"Broken" Retirement System

[chasesfish]

I really enjoy news stories like this:  They completely ignore the real issue, the lack of financial education and willingness for people to spend money:

http://time.com/money/3329350/retirement-system-fixes/

[Retired To Win]

It may not be right to do, but it is ALWAYS easier to blame a situation one has gotten into on something or someone else, rather than accept responsibility and take action to correct that situation.

A damn sorry state of affairs, if you ask me.

[clarkm04]

I thought the article was fairly good and had some good suggestions.

Particularly the opt out versus opt in.  Studies have shown that employers that go with opt out retirement plans end up with higher employee contribution and satisfaction since the employee has to do work to not save versus the current system of doing work to save.

I also found appealing the notion of expanding the TSP program to smaller companies.  Won't happen because Wall St. will do a full on assault to keep their fees.

Yes, spending is a problem, but these solutions will help a lot of people.

[dude]

I thought the article was fairly good and had some good suggestions.

Particularly the opt out versus opt in.  Studies have shown that employers that go with opt out retirement plans end up with higher employee contribution and satisfaction since the employee has to do work to not save versus the current system of doing work to save.

I also found appealing the notion of expanding the TSP program to smaller companies.  Won't happen because Wall St. will do a full on assault to keep their fees.

Yes, spending is a problem, but these solutions will help a lot of people.

Not surprisingly, as a Fed employee, I am very much AGAINST extending the TSP to non-Fed workers.  It would drive up the fees for us and ruin what is the TSP's best feature, and one of the very few perks federal workers get.  A few years back, they had to change the rules to stop a small group of idiots who were basically day-trading with their TSP accounts and driving costs up considerably for everynoe else.  Now you may only make a limited number of tranasctions in a month (though you can always transfer money into the G Fund).

[Elderwood17]

I am glad people are thinking of ways to help me work longer!  (Sarcasm alert)

There are some pretty good ideas in here.  I happen to have never had any pension options and the largest employer match I ever had was 2% (zero right now and my employer has over 5,000 employees.  Most were grandfathered with a match but new employees don't get one until after five years, and then it is not retroactive).  Therefore I see merit in anything that provides more options and opportunities.

[briandougherty]

I really enjoy news stories like this:  They completely ignore the real issue, the lack of financial education and willingness for people to spend money:

http://time.com/money/3329350/retirement-system-fixes/

Education is a real issue, but I think making sure government incentives through its direct programs and tax breaks being aligned to encourage retirement saving is a pretty real and important issue.

[Huffy2k]

Not surprisingly, as a Fed employee, I am very much AGAINST extending the TSP to non-Fed workers.  It would drive up the fees for us and ruin what is the TSP's best feature, and one of the very few perks federal workers get.  A few years back, they had to change the rules to stop a small group of idiots who were basically day-trading with their TSP accounts and driving costs up considerably for everynoe else.  Now you may only make a limited number of tranasctions in a month (though you can always transfer money into the G Fund).

Really?  Federal workers get very few perks?  In 2012 federal civilian workers had an average wage of $81,704, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation's 104 million private-sector workers was $54,995.  When benefits such as health care and pensions are included, the federal compensation advantage over private workers is even larger. 

In addition federal workers have access to the widest selection of health care plans of any private sector worker, liberal amounts of paid time off, retirement benefits as well as very family friendly workplace policies...

[zataks]

Not surprisingly, as a Fed employee, I am very much AGAINST extending the TSP to non-Fed workers.  It would drive up the fees for us and ruin what is the TSP's best feature, and one of the very few perks federal workers get.  A few years back, they had to change the rules to stop a small group of idiots who were basically day-trading with their TSP accounts and driving costs up considerably for everynoe else.  Now you may only make a limited number of tranasctions in a month (though you can always transfer money into the G Fund).

Really?  Federal workers get very few perks?  In 2012 federal civilian workers had an average wage of $81,704, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation's 104 million private-sector workers was $54,995.  When benefits such as health care and pensions are included, the federal compensation advantage over private workers is even larger. 

In addition federal workers have access to the widest selection of health care plans of any private sector worker, liberal amounts of paid time off, retirement benefits as well as very family friendly workplace policies...

And receive a healthy amount of sick and vacation leave.  And there's the speed at which bureaucracy moves, allowing a gently-paced day. =p

[kite]

I don't agree that further extending the retirement age is a good thing.   The wealth gap between old and young is the real inequality story and it's also the one we don't want to talk about all that much.   But for every boomer who hangs onto a job, there is a young person not getting hired. The jobs that are most pleasant to remain in, tend also to be the more lucrative (law, education,  technology, politics).  The rates of unemployment and underemployment for the young will have consequences that extend over the entire life times of millenials.  Consequently, that leaves fewer young people paying into the very systems that retirees are depending on for health care and an income stream. 
There's no one size fits all solution, but I think means testing the drawing of SS is a good start.

[beltim]

I don't agree that further extending the retirement age is a good thing.   The wealth gap between old and young is the real inequality story and it's also the one we don't want to talk about all that much.   But for every boomer who hangs onto a job, there is a young person not getting hired. The jobs that are most pleasant to remain in, tend also to be the more lucrative (law, education,  technology, politics).  The rates of unemployment and underemployment for the young will have consequences that extend over the entire life times of millenials.  Consequently, that leaves fewer young people paying into the very systems that retirees are depending on for health care and an income stream. 
There's no one size fits all solution, but I think means testing the drawing of SS is a good start.

Take away the pensions of those who have contributed the most into the system? I can't think of a single thing that would destroy Social Security faster.

[frugalecon]

Not surprisingly, as a Fed employee, I am very much AGAINST extending the TSP to non-Fed workers.  It would drive up the fees for us and ruin what is the TSP's best feature, and one of the very few perks federal workers get.  A few years back, they had to change the rules to stop a small group of idiots who were basically day-trading with their TSP accounts and driving costs up considerably for everynoe else.  Now you may only make a limited number of tranasctions in a month (though you can always transfer money into the G Fund).

Really?  Federal workers get very few perks?  In 2012 federal civilian workers had an average wage of $81,704, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation's 104 million private-sector workers was $54,995.  When benefits such as health care and pensions are included, the federal compensation advantage over private workers is even larger. 

In addition federal workers have access to the widest selection of health care plans of any private sector worker, liberal amounts of paid time off, retirement benefits as well as very family friendly workplace policies...

And receive a healthy amount of sick and vacation leave.  And there's the speed at which bureaucracy moves, allowing a gently-paced day. =p

These statistics about average Federal pay vs. average pay in the private-sector are completely uninformative. The mix of job-types and skills in the Federal workforce is very different than in the private sector. In most Federal agencies, jobs such as security guards and custodians have been contracted out to the private sector, while jobs such as secretaries have basically disappeared. Consider an organization like the National Institutes of Health. Lots of PhD-holding scientists who earn below private-sector wages. I suspect that people who ignore these kinds of factors either just want to make political points or are completely innumerate.

[LalsConstant]

I question the idea we should be encouraging people who are already 50 plus to work longer.  That just creates even more people under thirty or even forty who will be serial low wage earners forever trapped at the bottom because no one ever retires.

[kite]

I don't agree that further extending the retirement age is a good thing.   The wealth gap between old and young is the real inequality story and it's also the one we don't want to talk about all that much.   But for every boomer who hangs onto a job, there is a young person not getting hired. The jobs that are most pleasant to remain in, tend also to be the more lucrative (law, education,  technology, politics).  The rates of unemployment and underemployment for the young will have consequences that extend over the entire life times of millenials.  Consequently, that leaves fewer young people paying into the very systems that retirees are depending on for health care and an income stream. 
There's no one size fits all solution, but I think means testing the drawing of SS is a good start.

Take away the pensions of those who have contributed the most into the system? I can't think of a single thing that would destroy Social Security faster.

Oh, it won't destroy the system.   It will destroy the political future of the first few who propose and endorse it in an unpalatable way.  Put another way,  how much SS is needed by the likes of  Bill Clinton,  Mitt Romney,  Warren Buffett, etc....

[beltim]

There's no one size fits all solution, but I think means testing the drawing of SS is a good start.

Take away the pensions of those who have contributed the most into the system? I can't think of a single thing that would destroy Social Security faster.

Oh, it won't destroy the system.   It will destroy the political future of the first few who propose and endorse it in an unpalatable way.  Put another way,  how much SS is needed by the likes of  Bill Clinton,  Mitt Romney,  Warren Buffett, etc....

None.  But it's just as unjust as taking their 401(k).  Or your 401(k).  There's literally no difference between the government means-testing their Social Security and means-testing your 401(k).

[frugalnacho]

I don't agree that further extending the retirement age is a good thing.   The wealth gap between old and young is the real inequality story and it's also the one we don't want to talk about all that much.   But for every boomer who hangs onto a job, there is a young person not getting hired. The jobs that are most pleasant to remain in, tend also to be the more lucrative (law, education,  technology, politics).  The rates of unemployment and underemployment for the young will have consequences that extend over the entire life times of millenials.  Consequently, that leaves fewer young people paying into the very systems that retirees are depending on for health care and an income stream. 
There's no one size fits all solution, but I think means testing the drawing of SS is a good start.

Take away the pensions of those who have contributed the most into the system? I can't think of a single thing that would destroy Social Security faster.

Oh, it won't destroy the system.   It will destroy the political future of the first few who propose and endorse it in an unpalatable way.  Put another way,  how much SS is needed by the likes of  Bill Clinton,  Mitt Romney,  Warren Buffett, etc....

I thought we were talking about social security and not welfare? 

[dude]

Not surprisingly, as a Fed employee, I am very much AGAINST extending the TSP to non-Fed workers.  It would drive up the fees for us and ruin what is the TSP's best feature, and one of the very few perks federal workers get.  A few years back, they had to change the rules to stop a small group of idiots who were basically day-trading with their TSP accounts and driving costs up considerably for everynoe else.  Now you may only make a limited number of tranasctions in a month (though you can always transfer money into the G Fund).

Really?  Federal workers get very few perks?  In 2012 federal civilian workers had an average wage of $81,704, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation's 104 million private-sector workers was $54,995.  When benefits such as health care and pensions are included, the federal compensation advantage over private workers is even larger. 

In addition federal workers have access to the widest selection of health care plans of any private sector worker, liberal amounts of paid time off, retirement benefits as well as very family friendly workplace policies...

Ah, this old canard again.  You are comparing apples and oranges.  A very large percentage of government workers are advanced degree holders.  Think DOJ (lawyers), VA and CDC (doctors), NASA/NRC/FDA, etc, etc, (scientists/engineers), SEC, FCC, and on and on.  And how do you compare the salaries of FBI/CIA, etc. with the private sector?  Comparing the salaries of federal workers with the "average" salary across the U.S. is pointless.  Almost all low-skill jobs (janitors, landscaping, food service, etc.) in government are contractors (TSA being the notable exception). Yes, there is a case to be made that clerical workers are overpaid, or at least paid more than their private sector counterparts, but for most professionals in government, that's simply not the case.

[dude]

There's no one size fits all solution, but I think means testing the drawing of SS is a good start.

Take away the pensions of those who have contributed the most into the system? I can't think of a single thing that would destroy Social Security faster.

Oh, it won't destroy the system.   It will destroy the political future of the first few who propose and endorse it in an unpalatable way.  Put another way,  how much SS is needed by the likes of  Bill Clinton,  Mitt Romney,  Warren Buffett, etc....

None.  But it's just as unjust as taking their 401(k).  Or your 401(k).  There's literally no difference between the government means-testing their Social Security and means-testing your 401(k).

Exactly right.  Taxing and redistributing income is one thing, but confiscating the monies one has put into a Trust Fund for their old age is another.  It pains me that people can't see this.

[foobar]

1) TSP for everyone. Or let you transfer your 401(k) dollars to an ira every year (i.e. if your firm sucks, those assets are going to end up at vanguard). Personally I think we have way too many retirement accounts types and speciality accounts. Things like ROTHs add a nightmare of complexity for little gain. What to encourage low income savers? Give them a tax credit. And no I don't care that it is going to save me a zillion dollars in taxes in the future.

2) I am pretty sure you an do that lump sum today. You file and suspend and any time before 70 you can get that money retroactively. Or you can wait til 70 and get a much larger benefit on a monthly basis

3) This gets beyond messy. What about if you have a wife earning less than her spousal benefit. Should she also get a tax break? What about if your a smoker or fat?

4) I think getting rid of IRA RMDs is a great idea. We also need to get rid of the stretch IRA at the same time. You inherit (nonspousal) ira,you have 5 years to take the money out and pay your taxes.

[trailrated]

I really enjoy news stories like this:  They completely ignore the real issue, the lack of financial education and willingness for people to spend money:

http://time.com/money/3329350/retirement-system-fixes/

I stole this from a fortune cookie yesterday, "No snowflake in an avalanche ever feels responsible."

[chasesfish]

The only point I would make is this:  all we want to talk about is government incentives instead of education and responsibility.   

If we want to talk about government policy, I would make traditional IRA limits $50,000 per year.  It's crazy we have different rules for different plans and force employers to make a decision on what/how to offer retirement plans


Sent from my iPhone using Tapatalk

[NICE!]

Not surprisingly, as a Fed employee, I am very much AGAINST extending the TSP to non-Fed workers.  It would drive up the fees for us and ruin what is the TSP's best feature, and one of the very few perks federal workers get.  A few years back, they had to change the rules to stop a small group of idiots who were basically day-trading with their TSP accounts and driving costs up considerably for everynoe else.  Now you may only make a limited number of tranasctions in a month (though you can always transfer money into the G Fund).

Really?  Federal workers get very few perks?  In 2012 federal civilian workers had an average wage of $81,704, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation's 104 million private-sector workers was $54,995.  When benefits such as health care and pensions are included, the federal compensation advantage over private workers is even larger. 

In addition federal workers have access to the widest selection of health care plans of any private sector worker, liberal amounts of paid time off, retirement benefits as well as very family friendly workplace policies...

Ah, this old canard again.  You are comparing apples and oranges.  A very large percentage of government workers are advanced degree holders.  Think DOJ (lawyers), VA and CDC (doctors), NASA/NRC/FDA, etc, etc, (scientists/engineers), SEC, FCC, and on and on.  And how do you compare the salaries of FBI/CIA, etc. with the private sector?  Comparing the salaries of federal workers with the "average" salary across the U.S. is pointless.  Almost all low-skill jobs (janitors, landscaping, food service, etc.) in government are contractors (TSA being the notable exception). Yes, there is a case to be made that clerical workers are overpaid, or at least paid more than their private sector counterparts, but for most professionals in government, that's simply not the case.

Fair points, if the federal government weren't the behemoth it is. Even people who consider themselves extremely progressive often admit that the government is far too big and inefficient. I'd advocate for keeping the benefits good with a smaller workforce, but reducing the size & scope of federal government rarely (if ever) happens, so reducing benefits seems to be the only viable option.

[beltim]

Fair points, if the federal government weren't the behemoth it is. Even people who consider themselves extremely progressive often admit that the government is far too big and inefficient. I'd advocate for keeping the benefits good with a smaller workforce, but reducing the size & scope of federal government rarely (if ever) happens, so reducing benefits seems to be the only viable option.

Literally the first link from a "size of federal workforce" google search shows you're wrong.  The federal workforce has shrunk each of the last 3 years, and is 2/3 the size it was in the mid-60s, despite the fact that the population has grown >50% in that time.

http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

[sheepstache]

Possibly of interest to people wondering how social security works and where the money comes from. Bit long, but comic format!
http://economixcomix.com/home/social-security/

[Emilyngh]

I thought the article was fairly good and had some good suggestions.

Particularly the opt out versus opt in.  Studies have shown that employers that go with opt out retirement plans end up with higher employee contribution and satisfaction since the employee has to do work to not save versus the current system of doing work to save.

This.   We could sit here all day and talk about how people should take responsibility for their own retirement, spend less, and save more.   And it's worth saying for those who will actually listen and follow through, but sad or not, this is the minority of Americans.   

reality is that most will procrastinate with their retirement as they do with everything else, so if we can make some simple changes that infringe on no liberties but making saving easier than not and require little work/research (like opting out instead of in with an automatic increase in amount, and requiring 401ks to have low fees) that will make serious progress towards helping, whhhhy not?   Out of spite for those who are not as smart as us?

[Beric01]

Possibly of interest to people wondering how social security works and where the money comes from. Bit long, but comic format!
http://economixcomix.com/home/social-security/

Wow, what a biased and uninformed take on Social Security! People didn't lose all their retirement savings in the crash - the market has more than returned to pre-2008 levels. Buying Vanguard index funds doesn't stuff the pockets of the rich, and more than owning stock does. And remember, YOU own your stock, not the company you're invested in. If the company does well, you're stuffing your own pockets.

some people, in any market, will lose everything

Well certainly they will, if they buy only penny stocks! If they bought index funds, they'd be doing just fine right now.

I just can't understand why the government forces us to save for retirement in such an inefficient retirement savings plan. If I could take my own money paid in Social Security taxes and invest it in the market instead, I'd be WAY better off. My generation (Millennials) is realizing what a bad deal Social security is, and we'll be fixing it for real once we're getting elected in numbers.

[Left]

I don't get the post... seems like people want to just have everything without working for it? They want a pension? my parents have them (both state employees), and guess what? I don't want one. They make about 20% less than if they were in private industry, have to work for 20+ years. Saving 20% of your income for 20 years is the same result, FI through investments instead of a pension. The flip side is that the state can always change it's mind about pension payout (unlikely but possible). Sure the market could drop but I can adjust myself for it.

if I had to pick between a pension and having to work until "retirement" to get it, or a 401k where I can use it after I get to "fi" goal, I know which one I'll take. And having a pension in no way means that the person will be financially responsible. Look at the pensioners living in thailand/etc because they can't "cut" it back here in the US....

the govt could just make SS into a individual roths, people forced to pay into it but the money is only for themselves and not paying the previous/future generations... and let the polititcians learn to budget and not take excess from SS and then claim it is underwater

[franklin w. dixon]

Fair points, if the federal government weren't the behemoth it is. Even people who consider themselves extremely progressive often admit that the government is far too big and inefficient. I'd advocate for keeping the benefits good with a smaller workforce, but reducing the size & scope of federal government rarely (if ever) happens, so reducing benefits seems to be the only viable option.

Literally the first link from a "size of federal workforce" google search shows you're wrong.  The federal workforce has shrunk each of the last 3 years, and is 2/3 the size it was in the mid-60s, despite the fact that the population has grown >50% in that time.

http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

Egads, it's libertarians' one weakness: someone who knows anything about anything.

[agent_clone]

Personally I would disagree with point 2 in that article.  The one where it allows people to take the money as a lump sum.  In Australia the superannuation system allows people to take money as a lump sum.  They then spend it all and claim the pension... A lot of people can't manage access to large sums of money.

[NICE!]

Fair points, if the federal government weren't the behemoth it is. Even people who consider themselves extremely progressive often admit that the government is far too big and inefficient. I'd advocate for keeping the benefits good with a smaller workforce, but reducing the size & scope of federal government rarely (if ever) happens, so reducing benefits seems to be the only viable option.

Literally the first link from a "size of federal workforce" google search shows you're wrong.  The federal workforce has shrunk each of the last 3 years, and is 2/3 the size it was in the mid-60s, despite the fact that the population has grown >50% in that time.


http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

Egads, it's libertarians' one weakness: someone who knows anything about anything.

Nice assumption about my political beliefs. You don't know me. Furthermore, basically calling an entire set of people stupid? Wow.

That doesn't answer the scope part of the equation. I find that far more important than the size of the workforce and again, this isn't something that is confined to libertarian or conservative circles.

[NICE!]

Fair points, if the federal government weren't the behemoth it is. Even people who consider themselves extremely progressive often admit that the government is far too big and inefficient. I'd advocate for keeping the benefits good with a smaller workforce, but reducing the size & scope of federal government rarely (if ever) happens, so reducing benefits seems to be the only viable option.

Literally the first link from a "size of federal workforce" google search shows you're wrong.  The federal workforce has shrunk each of the last 3 years, and is 2/3 the size it was in the mid-60s, despite the fact that the population has grown >50% in that time.

http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

This is a friendly post. "You're wrong" - effective strategy.

I said "size and scope." This isn't only talking about the amount of workers, but thanks for the data. I knew the workforce had gotten somewhat smaller primarily due to hiring freezes, but I didn't know it was that much smaller. I'm curious how many of those positions will return.

[hernandz]

My generation (Millennials) is realizing what a bad deal Social security is, and we'll be fixing it for real once we're getting elected in numbers.

Your generation will need to vote more as a block before getting elected in larger numbers in order to change Social Security, since as a group you don't have widespread economic power.  As my parents and my generation have made sure that Millennials don't get any education in electoral power, you have an uphill battle. It appears that Millennials don't care for Republican social issues, and are skeptical of Democratic economic issues, you'll need to bring into existence a new political party, while simultaneously dealing with your own life/economic problems, including family both elder and younger, and climate issues that we older folks didn't take care of in time.

I wish you luck.   

[foobar]

My generation (Millennials) is realizing what a bad deal Social security is, and we'll be fixing it for real once we're getting elected in numbers.

Wanna bet?:) By the time Millennials are old enough to make a difference they will be well entrenched in the system and will want to make sure they get their money out:) Just make sure to retire early. It makes SS a much better deal.

SS isn't perfect. But it does a very good job at what it was designed to do (reduce elderly poverty).

[sheepstache]

Possibly of interest to people wondering how social security works and where the money comes from. Bit long, but comic format!
http://economixcomix.com/home/social-security/

Wow, what a biased and uninformed take on Social Security!

It is a little hand-wavey about "tax cuts for the rich" and what the other budgetary issues are.  I thought it was a good explanation of the money flow (if it's accurate).

some people, in any market, will lose everything

Well certainly they will, if they buy only penny stocks! If they bought index funds, they'd be doing just fine right now.

I just can't understand why the government forces us to save for retirement in such an inefficient retirement savings plan. If I could take my own money paid in Social Security taxes and invest it in the market instead, I'd be WAY better off. My generation (Millennials) is realizing what a bad deal Social security is, and we'll be fixing it for real once we're getting elected in numbers.

Why and whether you would want a system like social security is beyond the scope of the comic, though.

Anyway, someone above was referring to the trust fund and re-distributing vs. confiscation, I had always been confused about the question of entitlements vs. transfer of money between generations and found this helpful the first time I read it.
Anyway,

[electriceagle]

Possibly of interest to people wondering how social security works and where the money comes from. Bit long, but comic format!
http://economixcomix.com/home/social-security/

Wow, what a biased and uninformed take on Social Security! People didn't lose all their retirement savings in the crash - the market has more than returned to pre-2008 levels. Buying Vanguard index funds doesn't stuff the pockets of the rich, and more than owning stock does. And remember, YOU own your stock, not the company you're invested in. If the company does well, you're stuffing your own pockets.

some people, in any market, will lose everything

Well certainly they will, if they buy only penny stocks! If they bought index funds, they'd be doing just fine right now.

I just can't understand why the government forces us to save for retirement in such an inefficient retirement savings plan. If I could take my own money paid in Social Security taxes and invest it in the market instead, I'd be WAY better off. My generation (Millennials) is realizing what a bad deal Social security is, and we'll be fixing it for real once we're getting elected in numbers.

I can tell you why: the government is not honest enough to handle decisions on where to invest.

The moment the door opens to invest social security money in the stock market, the lobbyists will flood Washington with golden proposals that look good but are hollow inside. Everybody and their uncle Bernie will have a high-yield, low-risk fund that social security money should be invested in.

Congresspeople will lose their jobs for not investing social security money with companies in their districts
Social security decisionmakers will get million dollar jobs on wall street the day after leaving government service

Please excuse my terminology: it would be a shitshow.

[MDM]

Fair points, if the federal government weren't the behemoth it is. Even people who consider themselves extremely progressive often admit that the government is far too big and inefficient. I'd advocate for keeping the benefits good with a smaller workforce, but reducing the size & scope of federal government rarely (if ever) happens, so reducing benefits seems to be the only viable option.

Literally the first link from a "size of federal workforce" google search shows you're wrong.  The federal workforce has shrunk each of the last 3 years, and is 2/3 the size it was in the mid-60s, despite the fact that the population has grown >50% in that time.

http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

Egads, it's libertarians' one weakness: someone who knows anything about anything.

Depends on your definition of "federal workforce."  Of the categories in the link, only uniformed military personnel have decreased from the mid-60s.  Legislative/judicial is plotted on the secondary axis due to the absolute scale, but relative increase is obvious.  Also, "executive" includes postal workers.  Another quick google search shows that the number of postal workers has decreased by ~200K over the last 9 years of the opm.gov data, so non-postal executive workers have increased by ~that amount over that time.

beltim's link tends to support NICE!'s point, rather than refute it.

[soccerluvof4]

Work 40 years instead of 30 years for qualifying wages.  This part is nonsense. Seems to me that people that are more responsible should be rewarded for such and perhaps have a minimum requirement for those that cant make good decisions.

[MrsPete]

From the article:  Only 42% of private sector workers ages 25 to 64 have any pension coverage in their current job.
False.  Almost all working Americans are involved in the Social Security system, which essentially is a non-optional pension plan. 

With that in mind, I disagree with the idea that the government should begin administering TSPs for all workers.  Why?  Because they're not exactly managing Social Security well -- why should we put MORE of our resources into their hole-filled bucket?

On another topic, yes, I would love some tax relief . . . but is it realistic?  Our country is in debt.  Bad debt.  Can we really afford to continue enslaving future generations into paying this?  Taxes are awful, but we also have to pay off some debt.   

[sheepstache]

I can tell you why: the government is not honest enough to handle decisions on where to invest.

Oh, good point, the comic isn't clear whether it's talking about people managing their own investments or social security funds being invested by the administration.

[foobar]

From the article:  Only 42% of private sector workers ages 25 to 64 have any pension coverage in their current job.
False.  Almost all working Americans are involved in the Social Security system, which essentially is a non-optional pension plan. 

With that in mind, I disagree with the idea that the government should begin administering TSPs for all workers.  Why?  Because they're not exactly managing Social Security well -- why should we put MORE of our resources into their hole-filled bucket?

You realize the government managing TSP means you write them a check and they give you an account with a dozen or so of the best investment products in the world to choose from? Turns out being a huge fund gives you a ton of pricing advantages.....

[GardenFun]

Here's my complaint with pensions.

You retire and start collecting at 60, die at 63, and unless you chose a plan with some percentage of spousal benefit, your family loses all the money you put into the plan.  Worse if your spouse passes away soon after you.

However, with a 401k, all the money accumulated (your input, company match, interest) gets passed on to your heirs upon your death. 

Based on my parents' and in-laws' information, part of their paycheck gets removed and placed into the pension fund, just like a 401k.  Is this true?  Then why wouldn't a person want the flexibility of a 401k?  Purely due to the inability to handle a large chunk of money at once?

[foobar]

Here's my complaint with pensions.

You retire and start collecting at 60, die at 63, and unless you chose a plan with some percentage of spousal benefit, your family loses all the money you put into the plan.  Worse if your spouse passes away soon after you.

However, with a 401k, all the money accumulated (your input, company match, interest) gets passed on to your heirs upon your death. 

Based on my parents' and in-laws' information, part of their paycheck gets removed and placed into the pension fund, just like a 401k.  Is this true?  Then why wouldn't a person want the flexibility of a 401k?  Purely due to the inability to handle a large chunk of money at once?

It is more than just the ability to manage money. Look up sequence of risks. With a pension, that is placed on the company. Go to the fire calc and look at the 1973,1974, and 1975 retiree.  In order to get the chance to be the guy that doubles the money, you need to take the risk of being the guy that goes bankrupt.  Pensions (and annuities) are hybrid products. They are a combo of insurance and investment. As that you lose some to fees but you gain risk reduction. The average case is much better just investing. The worse cases are much better with the pension.

The exact details on what wins comes down to the numbers (a lot of pension require employees to put some money in but also have huge (i.e. a lot more than your puny 3% 401(k) one) employer matches) and unknowables (i.e. do your investments return more than the 7% that most pensions use, what type of raises will you get, will your pension get crunched down,...).  In general the ones I have seen have been pretty decent investments (i.e. tend to be better than sticking your money in a 60/40 fund and buying an annuity at 65).

[GardenFun]

Here's my complaint with pensions.

You retire and start collecting at 60, die at 63, and unless you chose a plan with some percentage of spousal benefit, your family loses all the money you put into the plan.  Worse if your spouse passes away soon after you.

However, with a 401k, all the money accumulated (your input, company match, interest) gets passed on to your heirs upon your death. 

Based on my parents' and in-laws' information, part of their paycheck gets removed and placed into the pension fund, just like a 401k.  Is this true?  Then why wouldn't a person want the flexibility of a 401k?  Purely due to the inability to handle a large chunk of money at once?

It is more than just the ability to manage money. Look up sequence of risks. With a pension, that is placed on the company. Go to the fire calc and look at the 1973,1974, and 1975 retiree.  In order to get the chance to be the guy that doubles the money, you need to take the risk of being the guy that goes bankrupt.  Pensions (and annuities) are hybrid products. They are a combo of insurance and investment. As that you lose some to fees but you gain risk reduction. The average case is much better just investing. The worse cases are much better with the pension.

The exact details on what wins comes down to the numbers (a lot of pension require employees to put some money in but also have huge (i.e. a lot more than your puny 3% 401(k) one) employer matches) and unknowables (i.e. do your investments return more than the 7% that most pensions use, what type of raises will you get, will your pension get crunched down,...).  In general the ones I have seen have been pretty decent investments (i.e. tend to be better than sticking your money in a 60/40 fund and buying an annuity at 65).

Thank you for the info!