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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

#121

Post by wavefunction »

user5994461 wrote: post #59
konschubert wrote: post #52

Earlier quoted context omitted.

You can have a "contract of the generations", where the younger generation finances the pensions of the older generation through social security payments. Many countries do it like that.

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.

A ponzi scheme is an illegal act of fraud whereas a Social Security type pension is something society has agreed upon.

Not surprised you're using a throw-away username and I'm going to downvote it accordingly.

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

#122

Post by sschueller »

jo909 wrote: post #109

> 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 ro…

Life expectancy sadly is dropping at the moment.

http://www.bbc.com/news/world-us-canada-42452733

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

#123

Post by ac29 »

advisedwang wrote: post #111
rwmj wrote: post #87

I'm missing a detail of the US system ... > Years ago, Coomer and his co-workers at the Tulsa plant of McDonnell-Douglas, the famed airplane maker, were enrolled in the company pension, but in 1994, with an eye toward cutting retirement costs, the company closed the plant. Did the McDonnell-Douglas company not pay into a separate pension fund, or did they raid the fund somehow?

It sounds like by closing the plant and stopping the employees reaching retirement age, they massively reduced the amount the employees were eligible to receive. Even if the pension fund was separate, by reducing eligibility this way they company had to pay less into it over the following years.

To add to that, this pension (and many others) was structured such that payouts are non-linear based on number of years worked, so for example, you might get:

0-5 years worked: no pension

5-10 years worked: 5% pension

10-20 years worked: 20% pension

30+ years worked: full pension

By preventing workers from being able to work the full 30+ years, they never had to pay the full pension. One of the workers in the story mentions receiving 1/5 of full pension after being laid off due to the closure.

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

#124

Post by jo909 »

skookum wrote: post #120
jo909 wrote: post #117

Earlier quoted context omitted.

This is totally an important factor for the pension provider, your are right about that. They will factor in how many people will never reach the payout age, the distribution of payout age, maybe if the spouse is covered too how long they might live, how may people switch their jobs and forfeit the pension etc. I'd argue this has an impact on the "savings rate" per employee, but not on the average payout length.

> I'd argue this has an impact on the "savings rate" per employee, but not on the average payout length. Your argument is only correct if we define the average payout length to only factor in those employees who receive at least one check. However the original quote that you claimed was wrong is referring how much the pension has to pay out on average, which is not limited to those who live long enough to collect a p…

I follow your argument, but I think that's certainly not what the author of the article was intending.

And that's a very hard number to come by, because as I've argued you would have to factor in all other reasons why a pension might have to be paid out longer or not at all.

Certainly "3 years of average payout" must be completely and utterly wrong because this number includes infants etc which were never employed. Infant and child mortality has an enormous impact on average life expectancy.

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

#125

Post by [deleted] »

sjg007 wrote: post #96
sbennettmcleish wrote: post #91

These "company managed" pension schemes have always fascinated me and would seem ripe for corruption / raiding by the company if they're short a few $$$. Seems like in Australia we're in a pretty good position with "superannuation" https://en.wikipedia.org/wiki/Superannuation_in_Australia being compulsory since 1992 and is typically managed by completely unrelated parties to your employer. The payments are generally…

Replace corporation with government and you see the same behavior at city/county/state/national levels.

[deleted]

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

#126

Post by dominotw »

Gibbon1 wrote: post #77
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.

> That's a ponzi scheme. In no away shape or form a ponzi scheme.

Seems to somewhat fit the defition, if you squint a little

> A Ponzi scheme is a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading.

https://en.wikipedia.org/wiki/Ponzi_scheme

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

#127

Post by Joky »

nunez wrote: post #24
jstewartmobile wrote: post #18

Earlier quoted context omitted.

I'm not sure 401ks are so great. Many charge ridiculous management fees for funds that track mundane things like the S&P 500, but if you want that employer match, no way around it. Mostly a case of perfectly intelligent people throwing wads of money into the market on autopilot because that's all the 401k lets you do. Lambs to the slaughter! edit: Example: Back when I was on 401k, was into a S&P500 fund that had an e…

Yeah the only time it makes sense to have a 401k is if your company matches your contributions.

I'm using it to save taxes, because I'm not sure what are the alternatives. You're comment makes me feel I should be less ignorant: any good online reading to suggest?

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

#128

Post by dominotw »

aaomidi wrote: post #101
sumedh wrote: post #88

Earlier quoted context omitted.

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…

> think about different systems to support everyone in the upcoming job armageddon.

Would have been nice if the opposite side articulated what exactly that they were thinking of doing or at-least some vague idea would have been nice. Repeatedly saying "most qualified in the history to run as president" is not very convincing.

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

#129

Post by Joky »

Bahamut wrote: post #76
jedmeyers wrote: post #26

Earlier quoted context omitted.

> It’s easy to consider putting 20 to 30% of your salary towards savings and investments when you are making Silicon Valley money. Only if you are making Silicon Valley money somewhere outside of Silicon Valley. Otherwise, not so easy.

Hm? I dump about 25% of my compensation while living in the Valley (right in Sunnyvale), even while paying 100% of the rent/costs for my 2 bedroom apartment and take multiple vacations a year. I actually even debated dumping almost 6% more, but I want to save up for a trip to Japan in a couple of months.

I'd do this if I wasn't supporting kid/wife. Most problem I hear when trying to hire people from outside the valley is when they have a family: the salary in tech allows a confortable appartement, but not easily a house in a good school district.

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

#130

Post by dguaraglia »

jedmeyers wrote: post #26
dguaraglia wrote: post #16

Earlier quoted context omitted.

It’s easy to consider putting 20 to 30% of your salary towards savings and investments when you are making Silicon Valley money. It’s not so easy when you are making minimum wage while paying school loans, or even if you are one of the families earning the median household income of ~$60k and you have a couple kids.

> It’s easy to consider putting 20 to 30% of your salary towards savings and investments when you are making Silicon Valley money. Only if you are making Silicon Valley money somewhere outside of Silicon Valley. Otherwise, not so easy.

Fair enough. The moment you have a kid, the 20/30% figure goes out the window if you live in San Francisco or any other expensive part of the Valley.
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