wages were kept very low. But Boomers had the advantages of cheap education (college was dirt cheap) and generally cheap housing, rent or buy. There was a huge shortage of jobs, so Boomers made new jobs. They created new companies large and small. And during that process "pensions" went away and people had to plan on using SS and their savings for retirement. SS was a base, and you were supposed to to make up the rest with your own savings (IRA, etc.)
I think the Gen Z of today, like all past generations, is responsible for finding their own way. I do think we've put some serious and unnecessary impediments on them (taxes, including SS, high housing costs and predatory education costs). Addressing those three key issues would do a lot to level the playing field for Gen Z.
AI is a wild card. But economic activity is at its core people's labor being transferred around. The core value is still people to people, people trading their work for the results of other peoples labor. I don't think AIs trading with other AIs is a thing (yet anyway). AI will certainly change what jobs may be available from current employers, but will aso certainly result in the creation of new jobs and new types of jobs as people seek new ways to trade their labor for the creations of others.
I really appreciate you outlining some of the history Boomers have faced. For a while, I was angry (like most most Millennials and now Gen Z) but I've come to appreciate the hardships that shaped how Boomers came into the world.
I recently read a book that covered the GI Bill. I had no idea America was technically still in a depression and if something wasn't done, to your point, all these returning vets were coming home to no jobs. The GI Bill gave them an education and creditworthiness so they could buy homes.
I'm interested in studying the 1970s/1980s more, during what I would consider America's deindustrialization period. My dad graduated high school in 1979 and did some community college but didn't get a 4-year degree. I never appreciated how hard it was for guys like him who were teenagers during stagflation and trying to become young adults during the 1980s when interest rates were sky high.
I think Gen Z is facing a huge problem but at the same time, they aren't unique. Every generation has faced hardship. I think the game is rigged but it's up to them (and honestly, the rest of us) to choose a new game to play. If enough of us play that new game, the system will change as a result.
Your analysis, Amanda, seems very well thought out if not distressing. I am weeks away from turning 70. Due to needing SSDI in my 50’s, I have no savings for my retirement. Thankfully, I have recovered enough to work again and now teach ESL part time to supplement my retirement SSA income. I have been planning on quitting my job and living off the SSA check in a cheaper state near one of my daughters and her family. But your piece today is giving me second thoughts. Any reaction?
While I'm nowhere near retirement yet, all of this is quite distressing for me too. And I wrote all of this -- go figure! My income has dwindled and while I'm hoping to grow Substack, it's not quite where I need it to be yet. I've had to start drawing on my retirement savings to cover my expenses.
The thing I keep thinking about is how do I get more life out of life?
Or put another way how do I maximize the things that are important?
Most of us have become cogs in an economic machine. We waste away our lives working. On the one hand some work is necessary, but is 50+ hours a week for 40 years necessary? I'm beginning to doubt that.
I obviously don't know your personal financial situation but if I had the option to move closer to family, I would choose that option.
I'm reading a book now called Die With Zero. It's an interesting perspective on how to manage money and risk in retirement. It raises some really good points I hadn't considered before. Given what I wrote here, it's honestly making me reconsider the whole idea of retirement to begin with.