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They are tested and the results have already been a disaster. People don't save for 401ks. And why would they? The fact is, when you are living paycheck to p

They are tested and the results have already been a disaster. People don't save for 401ks. And why would they? The fact is, when you are living paycheck to paycheck, retirement takes a backseat to rent. And even when they do save, we are currently looking at a market downturn. The last 5 years have been pretty rough in terms of the stock market with returns being much lower than you might count on. There is an option, it's fully funding social security by lifting the income cap. It's silly that you get a tax break on SS simply by making too much money. The biggest threats to the average person being able to retire is the government gutting, dismantling, and/or privatizing Medicaid, Medicare, and social security. With those gone, yeah grandma is going to have to work in the Foxconn factory to avoid eating catfood. It's not completely hopeless, but people really need to be informed on this. We are running headlong into this problem because neither party wants to raise taxes to fund these essential programs. This is a government problem to solve which is best solved by a government agency. It will be a disaster if private corporate leaches get involved, matching the current state of healthcare for anyone not disabled or younger than 65. For anyone that advocates UBI. That's what social security is, UBI (with an age restriction).

raymondgh 2y ago
My iOS Stocks app says S&P 500 is up 146.23% over the last 5 years. But isn’t that much too short an interval to evaluate in the first place in consideration for retirement?
- dmoy 2y ago
  That doesn't even include dividends. It's more like 166% after dividends But also yes it's too short of an interval for retirement savings
- blargey 2y ago
  “Up 146%” is either because your start time is during the 2020 market crash, or the display is actually “150% of the starting value” (up 50%).
ryandrake 2y ago
I know people in my age group (GenX) who have not saved even a penny for retirement. And these guys are in good jobs in tech with access to generous 401ks. They just spend their whole paychecks, and more via borrowing. If these guys (who definitely have the means to) won't save, I don't understand why we think "personal savings" is overall a viable system for taking care of the elderly. There is going to be a huge amount of either 1. misery or 2. bailouts in the next 30 years as GenX and Millennials start retiring.
- lotsofpulp 2y ago
  Everyone already has mandatory defined benefit pensions in the US. It’s called Social Security.
dmoy 2y ago
People definitely don't save enough for retirement under the current system. The median household entering retirement right now has like $150k, which translates to very little on top of social security. So now without pensions, people's entire retirement strategy is social security and maybe selling a primary residence. Elder poverty is already high, and will get much higher in the future > The last 5 years The last 5 years were freaking amazing for investments. Even including the current small downturn, s&p 500 total returns are up like +160% in the last 5 years. After factoring inflation it's more like +80% or so? Which is over 10% real returns per year, which is wayyyyy above historical average (closer to 5-7% real returns).
UncleEntity 2y ago
> For anyone that advocates UBI. That's what social security is, UBI (with an age restriction). That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever. The fact that the government turned it into a ponzi scheme by raiding its assets, thanks Reagan, doesn't mean it doesn't have qualifications beyond being a certain age, they send a letter yearly, I believe, which details your contributions and expected benefits. [0] even though, by their own calculations, you are better off financially by putting your money in a literal mattress it is still an investment
- Kirby64 2y ago
  > That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever. Except - just like most progressive taxes, social security costs more for those who make more money and less for those who make less (beyond the income tax, but that's an aside). The only difference between UBI and social security is that, in theory, UBI would require no contributions what-so-ever to earn money out whereas social security requires contributions. The only difference is this makes UBI more progressively taxed than social security.
  - Jtsummers 2y ago
    OASDI and Medicare taxes actually regressive taxes. It costs you less (as a percentage) once you exceed whatever the current threshold is ($178k this year, IIRC). Remember that the definition of a progressive tax is that the rate goes up as your income goes up, a regressive tax is the opposite. Up to the current year's threshold, your OASDI and Medicare tax rate is constant, and then it drops.
    - dmoy 2y ago
      If we're being pedantic:. oasdi is extremely regressive (no tax at all above like 2x median household income, vs e.g. income taxes which continue ramping up until closer to 10x median income after becoming flat). Medicare tax is not capped, and is slightly progressive in that it jumps from 2.9% to (I forget like % higher) at somewhere around 3x median household income.
triceratops 2y ago
> when you are living paycheck to paycheck, retirement takes a backseat to rent. Even if you can't afford to save for retirement, you really can't afford not to. > There is an option, it's fully funding social security by lifting the income cap That's kinda correct. The income cap on Social Security is effectively a regressive tax. But it won't help fund retirements into the future. By law, Social Security only invests in Treasuries. This can't provide the returns needed to fund retirements unless the worker-to-retiree ratio massively improves. Social Security should be allowed to invest in VTI or some other broad-based investment vehicle. This aligns the incentives correctly. We don't want current workers paying for retired workers. We want rising productivity in the economy to do that. > It will be a disaster if private corporate leaches get involved +100 company 401k plans are effectively leeches that suck away returns. Detach 401ks from employment and make them like IRAs instead. Cheer as Vanguard drives away the parasites who charge high management fees.
- dmoy 2y ago
  > Detach 401ks from employment and make them like IRAs instead. Cheer as Vanguard drives away the parasites who charge high management fees. It would be pretty awesome if they opened TSP to everyone
ahepp 2y ago
> And even when they do save, we are currently looking at a market downturn. The last 5 years have been pretty rough in terms of the stock market with returns being much lower than you might count on. VFIAX S&P500 tracking mutual fund closed at $212.65 five years ago, and closed at $519.60 today. By my math that comes out to an annualized yield of 19.56%, a rate so incredible I'm worried I somehow did the math wrong. So I'm curious, have I done the math wrong? Or are you saying making 20% per year in an index fund is a rough stock market?

raymondgh 2y ago

My iOS Stocks app says S&P 500 is up 146.23% over the last 5 years. But isn’t that much too short an interval to evaluate in the first place in consideration for retirement?

dmoy 2y ago
That doesn't even include dividends. It's more like 166% after dividends But also yes it's too short of an interval for retirement savings
blargey 2y ago
“Up 146%” is either because your start time is during the 2020 market crash, or the display is actually “150% of the starting value” (up 50%).

ryandrake 2y ago

I know people in my age group (GenX) who have not saved even a penny for retirement. And these guys are in good jobs in tech with access to generous 401ks. They just spend their whole paychecks, and more via borrowing. If these guys (who definitely have the means to) won't save, I don't understand why we think "personal savings" is overall a viable system for taking care of the elderly. There is going to be a huge amount of either 1. misery or 2. bailouts in the next 30 years as GenX and Millennials start retiring.

lotsofpulp 2y ago
Everyone already has mandatory defined benefit pensions in the US. It’s called Social Security.

dmoy 2y ago

People definitely don't save enough for retirement under the current system. The median household entering retirement right now has like $150k, which translates to very little on top of social security. So now without pensions, people's entire retirement strategy is social security and maybe selling a primary residence. Elder poverty is already high, and will get much higher in the future > The last 5 years The last 5 years were freaking amazing for investments. Even including the current small downturn, s&p 500 total returns are up like +160% in the last 5 years. After factoring inflation it's more like +80% or so? Which is over 10% real returns per year, which is wayyyyy above historical average (closer to 5-7% real returns).

UncleEntity 2y ago

> For anyone that advocates UBI. That's what social security is, UBI (with an age restriction). That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever. The fact that the government turned it into a ponzi scheme by raiding its assets, thanks Reagan, doesn't mean it doesn't have qualifications beyond being a certain age, they send a letter yearly, I believe, which details your contributions and expected benefits. [0] even though, by their own calculations, you are better off financially by putting your money in a literal mattress it is still an investment

Kirby64 2y ago
> That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever. Except - just like most progressive taxes, social security costs more for those who make more money and less for those who make less (beyond the income tax, but that's an aside). The only difference between UBI and social security is that, in theory, UBI would require no contributions what-so-ever to earn money out whereas social security requires contributions. The only difference is this makes UBI more progressively taxed than social security.
- Jtsummers 2y ago
  OASDI and Medicare taxes actually regressive taxes. It costs you less (as a percentage) once you exceed whatever the current threshold is ($178k this year, IIRC). Remember that the definition of a progressive tax is that the rate goes up as your income goes up, a regressive tax is the opposite. Up to the current year's threshold, your OASDI and Medicare tax rate is constant, and then it drops.
  - dmoy 2y ago
    If we're being pedantic:. oasdi is extremely regressive (no tax at all above like 2x median household income, vs e.g. income taxes which continue ramping up until closer to 10x median income after becoming flat). Medicare tax is not capped, and is slightly progressive in that it jumps from 2.9% to (I forget like % higher) at somewhere around 3x median household income.

triceratops 2y ago

> when you are living paycheck to paycheck, retirement takes a backseat to rent. Even if you can't afford to save for retirement, you really can't afford not to. > There is an option, it's fully funding social security by lifting the income cap That's kinda correct. The income cap on Social Security is effectively a regressive tax. But it won't help fund retirements into the future. By law, Social Security only invests in Treasuries. This can't provide the returns needed to fund retirements unless the worker-to-retiree ratio massively improves. Social Security should be allowed to invest in VTI or some other broad-based investment vehicle. This aligns the incentives correctly. We don't want current workers paying for retired workers. We want rising productivity in the economy to do that. > It will be a disaster if private corporate leaches get involved +100 company 401k plans are effectively leeches that suck away returns. Detach 401ks from employment and make them like IRAs instead. Cheer as Vanguard drives away the parasites who charge high management fees.

dmoy 2y ago
> Detach 401ks from employment and make them like IRAs instead. Cheer as Vanguard drives away the parasites who charge high management fees. It would be pretty awesome if they opened TSP to everyone

ahepp 2y ago

> And even when they do save, we are currently looking at a market downturn. The last 5 years have been pretty rough in terms of the stock market with returns being much lower than you might count on. VFIAX S&P500 tracking mutual fund closed at $212.65 five years ago, and closed at $519.60 today. By my math that comes out to an annualized yield of 19.56%, a rate so incredible I'm worried I somehow did the math wrong. So I'm curious, have I done the math wrong? Or are you saying making 20% per year in an index fund is a rough stock market?