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The idea of relying on the government for your retirement is insane to me, for exactly this reason. You're willing to bet your life that the government is alway

The idea of relying on the government for your retirement is insane to me, for exactly this reason. You're willing to bet your life that the government is always going to do right by you? Save your own money. If Social Security exists by the time I retire, great. I'm planning as if it won't.

JamesBarney 4y ago
There are very few if any institutions that sophisticated investors trust to pay back money more than the U.S. government. Banks go bankrupt, gold changes value, cash gets stolen. Seems like the U.S. government is the best option.
- dahfizz 4y ago
  US T-bills, sure. Not so for Social Security. I would trust my retirement to the US Treasury. No sane human would trust their retirement to the US Congress.
- maxilevi 4y ago
  Only because the debt is denominated in USD, so the government can always print it to pay it back. It’s not like it’s the most fiscally responsible government around
- ur-whale 4y ago
  https://www.officialdata.org/us/inflation/1800?amount=1 https://www.officialdata.org/us/inflation/1800?amount=1 I'd love to have to repay my debts with those conditions.
lotsofpulp 4y ago
The government issuing the money can reduce the purchasing power of “your” money anytime it wants, and most governments do every year.
- cypress66 4y ago
  Your savings wouldn't be all USD or bonds. It would include stocks, commodities, investments in other countries, maybe precious metals and crypto.
ur-whale 4y ago
> You're willing to bet your life that the government is always going to do right by you? Hear, hear, especially given the historical priors : (hint: across a generation-sized time spans, governments never keep their promises. Why should they, they usually are in power for decades at most). And yes, relying on governments to handle your retirement money is completely insane, but the vast majority of folks in e.g. the EU have drunk that kool-aid even though it was guaranteed to fail since day one. Retirement plans the way they work in Western Europe were always an absolute con, very much like a ponzi scheme (new players pay for the earlier players). When the young, working population was vastly larger than the old retiree population (because the retirement age was designed so that most people died before reaching it), the government milked their working young for all they were worth. Now that the age pyramid has inverted (large retiree population, few working youngs), there simply isn't enough income generated by the young to pay for the old and retirement income is paid using debt. What a freak show.
- croes 4y ago
  >Retirement plans the way they work in Western Europe were always an absolute con, very much like a ponzi scheme (new players pay for the earlier players) That's pretty much how families worked before retirement plans, the kids payed for the parents. This just got transferred to the whole society. And it worked as long the rise of productivity led to a rise of wages.
  - dahfizz 4y ago
    > And it worked as long the rise of productivity led to a rise of wages. It worked as long as people had more than 2 kids. There was always a larger young population supporting the smaller old population.
    - croes 4y ago
      It's about money, not population. And the GDPs are growing faster than the population, at least in the first world. So it's bo a matter of quantity but of distribution.
at_a_remove 4y ago
If it doesn't, well, American society has already bred the perfect group of shock-wave troops: a bunch of dead-eyed, lives paused, waiting for an apocalypse that never came Gen Xrs who will dub their explosive-laden waistcoat's "retirement vests." They're tech-savvy, they've waited for killer bees, land invasions, acid rain, nuclear war, and watched the low-risk sex of their elders transform into a high-stakes gamble at a lingering death. They remember 9/11 and Ruby Ridge. They won't factor into any threat profile because everyone forgets they even exist. They waited dutifully for the Boomers to retire only for 2008 to put a big hold on that, and the Millennials just climbed over them on the ladder. If that quote about "Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats" rang true for a group, that's the one I'd pick. Probably the last bunch you'd want to ditch Social Security on.
adra 4y ago
Most people (in the world) live entirely without saving and are making do in whatever way possible. For democracies that have stable governments sans USA, there is absolutely the assumption that the gov will pitch into avoid people starving in the streets.
weakfish 4y ago
Most don’t want to by choice! Many Americans specifically can’t afford to save, so what option do they have?
frenchman99 4y ago
That's if you have enough salary to save enough for retirement. Which is not the case for a lot of people unfortunately. Hence a government lead system where wealthy people are required to pay more to help less wealthy have a somewhat acceptable retirement.
- icelancer 4y ago
  > Hence a government lead system where wealthy people are required to pay more to help less wealthy have a somewhat acceptable retirement. Nothing stopped about this. Our demographics have changed for the worse in this regard, is all. From the latest report from the SSA's Board of Trustees: "Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. Costs of both programs will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population. Medicare costs will continue to grow faster than GDP through the late 2070s due to projected increases in the volume and intensity of services provided." Furthermore: "For the sixth consecutive year, the Trustees are issuing a determination of projected excess general revenue Medicare funding, as is required by law whenever annual tax and premium revenues of the combined Medicare funds will be below 55 percent of projected combined annual outlays within the next 7 fiscal years. Under the law, two such consecutive determinations of projected excess general revenue constitute a “Medicare funding warning.” Under current law and the Trustees’ projections, such determinations and warnings will recur every year through the 75-year projection period." It's a good read beyond the summary, too: https://www.ssa.gov/oact/TRSUM/tr22summary.pdf https://www.ssa.gov/oact/TRSUM/tr22summary.pdf
  - frenchman99 4y ago
    I don't understand what you're trying to say.
- dahfizz 4y ago
  The pension money doesn't come from nowhere. The people who are living paycheck to paycheck are paying 20% VAT and ~20% income tax. Maybe they would have less financial trouble if they could keep some of their own money. I'm all for a safety net. Scaling the system way down so that it only serves the people who need it would reduce the tax burden and solvency issues.
croes 4y ago
No, you're betting that their always will be a government and other people who pay taxes and social security fees. If you save for yourself it's likely that you lose.
yamtaddle 4y ago
Mandatory pension schemes remove the option to defect and spend money that "should" go toward retirement to instead compete in zero-sum games for benefit today for yourself and your kids (say, housing in good school districts, tuition, et c.). That part's pretty nice.
- tristor 4y ago
  > That part's pretty nice. The part where it takes people's money and prevents them from bettering the life of themselves and their families in favor of feeding that money into older people, most of whom are wealthier than the working person you're taking money from in real terms (e.g. most are homeowners)? I wouldn't classify that part as "pretty nice", but you do you.
  - yamtaddle 4y ago
    Money burned on these games (by making e.g. home prices in good school districts higher because people are competing with money that ought to be going to retirement) isn't helping anyone. It just hurts responsible savers because their and their kids' opportunities & QOL suffer relative to those who pick "defect"—unless they also sacrifice their retirement.
skywal_l 4y ago
What makes you think that if people are stupid enough to elect corrupt government officials they will be smart enough to invest their money wisely? If you trust the financial markets more than the government that you elect, I have a bridge to sell you. Sure some smart people will be able to extract profit from the market but most won't. I'd rather live in a country where the people I chose can organize to ensure that nobody needs for anything rather than in a country where I gamed the system and now have to protect my loot against hordes of have-nots. And if I can't do that, the joke is on me.
- dahfizz 4y ago
  > Sure some smart people will be able to extract profit from the market but most won't. Source? Put your money in an index fund. The S&P 500 from 1958 to 2008 went up 90x. The worst case scenario - All your savings are in stocks and you retire during the second worst financial crisis ever. And your returns are 90x. Not 90%, 9000%. The idea that "most won't extract profit" is nonsense. In the long term, its free money for everyone. https://www.officialdata.org/us/stocks/s-p-500/1958?amount=100&endYear=2009 https://www.officialdata.org/us/stocks/s-p-500/1958?amount=1...
loudmax 4y ago
I'm relying on a functional democratic government still existing when I retire. It doesn't seem like a high bar, though admittedly less of a certainty than we would have imagined a decade ago.
icelancer 4y ago
> Save your own money. If Social Security exists by the time I retire, great. I'm planning as if it won't. I would guess that most people my age (between 35-45) got told some variant of this in their business and economics classes in university. At least, I hope they did. Looking at Social Security budgets for about 20-30 minutes and what politicians have proposed to do to fix it is enough to make most reasonably-minded people understand that expecting anything more than token amounts of money from the program is idiotic.
pkaye 4y ago
Its crazy that we give 6.2% of our paycheck (and another 6.2% from our employer) and we can't expect much in return.
- dahfizz 4y ago
  Yeah. Even if I do get to collect SS, I'd have been better off investing that 6.2% the whole time.
  - tristor 4y ago
    With just a 3% APR on a savings account, if you took the 12.4% that everyone currently pays into social security and deposited in that account for 40 years (25 to 65) of your working life, at the current median annual income, you'd have $715k in cash saved. If you had invested that into a Roth 401k and invested it in the market at an annualized average return of 7.3% instead, it'd be $2.25M in retirement savings. Social Security is a Ponzi Scheme because it's taking money as an "investment" from people working today, to pay out returns to previous "investors" who are now retired, while the government has raided it and filled it with IOUs to support spending unrelated to the pension.
- 988747 4y ago
  that 6.2% from your employer is in fact also part of your paycheck, it's just not shown on your pay slip (probably to fool you, by making you think you got something "for free").
dgudkov 4y ago
If you don't trust your government, what makes you think that your money will keep its value over time regardless of government actions? A reckless government can destruct not only the retirement system, but the monetary system as well. A few populist decisions about inflation and your savings go to the waste bin forever.
morpheos137 4y ago
Governments create money and sustain its value. If you are relying on saved money for retirement then you are relying on government.

JamesBarney 4y ago

There are very few if any institutions that sophisticated investors trust to pay back money more than the U.S. government. Banks go bankrupt, gold changes value, cash gets stolen. Seems like the U.S. government is the best option.

dahfizz 4y ago
US T-bills, sure. Not so for Social Security. I would trust my retirement to the US Treasury. No sane human would trust their retirement to the US Congress.
maxilevi 4y ago
Only because the debt is denominated in USD, so the government can always print it to pay it back. It’s not like it’s the most fiscally responsible government around
ur-whale 4y ago
https://www.officialdata.org/us/inflation/1800?amount=1 https://www.officialdata.org/us/inflation/1800?amount=1 I'd love to have to repay my debts with those conditions.

lotsofpulp 4y ago

The government issuing the money can reduce the purchasing power of “your” money anytime it wants, and most governments do every year.

cypress66 4y ago
Your savings wouldn't be all USD or bonds. It would include stocks, commodities, investments in other countries, maybe precious metals and crypto.

ur-whale 4y ago

> You're willing to bet your life that the government is always going to do right by you? Hear, hear, especially given the historical priors : (hint: across a generation-sized time spans, governments never keep their promises. Why should they, they usually are in power for decades at most). And yes, relying on governments to handle your retirement money is completely insane, but the vast majority of folks in e.g. the EU have drunk that kool-aid even though it was guaranteed to fail since day one. Retirement plans the way they work in Western Europe were always an absolute con, very much like a ponzi scheme (new players pay for the earlier players). When the young, working population was vastly larger than the old retiree population (because the retirement age was designed so that most people died before reaching it), the government milked their working young for all they were worth. Now that the age pyramid has inverted (large retiree population, few working youngs), there simply isn't enough income generated by the young to pay for the old and retirement income is paid using debt. What a freak show.

croes 4y ago
>Retirement plans the way they work in Western Europe were always an absolute con, very much like a ponzi scheme (new players pay for the earlier players) That's pretty much how families worked before retirement plans, the kids payed for the parents. This just got transferred to the whole society. And it worked as long the rise of productivity led to a rise of wages.
- dahfizz 4y ago
  > And it worked as long the rise of productivity led to a rise of wages. It worked as long as people had more than 2 kids. There was always a larger young population supporting the smaller old population.
  - croes 4y ago
    It's about money, not population. And the GDPs are growing faster than the population, at least in the first world. So it's bo a matter of quantity but of distribution.

at_a_remove 4y ago

If it doesn't, well, American society has already bred the perfect group of shock-wave troops: a bunch of dead-eyed, lives paused, waiting for an apocalypse that never came Gen Xrs who will dub their explosive-laden waistcoat's "retirement vests." They're tech-savvy, they've waited for killer bees, land invasions, acid rain, nuclear war, and watched the low-risk sex of their elders transform into a high-stakes gamble at a lingering death. They remember 9/11 and Ruby Ridge. They won't factor into any threat profile because everyone forgets they even exist. They waited dutifully for the Boomers to retire only for 2008 to put a big hold on that, and the Millennials just climbed over them on the ladder. If that quote about "Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats" rang true for a group, that's the one I'd pick. Probably the last bunch you'd want to ditch Social Security on.

adra 4y ago

Most people (in the world) live entirely without saving and are making do in whatever way possible. For democracies that have stable governments sans USA, there is absolutely the assumption that the gov will pitch into avoid people starving in the streets.

weakfish 4y ago

Most don’t want to by choice! Many Americans specifically can’t afford to save, so what option do they have?

frenchman99 4y ago

That's if you have enough salary to save enough for retirement. Which is not the case for a lot of people unfortunately. Hence a government lead system where wealthy people are required to pay more to help less wealthy have a somewhat acceptable retirement.

icelancer 4y ago
> Hence a government lead system where wealthy people are required to pay more to help less wealthy have a somewhat acceptable retirement. Nothing stopped about this. Our demographics have changed for the worse in this regard, is all. From the latest report from the SSA's Board of Trustees: "Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. Costs of both programs will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population. Medicare costs will continue to grow faster than GDP through the late 2070s due to projected increases in the volume and intensity of services provided." Furthermore: "For the sixth consecutive year, the Trustees are issuing a determination of projected excess general revenue Medicare funding, as is required by law whenever annual tax and premium revenues of the combined Medicare funds will be below 55 percent of projected combined annual outlays within the next 7 fiscal years. Under the law, two such consecutive determinations of projected excess general revenue constitute a “Medicare funding warning.” Under current law and the Trustees’ projections, such determinations and warnings will recur every year through the 75-year projection period." It's a good read beyond the summary, too: https://www.ssa.gov/oact/TRSUM/tr22summary.pdf https://www.ssa.gov/oact/TRSUM/tr22summary.pdf
- frenchman99 4y ago
  I don't understand what you're trying to say.
dahfizz 4y ago
The pension money doesn't come from nowhere. The people who are living paycheck to paycheck are paying 20% VAT and ~20% income tax. Maybe they would have less financial trouble if they could keep some of their own money. I'm all for a safety net. Scaling the system way down so that it only serves the people who need it would reduce the tax burden and solvency issues.

croes 4y ago

No, you're betting that their always will be a government and other people who pay taxes and social security fees. If you save for yourself it's likely that you lose.

yamtaddle 4y ago

Mandatory pension schemes remove the option to defect and spend money that "should" go toward retirement to instead compete in zero-sum games for benefit today for yourself and your kids (say, housing in good school districts, tuition, et c.). That part's pretty nice.

tristor 4y ago
> That part's pretty nice. The part where it takes people's money and prevents them from bettering the life of themselves and their families in favor of feeding that money into older people, most of whom are wealthier than the working person you're taking money from in real terms (e.g. most are homeowners)? I wouldn't classify that part as "pretty nice", but you do you.
- yamtaddle 4y ago
  Money burned on these games (by making e.g. home prices in good school districts higher because people are competing with money that ought to be going to retirement) isn't helping anyone. It just hurts responsible savers because their and their kids' opportunities & QOL suffer relative to those who pick "defect"—unless they also sacrifice their retirement.

skywal_l 4y ago

What makes you think that if people are stupid enough to elect corrupt government officials they will be smart enough to invest their money wisely? If you trust the financial markets more than the government that you elect, I have a bridge to sell you. Sure some smart people will be able to extract profit from the market but most won't. I'd rather live in a country where the people I chose can organize to ensure that nobody needs for anything rather than in a country where I gamed the system and now have to protect my loot against hordes of have-nots. And if I can't do that, the joke is on me.

dahfizz 4y ago
> Sure some smart people will be able to extract profit from the market but most won't. Source? Put your money in an index fund. The S&P 500 from 1958 to 2008 went up 90x. The worst case scenario - All your savings are in stocks and you retire during the second worst financial crisis ever. And your returns are 90x. Not 90%, 9000%. The idea that "most won't extract profit" is nonsense. In the long term, its free money for everyone. https://www.officialdata.org/us/stocks/s-p-500/1958?amount=100&endYear=2009 https://www.officialdata.org/us/stocks/s-p-500/1958?amount=1...

loudmax 4y ago

I'm relying on a functional democratic government still existing when I retire. It doesn't seem like a high bar, though admittedly less of a certainty than we would have imagined a decade ago.

icelancer 4y ago

> Save your own money. If Social Security exists by the time I retire, great. I'm planning as if it won't. I would guess that most people my age (between 35-45) got told some variant of this in their business and economics classes in university. At least, I hope they did. Looking at Social Security budgets for about 20-30 minutes and what politicians have proposed to do to fix it is enough to make most reasonably-minded people understand that expecting anything more than token amounts of money from the program is idiotic.

pkaye 4y ago

Its crazy that we give 6.2% of our paycheck (and another 6.2% from our employer) and we can't expect much in return.

dahfizz 4y ago
Yeah. Even if I do get to collect SS, I'd have been better off investing that 6.2% the whole time.
- tristor 4y ago
  With just a 3% APR on a savings account, if you took the 12.4% that everyone currently pays into social security and deposited in that account for 40 years (25 to 65) of your working life, at the current median annual income, you'd have $715k in cash saved. If you had invested that into a Roth 401k and invested it in the market at an annualized average return of 7.3% instead, it'd be $2.25M in retirement savings. Social Security is a Ponzi Scheme because it's taking money as an "investment" from people working today, to pay out returns to previous "investors" who are now retired, while the government has raided it and filled it with IOUs to support spending unrelated to the pension.
988747 4y ago
that 6.2% from your employer is in fact also part of your paycheck, it's just not shown on your pay slip (probably to fool you, by making you think you got something "for free").

dgudkov 4y ago

If you don't trust your government, what makes you think that your money will keep its value over time regardless of government actions? A reckless government can destruct not only the retirement system, but the monetary system as well. A few populist decisions about inflation and your savings go to the waste bin forever.

morpheos137 4y ago

Governments create money and sustain its value. If you are relying on saved money for retirement then you are relying on government.