Expecting People to Save for Their Own Retirements Doesn't Work

[Ben]

Expecting people to save for their own retirements just does not work.

Yes, this is where we're going. More socialism, less personal responsibility. Some people can't stop from buying the newest iPhone, or a Corvette or whatever instead of putting money in a retirement fund. Thus no one should be allowed (or to their way of thinking, forced) to, and the government will and should take care of you. 

I apologize for the link to stupid Vox.

https://www.vox.com/2019/3/27/18174385/retirement-savings-401-k

[brimic]

So what they are saying is that delayed gratification and personal responsibility are attributes of the wealthy....

[brimic]

Hindsight 2070: We asked 15 experts, “What do we do now that will be considered unthinkable in 50 years?” Here’s what they told us.
Youth tackle football
Bosses
Eating meat
Conspicuous consumption
The drug war
The way we die
Banning sex work
Ending the draft
Facebook and Google
Abortion
Self-driving cars
Our obsession with rationality
Abandoning public education
The idea of a “wrong side of history”

 

[Pb]

It used to be to provide for their retirement people had kids, not saved money!

And now Americans have given up reproducing even at replacement rate.

[Fly320s]

It used to be to provide for their retirement people had kids, not saved money!

And now Americans have given up reproducing even at replacement rate.

I have two qualified heirs to the throne who can support me in my old age.  Yet, I will not burden them with my health and well-being.  I have many peasants for that.

[makattak]

I have two qualified heirs to the throne who can support me in my old age.  Yet, I will not burden them with my health and well-being.  I have many peasants for that.

I have 4.

I do not plan to burden them with my retirement if I can help it but I also have a non-zero expectation that sometime in the next 30 years the government may be seizing 401ks.

So it's nice to have a back-up plan. (Yes, the government can seize my children as well, but I put that at a lower chance than seizing my money.)

[MillCreek]

Well, the 403(b) route has worked for me so far, with $ 820,000 K in the kitty at age 59.  I started contributing at my first professional job at age 26, did matching, and never had to take a loan from the plan. Having said that, I realize full well that a substantial market downturn in the next several years could gut my retirement plan like a trout.  I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity, and am thinking about immediate payout vs. deferred payout vs. survivor benefits vs. return of principal. Since I have never had a pension, this would give me some of the security of a fixed payout not dependent upon market return. The current interest rates and rates of return on a fixed annuity are still not what I would want them to be, but I would be hedging against that downturn.

[brimic]

.  I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity, and am thinking about immediate payout vs. deferred payout vs. survivor benefits vs. return of principal. Since I have never had a pension, this would give me some of the security of a fixed payout not dependent upon market return. The current interest rates and rates of return on a fixed annuity are still not what I would want them to be, but I would be hedging against that downturn.

That's some hard core white privilege you have going on there comrade. Your capital belongs to proletariat, state will take take care of you. Da?

[BobR]

I am just relying on all of you suckers working stiffs fine upstanding tax payers to support me on my two .gov pensions and Social Security for the next 20 years or so. 


bob

[Ben]

  I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity,

If I didn't have the fed.gov pension (essentially an annuity) to back up my TSP, I would be doing something similar. Just for the safety net.

But yeah, the rates aren't great. If we ever go into one of those nutty early 80s things again, I would consider adding an annuity at 10%. 

[Firethorn]

I have:
military retirement
TSP
Roth IRA. 

I think that the current system where social security will pay enough that people don't end up on the street starving when they can no longer work if they don't have relatives willing to take them, with incentives for people to save otherwise, is about the best we can expect.

The problem with social security is that the excess isn't allowed to be invested effectively.

Some sort of mandatory IRA/401k system might be better, but would take a couple generations to switch to.

[Boomhauer]

I’d be contributing a lot more to my 401k if the .gov wasn’t getting to my paycheck first for social security and Medicare

[Ben]

The problem with social security is that the excess isn't allowed to be invested effectively.

I've always wondered what the social security kitty would look like if they invested as efficiently as say, Vanguard, with the same overhead. Well, and also didn't raid the thing. Well, and also vetted for fraud.

[Angel Eyes]

I've always wondered what the social security kitty would look like if they invested as efficiently as say, Vanguard, with the same overhead. Well, and also didn't raid the thing. Well, and also vetted for fraud.

So what you're saying is: I've always wondered what the social security kitty would look like if the government didn't run it.

[Ben]

So what you're saying is: I've always wondered what the social security kitty would look like if the government didn't run it.

 

[MechAg94]

I would just like to know what the Social Security kitty looks like at all.  How much is money is actually mailed to retired people each year?  How high is their overhead?  How much of their budget goes to disability payments and how much is actually mailed out?  Lots of things I don't think I would be happy to learn.

[Northwoods]

I would just like to know what the Social Security kitty looks like at all.  How much is money is actually mailed to retired people each year?  How high is their overhead?  How much of their budget goes to disability payments and how much is actually mailed out?  Lots of things I don't think I would be happy to learn.

As a likely future recipient of SSDI I honestly wish it would go away.  I'd much prefer a totally privatized disability insurance environment.  Rates would go up but not as much as taxes would go down if it we're eliminated without the money simply being redirected (please suppress your guffawing). 

Same with regular retirement benefits.  That 12.4% would turbo-charge my retirement savings and I'd blow away the "return on investment" from SSI.  I'd even be willing to give up my "earned" benefits to date to make that happen.

If other schmucks out there aren't willing to take responsibility for their retirement savings, or to insure against disability, they can just work until they can't.  I'm ok with having it be an opt-out rather than opt-in scenario on some level for private retirement savings and disability insurance.  Not sure how that can work, but I'm open to the possibility if a workable solution is possible.

[brimic]

I’d be contributing a lot more to my 401k if the .gov wasn’t getting to my paycheck first for social security and Medicare

I’d be very close to retirement right now in that scenario.

[Firethorn]

I’d be contributing a lot more to my 401k if the .gov wasn’t getting to my paycheck first for social security and Medicare

I'd be able to retire right now based on my pay-in. 

[Scout26]

I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity, and am thinking about immediate payout vs. deferred payout vs. survivor benefits vs. return of principal. Since I have never had a pension, this would give me some of the security of a fixed payout not dependent upon market return. The current interest rates and rates of return on a fixed annuity are still not what I would want them to be, but I would be hedging against that downturn.

I know when Dad sold the tavern, he put big chunk of the money into a annuity.  I remember him telling me tat they calculated a monthly payment based on him living until age 75.  He lived until he was 91.  He used to joke that Home Office of the Insurance Company would call the agent that sold him him the policy each month to ask "Is that SoB dead yet ?" 

I'm meeting with an agent next Friday to learn more about them and maybe open one and start stashing money into one/them.

[charby]

I’d be very close to retirement right now in that scenario.

I've been saving a min of 15% (now 20% for the last 3.5 years) of my income for 18 years, I'm have no where near enough to retire yet.

[MechAg94]

I am in the 15% ball park.  It should be more with all the matching % and retirement plan % my company does.  I hope to be further along than Millcreek by the time I reach 60. 
What I need to do is save more after tax money. 

[MillCreek]

^^^Of note, I have lost hundreds of thousands of dollars in various 'market corrections' over the years; a downside of any retirement plan that relies upon the stock market.

[Northwoods]

^^^Of note, I have lost hundreds of thousands of dollars in various 'market corrections' over the years; a downside of any retirement plan that relies upon the stock market.

Unless you sold at the low point and never reinvested you haven't lost anything.  And values have been regained, and then some even since the last correction, never mind all the previous ones.

[Ben]

Unless you sold at the low point and never reinvested you haven't lost anything.  And values have been regained, and then some even since the last correction, never mind all the previous ones.

Yup. Anyone who has been able to follow the Vanguard philosophy of, "Don't just do something, stand there." Has done A-OK.