If You Think Social Security is Farked, Take a Look at Your Retirement Account!

Via Instapundit comes this Zero Hedge piece which reprints wisdom from Nick Colas and Sarah Miller of ConvergEX about retirement savings. And the lack thereof.

From Tyler Durden's intro to the piece (all emphases in original):

The state of Americans’ retirement accounts is dismal is how ConvergEx's Nick Colas begins his critically important-to-read note on the reality that millions face. According to an early 2012 study by the Employee Benefit Research Institute, Colas notes only 58% of us are currently saving money for retirement – and 60% of those that are have less than $25,000. Thirty percent have less than $1,000. Needless to say, it’s a far cry from the 8x-10x final earnings suggested by most retirement planners. So why are we so far behind? Americans aren’t exactly known for impressive savings habits, but that alone does not explain our poor preparation for retirement. Rather, a general lack of financial literacy, including basic understandings of savings growth and retirement income needs, superseding financial obligations, and basic behavioral finance biases keep us from putting cash away. But if we keep up at this pace, you can expect the ongoing political debate about Social Security to take on new and more strident tones.

Read the whole thing here.

The debate about Social Security - and the need to get rid of the whole goddamned program - has yet to get started in earnest. So far, the conversation has been mostly about which pols can say the most good things about a system that systematically robs the relatively poor and relatively young for the benefit of the relatively wealthy and relatively old.

As Veronique de Rugy and I pointed out in our "Generational Warfare" article in the August-September issue of Reason, folks retiring on Social Security since 2010 can bank on getting less out of the system than they put in. For instance, a man who earned the average wage over his career and retired in 2010 will have paid about $300,000 in Social Security tax. He can expect to get just $266,000 out in benefits. Because they tend to live longer, women earning the average wage get back more of their contributions but they too are already in a hole that's only going to get bigger. 

Things will only get worse from here when it comes to Social Security, which is funded by 12.4 percent in payroll taxes that are split between employer and employee on every dollar of earned income up to about $107,000, far above what most households, much less individuals, ever earn (a temporary break knocks 2 percentage points off the employee contribution). That money, of course, goes to pay today's retirees (and the Supreme Court has ruled that the government has absolutely no obligation to provide you with a Social Security check ever.

In 1940, there were 159 workers per Social Security beneficiary. Today, there are fewer than three. Absent mega-economic growth that has never been seen, benefits will need to shrink and shrink and shrink. And the very dough you might be using to build your nest egg never even sees your pockets on its way into the accounts of today's retirees who are, on average and in relative terms, fabulously wealthy.

Defenders of Social Security - a ragtag bunch of folks that includes Barack Obama, Mitt Romney, and every other major-party pol you can shake a cane at - like to talk about the plan as a trans-generational pact that has allowed Gramps to be self-sufficient and independent and all that, some of which is true. And they stress by minor tweaks to the system (by which they mean higher payroll taxes and smaller benefits) the system can last for another 1,000 years or whatever. Which is exactly what you want to hear from your retirement advisor, right?: That you can expect to pay more for less in the future!

Even the rosiest (read: most spurious) cost-rejiggerings can't address the fundamental unfairness of a system that robs Pete Jr. to pay Paul Sr. If we want to guarantee an income to old folks that would keep them out of poverty, then just give them all checks for the minimum amount necessary to do that and stop with the mumbo-jumbo about Social Security as something other than a generational rip-off whose time has come and gone. Let's own the fact that whatever your federal income tax rate is, you're coughing up 12.4 percent on top of that to gold-plate the golden year of the wealthiest segment of households in terms of median net worth.

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  • Mongo||

    Not one but two punchable faces in the pic.

  • Brett L||

    Top 60% of the top 60%, baby!

  • Jordan||

    Wow, my fellow countrymen really are pathetic drooling morons. Of course, it doesn't help that you have Keynesians constantly robbing you with inflation. The dollar's purchaing power has declined by something like 90% over the last 75 years.

  • sarcasmic||

    Once upon a time, twenty dollars could purchase an ounce of gold.

    Think about it.

  • Rasilio||

    An even better comparison than the cost of an ounce of gold is what type of lifestyle a given level of income can provide.

    On my own I earn more than 2.5x what my parents combined to earn in the late 1980's (when they were about the same age as I am) and yet I cannot afford anywhere near the same lifestyle. In order to reach the same level they were at I would need to earn at least 3.5 times what they did.

    What is even worse is that my parents were only right around the median income, maybe just a touch higher but clearly right in the middle quintile, my income puts me right in between the 75th and 80th percentile.

  • Tulpa (LAOL-PA)||

    Did your parents have Internet access in the late 80s? These "lifestyle level" comparisons are fundamentally apples vs oranges.

  • sarcasmic||

    Goalposts go whoosh!

  • Rasilio||

    Your comment will be relevant the instant I can eat my internet connection.

    Yes, I have access to the internet and 500 more cable channels than they did, however I have to budget (seriously) just to take a sunday drive out the Mohawk trail wheras my parents could take us on long weekend vacations several times a year and only had to budget for long distance trips to Washington, LA, or Florida. Similarly, taking the kids to something like a carnival or the movies was at worst a once every two week event, I can only afford to take my kids to the movies at all because there is a drive in 60 miles away that still charges by the car load.

  • Tulpa (LAOL-PA)||

    You have access to way more entertainment at home than your parents did if they went to the movies every night. I was around in the 1980s, and a month of a Netflix streaming subscription costs what, 3-4x what one movie ticket cost back then?

  • Rasilio||

    Netflix going to the movies.

    Hell I canceled my netflix subscription because their content was so friggin poor it wasn't worth paying for.

    That said again, I can't eat netflix. My point is that I make just shy of $100k per year, Don't smoke, do drugs, or drink any alcohol and with 4 kids I literally have to struggle every month just to keep the utilities all on and food on the table. There is maybe $200 a month left over if I am lucky and no unexpected expenses crop up.

    Now as for those entertainment options my parents lacked, well I could get rid of cable and internet and cancel my cell phone and go back to paying for a landline and up that to $450 a month to spare and very similar in home entertainment options and yes that would certainly make paying my basic bills easier but leaving anything aside for things like vacations or retirement savings, not so much.

  • Tulpa (LAOL-PA)||

    Well I don't presume to know the details of your particular situation. But it sounds strange. Energy and food have certainly become more expensive but not by that much.

    Of course if you live in an area like DC or SF or the like, I can understand that $100K doesn't go very far.

  • Rasilio||

    Boston actually.

    My take home pay is just over $5800 a month and that is with nothing being set aside for retirement.

    Rent - $2100 (I could find cheaper but not by much given that I have 4 kids)
    Food/Groceries - $1500
    Gas/electric - $200
    Phones - $200
    Cable/Internet - $200
    Car/Renters Insurance - $150
    Train Pass - $300 (MUCH cheaper than paying for parking)
    Gasoline - $300
    Clothing/Shoes - $150 ($300 annually for 6 people)
    Vehicle tax/maintenance - $150
    Credit Card Finance Charges - $50

    And those are just the big ticket items and, every month there is at least another $100 - $200 in mandatory (at least socialy) expenses such as field trip fees, school fundraisers, kids going to a friends birthday party, your kids birthday, etc.

    That leaves $500 for any and all non mandatory expenses in any given month and I still havn't accounted for Christmas (with 4 kids always expensive), going on dates with my wife (it has literally been more than 2 years, our idea of a date is getting to go grocery shopping without the kids), or any unreimbursed medical expenses (copays and the like), or any other entertainment expenses.

  • sarcasmic||

    That leaves $500 for any and all non mandatory expenses in any given month

    You're doing pretty good. Some of use have something closer to zero dollars for non-budgeted items.

  • Rasilio||

    Yes, but the point is that I am just a hair outside of the top economic quintile and as a practical matter I am just barely making ends meet living paycheck to paycheck with few options to change that short of increasing my income even further into the "wealthty" range.

    I was not complaining about my situation so much as pointing out that eventhough real median wages have been flat since the late 1980's they have declined significantly in purchasing power over that time.

    My parents whose income was somewhere around the 55th percentile in 1988 were able to live significantly above the paycheck to paycheck level wheras I cannot do so now even though we have a similar family size (they had 3 kids, I have 4)

  • sarcasmic||

    eventhough real median wages have been flat since the late 1980's they have declined significantly in purchasing power over that time

    I get it. I'm not making that much more than my father did in the 80s, and he did have a greater standard of living.

    Then again, technology has changed. Back then a VCR was a couple hundred bucks, and today you can get a DVD player for thirty. If you wanted a big tv you were spending thousands for a crappy projection model, and today you can get a big flatscreen for a few hundred. His 386 did 12mhz on turbo...

  • Rasilio||

    Yes but again I can't eat a big screen tv and as a practical matter it is merely a nice to have improvement over the old fashioned CRT screens. The same with faster computers, I'm not running statistical analysis on multi gigabyte datasets or producing music or video at home, other than being able to run more complex games I get no real measurable benefit out of a faster computer at home besides the satisfaction of saying I got the latest and greatest (not even close, the newest computer in my house is over a year old and was a 2 year old model at the time it was bought). Yes, those items are status symbols but if they were taken away and I had to live with a 386 with a CRT screen playing Civ 3 instead of Civ 5 I wouldn't really miss ANYTHING.

    This is a serious mistake our government economists make, trying to apply a monetary value to marginal technological improvements that ultimately provide no real value to the average persons life. Yes, the fact that some cancer researcher has a faster computer makes the world a better place, my having one, not so much.

  • Tulpa (LAOL-PA)||

    Yes, but the point is that I am just a hair outside of the top economic quintile and as a practical matter I am just barely making ends meet living paycheck to paycheck with few options to change that short of increasing my income even further into the "wealthty" range.

    A big part of the problem is where you live...a high cost of living, high tax area. You're probably nowhere near the top 20% income among residents of good neighborhoods in Boston.

  • Rasilio||

    Actually...

    http://en.wikipedia.org/wiki/N.....sachusetts

    I am significantly above the median household income in the town I live in and just a hair shy of the median family income

  • Rasilio||

    Oh I should add, I specifically moved here this year after living the last 10 years in the midwest (Cincinnati and Columbus Oh then Louisville Ky) becase while cost of living was cheaper there so were salaries in my field.

    When I was in Louisville with a salary of $84,000 I was probably slightly better off than I am now, however that job was eliminated and shipped to India and there was realistically no option to replace it locally, at best I could have taken a step backwards in my career progression and a $15k a year paycut which would have left me relatively worst off than I am right now, especially given that I fully expect to increase my salary by at least 30% within the next couple of months as that level of pay is more typical for someone in my field with as much experience as I have.

  • Tulpa (LAOL-PA)||

    Like I said, the details of your life are none of my biz, but now that you mention it...

    $400/mo for for phones and cable and internet? You must have sooper dooper packages or something. Having 4 kids doesn't make cable or internet expensive than being an evolutionary dead end like me.

    Are you paying for your kids' phones? Assuming your wife doesn't have a job, she doesn't need a high powered phone plan, does she? If times are tough, you should MAYBE have one big plan, if you need it for the work you do, and cheap prepaid plans for the others in the family.

    And a $300 train pass and $300 for gasoline? What the heck kind of traveling are you doing? $300 would buy a decent hybrid bicycle and then you'd never have to spend money on a train again.

    Again, the details are none of my business, but you brought them up so I'm going to have to share my skepticism about whether you're really cutting things to the bone.

  • Rasilio||

    Um, I live in Newburyport, it is 40 miles north of Boston where I work and going anywhere more exotic than the Market Basket requires a 25 mile jaunt either to Portsmouth NH or Danvers Ma, unless you want to pay the tourist boutique prices in downtown.

    Further with Gas running just shy of $4 a gallon gets me about 18 gallons of gas a week, Remember that part about 4 kids, means a minivan is necessary and that gets us about 18 miles to the gallon on average, good for about 300 miles a week. Now I could go buy a Hybrid minivan, or at least a more fuel efficient one but you note I have no car payment, The car payment for any Hybrid vehicle large enough to carry my family would be at least 2x what I currently spend in gas so it would be a money loser.

    Now, with that 40 mile commute, a Hybrid bike ain't gonna do me much good at all is it, especially once we start getting snow.

  • Rasilio||

    With respect to the phones and internet/cable. Yes I have higher level plans than needed as both my wife and I have smartphones, which technically she doesn't need but good lucky convincing her of that and the $70 a month her plan costs over a cheap prepaid one is a hell of a lot cheaper than a divorce lawyer. We also have a 3rd line for our 12 year olds use but it is a basic phone only plan.

    Similarly with the cable/net I work in IT so a high speed connection is required by my job and cable ends up being cheaper than DSL since we have no home phone and while we could cut our costs by about $60 a month going with a cheaper cable package honestly the marginal utility of that decision is just not worth it as most of the shows we actually watch are on the channels we would lose.

    The end result, yes we could cut our electronics subscription expenses by about $150 a month if we REALLY wanted or needed to but given the other options we could use that money for it is really not worth it to us, we'd be much better off finding a cheaper house if it came to that.

    Finally no, my wife does not work, with 4 kids it was not economically viable for her to work prior to this year due to daycare costs and realistically it would not provide us any benefit for another 2 years when our youngest will be in school.

  • Lord Humungus||

    my retirement account is just fine - but I fear it will become worthless anyways - hyper-inflation, baby.

  • Zeezrom||

    Same here. I'm in my early 50s, and I don't know what to do except pray.

  • Bardas Phocas||

    I'm purchasing gold and silver coins and used handguns as a store of value against inflation.

    But I've pretty much resigned I'll never retire, just keep dragging my sorry ass into any job I can get til I collapse while collecting shopping carts to buy my daily ration of soylent green.

  • Ptah-Hotep||

    Metals (gold, silver, lead) and farmland.

  • Heroic Mulatto||

    Can't eat gold.

    Bullets, beans, and band-aids.

  • Tulpa (LAOL-PA)||

    Depends on what kind of collapse you're preparing for. Gold and silver are perfectly good options for a currency collapse.

    A total socioeconomic collapse is another matter, but any of us who are non-criminals are probably doomed regardless in that case. I seriously doubt it's going to be like Hollywood portrays it.

  • robc||

    What, it wont be like Revolution?

    Which, BTW, pisses me off a little more each week.

  • Tulpa (LAOL-PA)||

    I can't afford to buy a new TV after smashing the screen, so I haven't watched it.

    My niece is totally into it, and into the Hunger Games crap too. The funniest thing is that my ultra-leftist sister, who used to spell out words like "gun" and "shoot" like they were swear words when the kids were around, is letting her learn to use a bow and arrow. Not sure if I'm allowed to bring her to the gun club for archery night. ;)

  • Mr. Soul||

    what's the first rule about gun club???

  • Tulpa (LAOL-PA)||

    Isn't there a massive glut of used guns on the market? The breakneck pace of new gun sales during the past few years isn't going to help that, either.

  • Rasilio||

    Or if not, look to Argentina.

    How long till we get some progressive administration who decides the way to save Social Security and guarantee the same retirement for everyone is by nationalizing all 401K and IRA accounts?

    Unlike the Conspiracy nuts I don't think there is any sort of active plan tp do this but realistically it is just a matter of time till there is a serious cash crunch and this is the only real course of action available to the government to come up with funds.

  • sarcasmic||

    You seriously don't think that there are people in Washington who view retirement accounts as an "untapped resource" for government revenue?

  • Rasilio||

    I think there are people in Washington who will do whatever it takes to keep the current system afloat so as to maintain their power as long as possible and they will rationalize any decision they make as being what is best for the country.

    Essentially what has happened in Argentina and I think it was Bulgaria is that the government created a new "pension" system called Guaranteed Retirement Accounts and required that all existing retirement accounts be nationalized to fund them.

    You can buy an awful lot of votes by promising a large group of people the life savings of a smaller group of people.

  • Loki||

    ^^THIS^^

    There's a reason why I haven't contributed to my 401k at my current employer. Actually several reasons. 1)I can't afford to what with the 30%+ reduction in pre-tax income that I took just because it still pays more than unemployment, 2) I hope not to be at this shit job much longer, and 3) I don't want the theifs to get their grubby little hands on it.

  • Jordan||

    California has already taken the first step down that road by requiring private employees to opt out of the public retirement system. And of course public employees are guaranteed payouts ahead of the private employees, by law.

  • Mr. Soul||

    i totally agree. Politics is about puddles of money. When one dries up, politicians need another. At some point when public need justifies it, all retirement plans will be raided.

    That's why Ayn called them looters.

  • The Hammer||

    My retirement account is fine for my age. The only problem with it is that it's denominated in dollars.

  • VG Zaytsev||

    Ninety four percent actually.

    http://data.bls.gov/cgi-bin/cp.....year2=1936

  • ||

    What gets me is that this problem has been obvious since the late 70s. Yet so far we have not come up with any plausible plan short of catastrophic systemic failure how to solve it.

  • Drake||

    There were plenty of decent plans to solve it. Bush even proposed some decent fixes in 2005. Our politicians are too stupid, cowardly, or pandering to attempt any real fixes.

  • ||

    Oh, I know that there are plenty of goods plans in the technical sense. My comment was directed at our inability to come up with plans that are feasible politically.

    You run up to the same thing time and again: anyone who proposes say an adjustment in the retirement age gets slandered as a granny-killing psuchopath bu the opposition.

  • robc||

    I wouldnt call Bush's "decent" but it was better than nothing, I guess.

    I dont like mixing public/private like he did.

    The most mix I can tolerate* is a mandatory payment into an account I own, but cant touch until age XX or death, whichever comes first.

    *in the Bernardo de la Paz sense.

  • Mo||

    A fully privatized, government run Social Security would be a nightmare structurally. It can work in a country like Singapore because it's tiny, in the US, not so much. If privatized Social Security had $100K for every adult (which would be low), we're talking about an excess of $23T. That's almost 50% of the market cap of all US equities combined or 100 CALPERs. You don't think that the management of that fund will be politicized and fund allocations will distort the market? The sheer magnitude of the fund makes it unwieldy to work in practice.

  • Mo||

    "A fully privatized, government" should read, "a government run private account system".

  • robc||

    Too late, you are required to go with your first answer. :)

  • johnl||

    If it was all in treasuries, the yield would be awful, and we would have the same problem with new symptoms.

  • robc||

    If its "fully privatized", then the individual will be deciding where to invest.

    It would basically be a mandatory IRA at that point.

    In fact, that is exactly how I would recommend they treat it.

    Having a fund that just has private ownership is that public/private mix I mentioned above that needs to be avoided.

  • Mo||

    What funds get included in it? Who gets vetted on the list? How are they prioritized? It's easy for Fidelity or Schwab to pull it off because they don't need to be unbiased. I think people underestimate the amount of market distortion that would come about with this much money flooding the system. The US is exceptionally large and rich and that complicates things immensely.

  • robc||

    Exact same rules as for current IRAs.

    Its just another IRA, a mandatory one.

  • ||

    I am certainly upset about losing a portion of my paycheck so that it goes directly to some old people, but I am even more upset that the portion of my paycheck I am losing cannot be contributed to my own retirement. So the theft is bad, but removing my own ability to plan for my retirement accordingly is worse in my opinion.

  • tarran||

    The rule of thumb to assure financial independence at your current standard of living is to save/purchase insurance w/ 10% of your income.

    Eliminate social security, and that all becomes possible. People could actually buy REAL INSURANCE rather than that faux insurance that FDR ripped off from Mussolini.

  • wef||

    obamaphones for everybody!

    related - household savings rates:

    http://www.gfmag.com/tools/glo.....z29T7FjGah

  • Death Rock and Skull||

    If I ever 'retire', it will be because I have to, and it will be pure misery.

    So, I'm not saving anything specifically for retirement. But its good to have assets. Fuck pensions/401Ks and social security.

  • Matrix||

    Fuck it... I'm investing my retirement in lottery tickets. Seems like a better plan than hoping social security is around or hoping my retirement investments/savings survive inflation or an economic collapse.

  • Marshall Gill||

    Defenders of Social Security - a ragtag bunch of folks that includes Barack Obama, Mitt Romney, and every other major-party pol you can shake a cane at

    Nick, you really are becoming David Weigel. There was one politician in recent memory who did attempt some sort of SS reform. Of course, for you to admit this would require intellectual honesty, which you apparently lack.

  • Tulpa (LAOL-PA)||

    He's not a politician any more, and it's not like he was in favor of getting rid of SS. Plus as Mo mentions above, his plan had even worse problems than SS as we know it does.

  • Mr. Soul||

    that's unpossible

  • DemosTheKnees||

    Funny magazine cover. Of course, it's the federal government holding the gun, not the citizenry.

  • Dr. Frankenstein||

    No the picture just cuts out the middleman of government. It is your fellow citizen robbing you.

  • DemosTheKnees||

    No. Granny cannot tax your paycheck. Only the various municipal, state and federal governments can do that. And if all the voters (not just Granny and her AARP pals) support this kind of soft-socialist redistribution of wealth, then tough titties. Vote harder. Or sit in your cubicle and bitch all day. Your choice.

  • EDG reppin' LBC||

    Very good point. Granny is not the enemy, she is merely looking out for her interests. Government is the means by which she secures her interests. Government is the problem.

    Government is the problem.

    Government is the problem.

    Government is the problem.

    Government is the problem.

    It bears repeating.

  • Loki||

    the system can last for another 1,000 years or whatever

    You know who else wanted to create a system that would last a thousand years...

  • DemosTheKnees||

    Yes.

  • Ptah-Hotep||

    The Romans?

  • LTC(ret) John||

    The Mayans?

  • Contrarian P||

    Senator Palpatine?

  • Strelock||

    Tausendjähriges Reich

  • albo||

    Farked

    Heh. Nice one. Here comes the science, as long as your dog wants steak.

    /former farker of many years

  • sarcasmic||

    It's only a matter of time before the federal government starts taxing wealth in addition to income.

    I predict that it will start with means testing for social programs. Once people are accustomed to giving the federal government an itemized list of their assets, the list will be used for the purpose of taxing those assets.

    Savers are chumps.

  • Zeb||

    Just do means testing for people who want the benefits. If you have enough to live on, you don't have to tell anyone what you have.

    (Yeah, I know, etc.)

  • Strelock||

    They already do this. My grandfather (a Pearl Harbor survivor with 5 battle stars) was denied VA coverage because he had to much in his bank account after selling his house and moving into an apartment.

  • The Craig||

    Rather, a general lack of financial literacy, including basic understandings of savings growth and retirement income needs, superseding financial obligations, and basic behavioral finance biases keep us from putting cash away.

    If we're going to have shitty public schools, I do think we could teach a little more personal finance.

  • Romulus Augustus||

    This seems a tough one for libertarians. My s.s. check is about 1/3 what the income from reinvested earnings would have been for 45 years had the money gone instead to an SP 500 fund. (Stock market is up over 1300% in that time.) And the check ends when I do - nothing to leave to the heirs. So, how do I give up that money (as some libertarians suggest) when it is an important component of retirement?
    I know the money they stole from me was given to others and now what is given to me was stolen from others. The best I can seem to do is 1)not advocate for s.s. increases and 2)support as one reform some sort of means testing based on what one earned over a lifetime not what one managed to put by for today. Short of a massive armed revolt by younger people, how can we turn this around short of going over a fiscal cliff?

  • ||

    That's the point I was trying to make above. We all are invested in the system so any reform will affect negatively, the more the older we get.

    These negative effects are concrete and immediate. Any positive effect is hypothetical and in the future. That is an impossible sell politically.

  • LTC(ret) John||

    The one farsighted observation I ever made as far as money goes was to see in the grand 1986 "reform" that S.S. was left out and would vanish before I could get anything out of it. Therefore, I have planned to get $0 out of it and have planned accordingly. I would be just fine with an admission that the scheme has collapsed and cutting my FICA way down (I understand they will have to steal a little of my money to pay current promises being paid out) and letting me opt out.

  • robc||

    I would be just fine with an admission that the scheme has collapsed and cutting my FICA way down (I understand they will have to steal a little of my money to pay current promises being paid out) and letting me opt out.

    The best way to handle that is to keep the employer match portion as needed.

    So even if you opt out, your employer (or if self employed, yourself) still has to pay the other half.

  • robc||

    For me the way to go is [insert standard libertarian disclaimers as needed]:

    1. Switch current workers to a mandatory-IRA type system. Splitting FICA tax 3-ways, put 5.0% into that account, 1.2% for SS Survivors insurance, and 1.45% for medicare.

    2. Current recipients of SS would continue on as if nothing has changed. For those not yet to age XX, which is somewhere near retirement, SS will be prorated somehow. Say, anyone between 20 and 60 gets a prorated amount. Over 60 would get 100% SS payments, 50 would get 75%, 40 would get 50%, 30 would get 25%, 20 and less would get zero. Something like that.

    We can also offer the youngsters buy outs, where they cash out from SS to their IRA and give up that future 25%.

    3. As recipients die off, the employer matching can be reduced, as possible, if possible.

    4. Eventually, we can make that mandatory phrase in step 1 non-mandatory.

  • Rasilio||

    Hmm, you are collecting Social Security meaning you had at least 47 years worth of votes to cast to change that system into something sustainable and yet it never happened.

    Choices, including votes have consequences and perhaps you will forgive us youngsters if we might not feel quite so sorry for you, especially given the messed up debt society you have left for us.

  • Kreel Sarloo||

    How the fuck do you know he hasn't voted, compaigned or otherwise tirelessly worked to change the system?

    Please, note the table above that shows that those who retired last year will get less out of SS in total lifetime benefits than they paid in total SS taxes while those who retired as recently as 1980 got over twice what they paide in.

    The people who have shouted down all the attempts to change Social Security are not the people who are retiring this year or next. They are the "greatest generation" and depression babies that everyone in the media keeps praising as being so self reliant.

  • db||

    I actually had an argument the other day with a friend who asserted that defined benefit pensions are the only fair way to do retirement savings. His argument? Because they're "defined" they are "secure" and can't be taken away. This is a guy who is normally very smart about many things but the breathtaking ignorance of his position floored me. Yes, because someone made a promise to pay you something, you by some magical definition will receive it. Never mind that the scheme is unsustainable. Never mind that no one has responsibility for their own retirement. In fact, the lack of responsibility is a feature, because TOP MEN making the investment decisions for the pension fund can never make a mistake. He said there's no investment, the money's just there and you get it back. I asked him how he thought the pension is supposed to pay out more than you put in and he said the company is on the hook for it. So how does the company pay for the pension? Excess profits. This guy has an MBA from Pitt.

  • Matrix||

    And what do you do when that company gets bought out or goes bankrupt as so many have and continue to do?

  • db||

    IT'S DEFINED. End of argument.

  • Tulpa (LAOL-PA)||

    This guy has an MBA from Pitt.

    That explains it.

  • db||

    I can only conclude from several Katz School grads I have talked with that the curriculum heavily emphasizes "private-public partnerships" and other cronyistic means of enriching one's business.

  • Tulpa (LAOL-PA)||

    Reality is, that IS the way to get ahead in the current business landscape. And people laugh when I say BO is a fascist.

  • gman68137||

    So the generation that's holding onto social security with white knuckles, saving pitifully little for retirement, but has spent the national treasure over the past 40 years in expanding entitlement programs? Did I get that right?

  • Rasilio||

    Pretty much, but you forgot to mention that they financed their lifestyle on debt causing their kids to come of age in an era of stagnant real wages so we have never really had a good option for saving ourselves because our cost of living has always been far too close to our incomes.

  • Strelock||

    Too bad so many people in my generation (30 years old) are drinking the koolaid so to speak. When I was younger I really thought that we would be smart enough as a generation to push for real change. Instead most people my age vote for the same failed policies and politicians their parents did before them.

  • Tulpa (LAOL-PA)||

    With U6 bouncing around between 15 and 20 percent, it's not surprising that lots of people aren't saving for retirement.

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