[atleastoptimal]

80% of the GDP over the next two decades will be siphoning money out of baby boomers (medical care, retirement homes, luxury cruises) before their children see a cent of it. Coupled with AI taking everyone's job, the end result is neo-feudalism where familial dynasties call all the shots.

[inigyou]

Isn't that already happening and has happened? This news is a decade late. Last decade we could've said "in the next few years"

[skybrian]

That kind of spending is included under "retirement spending" in the article. They estimate that substantial amounts go to heirs after that, but mostly among the affluent.

[boringg]

Bold assessment.

[jimbob45]

It’s not. If you have older parents today, you can do the math on what activities they’re doing and quickly determine that you’re never going to see a cent from them. My friends all report the same.

I may sound salty but I’m not. I’ve spent enough time on Reddit to know that the real nightmare is when your parents didn’t save anything and can’t still work. Then, you’re obligated to take care of them and they actively take away from both you and their grandchildren (if they didn’t outright block you from being able to have kids in the first place).

[CamJN]

> Then, you’re obligated to take care of them

No, you very much are not.

[edot]

Well, in 3/5 of the United States you are. Look up filial laws. They’re rarely enforced but they’re there.

[CamJN]

Well thankfully I don’t live in that broken country.

[jimbob45]

Most of us are thankful our parents took care of us and do love them. I recognize that it’s not everyone but I think most kids don’t want to see their parents suffer.

[Fire-Dragon-DoL]

If a parent starts with a home bought by the grandparent and dual income and a lot of money, and end up not having a pension because they spent all the money on holidays and multiple homes and zero investing, would you feel like you need to support them?

I feel constantly conflicted, the previous generation started with way more and wasted a lot more and now we are called in to support them, affecting their grandchildren? I don't think that's ok

[hdgvhicv]

As a parent I would far rather suffer than see my kids suffer.

[Avicebron]

As a child of parents who think like this, I refuse to let them.

[CamJN]

> Most

I’d love to see a source for that.

[suttontom]

> I’ve spent enough time on Reddit to know

Please tell me you see the irony in this.

[SoftTalker]

> siphoning money out of baby boomers (medical care, retirement homes, luxury cruises)

This has been happening for a while already.

[hotelsacher]

Why is it that every time I see the term "baby boomers" used here, it looks like a slur? Is it just ageism or did they do exceptionally terrible things?

[_doctor_love]

> the end result is neo-feudalism where familial dynasties call all the shots

I'm going to stick my neck out and say that this is mostly where we are already.

Agree that before the boomers can pass money to their children, our corporate overlords will find a way to hoover that money into their vaults.

Don't think AI will take everyone's job and is actually orthogonal to this entire issue.

[aianus]

Ok but the corporations are ultimately owned by humans who are alive so there is no way around the generational wealth transfer other than destroying wealth.

[alephnerd]

Not all households are as dysfunctional as the ones you described.

And there's a reason why trust and wealth planning has becoming increasingly common.

And while I am optimistic about AI's capabilities and am by no means an AI Luddite, assuming AI will take all jobs in the near future is ludicrous.

[Scubabear68]

"Not all households are as dysfunctional as the ones you described".

This comment of course needs to be taken in the context of HN. In the wider world, we have literal tens of millions of people in the United States who are in poverty and experience daily hunger and deprivation.

[loeg]

We do not have tens of millions of hungry people unless you're including being a bit peckish before lunch time.

[jakeydus]

USDA says that 13.7% of US households experienced food insecurity in 2024 [0]. Extrapolate that against population and you get 47 million people.

[0]: https://www.ers.usda.gov/topics/food-nutrition-assistance/fo...

EDIT since I can't reply to irish-coffee for some reason: nobody said literally starving, OP said experiencing hunger or deprivation.

[Aurornis]

You have to read their definitions. The broad 13.7% category includes everyone who was uncertain about being able to afford food.

You have to drill down to "very low food security" to reach the point where someone reports having reduced their food intake, which is a 5.4% number.

Still higher than I'd like! But it's not 47 million people.

[twister2920]

That's correct, it's 18.5 million people, which is in the tens of millions

[loeg]

Food insecurity is a bullshit category we invented because actual hunger is basically solved. Yes, it's (obviously) a much bigger category.

[irishcoffee]

> Food insecurity is the limited or uncertain access to enough safe, affordable, and nutritious food to live a healthy life. It means people do not know where their next meal will come from or cannot buy enough healthy food because they lack money or other resources

Pretty big gap between literal starving and food insecurity.

[mfro]

Pretty big gap in quality of life between people who have no worries about their next meal and those who have to stress over every one.

[cyanydeez]

I think youre confusing "defacto" job loss and "replacement" job loss.

Defacto job loss is: Your boss thinks you're replaceable with AI, and he fires you then puts the other workers implicitly responsible for your workload, _regardless of AI's capability.

Replacement job loss: AI actually does 100% of your work load.

Defacto jobloss is the insideous love child and will definitely accelerate because the "unwoke" mind virus rich people have that people are all replaceable, useless and "takers" as elon calls it. Workers will put up wiht it because they need a job under neofeudalism.

[alephnerd]

And that isn't how or why layoffs are happening as someone who has made those calls.

AI is being used as a scapegoat, but a lot of this is just rightsizing of headcount as I've previously mentioned on HN. Right before GPT-4 we were using COVID as that scapegoat in 2023.

[casey2]

What "shots" are the familial dynasties calling if nobody cares to work? I thought AI replaces prompt engineering

[RickJWagner]

Siphoning money out of…? Really?

What about when you reach retirement age? Will you consider medical care, a new house, or a cruise to be siphoning off of money that presumably belongs to someone else?

The money is theirs to use as they see fit. Maybe they earned it, maybe they inherited it. It doesn’t matter. You make your own fortune in this world, and then you get to decide how to spend it.

[fHr]

not wrong

[cyanregiment]

I had the same fears but even the boomers sitting on million dollar homes are being called “cash poor”.

You still need an income. You can only refinance so much, and then you’re paying off interest.

If your home 10x’s in value so does your property tax. Some people are paying $1500/mo. in property tax. They need a job just to cover it.

You can’t sell the house and cash out because you need that cash to buy the next house without having a huge monthly payment.

It’s not enough to just own assets. They have to be capitalized upon in some way - having a renter, building a farm, storage, or other business with it, and so-on.

But nobody is really doing that. I think boomers thought they would get rich off the real estate and it’s not really happening. All it did was make prices out of reach for the average person.

Super wealthy are buying homes at inflated prices which is interesting and surprising but they’re largely not boomers.

Dynasties calling shots maybe, probably. But what’s new?

[loeg]

> If your home 10x’s in value so does your property tax.

This isn't how property tax works in many places (assuming you're talking about supply/demand constraint reasons and not individual property development, e.g. apartment building). There is an overall assessment being raised by the entity (e.g., county), and it is divided pro rata across property owners. In this system, if everyone's property goes up 10x, the amount they pay individually stays exactly the same.

[sokoloff]

> If your home 10x’s in value so does your property tax

If the entire city goes up 10x (without corresponding general inflation), you’ll likely find the tax rate goes down because most places tax property to fund government and few places would quickly swell the city budget by 10x.

[cortesoft]

> If your home 10x’s in value so does your property tax.

That depends on where you live. For example, in California we have Prop 13, which limits how much the assessed value for a home can increase without being sold.

This means that even if your house goes up 10x in value, California will only increase the assessed value for tax purposes by 2% each year.

[smhenderson]

It's similar where I am - a bank and a realtor might say a home is worth .5M but the tax man still assesses it at around 115K.

I bought my home over 20 years ago and it is worth much more than I paid on the market. Yet the value of the property for tax purposes is only 3K more than what I paid for it in 2002.

[deepsun]

Curiously, most homeowners, even recent ones, vote against changing that, because nominal value of the tax would go up for everyone, so we have the status quo.

But the solution I think should come out of the budget -- say, a municipal budget gets $100 today from property taxes, while recent homeowners pay $80 of that. If we just change the assessment rules to make it fair with long-time homeowners, then recent homeowners will pay $90, and long-timers will pay, say, $70. But budget only needs $100, not $160. So we can lower taxes at the same time as equalizing the assessment rules.

[Danox]

If you are of retirement age prop 13 saves you if you own your house and are on a fixed income and not a member of the 5%, because if it wasn’t for prop 13, the local municipalities would continue to jack up your property tax to the moon.

Prop 13 was passed through a statewide initiative process, because at the time the statewide politicians were never going do the right thing for retirees that managed to own a house.

Prop 13 is not necessarily a perfect solution, but since that time the politicians inside California or in other states are by and large incapable coming up with any other solutions that would benefit a larger body/group of people who own or are buying homes.

[tzs]

We've got a pretty good system in Washington for helping retired and disabled people not get taxed out of their homes.

• Applies to age 61+, age 57+ surviving spouse if the person who qualified dies, unable to work due to disability, or disabled veteran with a service connected rating of 40%+.

• Disposable income must be less than 70% of median county income.

• Your assessed value for property tax purposes is the minimum of the actual accessed value and the accessed value when you qualified for the program.

• You are exempted from paying one of the statewide school levies (there are two of them) and from paying "excess levies". Generally, "excess levies" are voter approved levies.

• If your disposable income is less than 60% of the county median household income you also are exempt from regular levies on min($70000, max($50000, 0.35 V)) where V is the assessed taxable value.

• If your disposable income is less then 50% of the county median household income the exemption from regular levies is max($60000, 0.60 V).

In my county those income levels are $65k, $56k, and $46k but are updated every three years and for 2027-2029 will be $93k, $81k, $70k. For a house with a tax of $3600, the tax as you go through those levels would be about $2200, $1900, and $1000 (or maybe it was $2400, $2200, and $1000...it was a while ago that I calculated it and I'm not sure which it was). (For King County, which is where Seattle is, the levels next year will be $101k, $89k, and $76k).

Disposable income is basically all your income, even if it is not taxable, with deductions for various medical things like drugs, in-home care and assistance, Medicare and Medigap premiums, and many others.

If your disposable income goes over the 70% threshold and you lose eligibility but it comes back down after one year and you reapply you get back your original frozen assessment. You can repeat this so you could qualify and get the frozen assessment and the exemptions, then alternate years in which you take a big IRA withdrawal which pushes you over and you pay tax that year based on your actually assessment and with no exemptions, then do a year with the frozen assessment and the exemptions.

[cyanregiment]

Should have just said “if value goes up 10x the tax increases” to keep it accurate.

The overall point stands though beyond that nitpick

[SoftTalker]

> I think boomers thought they would get rich off the real estate and it’s not really happening.

It would have if they had paid off their mortgages instead of borrowing against equity, refinancing and taking equity out, etc.

If you still owe 70-80% of your house to the bank when you retire, it's not really an asset.

[cyanregiment]

Exactly, it’s not enough to just own it. They find themselves tapping into that sweet equity.

You have to do something with the land even if it means improving your home, paving a road, to increase the value above and beyond the market trend - to live off of! Otherwise you’re a buyer (or borrower) again

[Danox]

Correct, you have to own the house outright which is the first step towards financial independence. Next step is having some investments if you’re lucky, fortunate at least a million-two million dollars above and beyond owning your house.