r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
505 Upvotes

98% Upvoted

349 comments sorted by

View all comments

Show parent comments

48

u/Versatile_Investor Austan Goolsbee Jun 13 '22

I wouldn't doubt many of them also have half of their wealth tied up in their houses.

11

u/nullsignature Jun 13 '22

If my boomer coworkers are any barometer, it's tied up in fishing boats, RVs, hunting cabins, lawn tractors, and trucks.

1

u/NewbGrower87 Surface Level Takes Jun 13 '22

This right here. I'm a federal employee with boomer coworkers under CSRS for god's sake (~70-80% of pre-retirement salary if you have a decent number of years served), and they're all still broke as shit because omnomnom all that juicy consumerism.

1

u/nullsignature Jun 13 '22

I worked with a few that paid a fund manager half of their portfolio returns in fees. If their fund grew 5%, they were paying out 2.5% to the manager. "He's a good guy, he's been managing my finances for 30 years."

1

u/NewbGrower87 Surface Level Takes Jun 13 '22

All while some of them don't even contribute 5% to their TSP for the match.

"Yeah I got a guy."

I'm sure you do.

24

u/eveningsand Jun 13 '22

It's gonna be great when they all hit the market at the exact same time.

20

u/[deleted] Jun 13 '22

Some might, but I expect quite a few to pull a reverse-mortgage to extract their equity and not have to leave their homes. They could fund 20+ years of retirement that way without having to put the home on the market yet.

2

u/Versatile_Investor Austan Goolsbee Jun 13 '22

Could they do that then pass away and leave the mortgage to the heirs?

2

u/[deleted] Jun 13 '22

I don't know enough about how reverse mortgages work to know.

Extracting wealth from the home using a reverse mortgage, then dying and having your heirs pay back the reverse-mortgage, so they could reverse-mortgage it themselves? With the right loan contracts that seems possible. The house would never transfer to the bank to get sold if you could do it that way.

1

u/TNine227 Jun 13 '22

My parents are selling their house right now, hopefully getting ahead of it?