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Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

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Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#71

Post by bryanlarsen »

endymi0n wrote: post #9
kome wrote: post #7

i strongly oppose the American approach to pensions, which is regrettably spreading worldwide. relying on private savings to finance retirement is highly risky, and this is the crux of the article in question. pension systems should be administered through public programs, not turned into moralistic contests in which individuals are penalized if their investments fail for any reason (and it's only their fault... whil…

I agree, but the German one is also pretty dodgy: Basically pay the rents of the old generation from a share of the working one. It's already coming apart due to demographic change and the next few years will be disastrous. If there's an approach to model imho it's the Norwegian one: Actually backed by stocks, but managed and distributed by a central investment fund. It's far easier if the country is smart enough to…

> pay the rents of the old generation from a share of the working one.

That's what Norway does too, just less directly. The $1.75T that Norway has in their sovereign wealth fund is just a claim on future output. Germany's taxes are a claim on future output.

Or to look at it at a micro perspective. Suppose you have $10M saved for retirement, but need to hire a personal care nurse. But there aren't any and you get in a bidding war with someone who has saved $100M.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#72

Post by CincinnatiMan »

kome wrote: post #7

i strongly oppose the American approach to pensions, which is regrettably spreading worldwide. relying on private savings to finance retirement is highly risky, and this is the crux of the article in question. pension systems should be administered through public programs, not turned into moralistic contests in which individuals are penalized if their investments fail for any reason (and it's only their fault... whil…

With a pension system, if I die shortly after retiring, my heirs and I get nothing. Whereas if I save for my own retirement with a 401k, my heirs would get that money.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#73

Post by otoburb »

dachris wrote: post #41
pjc50 wrote: post #11

Under-rated problem. The decline is real, and towards the end of their life many people end up handing a power of attorney to their children or other close relative in order to run their lives. While in the meantime there are so many more internet-enabled scams.

Google site:bogleheads.org elderly scams - the list goes on and on ... I've also got elderly relatives, and even with their pensions secure (European-style pension system), there's lots of people going after their money. Trying to prepare them for encounters with online and real world scammers is an ongoing process, e.g. by recounting the cases that I read in the news to foster mistrust. I've lost count how often an…

>>I've lost count how often an elderly family member (who is still sharp as a tack fortunately) told me that the "police", "your beloved niece", or "Microsoft" called them.

It's very sobering when we realize that we too will one day be just like them.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#74

Post by javagram »

EE84M3i wrote: post #65
KK7NIL wrote: post #8

Earlier quoted context omitted.

Public pension schemes always end up being turned into Ponzi schemes for short term political gain, especially as birthrates keep dropping. US social security and Medicare are a great example of this but you'll find similar examples throughout the western world. In contrast private retirement plans put the individual in charge of their own retirement (why should the government be telling you when to retire?) and does…

> In contrast private retirement plans put the individual in charge of their own retirement (why should the government be telling you when to retire?) What countries let you do this? I thought 401ks, for example, do not generally allow tax free early withdrawals.

Early retirement can be done through https://www.irs.gov/retirement-plans/substantially-equal-per...

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#75

Post by rightbyte »

wakawaka28 wrote: post #66
equalsione wrote: post #59

Earlier quoted context omitted.

People are living longer after retirement (over 10 years longer since the 1970s) and birth rates have fallen. Expenditure surpasses income eventually. There are other factors but that seems to be the main issue.

Making the pension a public problem won't fix it. The money has to come from somewhere.

The money can come from tax. You can balance it such that payments don't exceed tax income if balance is of concern.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#76

Post by ThrowawayR2 »

pjc50 wrote: post #11

Under-rated problem. The decline is real, and towards the end of their life many people end up handing a power of attorney to their children or other close relative in order to run their lives. While in the meantime there are so many more internet-enabled scams.

Except increasingly many elderly don't have children / relatives to pass power of attorney to. A bit of a tangent but there is a market opening for a national scale business that is a trustworthy end of life management service for people who are going to die alone. That is going to be a huge market if demographic trends are any indication.

Local attorneys / solicitors already provide such services but one has no way of knowing whether they are trustworthy or will remain trustworthy (think Lionel Hutz from the Simpsons) whereas a larger scale business can afford to do internal auditing and integrity checks and make them public to ensure trustworthiness. A large enough scale business can also afford to maintain specialists on hand to handle things like managing online social media accounts that a local operation wouldn't be able to afford.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#77

Post by CobaltFire »

kome wrote: post #7

i strongly oppose the American approach to pensions, which is regrettably spreading worldwide. relying on private savings to finance retirement is highly risky, and this is the crux of the article in question. pension systems should be administered through public programs, not turned into moralistic contests in which individuals are penalized if their investments fail for any reason (and it's only their fault... whil…

Around 2011 a report from the CBO came across my desk. It was a study regarding how long US military retirees lived after retirement.

Two key findings were in the report:

Career Military lived (this is from memory but should be very close to accurate) 7-15 years longer than their civilian cohort.

The difference in longevity tracked so strongly with rank they had to run the numbers several times and make sure there weren’t errors. As in, E5 retirees were the shortest lived, while O6+ were the longest.

They identified several possible reasons for the longer lifespans including availability of care and adherence to care. They also identified several possible reasons for the difference between ranks including obesity, smoking, and alcohol use (all had the same trends).

That report likely led to us reducing the military pension, which has had a fairly impressive negative impact on retention.

All of that to say that defined benefits plans are EXPENSIVE and they cut those benefits 20% due to people living ~40 years retired vs the budgeted ~25.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#78

Post by HWR_14 »

CobaltFire wrote: post #77
kome wrote: post #7

i strongly oppose the American approach to pensions, which is regrettably spreading worldwide. relying on private savings to finance retirement is highly risky, and this is the crux of the article in question. pension systems should be administered through public programs, not turned into moralistic contests in which individuals are penalized if their investments fail for any reason (and it's only their fault... whil…

Around 2011 a report from the CBO came across my desk. It was a study regarding how long US military retirees lived after retirement. Two key findings were in the report: Career Military lived (this is from memory but should be very close to accurate) 7-15 years longer than their civilian cohort. The difference in longevity tracked so strongly with rank they had to run the numbers several times and make sure there we…

I thought the military could retire with a full pension after 20 years. Wouldn't that imply that they have an expected retirement of around 40 years?

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#80

Post by HWR_14 »

YWall39 wrote: post #15
kome wrote: post #7

i strongly oppose the American approach to pensions, which is regrettably spreading worldwide. relying on private savings to finance retirement is highly risky, and this is the crux of the article in question. pension systems should be administered through public programs, not turned into moralistic contests in which individuals are penalized if their investments fail for any reason (and it's only their fault... whil…

European pensions are predominantly unfunded, and promises typically amount to 3.5 times GDP. The prevailing view among those who have looked at this is that nobody under the age of 40 will get anything close to what is promised. The only exception is Netherlands, and maybe Sweden. Leaving private pensions the only option.

Is 3.5 times GDP a high number? To pay out over the next 40-50 years?
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