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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

#141

Post by [deleted] »

konschubert wrote: post #135
RobertoG wrote: post #116

Earlier quoted context omitted.

Don't you think that your formula needs a productivity term somewhere? How is that when we talk about this, nobody mentions that if the gross domestic product per capita goes up enough, there is not problem. The 'savings' perspective makes only sense in the personal sense. I mean, the problem is not money. If in 20 years we have robots, infrastructure, cheap energy, etc enough for feeding and taking care of everybody…

This whole thread is weird. People think that paying retirements through social security means that future generations have to shoulder the burden. But if they instead "save" the money, somehow they won't have to? In the end, the bread that goes on the table in 50 years will be produced by a farmer of the future generation. Savings and social security are just two different ways of writing the same contract.

[deleted]

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

#142

Post by sizzle »

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…

You are a great child.

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

#143

Post by woobar »

ajmurmann wrote: post #14
shorttime wrote: post #8

Terrible spot to be in, hoping I will avoid it with a traveling retirement plan (401k). How do other 1st world countries manage elderly workers/people that should no longer work? SS is an option and I don't believe it will go bankrupt, wages of about 125K contribute to SS, anything larger does not. Just have to adjust that limit to keep it where it needs to be. So that helps a little bit.

I think most European countries have more generous/realistic state provided, financial retirement support.

Is it the case though? The Netherlands _full_ state pension is 70% of the minimum wage, which ammount to something like 15K euros annualy. The Netherlands have a strong economy, but even there people have to rely on corporate pensions.

For comparison, the _average_ SS benefit in US is ~$15K, and max is ~$31K

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

#144

Post by cmurf »

Joky wrote: post #127
nunez wrote: post #24

Earlier quoted context omitted.

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?

It's worth doing the "what if" on a Roth 401(k). The money goes in after tax, so you lose the deduction, but the money grows tax free, and you can pull it out tax free. Usually you come out ahead paying tax on less money now, and no tax on the grown investment later.

You can also open an IRA on your own and stuff that to the limit every year. Again there is a Roth version, which you can dip into for certain things before retirement age without penalty, and never pay tax on the withdrawal because tax was paid already going in.

Another thing to look into is if your employer can offer an HSA qualifying health care plan. You get a tax deduction on the front end when funding the HSA, and it can grow tax free, with tax free withdrawals for qualifying medical expenses - the trick is to never use it while you're working. Just pay co-pays, and deductible amount from pocket, instead of from the HSA. Use the HSA later to pay the things Medicare doesn't (which is a lot).

The best way to avoid taxes is to make the maximum possible contribution every year now while you can.

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

#145

Post by dsr_ »

Then corporate America changed: Union membership waned. Executive boards, under pressure from financial raiders, focused more intently on maximizing stock prices. ...

Exactly what led corporate America away from pensions is a matter of debate among scholars, but there is little question that they seem destined for extinction, at least in the private sector.

Oh, please. Nobody seriously debates this, the answer is right there. The policy of the federal government, since Reagan, has been to bust the power of unions every chance they get. Just look at the decisions of the NLRB before and after Reagan.

Labor lost power, corporations gained it. First pensions were reduced, then deliberately underfunded, then raided, then eliminated. The government went along with all of that.

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

#146

Post by pinewurst »

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…

I have a good friend in Australia whose employer stole at least $10K from his superannutation - apparently without any comebacks.

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

#147

Post by toomuchtodo »

briandear wrote: post #65
zzleeper wrote: post #63

Earlier quoted context omitted.

For company plans, you said the answer. It's silly to assume that your employer will be alive when you are 80 year sold, and also seems like a stupid idea for a company in a completely unrelated business to get into the retirement fund mgmt business. For states, the reason is population. If your pop doubles every 50 years, then you only need 2 young people to pay for one retiree. If it's the opposite (Japan now, US i…

So it’s a Ponzi scheme.

Only if you have the unrealistic view that each generational cohort is completely isolated economically.

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

#148

Post by SubiculumCode »

dizzystar wrote: post #50
ec109685 wrote: post #46

Earlier quoted context omitted.

Why didn’t your coworker enroll in a ACA program?

She was covered under military, then she was enrolled in ACA, then dropped multiple times.

Pre-existing condition laws would have stopped this. Unless more info provided,I call FUD

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

#149

Post by pinewurst »

jstewartmobile wrote: post #54
hkmurakami wrote: post #45

Earlier quoted context omitted.

When was this / which vendor was this? My barebones Fidelity 401k plan which only gave me 12 funds to choose from had a S&P500 fund with an expense ratio of ~0.2% iirc. (I don't remember what sort of fees there were in the overall 401k account though)

That was almost 15 years ago, so I'd have to do some digging to name names. On the whole, perhaps things have gotten better since then. It is still a thing though. Father-in-law had most of his stuff at Edward Jones. Some of their fees put mine to shame: https://www.edwardjones.com/planfees/fees-compensation/mutua... edit: Most of his had different titles, but their largest holdings were the same handful of stocks. W…

Edward Jones is exceptionally bad. I remember a few years ago, articles about them directing investments preferentially into funds they were rewarded on. I see as many of their branches as convenience stores and wonder why so many people would give them their savings?

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

#150

Post by cmurf »

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.

Why are you saying this? The employee can make up to $18,000 in contributions to a 401k, and still max out their IRA (Roth or conventional). You're not maxing out your retirement savings options if you're refusing to participate in a 401k.

For those who are self employed should look into SEP and SIMPLE IRAs, in addition to making the max contribution to a Roth IRA and HSA.

For those over 50, many offer additional catch up contribution limits, which raise the max contribution you can make each year.

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