Too Many Americans Will Never Be Able to Retire

[blackomen]

https://getpocket.com/explore/item/too-many-americans-will-never-be-able-to-retire

[ysette9]

I don’t see why this is in the comedy section.  Having an aging demographic is a real issue that many rich nations are or will struggle with. Japan is the poster child but many others are following in its wake, even China. If you have a pension system designed in an era with many more workers-to-retirees than we have now and if our economy and stock market need continual growth, then an aging and shrinking population poses a problem.

[Just Joe]

Certainly a worthwhile topic to discuss but its incorrectly categorized in the comedy section.

[Just Joe]

Having read the article the end of it suggests that large systemic changes are required that only politicians can accomplish. Not much about spending more carefully over one's lifetime.

[sherr]

Having read the article the end of it suggests that large systemic changes are required that only politicians can accomplish. Not much about spending more carefully over one's lifetime.

So here's the thing. If we're talking about one individual's failure to retire because they overspent and weren't responsible then sure, that's the individual's problem. If we're talking about how the average person can't retire because they overspent and weren't responsible, then that's a systemic problem that requires a systemic fix. Things can be both at the same time.

401ks are similar. For you and me a 401k is probably vastly superior to a pension because we can take our future into our own hands and aren't tied to the continuing existence / responsible behavior of our employers. But for the average person? It seems like most people are not saving enough for retirement under the 401k system. A better system would ensure good outcomes for the average person, not just the exceptional people.

[Bloop Bloop]

I'm not sure the answer to the retirement crisis is to deliver more public funds.  We already do enough as it is to support the average plodder.

Perhaps people will just have to get used to working longer. Or saving better.

People in Asian countries can save just fine for retirement and/or rely on family support, so perhaps Americans need to be less individualistic and a bit more responsible.

[ysette9]

I'm not sure the answer to the retirement crisis is to deliver more public funds.  We already do enough as it is to support the average plodder.

Perhaps people will just have to get used to working longer. Or saving better.

People in Asian countries can save just fine for retirement and/or rely on family support, so perhaps Americans need to be less individualistic and a bit more responsible.

@sherr had it right about a good system ensuring good outcomes for the average person. You can’t “should” people into changing, especially on a massive scale. There is no way you are going to “should” Americans, a country founded on individualism, into being more community- and family-focused like Asian countries. It literally isn’t part of our culture. “Should” is not an action plan.

So you work with what you have. Nudges. Systems that make it easy to do the outcome you want and harder to do otherwise. SS coming out of payroll taxes works well. We could expand that and have more generous SS payouts. We could make contributing to an IRA the default option for everyone out of payroll and require people to opt out. We could offer prizes or other inducements to make saving and investing attractive (Freakonomics had an interesting podcast on that a while back). I’m sure there are other clever ideas worth exploring.

[Imma]

While for me personally a 401-type retirement account would be ideal, I'm kind of glad we don't have this system in my country (the Netherlands) . Most companies are enrolled in a pension fund for their specific field and if they are, all workers have pension contributions taken from their wages automatically. In my case 3,5%. Only if this is not offered at your company you can put tax-free money in a retirement account.

The pension funds are professional investors and their stability is monitored by the national bank. They also have access to investments that you and I don't have, because they sit on billions and billions of €.  For people who are totally not interested in investing or retirement (=far more people than you can imagine) this is great because they don't end up in poverty even they are old, even though they never paid attention to it.

It's not great if you want to FIRE because you can only access the money at retirement age but it's a good system for society overall.