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A preview of the U.S. without pensions

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Re: A preview of the U.S. without pensions

#101

Post by aaomidi »

sumedh wrote: post #88
Kyragem wrote: post #20

Yet these old folks all voted for trump/GOP. Good luck trying to make a living when they cut social security next year.

They voted for Trump because he was saying he is going to bring back jobs while Clinton was not exactly sure what her platform was. If I am a 50 year man who lost his job, I am going to vote for Trump. It is just amazing that lot of people including you and Clinton don't understand this simple point.

Oh we do. It's just saying you're going to do something vs actually doing it is much different.

It surprises me that Trump supporters can't see beyond words. Hopefully after these four years you will understand that jobs are going to be going away. There is essentially no way to move time backwards to when technology was at its infancy and there were hundreds of jobs.

Instead of supporting candidates who give people a false hope of steel jobs think about different systems to support everyone in the upcoming job armageddon.

Re: A preview of the U.S. without pensions

#102

Post by chowyuncat »

lewis500 wrote: post #17

This is horrible. A few years ago I realized my parents were way behind on savings and just incessantly nagged them until they got on a good plan. They kicked and screamed the whole time ("You're our son. You can't tell us what to do."), but it's turned out to be one of the best decision I ever made. Next year they are actually going to retire. I dunno what I'd do if they had to work at Wal-Mart just to make ends mee…

How were they able to catch up in just three years?

Re: A preview of the U.S. without pensions

#103

Post by user5994461 »

Joeri wrote: post #68
user5994461 wrote: post #59

Earlier quoted context omitted.

That's a ponzi scheme. That's what many countries in Europe do and that is currently collapsing. It takes something like 4 active workers to pay the pension of 1 current retiree. The proportion was fine after the baby boom, it's not anymore and it's getting worse.

It's not a ponzi scheme, it's a numbers game. Basically the formula is: X * Y = A * B, where X is the number of retirees, Y the number of years they live past retirement on average, A the number of people who work, and B the number of years an average career lasts. What is happening in europe is that the right-hand side of the equation is producing a lower number (due to later career starts and less actively working…

The base is a ponzi scheme. Promise to pay people over 65 a guaranteed sum per month and hope that the taxes on working people can fund it.

You're right that it doesn't have to be a ponzi scheme. The government could increase the age of retirement and/or lower the pensions. However that's not possible in practice, it doesn't get you elected and it'd provoke massive strikes for months.

The government would rather accumulate debt for 20 years than cut any pension. Then the next generation has to deal with unfunded pensions and trillions of debt. It's actually possible to go beyond recoverable and collapse because of the non elasticity, this has happened before historically.

Re: A preview of the U.S. without pensions

#104

Post by konschubert »

Joeri wrote: post #68
user5994461 wrote: post #59

Earlier quoted context omitted.

That's a ponzi scheme. That's what many countries in Europe do and that is currently collapsing. It takes something like 4 active workers to pay the pension of 1 current retiree. The proportion was fine after the baby boom, it's not anymore and it's getting worse.

It's not a ponzi scheme, it's a numbers game. Basically the formula is: X * Y = A * B, where X is the number of retirees, Y the number of years they live past retirement on average, A the number of people who work, and B the number of years an average career lasts. What is happening in europe is that the right-hand side of the equation is producing a lower number (due to later career starts and less actively working…

Not exactly. More like:

Number_of_retirees * averagr retirement_payment = number_of _people * average_retirement insurance_payments

You can also prop up the right side with tax money from other sources.

I'm not saying it's perfect or even that it works well.

But there is nothing inherent in it that requires a growing economy.

Re: A preview of the U.S. without pensions

#105

Post by lewis500 »

chowyuncat wrote: post #102
lewis500 wrote: post #17

This is horrible. A few years ago I realized my parents were way behind on savings and just incessantly nagged them until they got on a good plan. They kicked and screamed the whole time ("You're our son. You can't tell us what to do."), but it's turned out to be one of the best decision I ever made. Next year they are actually going to retire. I dunno what I'd do if they had to work at Wal-Mart just to make ends mee…

How were they able to catch up in just three years?

By "a few years" I mean about ten or eleven years ago. Fortunately, that means they bought most of their stocks since 2008 and have gotten great returns. They were also fortunate to buy a house in a good neighborhood during the bottom of the slump, and to live in a cheap state. So they can sell their house and almost pay cash for a modest house a little further out from the city. Fortunately, the city has relatively low traffic so even in the country they can get to a great hospital within 20 minutes. The state also has basically no property tax for seniors, which I think is questionable policy but very good for them.

They aren't wealthy by any means, like the retirees out here in California who have a million dollars (or several). But between their stocks, the home equity, the two social security checks and a small pension my dad got from spending time at a job at the city government they'll be alright.

Re: A preview of the U.S. without pensions

#106

Post by lewis500 »

bagels wrote: post #19
lewis500 wrote: post #17

This is horrible. A few years ago I realized my parents were way behind on savings and just incessantly nagged them until they got on a good plan. They kicked and screamed the whole time ("You're our son. You can't tell us what to do."), but it's turned out to be one of the best decision I ever made. Next year they are actually going to retire. I dunno what I'd do if they had to work at Wal-Mart just to make ends mee…

Would be nice if the birth year were adjustable.

I thought about that but it makes the visualization much more complicated and, moreover, would require forecasting wages way out into the future to be relevant to a millennial. If you had tried to do some wage forecast in 1970 you would've gotten things very wrong, so maybe the same is true today. One day I will add this feature but not soon.

Re: A preview of the U.S. without pensions

#107

Post by user5994461 »

mwfunk wrote: post #72
user5994461 wrote: post #55

Earlier quoted context omitted.

Not sure what you mean. Retirees don't create jobs. They just get money handed to them monthly as promised by the pension formula decided decades ago. (that money is supposed to come from taxes on active workers's salaries) The whole system collapse when taxes are not enough to cover the pensions that were promised. It's a ponzi scheme.

That’s a problem of demographics and unemployment, not a Ponzi scheme. Ponzi schemes are scams, but they do effectively take money from people and give it to other people, which doesn’t happen if there’s no funds to transfer. I don’t think any country can sustain a 25% unemployment rate for any length of time without it having catastrophic second- and third-order effects. That’s the problem, not the concept of taxpay…

It's not the percentage for the whole population. It's 25% unemployment for young people. 50% unemployment for young people without higher education.

Re: A preview of the U.S. without pensions

#108

Post by pjc50 »

friedButter wrote: post #7

Is retirement planning (Live "below your means" and put in 20-30% or more of your salary towards long term investments), and family support (you fund your kids education and parents post retirement needs, and your kids fund your post retirement needs and your grandkids education) such an alien concept for Americans? When you manage it internally, instead of paying interest to a bank, you just have lost opportunity co…

> your kids fund your post retirement needs and your grandkids education

Given American cost of living, this is no longer feasible.

Also the impact of divorce and other kinds of freedom, the structure of obligation no longer works like that either.

Re: A preview of the U.S. without pensions

#109

Post by jo909 »

> The average life expectancy in 1950 was 68, meaning that a pension had to pay out only three years past the typical retirement age of 65. Today, average life expectancy is about 79, meaning that the same plan would have to pay out 13 years past typical retirement age.

That's the wrong statistic to use and completely wrong conclusion.

Life expectancy _for a 65 year old_ person in 1950 was another 13.9 years. That rose only to 19.1 years in 2010 (newest number I found at a glance).

All the babies and people dying before age 65 reduce the average life expectancy drastically, but have no bearing on pension payment length.

Re: A preview of the U.S. without pensions

#110

Post by pjkundert »

mattmanser wrote: post #82
ec109685 wrote: post #51

Earlier quoted context omitted.

Why will the world be so much worse off at 400 trillion instead of 70 trillion? Presumably “the world” will have many many more folks making more money by then given the rates of economic growth in third world countries. 10B people can cover 400T in 10 years paying just $10 a day.

Western world has stopped having as many children, hence why governmemts are dead keen on immigration even though their constituents aren't.

However, immigrants are not “fungible” (as much as central planners wish they were). In fact, it’s becoming evident that certain immigrants may be a liability, and even displace potential immigrants who are valuable. This will be addressed as the facts unfold themselves, I suspect.
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