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Basing a system on people’s voluntarily saving for 40 years and evaluating the relevant information for sound investment choices is like asking the family pet t

Basing a system on people’s voluntarily saving for 40 years and evaluating the relevant information for sound investment choices is like asking the family pet to dance on two legs. What other skills along with "saving for retirement" are we all apparently hapless victims of our own incompetence for lacking? I'm not going to argue that "people" haven't been shafted by changing times and a variety of cultural and economic forces, but I take offense at the comparison to a dancing pet, as I think any self-respecting reader should. Or are we supposed to chuckle with recognition at the absurdity of being trusted with our own finances? A similar discussion of the unemployment problem would run along the lines of: "Who really knows how to apply for a job, right? Or calculate what your salary needs to be to afford rent after taxes... we're not freaking accountants!" We are all going to get old one day, stop working, and still need a private source of money (personal savings, inheritance, pension, etc.). I don't think most people stop and truly reflect on this responsibility. They should drill it into us in school, really, along with the multiplication tables and long division. I don't remember a single lesson on what a stock is or how to balance a checkbook. Or, for that matter, how to make a friend, find a mate, or display leadership. As an adult you eventually realize what's really important in life. Financial solvency is not the pinnacle but it's a big one.

polyfractal 14y ago
The silly part is that finance courses used to be common. My parents took a basic finance course in grade school, where they learned how to balance a checkbook. Those all got cut for whatever reason (budget, not applicable to college entrance exams, etc). I have no idea why the first time people encounter personal finance is either a college course or when they realize they have bills to pay as an adult And, for what it's worth, I taught my dog "close the door" last night. I've seen plenty of dogs do "stand up" on two legs as a trick. Honestly, the OP didn't even use a good analogy. If it's as "hard" as teaching a dog to stand on two legs...well, that isn't really very hard...
- ceejayoz 14y ago
  > I have no idea why the first time people encounter personal finance is either a college course or when they realize they have bills to pay as an adult Oh, it's not a college course. It's the rep from the credit card company with a booth at college orientation giving out free t-shirts if you sign up for a card, one that has a $90 annual fee, a 25% interest rate, and a couple dozen other gotchas.
  - dan-k 14y ago
    Well, until the Credit Card Act of 2009. Now you have to be 21 to get a credit card unless you can demonstrate significant means to pay it off or have a cosigner. I managed to sneak through the last year before this went into effect, but considering all the issues my friends have just with their student loans, I'm sure it's saved people a lot of misery, even if the nanny-state aspect of it still rankles me a little...
    - wccrawford 14y ago
      It's pushed the limit out 3 years, but I wonder if it's really changed anything? They're 3 years older, but are they 3 years wiser? Wisdom tends to come from experience, and since they don't have any experience with credit cards... Well, I doubt they're wiser about them.
      - freehunter 14y ago
        At least they're closer to having the means to pay it off. At 21 (as a college senior) you might have a part-time job, you might have an internship, or you might be full-time somewhere. As a college freshman or incoming freshman, chances are you won't have that income. As a senior, theoretically you should be done burying yourself in debt, and beginning to have the means to pay it off.
- drumdance 14y ago
  I took a civics class in high school that touched on a lot of this - how to budget, the magic of compound interest, the real costs of having children etc. We even had to carry around a raw egg for two weeks as a proxy for a child, the idea being to give you a sense of how much attention children demand. Didn't stop me from getting in serious credit card debt, though.
- Evbn 14y ago
  If those classes were canceled for budget reasons, they obviously weren't very effect at teaching successful budgeting.
Cushman 14y ago
In the paragraph immediately after that, she notes that retirement planning requires not merely competence, but prescience: You need to know when you'll retire, and when you'll die. You need to know when you'll get fired, get sick, have a child. You need to make investments that will consistently beat inflation over the course of decades. Now, we could debate to what extent it's possible to guesstimate these things, and to what extent it's reasonable to expect people to do that themselves, but I think that may be missing the main point, which is: Why? Why should we want to require every individual to perform these calculations for themselves, knowing that many will get it wrong and become a tragic drain on our last-resort emergency support system? Why, when it would be so easy (and so much cheaper) for us to assume some collective responsibility as a massively productive society to take care of our individuals who are no longer productive, and let no one have to die in poverty?
- dgreensp 14y ago
  Saying that "you'd have to know the future" is just an overly dramatic way of talking about risk, and her points are overblown for effect. I could see your argument in a thread about healthcare, say, but we are talking about personal money, on top of any (current) insurance or social programs. There is no universal personal risk elimination system that smooths out risks due to the stock market, personal circumstances, etc. and makes sure we are never forced to live a less comfortable life than we anticipated. Even if we decided to compensate all retirees for lack of savings or income, to say it's obvious or easy to do so is obtuse. The current model for retirement savings, which forces individuals to figure out a plan for their retirement years, whether through a “guy” or by individual decision making, will always fall short. Surely "a plan" is the very least we should be expected to have regarding our finances, not some unjust burden thrust on us by outside forces?
  - deleted 14y ago
    [deleted]
  - Cushman 14y ago
    I think it's fair to say a solid financial plan could be the difference between comfort and affluence. For it to be the difference between comfort and poverty is inhumane. That's where I'm coming from: No one who spends their life contributing value to our society should have to live out their final years and die in poverty. It's just not right, and there's no good reason to extend that right only to those individuals who have the ability to manage their own retirement. Talking about risk and education and so on is misdirection. This is just something a civilized culture should do.

polyfractal 14y ago

The silly part is that finance courses used to be common. My parents took a basic finance course in grade school, where they learned how to balance a checkbook. Those all got cut for whatever reason (budget, not applicable to college entrance exams, etc). I have no idea why the first time people encounter personal finance is either a college course or when they realize they have bills to pay as an adult And, for what it's worth, I taught my dog "close the door" last night. I've seen plenty of dogs do "stand up" on two legs as a trick. Honestly, the OP didn't even use a good analogy. If it's as "hard" as teaching a dog to stand on two legs...well, that isn't really very hard...

ceejayoz 14y ago
> I have no idea why the first time people encounter personal finance is either a college course or when they realize they have bills to pay as an adult Oh, it's not a college course. It's the rep from the credit card company with a booth at college orientation giving out free t-shirts if you sign up for a card, one that has a $90 annual fee, a 25% interest rate, and a couple dozen other gotchas.
- dan-k 14y ago
  Well, until the Credit Card Act of 2009. Now you have to be 21 to get a credit card unless you can demonstrate significant means to pay it off or have a cosigner. I managed to sneak through the last year before this went into effect, but considering all the issues my friends have just with their student loans, I'm sure it's saved people a lot of misery, even if the nanny-state aspect of it still rankles me a little...
  - wccrawford 14y ago
    It's pushed the limit out 3 years, but I wonder if it's really changed anything? They're 3 years older, but are they 3 years wiser? Wisdom tends to come from experience, and since they don't have any experience with credit cards... Well, I doubt they're wiser about them.
    - freehunter 14y ago
      At least they're closer to having the means to pay it off. At 21 (as a college senior) you might have a part-time job, you might have an internship, or you might be full-time somewhere. As a college freshman or incoming freshman, chances are you won't have that income. As a senior, theoretically you should be done burying yourself in debt, and beginning to have the means to pay it off.
drumdance 14y ago
I took a civics class in high school that touched on a lot of this - how to budget, the magic of compound interest, the real costs of having children etc. We even had to carry around a raw egg for two weeks as a proxy for a child, the idea being to give you a sense of how much attention children demand. Didn't stop me from getting in serious credit card debt, though.
Evbn 14y ago
If those classes were canceled for budget reasons, they obviously weren't very effect at teaching successful budgeting.

Cushman 14y ago

In the paragraph immediately after that, she notes that retirement planning requires not merely competence, but prescience: You need to know when you'll retire, and when you'll die. You need to know when you'll get fired, get sick, have a child. You need to make investments that will consistently beat inflation over the course of decades. Now, we could debate to what extent it's possible to guesstimate these things, and to what extent it's reasonable to expect people to do that themselves, but I think that may be missing the main point, which is: Why? Why should we want to require every individual to perform these calculations for themselves, knowing that many will get it wrong and become a tragic drain on our last-resort emergency support system? Why, when it would be so easy (and so much cheaper) for us to assume some collective responsibility as a massively productive society to take care of our individuals who are no longer productive, and let no one have to die in poverty?

dgreensp 14y ago
Saying that "you'd have to know the future" is just an overly dramatic way of talking about risk, and her points are overblown for effect. I could see your argument in a thread about healthcare, say, but we are talking about personal money, on top of any (current) insurance or social programs. There is no universal personal risk elimination system that smooths out risks due to the stock market, personal circumstances, etc. and makes sure we are never forced to live a less comfortable life than we anticipated. Even if we decided to compensate all retirees for lack of savings or income, to say it's obvious or easy to do so is obtuse. The current model for retirement savings, which forces individuals to figure out a plan for their retirement years, whether through a “guy” or by individual decision making, will always fall short. Surely "a plan" is the very least we should be expected to have regarding our finances, not some unjust burden thrust on us by outside forces?
- deleted 14y ago
  [deleted]
- Cushman 14y ago
  I think it's fair to say a solid financial plan could be the difference between comfort and affluence. For it to be the difference between comfort and poverty is inhumane. That's where I'm coming from: No one who spends their life contributing value to our society should have to live out their final years and die in poverty. It's just not right, and there's no good reason to extend that right only to those individuals who have the ability to manage their own retirement. Talking about risk and education and so on is misdirection. This is just something a civilized culture should do.