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It is not disingenuous and it really doesn't even require much math. Buying target date and index funds is remarkably straightforward in 2024. Know how and wher

It is not disingenuous and it really doesn't even require much math. Buying target date and index funds is remarkably straightforward in 2024. Know how and where to buy them takes about an evening of reading. I know because that's how I did it. I did not have a home ec class, I did not have someone to show me how, and I am not that great at math.

PaulDavisThe1st 2y ago
I have also done this. But ... my wife, who is perfectly capable of basic math, would never have been able to do this task, nor would she have wanted to, and in the past she was exploited by financial advisers seeking to do it for her. I have no doubt that some people with weak/average math skills can do this, mostly because the math skills have nothing to do with it, really. Confidence about how to invest and manage your life savings is an entirely different thing, and since we don't teach people anything about this, many, many people do not have it.
- missedthecue 2y ago
  I think in the end we are agreeing here. The big problem is that it's opt-in. Making this mandatory like Australia and Singapore solves the biggest problems of apathy or simply being unaware. Social security for example only works because it's mandatory. I think having some percent of your check go into index funds automatically would work too.
  - ghaff 2y ago
    We have social security in the US. If you think people should be putting more money in so they mostly automatically get more money out after they retire that's "just" a political problem. Setting up a parallel mandatory system just seems like an unnecessary complication. There's nothing especially magical about 401ks. Yes, many companies match contributions up to some level. And there are some tax benefits but it's mostly about saving for retirement. It's not like defined benefit plans were anything like universal in the US--mostly big companies for employees with relatively long tenures.
    - missedthecue 2y ago
      The thing that makes 401ks magical compared to social security is decades of compound interest. The average social security payment is only $1700 a month. Not enough to live on, yet the program is almost unaffordable.
      - ghaff 2y ago
        But that hasn't historically made 401ks magical relative to personal savings more broadly. Yes, many companies match up to a point and there are some tax benefits relative to just making an automatic contribution to an index fund, but most of the benefit is just saving on a relative basis. I agree that SS by itself isn't really enough to live on for most people. But that's also just about what I get from my defined benefit pension--albeit for just about a third of my career. A nice bonus but just that.

PaulDavisThe1st 2y ago

I have also done this. But ... my wife, who is perfectly capable of basic math, would never have been able to do this task, nor would she have wanted to, and in the past she was exploited by financial advisers seeking to do it for her. I have no doubt that some people with weak/average math skills can do this, mostly because the math skills have nothing to do with it, really. Confidence about how to invest and manage your life savings is an entirely different thing, and since we don't teach people anything about this, many, many people do not have it.

missedthecue 2y ago
I think in the end we are agreeing here. The big problem is that it's opt-in. Making this mandatory like Australia and Singapore solves the biggest problems of apathy or simply being unaware. Social security for example only works because it's mandatory. I think having some percent of your check go into index funds automatically would work too.
- ghaff 2y ago
  We have social security in the US. If you think people should be putting more money in so they mostly automatically get more money out after they retire that's "just" a political problem. Setting up a parallel mandatory system just seems like an unnecessary complication. There's nothing especially magical about 401ks. Yes, many companies match contributions up to some level. And there are some tax benefits but it's mostly about saving for retirement. It's not like defined benefit plans were anything like universal in the US--mostly big companies for employees with relatively long tenures.
  - missedthecue 2y ago
    The thing that makes 401ks magical compared to social security is decades of compound interest. The average social security payment is only $1700 a month. Not enough to live on, yet the program is almost unaffordable.
    - ghaff 2y ago
      But that hasn't historically made 401ks magical relative to personal savings more broadly. Yes, many companies match up to a point and there are some tax benefits relative to just making an automatic contribution to an index fund, but most of the benefit is just saving on a relative basis. I agree that SS by itself isn't really enough to live on for most people. But that's also just about what I get from my defined benefit pension--albeit for just about a third of my career. A nice bonus but just that.