Author Topic: Vox: 401(k)s will be considered unthinkable 50 years from now  (Read 5221 times)

Tertulio

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And that’s a problem. There’s a reason, it turns out, why employers didn’t hand retirement planning off to workers: 401(k)s are terrible at ensuring that those who need to save for retirement do. Indeed, over the same period in which 401(k)s expanded, the share of working-age households at risk of being financially unprepared at age 65 jumped from 31 percent (in 1983) to more than 53 percent (in 2010). Indeed, the terribleness of 401(k)s helped spark a new field of behavioral economics, which showed that voluntary plans in which people manage their own investments defy everything we know about how the brain works.

Seems to me this is less about (not at all about) the merit of 401ks and more about a gap in financial education and peoples' tendency towards reckless spending.

https://www.vox.com/2019/3/27/18174385/retirement-savings-401-k?fbclid=IwAR3kWhMXzXIZ83XNNH7gYuvI9wnzJjL15stUXjVYhunUtG93D1ZUL9SD3sY

Askel

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #1 on: April 15, 2019, 11:30:51 AM »
Eh, at least there's hope.  From the same series:

https://www.vox.com/2019/3/27/18188801/conspicuous-consumption-luxury-items

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #2 on: April 15, 2019, 11:32:35 AM »
The author's first fallacy is to state that people need to save for retirement; social security provides for retired persons' needs, and the 401(k) simply supplements that.

The second fallacy is that it is the rich who benefit the most from 401(k)s. Rather, it is the people who want to get rich who benefit the most from 401(k)s.

MilesTeg

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #3 on: April 15, 2019, 11:39:58 AM »
The purpose of 401ks has never been to help the average person retire. Yes, if you are financially literate and both capable of and willing to save they can be used for that purpose. But that does not describe the average person.

The real reason 401k plans were dreamed up and promoted was to make money off people using them, both with fees and by injecting large amounts of capital into various investment firms's coffers.

That they have contributed to the effective dissolution of pensions is something we will, as a society, regret at some point.

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #4 on: April 15, 2019, 12:40:13 PM »
While his conclusion is wrong, his problem statement still holds. It is possible that 50 years from now employer contributions will be mandated by law and early distributions will be prohibited. At that point the "401k" will barely be recognizable to us.

The second fallacy is that it is the rich who benefit the most from 401(k)s. Rather, it is the people who want to get rich who benefit the most from 401(k)s.

People with the highest marginal tax rate obviously benefit the most, but that includes state income tax. In a sense, people in Oregon benefit more from 401Ks than people in Washington State do. Also, I can work my whole life in OR and then retire in WA where there is no state income tax.
« Last Edit: April 15, 2019, 12:42:34 PM by PDXTabs »

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #5 on: April 15, 2019, 12:48:53 PM »
Listening to Freakonomics podcast has led me to realize that if we really want to improve things around us, we have to let go of “should” and accept people where they are. That means embracing and accepting human nature and finding a way to work with that instead of against it.

Human nature is to discount future outcomes and prioritize the present. People are naturally bad at delayed gratification and saving for the future. We are the lucky few who buck that trend, fell education or nature or upbringing or environment. Most people are not like us. We can tut-tut and say they should be better, which isn’t getting us that far, or we can instead look for ways to work with people. So nudges are great, such as auto signing up for 401k and auto contribution increases unless you opt out. Most people would be better off being forced into paying more into SS or being forced into a pensioner scheme.

tralfamadorian

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #6 on: April 15, 2019, 02:23:47 PM »
Listening to Freakonomics podcast has led me to realize that if we really want to improve things around us, we have to let go of “should” and accept people where they are. That means embracing and accepting human nature and finding a way to work with that instead of against it.

+1 Whether it is financial, physical or mental health, any time society expects John Q Public to do something for their own future without an immediate payback of some kind it doesn't work out.

wenchsenior

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #7 on: April 15, 2019, 02:48:54 PM »
Listening to Freakonomics podcast has led me to realize that if we really want to improve things around us, we have to let go of “should” and accept people where they are. That means embracing and accepting human nature and finding a way to work with that instead of against it.

Human nature is to discount future outcomes and prioritize the present. People are naturally bad at delayed gratification and saving for the future. We are the lucky few who buck that trend, fell education or nature or upbringing or environment. Most people are not like us. We can tut-tut and say they should be better, which isn’t getting us that far, or we can instead look for ways to work with people. So nudges are great, such as auto signing up for 401k and auto contribution increases unless you opt out. Most people would be better off being forced into paying more into SS or being forced into a pensioner scheme.

Absolutely. 

exterous

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #8 on: April 15, 2019, 07:33:19 PM »
That they have contributed to the effective dissolution of pensions is something we will, as a society, regret at some point.

I'm not sure why people are so enamored with pensions. Even at their peak only a minority were ever covered by a pension. Otherwise they have been rife with underfunding, fraud, terrible structuring and bankruptcy. The PBGC - a major backstop for many private pensions that go south - warned in may of last year "union retirees could see their pension benefits cut by 90 percent by 2025" due to funding shortfalls for an area that covered 10 million pensioners (although I believe their situation has improved slightly since then). Many of those that the PBGC is still covering have already their pension payouts reduced when the PBGC took over the pension. I have a friend whose Dad was left without a pension when the Delphi salaried workers got screwed. There have been several pension scandals locally where companies, actuarials, auditors, politicians, developers, and financial advisers have been charged with pension fraud. My wife is covered by a pension and its funding level went from ~65% in 2015 to ~60% this year. I can only imagine how badly its going to do in a year the economy doesn't do well. Personally I wouldn't feel comfortable with the majority of my retirement depending on the good stewardship of execs and politicians

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #9 on: April 15, 2019, 07:44:49 PM »
That they have contributed to the effective dissolution of pensions is something we will, as a society, regret at some point.

I'm not sure why people are so enamored with pensions.

Yes, if by pension you mean defined benefit pension, I do not like them. It is entirely possible to work as a teacher for 40 years and not receive a pension or even Social Security. This is because:
  • All defined benefit pensions have some sort of earn-in. That is, work for at least five years to be eligible.
  • It is legal for your district (under federal law) to not pay into Social Security if you have a defined benefit pension.

So if you get laid off every 3 years and change districts to find a job you can literally retire penniless.

Also, find any pilot that worked for a big airline before ~1980. The airlines went bankrupt and their pension took a huge cut.

I'd rather prohibit early distributions and mandate employer contributions.

Buffalo Chip

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #10 on: April 15, 2019, 08:16:04 PM »
The author is making the right prediction for (somewhat) the wrong reasons. 401k’s will likely die for some of the reasons listed but also because of RE. The people who are extremely bright, analytical and likely to try experiment with new things, i.e. the people who are the engines of progress, are also those folks who are most attracted to FIRE.  Long term, I suspect there will be a tipping point where too many of those creators have left the workforce early. And retirement vehicles will be reconfigured to discourage that.

Montecarlo

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #11 on: April 15, 2019, 10:29:37 PM »
Listening to Freakonomics podcast has led me to realize that if we really want to improve things around us, we have to let go of “should” and accept people where they are. That means embracing and accepting human nature and finding a way to work with that instead of against it.

+1 Whether it is financial, physical or mental health, any time society expects John Q Public to do something for their own future without an immediate payback of some kind it doesn't work out.

I feel very much Dr. Jekyll and Mr. Hyde on that.

My Dr. Jekyll side agrees very much.  In my line of work, a lot of people say things like “if they just followed the process, everything would be okay!”

No!  Either the process doesn’t account for the human element, or the training is insufficient.  Stop blaming the employees if you want the company to get better.  Hire better employees, provide better training, or make better processes!  (One of those is my job).

But on this issue, I am more of Mr. Hyde.  People need to be responsible for their own future.  I get it doesn’t come naturally.  The average smart person doesn’t prepare well financially for the future, let alone the average person. 

But “finding a way to work with” human nature sounds a lot like nanny state.  How do you propose to “work with”?

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #12 on: April 16, 2019, 08:48:55 AM »
The second fallacy is that it is the rich who benefit the most from 401(k)s. Rather, it is the people who want to get rich who benefit the most from 401(k)s.
People with the highest marginal tax rate obviously benefit the most...

True, but only because they are also taxed the most. That being said, I think a "flat 401(k)" would be a much better system.

I'll also chime in on pensions: I think they are a very poor solution to retirement savings in that they force people to remain at companies (or encourage companies to lay off people). A 401(k) type system is far better, with social security used to cover needs. (As another poster noted, being able to opt out of social security should be criminal.)

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #13 on: April 16, 2019, 09:47:32 AM »
The author's first fallacy is to state that people need to save for retirement; social security provides for retired persons' needs, and the 401(k) simply supplements that.


I disagree. I don't think social security has ever been designed to PROVIDE for a retired person's needs. Rather it has been the supplement.

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #14 on: April 16, 2019, 10:13:29 AM »
The author's first fallacy is to state that people need to save for retirement; social security provides for retired persons' needs, and the 401(k) simply supplements that.


I disagree. I don't think social security has ever been designed to PROVIDE for a retired person's needs. Rather it has been the supplement.

Am I missing an important distinction? Social security will pay out, even to people who have not earned much throughout their entire career, an amount roughly equivalent to the currently proposed UBI. This should more or less cover their needs and keep them out of abject poverty. It is up to the people to supplement this amount if they deem to do so.

Just Joe

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #15 on: April 16, 2019, 11:56:43 AM »
Do you think that any political efforts to end SS will be successful. We've seen efforts to attack the ACA rather than fix/adjust/tune the ACA.

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #16 on: April 16, 2019, 12:30:55 PM »
Am I missing an important distinction? Social security will pay out, even to people who have not earned much throughout their entire career, an amount roughly equivalent to the currently proposed UBI. This should more or less cover their needs and keep them out of abject poverty. It is up to the people to supplement this amount if they deem to do so.

But the minimum payment is an order of magnitude (or more) less:
https://www.fool.com/retirement/general/2016/06/28/what-is-the-minimum-social-security-benefit.aspx
« Last Edit: April 16, 2019, 12:33:16 PM by PDXTabs »

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #17 on: April 16, 2019, 12:43:15 PM »
Am I missing an important distinction? Social security will pay out, even to people who have not earned much throughout their entire career, an amount roughly equivalent to the currently proposed UBI. This should more or less cover their needs and keep them out of abject poverty. It is up to the people to supplement this amount if they deem to do so.

But the minimum payment is an order of magnitude (or more) less:
https://www.fool.com/retirement/general/2016/06/28/what-is-the-minimum-social-security-benefit.aspx

I might be mistaken, but

Quote
As of 2017, the federal poverty level (FPL) for an individual is $12,060, which translates to $1,005 per month -- about 18% greater than the current 30-year special minimum benefit.

Quote
It's important to note that the special minimum benefit is price-indexed, while the regular method of calculating benefits is wage-indexed. Since wages generally grow faster than prices, the standard calculation method has grown more rapidly than the special minimum benefit to the point where new beneficiaries rarely receive the special minimum -- their standard PIA is almost always higher. In fact, 2018 is projected to be the last year when new retirees could theoretically be eligible for a special benefit.

In a nutshell, the special minimum benefit is being used less and less these days, and is so low in comparison with most workers' PIA that it's nearly irrelevant to new beneficiaries.

So bottom-line, even for the poorest it is right about at the currently proposed UBI of $1,000 per month.

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #18 on: April 16, 2019, 12:51:36 PM »
I might be mistaken, but

Quote
As of 2017, the federal poverty level (FPL) for an individual is $12,060, which translates to $1,005 per month -- about 18% greater than the current 30-year special minimum benefit.

Are you being intentionally difficult? That's if you manage to work for 30 years of your life and make enough money in that year to be counted. Ways that might not happen:
  • Working in another country.
  • Being sick but not sick enough to collect disability.
  • Caring for children or spouses (you have to be legally married to your spouse for 10 year to get any spousal benefits). You could literally spend your whole life married as a dependent and then end up destitute.
  • Some school districts do not pay into SS for their teachers, which is perfectly legal.

A UBI would take care of all of the situations, but I'm not sure that it is on topic for this thread.
« Last Edit: April 16, 2019, 12:53:23 PM by PDXTabs »

I'm a red panda

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #19 on: April 16, 2019, 12:53:24 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.


PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #20 on: April 16, 2019, 12:58:23 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

Well, retirees get Medicare. But I agree, if you are getting your $41/mo social security check it's not going to go far.

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #21 on: April 16, 2019, 01:10:04 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

Well, retirees get Medicare. But I agree, if you are getting your $41/mo social security check it's not going to go far.

This is why I was stating that SS is meant to supplement retirement. It is not a full safety net that provides for retirement needs.

I also think, if we assume SS will fail, there is no reason to also assume Medicare will still exist.  I don't know that either assumption is reasonable though.

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #22 on: April 16, 2019, 01:13:44 PM »
I might be mistaken, but

Quote
As of 2017, the federal poverty level (FPL) for an individual is $12,060, which translates to $1,005 per month -- about 18% greater than the current 30-year special minimum benefit.

Are you being intentionally difficult? That's if you manage to work for 30 years of your life and make enough money in that year to be counted. Ways that might not happen:
  • Working in another country.
  • Being sick but not sick enough to collect disability.
  • Caring for children or spouses (you have to be legally married to your spouse for 10 year to get any spousal benefits). You could literally spend your whole life married as a dependent and then end up destitute.
  • Some school districts do not pay into SS for their teachers, which is perfectly legal.

A UBI would take care of all of the situations, but I'm not sure that it is on topic for this thread.

Why would I be intentionally difficult? You were the one who stated there was an order of magnitude difference, and when I showed otherwise, you come back with a bunch of edge cases. Some of these edge cases have merit and should be fixed.

UBI is a topic of other threads, and let's quarantine it to Off Topic.

ETA: I find it amusing that your consider working 30 years of one's life somehow exceptional.
« Last Edit: April 16, 2019, 01:15:20 PM by Boofinator »

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #23 on: April 16, 2019, 01:25:51 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

The people getting $1,000 per month in SS benefits essentially made minimum wage their entire life, which works out to roughly the same amount in income (SS pays out 90% of your wages at that level). When you consider you won't be paying taxes on those benefits (including 6.2% SS tax), it should be very roughly equal to what you were making when working.

So, could you explain how those people survived on this amount before SS, but then suddenly they can't make it on the same amount of money because their checks are being signed by someone else?

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #24 on: April 16, 2019, 01:27:49 PM »
Why would I be intentionally difficult? You were the one who stated there was an order of magnitude difference, and when I showed otherwise, you come back with a bunch of edge cases. Some of these edge cases have merit and should be fixed.

Between my mother and father they hit three out of four of your "edge cases." My mother receives substantially less than $1000/mo (an order of magnitude less, in fact) even though she retired at her full retirement age.

ETA: I find it amusing that your consider working 30 years of one's life somehow exceptional.

Because that's not what we are talking about. We are talking about getting 30 years of credits with a bureaucracy in the US. Have you lived your whole life in the US? Maybe that's the difference. My father wasn't born in this country. My mother and I did not live our whole lives in this country, but we're all citizens. If we fill up your jails because we only get $41/mo to live on we are still your problem. Note: this example is hypothetical, my father is dead and my mother has enough private savings. But SS will not be enough to keep her off the streets if anything goes wrong.
« Last Edit: April 16, 2019, 01:33:25 PM by PDXTabs »

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #25 on: April 16, 2019, 01:54:41 PM »
Edge cases are people too.

I've been an edge case in a different political matter. It sucks, and people dismiss you because you don't represent an average. It doesn't mean your case isn't real, and valid.

Montecarlo

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #26 on: April 16, 2019, 02:09:22 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

Did I just read that on MMM forums?

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #27 on: April 16, 2019, 02:12:05 PM »
Quote
401k’s will likely die for some of the reasons listed but also because of RE. The people who are extremely bright, analytical and likely to try experiment with new things, i.e. the people who are the engines of progress, are also those folks who are most attracted to FIRE.  Long term, I suspect there will be a tipping point where too many of those creators have left the workforce early.

So you're saying that Atlas will shrug?

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #28 on: April 16, 2019, 02:26:36 PM »
Edge cases are people too.

I've been an edge case in a different political matter. It sucks, and people dismiss you because you don't represent an average. It doesn't mean your case isn't real, and valid.

Also, if those edge cases are cold and hungry, it turns out that they are highly motivated to change that situation. It doesn't matter if their solution might land them in jail, because jail has a roof and food.

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #29 on: April 16, 2019, 02:28:17 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

Did I just read that on MMM forums?

How many people on this forum live, completely, on under $1,000 a month?   I suspect the answer is "not many".

Montecarlo

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #30 on: April 16, 2019, 02:49:10 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

Did I just read that on MMM forums?

How many people on this forum live, completely, on under $1,000 a month?   I suspect the answer is "not many".

You kinda moved the goalposts on me there :-p

Even so, it is possible.  I can produce 12K passively a year, and if I had to I could make it work.  I also only pay property taxes for housing
« Last Edit: April 16, 2019, 02:50:53 PM by Montecarlo »

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #31 on: April 16, 2019, 03:07:10 PM »
Why would I be intentionally difficult? You were the one who stated there was an order of magnitude difference, and when I showed otherwise, you come back with a bunch of edge cases. Some of these edge cases have merit and should be fixed.

Between my mother and father they hit three out of four of your "edge cases." My mother receives substantially less than $1000/mo (an order of magnitude less, in fact) even though she retired at her full retirement age.

ETA: I find it amusing that your consider working 30 years of one's life somehow exceptional.

Because that's not what we are talking about. We are talking about getting 30 years of credits with a bureaucracy in the US. Have you lived your whole life in the US? Maybe that's the difference. My father wasn't born in this country. My mother and I did not live our whole lives in this country, but we're all citizens. If we fill up your jails because we only get $41/mo to live on we are still your problem. Note: this example is hypothetical, my father is dead and my mother has enough private savings. But SS will not be enough to keep her off the streets if anything goes wrong.

Not to make light of anybody else's situations, but your parents did choose to immigrate here. Also, SS is a defined benefit pension plan, not "let's give money to every immigrant over a certain age" system.

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #32 on: April 16, 2019, 03:13:02 PM »
Not to make light of anybody else's situations, but your parents did choose to immigrate here. Also, SS is a defined benefit pension plan, not "let's give money to every immigrant over a certain age" system.

Please show me where I wrote that my mom was an immigrant?!?!

EDTIed to add - and it doesn't matter. Is that what we told to the Vietnamese refugees that helped us during the war? "Not to make light of anybody else's situations, but your parents did choose to immigrate here." They still need to sleep somewhere and eat food once they are citizens or they are your problem.
« Last Edit: April 16, 2019, 03:33:54 PM by PDXTabs »

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #33 on: April 16, 2019, 03:54:46 PM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

Did I just read that on MMM forums?

How many people on this forum live, completely, on under $1,000 a month?   I suspect the answer is "not many".

You kinda moved the goalposts on me there :-p

Even so, it is possible.  I can produce 12K passively a year, and if I had to I could make it work.  I also only pay property taxes for housing

Talk about edge case if you don't have a house or rental payment...

Yes, most people on this board should be mortgage free by governmentretirement age, but that is just not true of the general population, for whom social security supplements, not provides, a retirement income for.

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #34 on: April 16, 2019, 05:08:04 PM »

Talk about edge case if you don't have a house or rental payment...

Yes, most people on this board should be mortgage free by governmentretirement age, but that is just not true of the general population, for whom social security supplements, not provides, a retirement income for.

Aren't those the type of people we are mocking on the "Antimustachian Wall of Shame and Comedy"?

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #35 on: April 16, 2019, 08:15:46 PM »
Talk about edge case if you don't have a house or rental payment...

Yes, most people on this board should be mortgage free by governmentretirement age, but that is just not true of the general population, for whom social security supplements, not provides, a retirement income for.

Aren't those the type of people we are mocking on the "Antimustachian Wall of Shame and Comedy"?

I sure hope not.

ysette9

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #36 on: April 16, 2019, 08:43:23 PM »
Talk about edge case if you don't have a house or rental payment...

Yes, most people on this board should be mortgage free by governmentretirement age, but that is just not true of the general population, for whom social security supplements, not provides, a retirement income for.

Aren't those the type of people we are mocking on the "Antimustachian Wall of Shame and Comedy"?

I sure hope not.
Oh snap

Montecarlo

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #37 on: April 16, 2019, 09:07:54 PM »
Talk about edge case if you don't have a house or rental payment...

Yes, most people on this board should be mortgage free by governmentretirement age, but that is just not true of the general population, for whom social security supplements, not provides, a retirement income for.

Aren't those the type of people we are mocking on the "Antimustachian Wall of Shame and Comedy"?

I sure hope not.

Hat tip

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #38 on: April 17, 2019, 08:17:35 AM »
In most places $1,000 a month won't even provide a place to live, much less food to eat, heat in the winter, medical care, etc.

Did I just read that on MMM forums?

How many people on this forum live, completely, on under $1,000 a month?   I suspect the answer is "not many".

You kinda moved the goalposts on me there :-p

Even so, it is possible.  I can produce 12K passively a year, and if I had to I could make it work.  I also only pay property taxes for housing

Talk about edge case if you don't have a house or rental payment...

Yes, most people on this board should be mortgage free by governmentretirement age, but that is just not true of the general population, for whom social security supplements, not provides, a retirement income for.

As I've mentioned already on this thread, that's the same amount of money these people have been living on their entire lives. What makes it any different now that they're in retirement?

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #39 on: April 17, 2019, 08:42:46 AM »
Not to make light of anybody else's situations, but your parents did choose to immigrate here. Also, SS is a defined benefit pension plan, not "let's give money to every immigrant over a certain age" system.

Please show me where I wrote that my mom was an immigrant?!?!

EDTIed to add - and it doesn't matter. Is that what we told to the Vietnamese refugees that helped us during the war? "Not to make light of anybody else's situations, but your parents did choose to immigrate here." They still need to sleep somewhere and eat food once they are citizens or they are your problem.

Perhaps you could do me a favor. Please ask your mom how she feels about not receiving social security benefits, despite not having paid into the program as required to by law in order to receive benefits. Also, I'm curious how she thinks her current situation would compare to moving back to her husband's former country (presumably where you grew up).

My guess is she might tell you that moving to a different country can be a major sacrifice, but in her case it was worth it (for whatever reasons). This is nothing new, and something pretty much all immigrants (from Roanoke to the South Vietnamese to today) would agree with.

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #40 on: April 17, 2019, 09:07:06 AM »
Perhaps you could do me a favor. Please ask your mom how she feels about not receiving social security benefits, despite not having paid into the program as required to by law in order to receive benefits. Also, I'm curious how she thinks her current situation would compare to moving back to her husband's former country (presumably where you grew up).

Well, my dad divorced her before they were married for precisely 10.0 years, so she gets precisely 0% of his SS benefits (he worked in the US for decades, he payed in plenty). I'd says that she is pretty mad about it, having talked to her. But that's just a "corner case" so you needn't worry about it.

Also, if she burglarizes your home to steal your valuables to meet her basic needs, your lecturing will be of no help. Your stuff will be gone. Which was my entire point. She's a natural born US citizen, you can't deport her, she doesn't have any other passports. Her and people like her who fall through the cracks only create problems for everyone that has something to steal (people like us). It turns out that humans have evolved for millions of years to survive. They won't just lie down in the street and die, as much as you would like it. If it comes down to dying and stabbing you in the face, most of them will stab you in the face, because that's exactly what most of our evolution and history has been.

ETA - also, this entire thread was about the future of retirement savings, what it should look like going forward, not the past. Was that not obvious to you, or do you just like to argue?
« Last Edit: April 17, 2019, 09:14:10 AM by PDXTabs »

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #41 on: April 17, 2019, 09:28:32 AM »
They won't just lie down in the street and die, as much as you would like it. If it comes down to dying and stabbing you in the face, most of them will stab you in the face, because that's exactly what most of our evolution and history has been.

You were the one who stated that social security paid an order of magnitude less than UBI and therefore should be changed. I called you out on this obvious fallacy, but then you presented some edge cases. When I mentioned these are edge cases, maybe some should be fixed and others not, and that immigrants take risks when they move to different countries (yes your mother is technically not an immigrant, but was an ex-pat and then apparently lived here for decades without working), you suggest that I want them to lay down and die, and most of them will stab me in the face?? WTF?? If your mother wanted SS so bad, she could have gotten a fucking job like everyone else. Or she can try stabbing me in the face and see how well that works out.

MOD NOTE: Let's not do personal attacks.
« Last Edit: April 22, 2019, 03:10:33 PM by arebelspy »

PDXTabs

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #42 on: April 17, 2019, 10:00:00 AM »
If your mother wanted SS so bad, she could have gotten a fucking job like everyone else.

Please look at the history of our country as it has related to women and tell me that the traditional path to wealth has been working and not marriage or inheritance. She did exactly what every other woman has done for millennia, and it worked out for her just fine. But if anything happens to her wealth, there is no "social security" (in little caps) to secure her. I understand exactly how all the algorithms around social security work, I would like it to be better (or replaced with something better).

I would like it to be better because I don't want to get stabbed (or shot, or beaten) so that someone can eat for the day. I also don't want my identity stolen, my house burglarized, or my vehicle broken into. But seriously, what would you do if you couldn't feed yourself? I guess in a sense the retired population isn't such a big threat, they aren't very spry, so we only have to stomach the moral failing of watching them die on the street.

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #43 on: April 17, 2019, 10:29:35 AM »
My female ancestors (going back 2-3 generations because of my limited knowledge) all worked. Not saying this is better or worse than not working, but just as a counterpoint to "the traditional path to wealth for women".

I'm not so worried about getting stabbed or shot. Very few people have murderous tendencies. People will do what needs to be done to eat, but at the worst it usually comes down to theft (if it comes down to that). Instead, what most people do is work to provide value to others in exchange for money which they can use to buy food and shelter. And the government has all sorts of programs in place to help people find new jobs and eat and reside in a house on a limited budget.

Quote
I guess in a sense the retired population isn't such a big threat, they aren't very spry, so we only have to stomach the moral failing of watching them die on the street.

How many of these people do you actually see or read about rather than imagine? And if they are so abundant, are you giving all of your free time and extra money to absolve yourself of this moral failing?

Montecarlo

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #44 on: April 17, 2019, 10:43:12 AM »
Oh, get a room you two.

You are clearly talking past each other and don’t even know which points you agree and disagree on.

beltim

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #45 on: April 17, 2019, 10:57:07 AM »
If your mother wanted SS so bad, she could have gotten a fucking job like everyone else.

Please look at the history of our country as it has related to women and tell me that the traditional path to wealth has been working and not marriage or inheritance. She did exactly what every other woman has done for millennia, and it worked out for her just fine. But if anything happens to her wealth, there is no "social security" (in little caps) to secure her. I understand exactly how all the algorithms around social security work, I would like it to be better (or replaced with something better).

I would like it to be better because I don't want to get stabbed (or shot, or beaten) so that someone can eat for the day. I also don't want my identity stolen, my house burglarized, or my vehicle broken into. But seriously, what would you do if you couldn't feed yourself? I guess in a sense the retired population isn't such a big threat, they aren't very spry, so we only have to stomach the moral failing of watching them die on the street.

If something happened to her wealth, wouldn't she be eligible for Supplemental Security Income, Medicaid, and Section 8 housing?

ixtap

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #46 on: April 17, 2019, 01:10:34 PM »
Back to the topic, it is pretty bizarre that we have decided that folks should be responsible for their own retirement and the best vehicle for it is subject to rules made by an individual employer.
« Last Edit: April 17, 2019, 01:27:22 PM by ixtap »

Buffalo Chip

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #47 on: April 17, 2019, 01:26:13 PM »
Oh, get a room you two.

You are clearly talking past each other and don’t even know which points you agree and disagree on.

+1

Boofinator

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #48 on: April 17, 2019, 01:27:27 PM »
Back to the topic, it is pretty bizarre that we. Have decided that folks should be responsible for their own retirement and the beat vehicle for it is subject to rules made by an individual employer.

Concur (with the bolded part). Similar to the current situation with health insurance. Reduces employee mobility, though admittedly not as poorly as a pension system.

caleb

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Re: Vox: 401(k)s will be considered unthinkable 50 years from now
« Reply #49 on: April 17, 2019, 05:42:33 PM »
Hacker is basically right: the 401k is not a vehicle for reliably continuing workers' expected standard of living into their retirement years.  However, he doesn't specify how and why the current form of the 401k will die.

The 401k will die because it defers tax revenue that's going to be urgently needed in the near future.  As the Baby Boomers retire with little or no savings, there's going to be tremendous pressure to increase the safety net for retirees.  We're reaching the end of our ability to borrow without major penalty (i.e. debt > GDP), so tax revenue is going to have to cover at least part of the expansion.

The first move seems to be changing all 401ks to Roths (get the money now), which puts the tax consequences outside of the 10 year budgeting window.  It also creates a time bomb for tax revenues decades in the future for later generations to address.