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Old 07-24-2012, 04:34 PM   #41
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Is it worth remembering that many people in previous generations had mandated retirement accounts? They were known as pensions or defined benefit plans...
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Old 07-24-2012, 06:18 PM   #42
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It just seems ironic to me, given the criticism that SS and government pensions get on here, that the idea of mandated personal savings accounts, is equally offensive to some of you. Especially since the anti-nanny state, extreme fiscal conservatives, are the main ones spearheading these plans as part of SS reform.

On the subject of financial education in the schools. Yes, much needs to be done. Mainly in the area of personal budgeting, what it cost to raise a child, and the avoidance of predatory lending practices. If you really think you can teach the average teenager, who struggles with Algebra I, how to successfully invest in the stock market, you better think again.

Many of you come from careers requiring a strong mathematical background. That same ability lends itself well to investing. The bulk of the population doesn't have this ability, and is not likely to have it in the future.

The nanny state is fine when it benefits you. Just witness the several threads concerning how to use the "Medicaid" provision of the new health care act, to facilitate E-R.
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Old 07-24-2012, 06:23 PM   #43
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On the subject of financial education in the schools. Yes, much needs to be done. Mainly in the area of personal budgeting, what it cost to raise a child, and the avoidance of predatory lending practices. If you really think you can teach the average teenager, who struggles with Algebra I, how to successfully invest in the stock market, you better think again.

Many of you come from careers requiring a strong mathematical background. That same ability lends itself well to investing. The bulk of the population doesn't have this ability, and is not likely to have it in the future.
That's what all-in-one funds that rebalance automatically are for, you don't need to know anything except to leave them alone. Again, it begins with too many not saving (enough) from my 35 years watching employees manage their 401k's. All of them were smart enough, those who weren't building a nest egg lacked the simple discipline to save to begin with...they were "educated" annually or more often. The latest car, TV, iPhone was always a higher priority...
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Old 07-24-2012, 06:30 PM   #44
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Originally Posted by Texas Proud View Post
I find it interesting that there are many billions of people on this planet that do not even come close to the wealth we have here and they seem to be doing just fine... without any retirement plan....

AND, people have been living for many hundreds of years without any plan...

All these things are new... they did not exist when my mother was born...


I just do not think it is gvmt's job to make sure everybody is able to live like they did prior to retirement.... SS is there for basics... you can live OK with that level of income..
I believe anyone who spends a lifetime in the workforce, deserves a modest retirement. I don't care how that system is designed, or who administers it. But it should be a basic right.
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Old 07-24-2012, 06:34 PM   #45
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I believe anyone who spends a lifetime in the workforce, deserves a modest retirement. I don't care how that system is designed, or who administers it. But it should be a basic right.
Does today's SS fulfill your desire for workers to be guaranteed a modest retirement? Or are you looking for something more?
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Old 07-24-2012, 06:52 PM   #46
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I just searched through the United States Constitution and its amendments and I did not find any RIGHT to retirement.

Retirement should just be a privilege for those who choose to participate and therefore the government shouldn't be coming up with new ways of collecting our money.

I believe that a properly implemented social security system would only be used by the destitute and could probably be combined with the welfare system to streamline care for those in need.
If you want the majority of seniors living on $674 a month, then that's the way to go.

Take away SS and replace it with a SSI type benefit, the social negatives are going to outweigh any fiscal problems that such a plan would solve.
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Old 07-24-2012, 06:53 PM   #47
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Don't most 401k's now have default contributions of 3% or so, invested into some semi-appropriate option? You have to opt out if you don't want to contribute. That seems like a reasonable approach, though a higher contribution and default Vanguard Target fund would be nice.

Heck, pensions didn't come with as many options and were mostly "mandatory". We could make the default options mandatory for the first 3 years of employment to get everyone started.
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Old 07-24-2012, 07:06 PM   #48
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Just as a voluntary Social Security system would have been a disaster, a voluntary retirement account plan is a disaster.
Hmm... I thought the current compulsory SS is getting in trouble. What was I missing?

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My plan calls for a way out that would create guaranteed retirement accounts on top of Social Security. These accounts would be required, professionally managed, come with a guaranteed rate of return and pay out annuities.
I personally think a compulsory savings plan might work. Perhaps it could be done by overhauling the current SS. Maybe something like the Australian superannuation, but I do not know much about this yet.

But, but, but anytime I hear about guarantees, I shudder. Didn't we hear that with SS and with various private and public pension plans? What were the Greeks told by their government?

I am reminded of the song "Paroles, Paroles" by Dalida and Alain Delon, where a woman was sick of "sweet nothings" from her lover.

Encore des mots / Again, the words
Toujours des mots / Always the words
Les mÍmes mots / Those same words
Rien que des mots / Nothing but words

Sorry, but I just have to put a link of that song here for French speakers.

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Old 07-24-2012, 07:14 PM   #49
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Originally Posted by BLS53 View Post
On the subject of financial education in the schools. Yes, much needs to be done. Mainly in the area of personal budgeting, what it cost to raise a child, and the avoidance of predatory lending practices. If you really think you can teach the average teenager, who struggles with Algebra I, how to successfully invest in the stock market, you better think again.

Many of you come from careers requiring a strong mathematical background. That same ability lends itself well to investing. The bulk of the population doesn't have this ability, and is not likely to have it in the future.
You don't need strong math skills, you just need some discipline, and basic knowledge to understand that you can't get rich quick and how compound interest works (ie save as much as you can as early as you can). The latter should be easy enough to teach, the former...?!?
There was a study that found that people who bought mutual funds were getting much less than the historical returns of the funds they were buying, the reason was because everytime the market drop, they would pull out and get back in only after the market has gone back up.
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Old 07-24-2012, 07:16 PM   #50
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Does today's SS fulfill your desire for workers to be guaranteed a modest retirement? Or are you looking for something more?
Nope, not looking for more. I think the current SS system is fine on the recipient end. Just wish that the powers that be, would implement a reform plan to make it fiscally stable. If that involves personal savings accounts, so be it.

I cringe when I hear "retirement" and "welfare" mentioned together. When I grew up, welfare was for lazy 20 year old's, who found out the government would give them money for having babies. Nobody lambasted seniors for receiving SS, and it shouldn't be any different today either.

Except for a small inheritance, every cent I've gotten since age 18 has been from the federal government. I think I earned every bit of it. I plan to collect SS in 2 years too.

I guess in your eyes that makes me a ward of the nanny state.
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Old 07-24-2012, 08:02 PM   #51
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If you want the majority of seniors living on $674 a month, then that's the way to go.

Take away SS and replace it with a SSI type benefit, the social negatives are going to outweigh any fiscal problems that such a plan would solve.
See table 2 here Monthly Statistical Snapshot, June 2012
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Old 07-24-2012, 08:11 PM   #52
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I've enjoyed a few mandatory pension plans during my working career. Two of them I participated in long enough to vest a benefit. In both cases (and in others where I didn't vest) the rules were changed without any input or consent from me and my "benefit" was reduced to almost nothing.

A significant advantage of 401k and IRA plans is that I actually OWN the account. The rules may change, but it would be hard to change the rules so that my ultimate benefit would be reduced as much as my pensions were.

Social Security (besides being a pay as you go plan) includes no particular guarantee that I will receive the benefit I think I was promised. That money is gone and the program explicitly promises that they reserve the right to change benefit formulas (means testing, revisions, taxation, underfunding) at any time. What would prevent any new program administered by the same Social Security Administration from the same problems.
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Old 07-24-2012, 09:07 PM   #53
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I wouldn't.
We already have a REQUIRED program that annuitizes your contributions, is inflation adjusted, it's called social security. If we need more SS, we can just raise SS taxes and be done. Of course SS had it's own problems, problems that won't be solved by ANOTHER government program.
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Exactly! There is already a compulsory plan in place called Social Security. Could the politicians please use whatever political capital they have left to reform that program rather than introduce yet another government tax and spend program that they can raid?
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Old 07-24-2012, 09:11 PM   #54
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Originally Posted by skyvue

People on this board (myself included) do not want this type of plan because we have the discipline to save on our own. However, I would arge that they plan she describes would be better off for the majority of Americans and perhaps our country in general. The "average" American has proven they lack the discipline to save for their own retirement and thus need somebody else to do it for them.
I propose that rather than expand into yet another government entitlement, our government instead begin incorporating basic principles of personal finance into public school curriculum. It is a shame people go through 12 years and more of school in this country without learning basic fundamentals of modern life such as insurance, credit, compounding, investing for the future, etc.
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Old 07-24-2012, 09:24 PM   #55
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Originally Posted by BLS53
It just seems ironic to me, given the criticism that SS and government pensions get on here, that the idea of mandated personal savings accounts, is equally offensive to some of you. Especially since the anti-nanny state, extreme fiscal conservatives, are the main ones spearheading these plans as part of SS reform.

On the subject of financial education in the schools. Yes, much needs to be done. Mainly in the area of personal budgeting, what it cost to raise a child, and the avoidance of predatory lending practices. If you really think you can teach the average teenager, who struggles with Algebra I, how to successfully invest in the stock market, you better think again.

Many of you come from careers requiring a strong mathematical background. That same ability lends itself well to investing. The bulk of the population doesn't have this ability, and is not likely to have it in the future.

The nanny state is fine when it benefits you. Just witness the several threads concerning how to use the "Medicaid" provision of the new health care act, to facilitate E-R.
There is a big difference. The nanny state has already forced ObamaCare through. I would have preferred this wasn't the case but for now what's done is done. Since I will be forced to pay for it as a taxpayer, I have the right to reap any benefits if I qualify for them.
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Old 07-24-2012, 10:10 PM   #56
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Thanks for the discussion folks, these thread has run its course.

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