Watching Social Security Eat the Young Alive

Quote :

"My 26 year old son got the most extraordinary letter from the Social Security Administration last week. In plain English it admitted that the system was a Ponzi scheme destined for bankruptcy more than a decade before he reaches retirement age. It warned that if he is to have any hope of retiring he'd better start saving on his own. Anyone who wasn't personally hypnotized by FDR knows this to be true. Yet I was still surprised that such a frank government confession didn't make national news. The two-page pamphlet entitled "What young workers should know about Social Security and saving" reminds us that 50 million, or one in six, Americans will collect more than $614 Billion dollars in Social Security benefits this year. It informs young people that the Security Taxes they now pay go into a "Trust Fund" that is used to pay current beneficiaries. Paying off early investors with funds taken from later investors is precisely how Wikipedia defines a Ponzi scheme. The pamphlet advises that the Social Security Board of Trustees estimates that the "Trust Fund" will be depleted before my son's 54th birthday. Because people are living longer and the birth rate is low, it goes on, taxes paid by workers in the future will not be enough to pay the benefits promised in his personalized retirement account statement enclosed with the pamphlet. Imagine what hell would break loose if Schwab or Fidelity Investments enclosed a confession like this when they mailed investors their 401(k) statements. On top of the negative rate of return young people paying into Social Security are expected to suffer, the pamphlet concludes that my son should plan on taking an additional 24% haircut on the benefits promised in his statement. This is the same healthy young kid being told that he will soon have to buy an artificially overpriced health insurance policy so his premiums can be redistributed to aging Baby Boomers lobbying Congress for free stuff. Given the fact that Social Security will be bankrupt before my son even reaches my age, the pamphlet directs him to a handy web calculator that shows how much he will have to save every week if he hopes to retire on his own. Play with it for a few minutes and you realize that there is only one field in the calculator that really matters, and that is the rate of inflation. Plug in an annual inflation rate of one or two percent and the numbers look pretty reasonable as compound interest works its magic. But stick in the double digit inflation figures that were in vogue when Jimmy Carter was president and a funny thing happens. In order to prepare for retirement, young people would have to save more than they make!"

Continued at http://www.realclearmarkets.com/articles/2009/12/07/watching_social_security_eat_the_young_alive_97536.html

This angers me, and if it doesn't anger you, you must not work for a living. The article asks a good question: why isn't the young generation outraged about this? Are they satisfied with paying into a program destined to fail? Every two weeks I watch a substantial part of my paycheck get flushed down the toilet of Baby Boomer entitlement programs, but I'm powerless to stop it. There's no plan to fix it. There was an effort to privatize SS, but I don't know that it would have really been a solution. The only option is to end Social Security entirely or decrease benefits across the board.

[Edited on December 8, 2009 at 4:01 PM. Reason : ]

12/8/2009 4:01:12 PM

I'm not worried b/c I'll do one of two things

-sit back and let gov't entitlement programs support me (thanks Obama )

or

-get a job with the gov't


(yes this is mostly in jest)

12/8/2009 4:20:22 PM

what can you do, the government has you by the balls and you can't do shit about it. Yay democracy!

12/8/2009 4:24:44 PM

The solution is to decrease benefits & increase taxes. Some level of optional privatization might work too, so long as it isn't forced, because obviously as the recent recession has shown, Wall Street can be volatile. If we keep some social safety nets going, as I think we should so that growing old doesn't mean growing poor, then privatization to a degree should be allowed, but not at 100% of your investments b/c then you lose the benefits of a safety net.

The main problem isn't that people aren't outraged, it is that the voters aren't demanding decreased benefits & increased taxes when they cast their votes. Now people under 18 can't be held responsible for this because obviously they aren't allowed a say, but voting age young voters need to vote in higher numbers.

And we face a bit of a prisoners dilemma in that individuals acting rationally on an individual level all want less taxes and more benefits for themselves, but these individual preferences create a collective action problem where we are stuck with a failing system. Furthermore any system that has broadly diffused costs and narrowly concentrated benefits creates a system with a powerful lobby for the benefits, and cost bearers who don't have incentive to care so much. And I don't see a youth lobby organizing on the level of the AARP anytime soon.

Given the dynamics of the situation, citizens will continue to demand politicians uphold this broken system by the way that they vote even as they claim to be outraged by it, which is further backed by a lobby created by the nature of the distribution of the benefits.

We need to 1) Strengthen the youth lobby, 2) Support decreased benefits, increased taxes, & some level of privatization, 3) Hope that well meaning politicians try to fix this problem under the cover of darkness and slip it unnoticed into a bill about something else, because if the American public which is outraged by this broken system finds out that politicians are trying to fix it, they'll vote them out of office in a heartbeat.

[Edited on December 8, 2009 at 4:28 PM. Reason : .]

12/8/2009 4:27:11 PM

I used to care about how much of my money would be burned into Social Security, but lately one of my long-term/some-time-in-the-next-decade goals has become "move to London"... so I tend to be apathetic.


Social Security (specifically, ending it) and conversion to nuclear power are (to me) hands down the two most important issues in American politics, and unfortunately they are also two of the most overlooked issues. Fuck the media and fuck the uninformed public.

[Edited on December 8, 2009 at 4:42 PM. Reason : .]

12/8/2009 4:41:36 PM

This is why I cringe whenever I hear them called "The Greatest Generation."

What, exactly, have they done that is positive since WWII?

Not much, but they're quite adept at stealing from their children.

12/8/2009 4:50:51 PM

Grew up during the Great Depression

Fought WWII

Went home and build the best economy in the world.


Which generation was better?

12/8/2009 5:00:10 PM

i like all the smack talking on the US in general..
economy, healthcare, military. we can't do shit right!!!

we are the worst country by far in every single category!! how are we all still alive???!??!?!

12/8/2009 5:07:45 PM

^

Quote :

"Multiple exclamation marks are a sure sign of someone who wears their underwear on their head. "

-Terry Pratchett

[Edited on December 8, 2009 at 5:14 PM. Reason : NOTE: Please don't let this marginally relevant humor post derail the thread]

12/8/2009 5:13:33 PM

I agree with Boone. I cant believe I said that.

I think Newt has a great plan for getting us off of SS while continuing to fund those current retirees.

The biggest thing would be to not tax investments/savings. imo and let people invest thier SS money into thier OWN account. None govt held, since they cant seem to keep their hands off this money. BTW, the taxes for the new govt health care plan will go into the general fund.. ZERO chance that will be pissed away huh.

[Edited on December 8, 2009 at 5:17 PM. Reason : .]

12/8/2009 5:13:46 PM

as if it couldn't be predicted, the solution is to cut taxes that disproportionately affect the wealthy. what surprise!

12/8/2009 6:49:58 PM

could you imagine if SS was privatized before the financial markets collapsed? We really would be on the cusp of hoovervilles popping up everywhere in that reality.

I agree social security needs to be dismantled, and I don’t know anyone my age who thinks otherwise. It’s primarily the old people and the AARP that are keeping any reform from happening, because below the age of maybe about 35, i think there is bi-partisan support for massive reforms to social security.

[Edited on December 8, 2009 at 7:05 PM. Reason : ]

12/8/2009 7:04:02 PM

and if you were in retirement and had your investments in those kinds of instruments, then you deserve to lose your shirt

12/8/2009 7:06:35 PM

Quote :

"and if you were in retirement and had your investments in those kinds of instruments, then you deserve to lose your shirt "

Wow.

You clearly haven’t been paying attention… the entire investing industry, not just high-risk stuff, went down in the collapse.

but lets say you just let people lose their money… what then? YOu leave a generation of homeless people to wander the streets? Do you seriously think that you or anyone else here, or any president (liberal or conservative) would sit back and let that happen? This is more or less how SS started in the first place. No first-world gov. as wealthy and powerful as ours is going to let their population descend into poverty. First and foremost, this is EXTREMELY damaging to production and industry and society, and a very distant second is that it’s immoral.

12/8/2009 7:16:02 PM

As the OP mentioned, it is easy to feel powerless on an issues with this kind of dynamics. One strategy we can engage in even at the level of everyday citizen is vote in younger officials. Only one US Senate candidate from NC out of the republican incumbent (Burr) and 3 democratic challengers is under 40 (that being captain in the United States Army Reserve & former State Senator Cal Cunningham). If we want change on this issue, the senate is where it'll have to come from. I don't wish to side track this thread, so here is a link to a thread on the 2010 senate election: http://www.thewolfweb.com/message_topic.aspx?topic=575993

12/8/2009 7:19:03 PM

Quote :

"You clearly haven’t been paying attention… the entire investing industry, not just high-risk stuff, went down in the collapse."

Not all investments have tanked, especially not the kinds that you should put your money in when you are nearing retirement.

12/8/2009 7:19:09 PM

^ obviously not all things collapse, but MOST things dropped significantly... and it’s irrelevant if you are near retirement or not, if your savings are wiped out.

But it should be fairly obvious that if social security had been privatized back with the Republicans wanted to do so, social security would be in much worse shape than it is now.

12/8/2009 7:23:19 PM

Quote :

"and it’s irrelevant if you are near retirement or not, if your savings are wiped out."

how are your "savings wiped out" if you own stock? they only get "wiped out" if you are dumb enough to sell at the bottom of the market due to panic.

Quote :

"But it should be fairly obvious that if social security had been privatized back with the Republicans wanted to do so, social security would be in much worse shape than it is now."

Only, it's not fairly obvious. I've made fantastic returns this year and am just about back to where I was last year before the crash. That is hardly the picture of "so much worse." Really, it's hard to imagine a system much worse than a Ponzi scheme

12/8/2009 7:26:54 PM

well, at least the government is coming around and finally admitting that it's basically just another tax. it's a good first step!!!

12/8/2009 9:50:23 PM

Quote :

"This is why I cringe whenever I hear them called "The Greatest Generation." What, exactly, have they done that is positive since WWII? Not much, but they're quite adept at stealing from their children."

Are you...are you serious?

12/8/2009 11:06:49 PM

was talking about the retarded habits of the baby boomers and how they've fucked the country for us on another forum and someone posted this:

http://consumerist.com/2007/04/snl-skit-dont-buy-stuff-you-cant-afford.html

ITS SO CONFUSING!!

12/8/2009 11:20:34 PM

Quote :

"and it’s irrelevant if you are near retirement or not, if your savings are wiped out."

Buy bonds. So far, only GM and Chrysler bond holders have lost anything, everyone else got a government bailout.

12/9/2009 12:29:50 AM

hey moron would you rather your dollar be worth 50 cents with the prospect of recouping 40% of your losses in one year, or would you rather your dollar be worth an IOU that doesnt look like it will be worth much. In fact they will need to raise the tax and means test out. So, yes, id rather have it privatized. Hands down. You would too.

12/9/2009 12:44:37 AM

Quote :

"This is why I cringe whenever I hear them called "The Greatest Generation.""

Ponzi scheme that it is, the "Greatest Generation" isn't the one that is going to bankrupt Social Security, it is their bratty and self-indulgent children.

So, yeah, I guess you've got a point if you want to blame their parenting, but I'm inclined to give them a break.

Quote :

"Only one US Senate candidate from NC out of the republican incumbent (Burr) and 3 democratic challengers is under 40 (that being captain in the United States Army Reserve & former State Senator Cal Cunningham). If we want change on this issue, the senate is where it'll have to come from."

You're smart enough to realize it won't come out of either major political party. Senate races are voted at the State level but they're funded at the national level. Young or not, Cunningham will likely get a significant amount of his money from Baby Boomers, who are also likely to be far more politically active (as older generations usually are) than our age group.

Social Security isn't going anywhere until the nation implodes under it's own debt.

Quote :

"I've made fantastic returns this year and am just about back to where I was last year before the crash."

Your returns are likely close to 0 when measured in a stable currency like the Euro. Several analysts have pointed out that much of the recent rally is due to the falling dollar. Jim Jubak also had an article a few weeks back about how the adjusted indexed stock market return rate over the last decade was in the 0 - 5% range. Of course, this beats the essentially and significantly negative rate of return of Social Security, but to pretend that the stock market is the end-all solution is flawed.

12/9/2009 2:50:54 AM

^Yeah, I'm pretty sure he's just confused about which generation is the "Greatest Generation."

Quote :

"d357r0y3r: The only option is to end Social Security entirely or decrease benefits across the board."

If we truly cannot afford it at all, then we're going to have to end it.

We can end it right now and dick over the old people who planned on receiving it.

Or we can warn coming generations not to plan for it and then end it.

Which one makes the most sense to you?

Quote :

"Plug in an annual inflation rate of one or two percent and the numbers look pretty reasonable as compound interest works its magic. But stick in the double digit inflation figures that were in vogue when Jimmy Carter was president and a funny thing happens. In order to prepare for retirement, young people would have to save more than they make!""

Man, that's rough. It's almost like we could benefit from some sort of safety net for retirees.

[Edited on December 9, 2009 at 4:36 AM. Reason : ]

12/9/2009 4:16:46 AM

Not to worry, I'm sure congress will come up with something to help us. Unlike those fatpig corporatists, they'd never put their personal interests before the will of the people.

12/9/2009 7:30:33 AM

Quote :

"If we truly cannot afford it at all, then we're going to have to end it. We can end it right now and dick over the old people who planned on receiving it. Or we can warn coming generations not to plan for it and then end it. Which one makes the most sense to you?"

The best thing I've come up with is to phase out Social Security. By that, I mean having a cutoff age where people aren't going to get anything at all. What should that age be? I don't know, 55 or something maybe. The thing is, we're not even going to have the money to pay for current retirees. If someone turns 65 today and lives to be 95, we're not going to be able to continue to pay out the benefits. Massive government deficits will have come to their grisly end long before that. The harsh reality is that we've set up this culture of dependency and now some old (and to some extent, young) people are going to suffer greatly somewhere along the line. The importance of personal savings cannot be overemphasized, because these are the consequences.

Also, there's a political aspect to all of this, as some in this thread have hit on. The vast majority of politicians are not going to come out and say "dismantle Social Security" because they don't want to lose the "old vote." They'll often use different language, like "Social Security reform," which generally means finding some way for the government to save the program or to collect more money. On the other hand, the young vote doesn't matter. Most young people are ignorant, or don't vote, and certainly don't have positions in elected office. Even if they are concerned about SS, the two parties aren't confronting it. Politicians simply don't have the courage to scrap Social Security, and it won't help them get re-elected, so it gets ignored.

I agree with another statement in this thread that says Social Security will end when we implode under our own debt, which is a certainty at this point...it's just a matter of what form that implosion takes. 50% interest rates? 40% unemployment? Double digit inflation? At that point, old people won't have the money to live, and the working population will be struggling to get by. A lot of good our social welfare programs will have done then.

12/9/2009 8:52:18 AM

Naa, that is overkill. The best solution is to abolish the payroll tax and then reduce social security payments to a flat inflation adjusted amount. This would mean poor workers get more than they do now and rich workers get less. As productivity increases over-time, paying the burden of these flat benefits will decrease with time. You can get the old people on board now by making the flat payment equal to current maximum payout of SS, so everyone gets a pay bump right now in exchange for the rest of us getting no more than that in the future.

12/9/2009 4:33:26 PM

Quote :

"Young or not, Cunningham will likely get a significant amount of his money from Baby Boomers, who are also likely to be far more politically active (as older generations usually are) than our age group."

You are right about that. Although for the primary at least I know there planning on doing a lot of student outreach, and I know the Cunningham has two young kids (like 6 & 7 years old I think), in addition to being the only candidate below 40. Granted none of that is a guarantee of anything, and no candidate in their right mind would campaign on a strategy that isn't signed, sealed, and stamped by the AARP, but if we get enough representatives who have personal stakes in reforming social security into office... it couldn't hurt.

Students for Cal Cunningham
http://www.facebook.com/home.php#/group.php?v=wall&gid=190343438518

Right now our options are Elaine Marshall (mid 60s), Richard Burr (mid 50s), Kenneth Lewis (late 40s), and Cal Cunningham (mid 30s). Given that info it doesn't guarantee reform will come from any of them, but it is easier to imagine reform coming from one end of the spectrum than the other.

None of this is meant to imply that age or position on social security should be the determining factor in who someone votes for.

[Edited on December 9, 2009 at 6:42 PM. Reason : .]

12/9/2009 6:41:37 PM

Quote :

"Naa, that is overkill. The best solution is to abolish the payroll tax and then reduce social security payments to a flat inflation adjusted amount. This would mean poor workers get more than they do now and rich workers get less. As productivity increases over-time, paying the burden of these flat benefits will decrease with time. You can get the old people on board now by making the flat payment equal to current maximum payout of SS, so everyone gets a pay bump right now in exchange for the rest of us getting no more than that in the future."

Hm. We agree on something. Interesting.

12/11/2009 4:29:44 PM

I would like to throw this out there as well,
the current health care bill is also going to eat the Young Alive,
you know those provisions that call for a maximum premium for old people who cost a lot more to provide health care services for ? ( * shed a tear for the baby boomers * )
Well.. if they aren't paying for it we are, economists agree.
http://www.cato.org/pub_display.php?pub_id=10933

This provision infuriates me and I wish more young recent college grads would wake up and realize their nice 20 year old <60/mo premiums are going to sky rocket, significantly decreasing real income even more while wages continue to fall, the fed continues to try to keep the price of housing as high as possible by further inflating the dollar, driving real wages even lower...

12/13/2009 8:21:03 PM

Quote :

"My 26 year old son got the most extraordinary letter from the Social Security Administration last week. In plain English it admitted that the system was a Ponzi scheme destined for bankruptcy more than a decade before he reaches retirement age."

Why does everyone have to hype everything past the point of being reasonable? Don't they realize they loose credibility - with those willing to investigate anyway. I read the two page letter and I didn't read where, in plain English, they admitted it was a Ponzi scheme.

Everyone knows how Social Security works, it is no mystery. I just get tired of the bullshit language that is used on both sides. It is an insult.

http://www.socialsecurity.gov/mystatement/Insert25+.pdf

12/13/2009 10:44:02 PM

Social Security will not run out. The government will just bail it out if it needs to.

"Too big to fail".

12/13/2009 11:07:34 PM

Quote :

"I read the two page letter and I didn't read where, in plain English, they admitted it was a Ponzi scheme."

I don't think you understand what a Ponzi scheme is. They are paying earlier "investors" with the money of later "investors." If you are under the age of something like 34 you would literally be better off taking the money they are taxing you for SS and sticking it in a jar and never looking at it again. That way you at least won't have a negative return on investment.

It's a horrible, horrible system that is robbing the young to pay the old with no possible way that they young will ever see any portion of that money. It's really just reprehensible.

12/14/2009 1:47:57 AM

^^ and where does the money come from to bail it (or anything else) out?

It can either cost money in taxes, or cost money in inflation.

12/14/2009 1:55:25 AM

Quote :

"I don't think you understand what a Ponzi scheme is ... It's a horrible, horrible system that is robbing the young to pay the old with no possible way that they young will ever see any portion of that money. "

First of all, I don't necessarally agree with the way SS is set up - current workers pay benifits to retired workers. I would have rather had it a be some kind of forced savings program, but I can understand how they didn't want to wait 60 yrs for a poverty program to be implemented for the elderly.

My problem is with people who do simplistic analysis, talk in absolutes, and then conclude the sky is falling. They, and the people who blindly post what they say, should be smarter than that. They've done fine with comparing it to a Ponzi scheme, they just haven't bothered with the contrast side.

One difference is that there will always be people working, so there will always be people putting money into it - so much for, "no possible way that the young will ever see any portion of that money." The letter says even when the "trust fund" runs out there will be enough workers to support 76% of benefits with no modifications in the system.

I just get tired of poor analysis being pawned off as good analysis, and those that don't know any better jumping on the bandwagon.

12/14/2009 7:12:38 AM

Quote :

"One difference is that there will always be people working, so there will always be people putting money into it - so much for, "no possible way that the young will ever see any portion of that money." The letter says even when the "trust fund" runs out there will be enough workers to support 76% of benefits with no modifications in the system."

Yeah, except there's an increasingly heavy burden on the people working because healthcare costs more and old people are living longer. At the same time, wages aren't going up, and many working class people are actually taking pay cuts. I don't think calling this thing a ponzi scheme is a misnomer, because the number of working people it takes to pay for a single beneficary keeps going up, and eventually the later "investors" realize that they're only going to get paid if someone else gets suckered in. That's the incentive to keep supporting Social Security...the last one out gets screwed, just like a ponzi scheme.

And yes, we know you think everyone's opinion is garbage except your own. Unfortunately, your own "analysis" isn't exactly blowing anybody away either.

[Edited on December 14, 2009 at 9:06 AM. Reason : ]

12/14/2009 9:05:05 AM

^^ Not true. You have no claim of ownership over the working that others will always be doing. Congress could vote with only 51% tomorrow to suspend all SS payments, and you would not get back the 13% you have been paying in all your life.

12/14/2009 10:04:25 AM

nom nom nom

12/14/2009 10:17:57 AM

^^ I wish they would. I'd be totally ok with paying SS and getting nothing back if that meant they would get rid of it. People now know that they have to invest on their own in order to retire. 401k programs and IRAs are commonplace and almost universally available. Our generation would be doing all future generations a huge service by killing this system now.

12/14/2009 6:07:21 PM

Quote :

"Well.. if they aren't paying for it we are, economists agree. http://www.cato.org/pub_display.php?pub_id=10933"

lol, "economists agree" *posts article from well-known libertarian think tank*

did anyone mention means testing?

Quote :

"401k programs and IRAs are commonplace and almost universally available."

There are MUCH better private plans than 401ks. They're a terrible model for retirement savings.

http://www.time.com/time/business/article/0,8599,1929119,00.html

http://www.time.com/time/business/article/0,8599,1864139,00.html

Quote :

"rom the end of 2007 to the end of March 2009, the average 401(k) balance fell 31%, according to Fidelity. The accounts have rebounded, along with the rest of the market, but that's little help for those who retired — or were forced to — during the recession. In a system in which one year's gains build on the next, the disaster of 2008 will dent retirement savings long after the recession ends. In what must seem like a cruel joke to many, the accounts proved the most dangerous for those closest to retirement. During the market downturn, the 401(k)s of 55-to-65-year-olds lost a quarter more than those of their 35-to-45-year-old colleagues. That's because in your early years, your 401(k)'s growth is driven mostly by contributions. You control your own destiny. But the longer you hold a 401(k), the more market-exposed it becomes. It's a twist that breaks the most basic rule of financial planning. The Society of Professional Asset-Managers and Record Keepers says nearly 73 million Americans, or just under 50% of our working population, now have a 401(k). And collectively we pour more than $200 billion into these accounts each year. But retire rich? Don't bet on it. The average 401(k) has a balance of $45,519. That's not retirement. That's two years of college. Even worse, 46% of all 401(k) accounts have less than $10,000. Today, just 21% of all U.S. workers are covered by traditional pensions, and the number shrinks every year. "The time may have come to consider returning 401(k) plans to their original position as a third tier of retirement planning, behind pensions and Social Security," says Alicia Munnell, who heads the Center for Retirement Research at Boston College. "They should not be the thing we rely on for retirement security." And the government seems to agree. This summer, the Government Accountability Office concluded, "If no action is taken, a considerable number of Americans face the prospect of a reduced standard of living in retirement." That's what is known as an understatement."

[Edited on December 15, 2009 at 3:43 PM. Reason : .]

12/15/2009 3:37:16 PM

Yes the 401k has it's shortcomings, but it's certainly better than counting on SS to be there for you. Retirement planning is easy and there are a ton of options available to anyone willing to concern themselves with their own future. IRAs, stocks, mutual funds, bonds, etc are all easy to buy or set up and if none of those appeal to you then try a SEP account, he'll even a savings account is vastly superior to SS.

12/15/2009 6:57:23 PM

Or we could get serious about means testing SS or putting together a new minimal pension scheme that pays out a minimum living income but comes out of the general fund or something to end not just the SS tax but the whole "raid the lockbox" bit, but there's really no use in debating fixes with some of you people here because the answer is always "get rid of it, personal responsibility, sterilize welfare recipients, hurf durf".

12/15/2009 7:01:53 PM

I dont venture into TSB very often but this thread has piqued my interest.

Perhaps the biggest thing we need to reevaluate is the entire concept of retirement. AFAIK it is a relatively modern concept that has emerged in the last hundred years or so. Probably an outgrowth of the industrial revolution, urbanization, and longer lifespans.

I do think that if everyone did not think that they were entitled to retirement and instead worked as long as they were able then a whole hell of a lot of this mess could be avoided to begin with.

Just a thought.

Blast away.

12/15/2009 11:07:14 PM

Quote :

"I do think that if everyone did not think that they were entitled to retirement and instead worked as long as they were able "

Fuck that! Work sucks!

How about I save and invest properly and work until I amass a large enough sum of money that I don't need to work anymore?

12/15/2009 11:10:31 PM

thats fine...I just don't understand the sense of entitlement that everyone should get to retire whether they save enough to do so or not. And if for some reason your investments fall through then suck it up and keep working. Or raise kids that are successful and dont be a shitty parent and maintain healthy family relationships throughout your life and live with them when you get old. But the idea that everyone has some sort of right to just stop being productive is absurd.

12/15/2009 11:12:47 PM

A system like HSA where private companies run the program, but the fed mandates certain restrictions+FDIC like insurance against the company's failure would be infinitely preferable to any kind of entirely government run plan.

Leaving it entirely in the hands of the fed means they'll consider those funds their own and raid them at will. Which is exactly what happens now.

12/15/2009 11:14:23 PM

Back in the day you could open postal savings accounts. You would go to the post office and basically buy treasury bills. Everyone back in the day had one of these accounts to protect their future. Why did we stop that?

Oh right, FDIC insurance. Now every bank account is a treasury bill. It is also why no one cares any more if their bank is lending money to the unqualified.

12/16/2009 11:31:04 AM

Quote :

"Don't bet on it. The average 401(k) has a balance of $45,519. That's not retirement. That's two years of college. Even worse, 46% of all 401(k) accounts have less than $10,000. Today, just 21% of all U.S. workers are covered by traditional pensions, and the number shrinks every year."

So 401ks are a bad idea because half the people using them aren't contributing shit to them ? I'd think with the combination of not getting a pension, knowing SS is either going to be gone or come up way short, logic would dictate saving and investing in some tax-benefiting account. Either defer the taxes till post-retirement (401k) or go for the tax free earnings (roth ira, roth 401k).

But there i go trying to give the average American the benefit of logic, which is a mistake on my part. Private savings/investing = win, Hoping someone else is just going to take care of you (government, company, union, kids, aliens) = fail.

12/16/2009 2:23:45 PM

Quote :

"The average 401(k) has a balance of $45,519"

is that average at retirement age for people who have put in a decent amount their entire career?

12/16/2009 2:58:54 PM