20 ms·

I'm not planning on Social Security being around by the time I'm old enough to tap into it, and I'm also not planning on having any kids to bail me out when I g

I'm not planning on Social Security being around by the time I'm old enough to tap into it, and I'm also not planning on having any kids to bail me out when I go senile, so yeah I'm putting a lot into my 401k. I think a lot of people my age (turning 30 next week) are feeling the same way, so I wonder if it's younger workers driving this trend.

Ixiaus 10y ago
I just turned thirty and I can echo your sentiments; I'm saving aggressively and investing across a wide array of assets and tax sheltered accounts with the idea that I may at best retire early and be capable of taking care of myself into old age.
cjkalsdf 10y ago
You think the stock market will be around when you are old enough to need your 401k? I max my contributions but I have no faith they won't be wiped out in some future crash.
- pwthornton 10y ago
  You buy shares in the stock market, not dollars, so a crash shouldn't hamper your ability to retire, unless you want to retire during the crash itself (although diversity of assets would help with this). The stock market recovered years ago from the Great Depression and is doing really well again.
  - SEJeff 10y ago
    If you want to correct someone, please correct them properly. You buy shares or instruments traded on Exchanges, which make up the "Stock Market". However, you don't always buy on Exchanges (OTC/Over the Counter Trading). Those instruments can be equities (shares of a company) aka stocks, securities, futures, options, etc. The Dow Jones Industrial Average (a common benchmark index such as the Standard and Poor's 500) is literally at an all time high and is on the cusp of 20,000: https://www.google.com/finance?cid=983582 https://www.google.com/finance?cid=983582 Edit: Changes "shares in instruments to shares or instruments". It was a bit ambiguous and I was originally trying to make it more obvious that shares are considered instruments (along with several other things traded).
    - pwthornton 10y ago
      The point of my post is that you are buying shares of something, and that crashes and downturns don't permanently harm your 401k. Also, crashes when you are young are good because you get to buy cheap shares. I could have gone into more detail, as you have done here, but that's not the point. The point is that downturns like the Great Recession do not permanently harm someone's retirement.
    - JumpCrisscross 10y ago
      > If you want to correct someone, please correct them properly. You buy shares in instruments traded on Exchanges, which make up the "Stock Market" Shares are instruments [1]. (You say this later, but nobody buys "shares in instruments"). Exchanges, together with ECNs, OTC markets, broker-dealers, other market makers, buyers, sellers, arbitrageurs, investment banks, et cetera make up the stock market. [1] https://en.m.wikipedia.org/wiki/Financial_instrument https://en.m.wikipedia.org/wiki/Financial_instrument
      - SEJeff 10y ago
        Totally correct. I had to reword that a few times but figured less people would understand it otherwise :)
  - thraway2016 10y ago
    I'm not sure if "crash" is the problem. Crashes happen in markets, it's part of the business cycle. OP is discussing a 30+ year time horizon, though. I can think of a few potential things that would precipitate not just a crash, but a long-term economic malaise: - Climate change - Political/social unrest (extrapolate Brexit, Trump, etc) - Mass unemployment caused by automation (you can't "retrain" 5MM 50yo truck drivers) - Empire collapse (has happened with every single empire in history - what makes the U.S. exempt?) - Nuclear exchange (tensions with Russia steadily increasing) - Grey goo / UFAI (I know, crazy, but still, 30+ year time horizon) While I'm sympathetic to the view that alarmist "the crash is coming" thinking is likely incorrect, whenever one discusses decades-long time horizon in an era of accelerating technology and political uncertainty, I don't think it's unreasonable to suggest that the VIX is not considering tail risk of unlikely, but highly impactful events.
    - Naga 10y ago
      I choose to ignore serious but unlikely events like that in my planning. A nuclear exchange or grey goo scenario is going to ruin my retirement plans no matter if I keep my investments in cash or in stocks. I'll have bigger problems than if I can sell my investments or not.
    - tzs 10y ago
      > OP is discussing a 30+ year time horizon, though. I can think of a few potential things that would precipitate not just a crash, but a long-term economic malaise ... > Climate change The climate change consequences big enough to cause a long-term economic malaise are far enough out to not affect most of today's workers. We'll mostly just get things that cause short term disruption, like more large storms, more weather variability, more record high tides, and similar things. The big things, like sufficient sea level rise to require abandoning significant parts of many major cities, long term changes in water availability that significantly change agriculture for whole regions, and so on are usually forecast to be in the 100+ year timeframe. This is one of the frustrating things about climate change. Over the long term it likely has disastrous consequences for humanity, but it can be largely averted or at least limited if action is taken early enough. But "early enough" puts you a time when the consequences are still localized and intermittent, and so it is easy for people to overlook it (especially when they can make more money by doing so).
  - thesimpsons1022 10y ago
    it took 30 years for people's stocks to recover that bought them right before the great depression.
    - pwthornton 10y ago
      The very nature of saving in a 401k is that you never at one time put in a high percentage of your balance into it. The max individual contribution is $18,000 a year. Let's say you have been doing around $10,000 the first 10 years of your career and the economy tanks. You now have 30-40 years until retirement, and you start doing $15,000 or so a year. That money that you put in before this huge crash may not grow that much before retirement, but the money you put in after the crash will be bought at low rates and will grow for a long time. You will also have put in a lot more money post crash anyway.
      - seanmcdirmid 10y ago
        You can contribute more after a certain age as a way of catching up.
        pwthornton 10y ago
        True. And you can also do other savings vehicles outside of your 401k to save even more money. I just wanted to illustrate that it's not like people put all of their money into their retirement account on one day and if a crash happens the next they are screwed.
        seanmcdirmid 10y ago
        True, I haven't been 401k eligible h(or even Roth), so I have a lot of savings in post tax cash. I just got my Chinese pension contributions refunded, at least, but I'm way behind even on my social security contributions.
    - jedbrown 10y ago
      How do you define "recover"? Stocks were ahead of 10-year T.Bonds by 1945. http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...
  - mywittyname 10y ago
    I actually worry about a large-scale "privatization" of the stock market in the distant future. I believe that the concentration of wealth will get so bad that small groups of people will be able to create private equity firms capable taking all the largest companies private. We are already to the point where there's so much private equity that startups don't need IPOs. So it's entirely possible that the next Google, Facebook, Amazon, Apple and Microsoft will never be exchanged on open markets.
- user837387 10y ago
  Forget the stock market, will you still be around. I'd plan accordingly (tongue in cheek)
- jgalt212 10y ago
  fair enough, but if there's a broad based and persistent market crash then there will be broad based and persistent deflation. Ergo, you won't need to have saved all that much money to retire.
- DesiLurker 10y ago
  then how about you invest in gold, its traditionally been a good fear hedge. or more appropriately adjust the weighting between gold & market based on your perception of risk. Note that I am not actually recommending investing in gold just making your abstract fearful thesis into something real. IMO unless you are talking about some civilization hurting disaster (like yellowstone .. not even then perhaps) markets recover from crashes. in a way they are a measure of optimism for future. so I'd factor than into my plans.
leggomylibro 10y ago
I'm in the same boat; I view my social security "contributions" as a lifestyle tax from the last generation, and I'd opt out of them in a second if I could. Instead, I'm planning my retirement around Roth IRAs and 401k savings. I think this is definitely a common sentiment amongst us youngsters.
- Frondo 10y ago
  I thought that way in my early- to mid-20s. I read lots of thoughtful articles about how SS was broke, wouldn't last, etc. As I got a little older, I started reading more about the history of SS, how it's always needed various adjustments over time, how people have always said it's going broke, it's unsustainable, etc. I realized that, for most of its history, the people who have said those things are actually more likely the ones who'd like it to go away entirely. While everyone else just makes the changes necessary to keep it going. After a while, I found I'd move into the "let's just make the changes necessary to keep it going, because it's a good program and has always had its detractors" camp. (which is where I am now.)
  - dlp211 10y ago
    To pile on to this. Even is SS makes no changes whatsoever, they can still pay out ~75% of the benefits starting in the late 2020's or early 2030's and all the way through the 2080's or 2090's based on the SS Trustee report. SS is going to be around unless we choose to elect officials that dismantle it. The fear mongering and apathy needs to stop.
    - harryh 10y ago
      It's worth noting that if there are benefit cuts of 25% that it's unlikely that each individual will see a 25% cut. It's more likely (in my opinion at least) that we'll see some sort of means testing where seniors with other income (from 401Ks, private pensions, other savings) see their benefits cut much more than 25% while those with low incomes retain their full benefits. So if you are saving a lot it could, ironically, be a self fulfilling prophecy that you get no social security.
pwthornton 10y ago
This seems to be the sentiment of younger professional workers. My wife has this view (we are both 32). I used to have it, but I doubt that SS won't be around in some form. It may pay out less or be means tested in the future, however. I have not heard this sentiment from younger blue collar and service workers, who are much more likely to need to rely on social security. I'm planning our retirement without needing any SS money, and whatever we get will just be some extra on top. Many non-professionals don't have this luxury.
kilroy123 10y ago
I'm 31 and couldn't agree more. I know I'll never have a pension in my life. I also don't expect Social Security to be around. I think it _could_ still be around, but I expect it to be replaced with something else or scrapped entirely. IMO, it's life or death to save properly for retirement.
justinph 10y ago
I read this a lot. Why do you expect this to be the case? Social Security may become unable to pay the benefits that you're expecting at some point because the input from workers will not be enough to pay those benefits. But that doesn't mean it will pay nothing. It will just pay less. You'll still get some payments.
- jameskegel 10y ago
  How do you support this assertion?
  - hooloovoo_zoo 10y ago
    Page 12 and 13 of this report https://www.ssa.gov/oact/tr/2016/tr2016.pdf https://www.ssa.gov/oact/tr/2016/tr2016.pdf.
  - garysieling 10y ago
    It's a pay-go system, it works that way by design
- Bartweiss 10y ago
  Bear in mind that "it goes broke" isn't the only failure mode, and it's certainly not what I consider most likely. Every few years there's another push to privatize Social Security - you don't just have to count on the mathematical solvency of the program but also its political viability.
  - aggie 10y ago
    It's one of the most popular social programs ever run in this country and that's why 'every few years' the efforts to privatize it go nowhere. Even the current unified Republican government won't dare touch it, and no one would want to more than Paul Ryan.
- mikeyouse 10y ago
  Agree wholeheartedly with this. The "Social Security is Failing" headlines are all ginned up to support political ends, they don't have much to do with the reality of the program. Large adjustments were already made to accommodate the baby boomer generation. That's why we have a $2.8 trillion-dollar trust fund. With current demographics, we should be able to pay 100% of promised benefits until the late 2030's. Afterwards, with a pure pay-go system, we'd only be able to pay ~80% of benefits. There are simple fixes that could dramatically extend the reserve depletion date to sometime in the 2050s. Not doing so is purely a political question. Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html
DoodleBuggy 10y ago
> "I'm not planning on Social Security being around by the time I'm old enough to tap into it" You need to change that attitude or your complacency will allow politicians to take it from you. The fact is you pay ~16% of your paycheck into social security and medicare, it is designed to be like a pension. It is not an entitlement, it's your money.
- fortytw2 10y ago
  If it was actually your money, paying into it would be optional.
  - chrisabrams 10y ago
    Bingo! This is the best attitude I have seen in the whole thread. Social Security is an authoritarian play, or a power play. Another way to look at it: if every single US tax payer had to manually pay their taxes, instead of them being auto-drawn from their respective W2 employer, you'd see more people asking the question "who's money is this really?" This is why the fair tax or similar plans will never pass. The power to silently tax people is too good for big brother.
    - knz 10y ago
      > Social Security is an authoritarian play, or a power play A more charitable view would be that social security is an attempt to provide a minimum standard of living for all seniors and the disabled. How do you propose that society cares for these people, particularly the disabled, if it's not done at a societal level? Retirement also benefits the young/middle aged by ensuring jobs open up.
      - chrisabrams 10y ago
        I think the older generation should give way to the younger generation. After all, it is the younger generation that is required to run the world while the older retires. However, as it is currently, the older generation is robbing the younger generation. The younger generation is paying for entitlements that it knows it will never receive. That is not sustainable, fair, or in my opinion: necessary. It should not be the governments job to manage retirement funds. That's why I said it's a power play, because if you made social security an open market with competition, you would probably see more positive support and results.
RobertoG 10y ago
Maybe a little out of scope, but, is it not the important issue if the society we live when we retire is richer or poorer than the society today? I mean, if we live in a society, for instance, three times richer (per capita) than today, it would be very strange that old people will have a hard time. In the other hand, if it's a poorer society, even people with savings are probably to have a hard retirement.
- athenot 10y ago
  It could be a problem if, using your example, society is 3 times richer but that comes from 10% being a lot richer and 90% being somewhat poorer. Inequality, it seems, is rising over time.
  - RobertoG 10y ago
    I suppose that what surprise me is the contradiction between the optimism about the future of HN crowd and their pessimism in this issue, as if nothing could be done (in the case that you think something should be done, of course). The inequality thing is far from unavoidable. In a democracy, at least, a society perceived as more fair for the majority should be attainable.
    - kmicklas 10y ago
      > The inequality thing is far from unavoidable. In a democracy, at least, a society perceived as more fair for the majority should be attainable. This is a nice thought in theory, but not really true as long as campaigns themselves are funded by private capital. And any attempt to change that leads to private capital (cough Koch brothers cough) funding candidates to stop it. I'm not super optimistic this will change without some kind of dramatic event (revolution, war, SS being defunded and lots of old people starve, etc.).
      - hx87 10y ago
        > but not really true as long as campaigns themselves are funded by private capital As long as funding correlates strongly with winning, or at least appears to correlate strongly with winning. If that ever goes away, legislators are going to look at lobbyists with a more skeptical eye.
torpfactory 10y ago
I truly believe that whatever people think about social security not being around when they retire, that it will be around at some level. We will almost certainly reduce benefits and/or increase retirement age. What is the alternative? There are far too many people who really can't save for retirement due to low wages for a significant part of the population. We aren't going to let these people live in abject poverty, and they aren't going to have any money to cough up to support themselves. It's the same for Medicare. Paul Ryan wants a premium support system where seniors receive part of the cost of their insurance premium from the government and pay the rest on their own. For many people, the will absolutely not have the money to spend on this. If they can't afford it, they will go to the emergency room and receive care (they legally can't turn you away) once their condition becomes severe enough. We can either force the hospitals to care for these people (and jack up the prices for the rest of us to compensate) or we can have a sane system where we all pay a reasonable price and split the burden over a larger population. I'm not arguing for some European style social welfare system. I think we ought to have a system that comports with the laws and norms we have in place now (norms/laws I understand: people can go to the ER and get care regardless of their ability to pay, elderly folks do not live in poverty).
- NoGravitas 10y ago
  > There are far too many people who really can't save for retirement due to low wages for a significant part of the population. We aren't going to let these people live in abject poverty, and they aren't going to have any money to cough up to support themselves. The history of the US in the past several decades suggests that yes, we absolutely are going to let these people live in abject poverty. Unfortunately.
  - awinder 10y ago
    The downstream effects on consumer spending would absolutely result in this being fixed. The alternative is large numbers of people going bankrupt and that's going to hit several sacred cows in this country, particularly housing. There's lots of reasons that I'm damn near convinced that SS will still be around, principally that the gap is actually not that bad if it's dealt with in advance so that the trust funds can take advantage of compounding interest. But even absent that, the fact that corporate america is going to be Victim #2 almost guarantees a fix.
deleted 10y ago
[deleted]
cmurf 10y ago
That's amusing. I'm 45 and said the same thing when I was in my mid-20's. And now I think it's just naive. The most docile 60 year olds I know become positively vitriolic at the idea of even the age of benefit payout being changed by 5 years. If Social Security were just done away with, I guarantee you the violent revolution they'd be considering wouldn't involve clever devices that take people's heads off cleanly, quickly and painlessly like the French did. Vlad the Impaler would be seen as a massage therapist in comparison. So if Social Security (and don't forget Medicare it's part of the same FICA taxation) were to go away, it definitely means some nasty calamity happened first, like Yellowstone or a meteor just blew up half the country, in which case we've got other problems. The thing to be concerned about is privatizing it. That's a con game to dump a shit ton of money into the stock market, with the ensuing distortion inflating the stock prices of the very wealthy. It's about helping them. It doesn't do squat to help the people who will depend on Social Security. They will not make more money. And just like with getting rid of it, there's no way it's tenable to tolerate the inevitable short term loss of asset value with recessions. We can't have retirees experiencing 5% let alone 20% loss of income for 1 month let alone 1 year let alone 5-8 years for a recovery. Old people would sooner pick up axes and make you shoot them, because shooting your grandma in the head is kinder than this Republican privatization of Social Security nonsense. Grandma is not going to go back to dumpster diving and living under a bridge again like the 1930's. And you've got the same financial concern with an unbalanced 401K - that could leave you in a lurch the same way a privatized Social Security plan can. So take the risks in that 401k while you're young, but at some point probably in your 50's, you'll want to start moving it to inflation indexed treasuries. Young people right now are more likely to be savers, because of 2007/2008. They saw what it did to the unprepared, so they know that sort of thing can happen. Gen X and the Baby Boomers didn't have anything nearly that scary.
- monocasa 10y ago
  > The most docile 60 year olds I know become positively vitriolic at the idea of even the age of benefit payout being changed by 5 years. I guess I'm afraid of a slow rollout. ie. everyone who's 40 and older gets normal social security, if you're ~35 now, you'll have to wait a few years more. It's exactly the kind of "we got ours" BS that the boomers are so known for.
fooey 10y ago
I'm 36 and in ~17 years of being a developer professionally, I've yet to find employment at a single company that offers any kind of retirement plan at all. I max out my IRA each year, but my retirement plan is to basically work until I can't, then hop on an iceberg. IMHO, between Americans being drastically underprepared for retirement and mass job automation, the country is on the cusp of a devastatingly colossal social disaster.
- TheCoelacanth 10y ago
  What kind of developer job doesn't have a 401k? Even the minimum wage job I had my first summer out of high school had one.
  - jessaustin 10y ago
    You had a minimum wage job with a 401k? That was a firm with a bigger HR department than it needed.
    - anigbrowl 10y ago
      Large firms can have low-paying entry-level jobs.
    - DashRattlesnake 10y ago
      > You had a minimum wage job with a 401k? That was a firm with a bigger HR department than it needed. Aren't there giant companies that employ low wage workers (e.g. McDonalds and Starbucks) that might reasonably offer 401ks to all employees, even the minimum wage ones? Ignoring the question if a minimum wage person can realistically afford to save, or course.
  - fooey 10y ago
    I'm in Southern Utah, so it's not very competitive for tech work. I should move, but inertia and a bit of luck stumbling into the few webdev jobs that are around here has kept me in place so far.
  - 10y ago
plandis 10y ago
Yeah I'm doing the exact same thing. Max out 401k / IRA every year + additional savings. I'm assuming that SS wont be around but if it is, great! Unfortunately, I have a feeling Republicans are really going to fuck people my age (mid 20's) over with some sort of slow phase-out so I'm also hedging my bet.
- DesiLurker 10y ago
  This is my real fear here. I am an immigrant in valley for a while now. I have always thought that the reason america has such a thriving service sector based economy is because they have a safety net to fall back to, which allows ppl to be free to take more risks & be generally more consumptive. My fear is that slowly as republicans take that safety net away it will force people to fix these problems at the individual level which will make them more conservative. overall I feel that (alongwith the fkups on science education) will have a detrimental effect on american competitiveness & larger economy. I do think that privatizing SS & medicare will give markets a one time boost & generally help those who are 'better vested'.
shoover 10y ago
I was thinking it may be boomers putting in catch-up funds. Younger folks today may still be trying to get started on a mortgage down payment, let alone saving for kids' college or maxing out the 401k.
dragonwriter 10y ago
> I'm not planning on Social Security being around by the time I'm old enough to tap into it But you assume your 401k will retain its favorable tax treatment? Why? Because it was promised, implictly, when you paid into it?

Ixiaus 10y ago

I just turned thirty and I can echo your sentiments; I'm saving aggressively and investing across a wide array of assets and tax sheltered accounts with the idea that I may at best retire early and be capable of taking care of myself into old age.

cjkalsdf 10y ago

You think the stock market will be around when you are old enough to need your 401k? I max my contributions but I have no faith they won't be wiped out in some future crash.

pwthornton 10y ago
You buy shares in the stock market, not dollars, so a crash shouldn't hamper your ability to retire, unless you want to retire during the crash itself (although diversity of assets would help with this). The stock market recovered years ago from the Great Depression and is doing really well again.
- SEJeff 10y ago
  If you want to correct someone, please correct them properly. You buy shares or instruments traded on Exchanges, which make up the "Stock Market". However, you don't always buy on Exchanges (OTC/Over the Counter Trading). Those instruments can be equities (shares of a company) aka stocks, securities, futures, options, etc. The Dow Jones Industrial Average (a common benchmark index such as the Standard and Poor's 500) is literally at an all time high and is on the cusp of 20,000: https://www.google.com/finance?cid=983582 https://www.google.com/finance?cid=983582 Edit: Changes "shares in instruments to shares or instruments". It was a bit ambiguous and I was originally trying to make it more obvious that shares are considered instruments (along with several other things traded).
  - pwthornton 10y ago
    The point of my post is that you are buying shares of something, and that crashes and downturns don't permanently harm your 401k. Also, crashes when you are young are good because you get to buy cheap shares. I could have gone into more detail, as you have done here, but that's not the point. The point is that downturns like the Great Recession do not permanently harm someone's retirement.
  - JumpCrisscross 10y ago
    > If you want to correct someone, please correct them properly. You buy shares in instruments traded on Exchanges, which make up the "Stock Market" Shares are instruments [1]. (You say this later, but nobody buys "shares in instruments"). Exchanges, together with ECNs, OTC markets, broker-dealers, other market makers, buyers, sellers, arbitrageurs, investment banks, et cetera make up the stock market. [1] https://en.m.wikipedia.org/wiki/Financial_instrument https://en.m.wikipedia.org/wiki/Financial_instrument
    - SEJeff 10y ago
      Totally correct. I had to reword that a few times but figured less people would understand it otherwise :)
- thraway2016 10y ago
  I'm not sure if "crash" is the problem. Crashes happen in markets, it's part of the business cycle. OP is discussing a 30+ year time horizon, though. I can think of a few potential things that would precipitate not just a crash, but a long-term economic malaise: - Climate change - Political/social unrest (extrapolate Brexit, Trump, etc) - Mass unemployment caused by automation (you can't "retrain" 5MM 50yo truck drivers) - Empire collapse (has happened with every single empire in history - what makes the U.S. exempt?) - Nuclear exchange (tensions with Russia steadily increasing) - Grey goo / UFAI (I know, crazy, but still, 30+ year time horizon) While I'm sympathetic to the view that alarmist "the crash is coming" thinking is likely incorrect, whenever one discusses decades-long time horizon in an era of accelerating technology and political uncertainty, I don't think it's unreasonable to suggest that the VIX is not considering tail risk of unlikely, but highly impactful events.
  - Naga 10y ago
    I choose to ignore serious but unlikely events like that in my planning. A nuclear exchange or grey goo scenario is going to ruin my retirement plans no matter if I keep my investments in cash or in stocks. I'll have bigger problems than if I can sell my investments or not.
  - tzs 10y ago
    > OP is discussing a 30+ year time horizon, though. I can think of a few potential things that would precipitate not just a crash, but a long-term economic malaise ... > Climate change The climate change consequences big enough to cause a long-term economic malaise are far enough out to not affect most of today's workers. We'll mostly just get things that cause short term disruption, like more large storms, more weather variability, more record high tides, and similar things. The big things, like sufficient sea level rise to require abandoning significant parts of many major cities, long term changes in water availability that significantly change agriculture for whole regions, and so on are usually forecast to be in the 100+ year timeframe. This is one of the frustrating things about climate change. Over the long term it likely has disastrous consequences for humanity, but it can be largely averted or at least limited if action is taken early enough. But "early enough" puts you a time when the consequences are still localized and intermittent, and so it is easy for people to overlook it (especially when they can make more money by doing so).
- thesimpsons1022 10y ago
  it took 30 years for people's stocks to recover that bought them right before the great depression.
  - pwthornton 10y ago
    The very nature of saving in a 401k is that you never at one time put in a high percentage of your balance into it. The max individual contribution is $18,000 a year. Let's say you have been doing around $10,000 the first 10 years of your career and the economy tanks. You now have 30-40 years until retirement, and you start doing $15,000 or so a year. That money that you put in before this huge crash may not grow that much before retirement, but the money you put in after the crash will be bought at low rates and will grow for a long time. You will also have put in a lot more money post crash anyway.
    - seanmcdirmid 10y ago
      You can contribute more after a certain age as a way of catching up.
      - pwthornton 10y ago
        True. And you can also do other savings vehicles outside of your 401k to save even more money. I just wanted to illustrate that it's not like people put all of their money into their retirement account on one day and if a crash happens the next they are screwed.
        seanmcdirmid 10y ago
        True, I haven't been 401k eligible h(or even Roth), so I have a lot of savings in post tax cash. I just got my Chinese pension contributions refunded, at least, but I'm way behind even on my social security contributions.
  - jedbrown 10y ago
    How do you define "recover"? Stocks were ahead of 10-year T.Bonds by 1945. http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...
- mywittyname 10y ago
  I actually worry about a large-scale "privatization" of the stock market in the distant future. I believe that the concentration of wealth will get so bad that small groups of people will be able to create private equity firms capable taking all the largest companies private. We are already to the point where there's so much private equity that startups don't need IPOs. So it's entirely possible that the next Google, Facebook, Amazon, Apple and Microsoft will never be exchanged on open markets.
user837387 10y ago
Forget the stock market, will you still be around. I'd plan accordingly (tongue in cheek)
jgalt212 10y ago
fair enough, but if there's a broad based and persistent market crash then there will be broad based and persistent deflation. Ergo, you won't need to have saved all that much money to retire.
DesiLurker 10y ago
then how about you invest in gold, its traditionally been a good fear hedge. or more appropriately adjust the weighting between gold & market based on your perception of risk. Note that I am not actually recommending investing in gold just making your abstract fearful thesis into something real. IMO unless you are talking about some civilization hurting disaster (like yellowstone .. not even then perhaps) markets recover from crashes. in a way they are a measure of optimism for future. so I'd factor than into my plans.

leggomylibro 10y ago

I'm in the same boat; I view my social security "contributions" as a lifestyle tax from the last generation, and I'd opt out of them in a second if I could. Instead, I'm planning my retirement around Roth IRAs and 401k savings. I think this is definitely a common sentiment amongst us youngsters.

Frondo 10y ago
I thought that way in my early- to mid-20s. I read lots of thoughtful articles about how SS was broke, wouldn't last, etc. As I got a little older, I started reading more about the history of SS, how it's always needed various adjustments over time, how people have always said it's going broke, it's unsustainable, etc. I realized that, for most of its history, the people who have said those things are actually more likely the ones who'd like it to go away entirely. While everyone else just makes the changes necessary to keep it going. After a while, I found I'd move into the "let's just make the changes necessary to keep it going, because it's a good program and has always had its detractors" camp. (which is where I am now.)
- dlp211 10y ago
  To pile on to this. Even is SS makes no changes whatsoever, they can still pay out ~75% of the benefits starting in the late 2020's or early 2030's and all the way through the 2080's or 2090's based on the SS Trustee report. SS is going to be around unless we choose to elect officials that dismantle it. The fear mongering and apathy needs to stop.
  - harryh 10y ago
    It's worth noting that if there are benefit cuts of 25% that it's unlikely that each individual will see a 25% cut. It's more likely (in my opinion at least) that we'll see some sort of means testing where seniors with other income (from 401Ks, private pensions, other savings) see their benefits cut much more than 25% while those with low incomes retain their full benefits. So if you are saving a lot it could, ironically, be a self fulfilling prophecy that you get no social security.

pwthornton 10y ago

This seems to be the sentiment of younger professional workers. My wife has this view (we are both 32). I used to have it, but I doubt that SS won't be around in some form. It may pay out less or be means tested in the future, however. I have not heard this sentiment from younger blue collar and service workers, who are much more likely to need to rely on social security. I'm planning our retirement without needing any SS money, and whatever we get will just be some extra on top. Many non-professionals don't have this luxury.

kilroy123 10y ago

I'm 31 and couldn't agree more. I know I'll never have a pension in my life. I also don't expect Social Security to be around. I think it _could_ still be around, but I expect it to be replaced with something else or scrapped entirely. IMO, it's life or death to save properly for retirement.

justinph 10y ago

I read this a lot. Why do you expect this to be the case? Social Security may become unable to pay the benefits that you're expecting at some point because the input from workers will not be enough to pay those benefits. But that doesn't mean it will pay nothing. It will just pay less. You'll still get some payments.

jameskegel 10y ago
How do you support this assertion?
- hooloovoo_zoo 10y ago
  Page 12 and 13 of this report https://www.ssa.gov/oact/tr/2016/tr2016.pdf https://www.ssa.gov/oact/tr/2016/tr2016.pdf.
- garysieling 10y ago
  It's a pay-go system, it works that way by design
Bartweiss 10y ago
Bear in mind that "it goes broke" isn't the only failure mode, and it's certainly not what I consider most likely. Every few years there's another push to privatize Social Security - you don't just have to count on the mathematical solvency of the program but also its political viability.
- aggie 10y ago
  It's one of the most popular social programs ever run in this country and that's why 'every few years' the efforts to privatize it go nowhere. Even the current unified Republican government won't dare touch it, and no one would want to more than Paul Ryan.
mikeyouse 10y ago
Agree wholeheartedly with this. The "Social Security is Failing" headlines are all ginned up to support political ends, they don't have much to do with the reality of the program. Large adjustments were already made to accommodate the baby boomer generation. That's why we have a $2.8 trillion-dollar trust fund. With current demographics, we should be able to pay 100% of promised benefits until the late 2030's. Afterwards, with a pure pay-go system, we'd only be able to pay ~80% of benefits. There are simple fixes that could dramatically extend the reserve depletion date to sometime in the 2050s. Not doing so is purely a political question. Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html

DoodleBuggy 10y ago

> "I'm not planning on Social Security being around by the time I'm old enough to tap into it" You need to change that attitude or your complacency will allow politicians to take it from you. The fact is you pay ~16% of your paycheck into social security and medicare, it is designed to be like a pension. It is not an entitlement, it's your money.

fortytw2 10y ago
If it was actually your money, paying into it would be optional.
- chrisabrams 10y ago
  Bingo! This is the best attitude I have seen in the whole thread. Social Security is an authoritarian play, or a power play. Another way to look at it: if every single US tax payer had to manually pay their taxes, instead of them being auto-drawn from their respective W2 employer, you'd see more people asking the question "who's money is this really?" This is why the fair tax or similar plans will never pass. The power to silently tax people is too good for big brother.
  - knz 10y ago
    > Social Security is an authoritarian play, or a power play A more charitable view would be that social security is an attempt to provide a minimum standard of living for all seniors and the disabled. How do you propose that society cares for these people, particularly the disabled, if it's not done at a societal level? Retirement also benefits the young/middle aged by ensuring jobs open up.
    - chrisabrams 10y ago
      I think the older generation should give way to the younger generation. After all, it is the younger generation that is required to run the world while the older retires. However, as it is currently, the older generation is robbing the younger generation. The younger generation is paying for entitlements that it knows it will never receive. That is not sustainable, fair, or in my opinion: necessary. It should not be the governments job to manage retirement funds. That's why I said it's a power play, because if you made social security an open market with competition, you would probably see more positive support and results.

RobertoG 10y ago

Maybe a little out of scope, but, is it not the important issue if the society we live when we retire is richer or poorer than the society today? I mean, if we live in a society, for instance, three times richer (per capita) than today, it would be very strange that old people will have a hard time. In the other hand, if it's a poorer society, even people with savings are probably to have a hard retirement.

athenot 10y ago
It could be a problem if, using your example, society is 3 times richer but that comes from 10% being a lot richer and 90% being somewhat poorer. Inequality, it seems, is rising over time.
- RobertoG 10y ago
  I suppose that what surprise me is the contradiction between the optimism about the future of HN crowd and their pessimism in this issue, as if nothing could be done (in the case that you think something should be done, of course). The inequality thing is far from unavoidable. In a democracy, at least, a society perceived as more fair for the majority should be attainable.
  - kmicklas 10y ago
    > The inequality thing is far from unavoidable. In a democracy, at least, a society perceived as more fair for the majority should be attainable. This is a nice thought in theory, but not really true as long as campaigns themselves are funded by private capital. And any attempt to change that leads to private capital (cough Koch brothers cough) funding candidates to stop it. I'm not super optimistic this will change without some kind of dramatic event (revolution, war, SS being defunded and lots of old people starve, etc.).
    - hx87 10y ago
      > but not really true as long as campaigns themselves are funded by private capital As long as funding correlates strongly with winning, or at least appears to correlate strongly with winning. If that ever goes away, legislators are going to look at lobbyists with a more skeptical eye.

torpfactory 10y ago

I truly believe that whatever people think about social security not being around when they retire, that it will be around at some level. We will almost certainly reduce benefits and/or increase retirement age. What is the alternative? There are far too many people who really can't save for retirement due to low wages for a significant part of the population. We aren't going to let these people live in abject poverty, and they aren't going to have any money to cough up to support themselves. It's the same for Medicare. Paul Ryan wants a premium support system where seniors receive part of the cost of their insurance premium from the government and pay the rest on their own. For many people, the will absolutely not have the money to spend on this. If they can't afford it, they will go to the emergency room and receive care (they legally can't turn you away) once their condition becomes severe enough. We can either force the hospitals to care for these people (and jack up the prices for the rest of us to compensate) or we can have a sane system where we all pay a reasonable price and split the burden over a larger population. I'm not arguing for some European style social welfare system. I think we ought to have a system that comports with the laws and norms we have in place now (norms/laws I understand: people can go to the ER and get care regardless of their ability to pay, elderly folks do not live in poverty).

NoGravitas 10y ago
> There are far too many people who really can't save for retirement due to low wages for a significant part of the population. We aren't going to let these people live in abject poverty, and they aren't going to have any money to cough up to support themselves. The history of the US in the past several decades suggests that yes, we absolutely are going to let these people live in abject poverty. Unfortunately.
- awinder 10y ago
  The downstream effects on consumer spending would absolutely result in this being fixed. The alternative is large numbers of people going bankrupt and that's going to hit several sacred cows in this country, particularly housing. There's lots of reasons that I'm damn near convinced that SS will still be around, principally that the gap is actually not that bad if it's dealt with in advance so that the trust funds can take advantage of compounding interest. But even absent that, the fact that corporate america is going to be Victim #2 almost guarantees a fix.

deleted 10y ago

[deleted]

cmurf 10y ago

That's amusing. I'm 45 and said the same thing when I was in my mid-20's. And now I think it's just naive. The most docile 60 year olds I know become positively vitriolic at the idea of even the age of benefit payout being changed by 5 years. If Social Security were just done away with, I guarantee you the violent revolution they'd be considering wouldn't involve clever devices that take people's heads off cleanly, quickly and painlessly like the French did. Vlad the Impaler would be seen as a massage therapist in comparison. So if Social Security (and don't forget Medicare it's part of the same FICA taxation) were to go away, it definitely means some nasty calamity happened first, like Yellowstone or a meteor just blew up half the country, in which case we've got other problems. The thing to be concerned about is privatizing it. That's a con game to dump a shit ton of money into the stock market, with the ensuing distortion inflating the stock prices of the very wealthy. It's about helping them. It doesn't do squat to help the people who will depend on Social Security. They will not make more money. And just like with getting rid of it, there's no way it's tenable to tolerate the inevitable short term loss of asset value with recessions. We can't have retirees experiencing 5% let alone 20% loss of income for 1 month let alone 1 year let alone 5-8 years for a recovery. Old people would sooner pick up axes and make you shoot them, because shooting your grandma in the head is kinder than this Republican privatization of Social Security nonsense. Grandma is not going to go back to dumpster diving and living under a bridge again like the 1930's. And you've got the same financial concern with an unbalanced 401K - that could leave you in a lurch the same way a privatized Social Security plan can. So take the risks in that 401k while you're young, but at some point probably in your 50's, you'll want to start moving it to inflation indexed treasuries. Young people right now are more likely to be savers, because of 2007/2008. They saw what it did to the unprepared, so they know that sort of thing can happen. Gen X and the Baby Boomers didn't have anything nearly that scary.

monocasa 10y ago
> The most docile 60 year olds I know become positively vitriolic at the idea of even the age of benefit payout being changed by 5 years. I guess I'm afraid of a slow rollout. ie. everyone who's 40 and older gets normal social security, if you're ~35 now, you'll have to wait a few years more. It's exactly the kind of "we got ours" BS that the boomers are so known for.

fooey 10y ago

I'm 36 and in ~17 years of being a developer professionally, I've yet to find employment at a single company that offers any kind of retirement plan at all. I max out my IRA each year, but my retirement plan is to basically work until I can't, then hop on an iceberg. IMHO, between Americans being drastically underprepared for retirement and mass job automation, the country is on the cusp of a devastatingly colossal social disaster.

TheCoelacanth 10y ago
What kind of developer job doesn't have a 401k? Even the minimum wage job I had my first summer out of high school had one.
- jessaustin 10y ago
  You had a minimum wage job with a 401k? That was a firm with a bigger HR department than it needed.
  - anigbrowl 10y ago
    Large firms can have low-paying entry-level jobs.
  - DashRattlesnake 10y ago
    > You had a minimum wage job with a 401k? That was a firm with a bigger HR department than it needed. Aren't there giant companies that employ low wage workers (e.g. McDonalds and Starbucks) that might reasonably offer 401ks to all employees, even the minimum wage ones? Ignoring the question if a minimum wage person can realistically afford to save, or course.
- fooey 10y ago
  I'm in Southern Utah, so it's not very competitive for tech work. I should move, but inertia and a bit of luck stumbling into the few webdev jobs that are around here has kept me in place so far.
- 10y ago

plandis 10y ago

Yeah I'm doing the exact same thing. Max out 401k / IRA every year + additional savings. I'm assuming that SS wont be around but if it is, great! Unfortunately, I have a feeling Republicans are really going to fuck people my age (mid 20's) over with some sort of slow phase-out so I'm also hedging my bet.

DesiLurker 10y ago
This is my real fear here. I am an immigrant in valley for a while now. I have always thought that the reason america has such a thriving service sector based economy is because they have a safety net to fall back to, which allows ppl to be free to take more risks & be generally more consumptive. My fear is that slowly as republicans take that safety net away it will force people to fix these problems at the individual level which will make them more conservative. overall I feel that (alongwith the fkups on science education) will have a detrimental effect on american competitiveness & larger economy. I do think that privatizing SS & medicare will give markets a one time boost & generally help those who are 'better vested'.

shoover 10y ago

I was thinking it may be boomers putting in catch-up funds. Younger folks today may still be trying to get started on a mortgage down payment, let alone saving for kids' college or maxing out the 401k.

dragonwriter 10y ago

> I'm not planning on Social Security being around by the time I'm old enough to tap into it But you assume your 401k will retain its favorable tax treatment? Why? Because it was promised, implictly, when you paid into it?