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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,
by 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 agoSaying 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 agoI 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.
- pmorici 14y agoAre you suggesting the U.S. government which is currently over 15 trillion dollars in debt and climbing would be better at planing for people's retirement? Because all evidence points to the contrary (for example if there is a surplus in social security taxes they spend the money on other stuff instead of saving or investing it). In fact one of the reasons it's so hard to save for retirement these days is because interest rates are being kept insanely low by government policy in order to support the ballooning debt. What ever happened to spending less and saving more, and since when did having to move into a smaller house and spend less extravagantly in retirement become some horrible hardship that required collective intervention?
- Thrymr 14y agoWell, they do invest the surplus of social security taxes in Treasury bonds and other U.S. government securities: http://www.ssa.gov/OACT/ProgData/describeoasi.html http://www.ssa.gov/OACT/ProgData/describeoasi.html The trouble comes when Social Security stops bringing in a surplus and has to start redeeming the trust fund. Then the Treasury has to start paying back the ~$3 trillion it will have borrowed. We'll see how that goes.
- simonh 14y agoGreat idea! I have some surplussavings. What I'll do is lend it to myself so I can spend it on stuff now, then demand it back from myself in 10 years time. Genius! Except what actually happens is we demand it back from our children after we've retired. Sucks to be them.
- Cushman 14y ago> the U.S. government which is currently over 15 trillion dollars in debt As opposed to US consumer debt which is only, what, 11 trillion?
- pmorici 14y agoConsumer debt is an individual personnel choice, government debt is not.
- tosseraccount 14y ago"... to assume some collective responsibility as a massively productive society to take care of our individuals who are no longer productive". It's called "social security" and "welfare". It's the safety net for those without "competence" and "prescience" (or unlucky ... whatever). 401Ks, Roths, IRA, pensions are for those who do have "competence" and "prescience".