5 ms·

Is this new though? I don’t think people in the past saved much either

toomuchtodo 4y ago
It's a lengthy discussion topic to say the least. High level, pension coverage and associated healthcare plans have declined over the decades, 401ks (they were initially designed as a tax shelter for the wealthy) were parroted as the solution when they weren’t, and with the healthcare arrangement in the US, what might have been sustainable previously no longer is. Hence, people bouncing from an extraction economy to enjoy higher standard of living during the last chapter of their life (because it ain’t getting fixed in the US in a timeframe that matters to them). Florida was the default for a lot of retirees because of no state income tax, warm weather, and low cost of living, but those days are long gone with the residential insurance market collapsing, the price of real estate at all time highs, and the extreme shortage of doctors, RNs, CNAs, and care home aides. Similar to college costs, the amount of total capital required to retire comfortably is accelerating away (due to underlying cost inflation, compressed future capital market returns, and longer expected lifetimes) from the capability of the mean worker to accomplish the necessary level of wealth accumulation during a work lifetime. Very few levers to pull besides earning more or finding somewhere to live that costs less.
- antisthenes 4y ago
  This is all perfectly fine. The wealthy years of the 20th century (driven by ludicrous amounts of fossil fuel exploitation) are an incredible anomaly in human history anyway. We're just reverting back to the mean when the vast majority of people never retired. It was good enough not to die of hunger. This is going to continue until we start decoupling more of the economy from fossil fuels.
  - klipklop 4y ago
    This is a super narrow pessimistic viewpoint that is rife with agenda pushing. We do not know if the wealthy years of the 20th century are over yet. Neo-feudalism is possible, but unlikely to be the same conditions as the middle-ages standard of work until you drop dead. Not every single problem in society is fixed by getting off fossil fuels. "Decoupling" the economy from fossil fuels will not be a magic solution in this case.
- maxerickson 4y ago
  So the wealthy are sheltering a modest value every year in their 401k? (the contribution limit this year is ~$20,000, which hey, good for people that can set that much earned income aside, but I'm not sure they are "the wealthy" that you mean. Even the considerably higher overall contribution limit for catchup contributions doesn't seem like something "the wealthy" would be worried about for tax sheltering)
  - toomuchtodo 4y ago
    https://news.ycombinator.com/item?id=31326933 https://news.ycombinator.com/item?id=31326933 https://news.ycombinator.com/item?id=29780629 https://news.ycombinator.com/item?id=29780629 https://www.bogleheads.org/wiki/Mega-backdoor_Roth https://www.bogleheads.org/wiki/Mega-backdoor_Roth https://www.washingtonpost.com/outlook/2022/04/20/retirement-ira-inequality-budget/ https://www.washingtonpost.com/outlook/2022/04/20/retirement... https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3997927 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3997927 https://www.epi.org/publication/retirement-in-america/ https://www.epi.org/publication/retirement-in-america/ https://www.census.gov/library/stories/2022/08/who-has-retirement-accounts.html https://www.census.gov/library/stories/2022/08/who-has-retir...
    - maxerickson 4y ago
      Okay, do I need to read through all that and find out how your definition of "the wealthy" aligns with the contribution limits? Roths aren't even vaguely related to the origin of 401ks, so I guess no need to look at those.
      - toomuchtodo 4y ago
        Whether you read them is up to whether you value citations for my thesis. I have no preference either way, as nothing material will result from me attempting to prove the thesis in this thread. I hope the links are helpful to whomever encounters the thread in the future. If I didn't believe my thesis was on a solid foundation of facts, I wouldn't have asserted it.
oneoff786 4y ago
The past several decades saw a massively booming economy that allowed for big pensions and huge gains on real estate.

It's a lengthy discussion topic to say the least. High level, pension coverage and associated healthcare plans have declined over the decades, 401ks (they were initially designed as a tax shelter for the wealthy) were parroted as the solution when they weren’t, and with the healthcare arrangement in the US, what might have been sustainable previously no longer is. Hence, people bouncing from an extraction economy to enjoy higher standard of living during the last chapter of their life (because it ain’t getting fixed in the US in a timeframe that matters to them). Florida was the default for a lot of retirees because of no state income tax, warm weather, and low cost of living, but those days are long gone with the residential insurance market collapsing, the price of real estate at all time highs, and the extreme shortage of doctors, RNs, CNAs, and care home aides. Similar to college costs, the amount of total capital required to retire comfortably is accelerating away (due to underlying cost inflation, compressed future capital market returns, and longer expected lifetimes) from the capability of the mean worker to accomplish the necessary level of wealth accumulation during a work lifetime. Very few levers to pull besides earning more or finding somewhere to live that costs less.

antisthenes 4y ago
This is all perfectly fine. The wealthy years of the 20th century (driven by ludicrous amounts of fossil fuel exploitation) are an incredible anomaly in human history anyway. We're just reverting back to the mean when the vast majority of people never retired. It was good enough not to die of hunger. This is going to continue until we start decoupling more of the economy from fossil fuels.
- klipklop 4y ago
  This is a super narrow pessimistic viewpoint that is rife with agenda pushing. We do not know if the wealthy years of the 20th century are over yet. Neo-feudalism is possible, but unlikely to be the same conditions as the middle-ages standard of work until you drop dead. Not every single problem in society is fixed by getting off fossil fuels. "Decoupling" the economy from fossil fuels will not be a magic solution in this case.
maxerickson 4y ago
So the wealthy are sheltering a modest value every year in their 401k? (the contribution limit this year is ~$20,000, which hey, good for people that can set that much earned income aside, but I'm not sure they are "the wealthy" that you mean. Even the considerably higher overall contribution limit for catchup contributions doesn't seem like something "the wealthy" would be worried about for tax sheltering)
- toomuchtodo 4y ago
  https://news.ycombinator.com/item?id=31326933 https://news.ycombinator.com/item?id=31326933 https://news.ycombinator.com/item?id=29780629 https://news.ycombinator.com/item?id=29780629 https://www.bogleheads.org/wiki/Mega-backdoor_Roth https://www.bogleheads.org/wiki/Mega-backdoor_Roth https://www.washingtonpost.com/outlook/2022/04/20/retirement-ira-inequality-budget/ https://www.washingtonpost.com/outlook/2022/04/20/retirement... https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3997927 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3997927 https://www.epi.org/publication/retirement-in-america/ https://www.epi.org/publication/retirement-in-america/ https://www.census.gov/library/stories/2022/08/who-has-retirement-accounts.html https://www.census.gov/library/stories/2022/08/who-has-retir...
  - maxerickson 4y ago
    Okay, do I need to read through all that and find out how your definition of "the wealthy" aligns with the contribution limits? Roths aren't even vaguely related to the origin of 401ks, so I guess no need to look at those.
    - toomuchtodo 4y ago
      Whether you read them is up to whether you value citations for my thesis. I have no preference either way, as nothing material will result from me attempting to prove the thesis in this thread. I hope the links are helpful to whomever encounters the thread in the future. If I didn't believe my thesis was on a solid foundation of facts, I wouldn't have asserted it.

oneoff786 4y ago

The past several decades saw a massively booming economy that allowed for big pensions and huge gains on real estate.