What has the world come to??!

[Bestwifeever]

I think some people forget that public sector pensions have a contribution factor from the employee, the same as the rest of us contribute a percentage to SS, so I see public sector pensions much more like SS than the private sector pensions. DH has a frozen noncola private sector pension that he did not contribute to and whose calculation did not grow once the plan was frozen--that plus SS will cover our expenses and the defined contribution plan that replaced the pension some 20 years ago turned out to be a darned good thing for him. Unlike people receiving most private sector pensions, most of the public sector folks are not going to receive SS.

(I know people are going "well duh" but I have to remind myself of this every once in a while )

 

[gozer]

This sounds like a good idea to me.

Those who want the schools to do more teaching of this-or-that, need to also tell us what should be dropped to make room for the new material.

Study hall. My son's school had financial classes in both middle and high school. They were elective type classes. They were not elective for my son. We made them mandatory.

 

[gozer]

I think some people forget that public sector pensions have a contribution factor from the employee, the same as the rest of us contribute a percentage to SS, so I see public sector pensions much more like SS than the private sector pensions. DH has a frozen noncola private sector pension that he did not contribute to and whose calculation did not grow once the plan was frozen--that plus SS will cover our expenses and the defined contribution plan that replaced the pension some 20 years ago turned out to be a darned good thing for him. Unlike people receiving most private sector pensions, most of the public sector folks are not going to receive SS.

(I know people are going "well duh" but I have to remind myself of this every once in a while )

Both SS and Public Pensions have a contribution factor from the employee.

I read an article a few years ago that compared SS to public pension. The link below is a different article, but it seemed to reach the same conclusion. i.e. they are similar but the average public pension is far better than the equiv workers SS.

Social Security Benefits vs. Public Pensions « CIV FI

 

[jclarksnakes]

I disagree with the OP. Making a living and LBYM and saving and investing for retirement have been easy for anyone in the USA the last 100 years. Many of the people today who think they are working hard are in fact hardly working at all. Whether you are brilliantly intelligent or slightly below average intelligence you have to learn your craft and keep learning though out your life. IMO people who have not been back to school every few years to increase what they know about their chosen field or even to learn a new field are slacking off. Too bad for them when they are not competitive in the workplace. Most people do not have the discipline to LBYM. Too bad for them. Asset allocation and investment selection can be tough and even important after you have amassed quite a bit. However, early in saving and investing all you have to do is pick out some low expense funds and aggressively sock money away in them and stay the course while they grow. Too bad for the people who do not have the discipline to do this. It is definitely not rocket science. Hell, even this goober figured it out pretty easily long ago.

 

[Fermion]

If you work about 30 years, you get to collect around $1800 a month in SS payments at age 62. That is like a pension of $21,600.

Are public pensions that low?

 

[gozer]

If you work about 30 years, you get to collect around $1800 a month in SS payments at age 62. That is like a pension of $21,600.

Are public pensions that low?

You need more specific salary data to make a comparison. There will always be outliers.

 

[Bestwifeever]

If you work about 30 years, you get to collect around $1800 a month in SS payments at age 62. That is like a pension of $21,600.

Are public pensions that low?

I don't know; you could probably google it. But the public pension plans require higher contributions from employer and employee than SS does, I believe. And you would have to compare taking a pension early against the early SS retirement example you give. And the lower pay over 30 years the public service employee is perceived to have received vs the private sector (not necessarily since the last recession). Etc., etc. Private vs public vs no pensions have been discussed many times here.

In terms of the OP, I was thinking about my parents' (remarkably short) and grandparents' (somewhat longer for the most part--grandfathers died at 60 and early 70s, grandmothers lasted til 80) retirements. I don't think it was any easier for them, nor more difficult, just different. Some had pensions, some didn't. Some were cared for at home by family til death, some passed away in old fashioned county nursing homes with many beds in a big room--no fancy accommodations whatsoever. None of them had a retirement income equivalent to their working years, none had money for luxuries, none had the options of downsizing as their homes were small to begin with. In their eyes, only rich people had money in the markets or even knew how to access the markets.

DH's parents and grandparents were better off (and were the "rich people" with money in the markets) but all in all my kids' generation is much more financially savvy and has more opportunity/investment vehicles for growing their nest eggs. It will be interesting to see how they feel in 30 years.

 

[Mulligan]

Study hall. My son's school had financial classes in both middle and high school. They were elective type classes. They were not elective for my son. We made them mandatory.

My personal experience with teaching personal finance is though it creates exposure, it doesn't carry much follow through in their lives as the students treat the class as something to pass as opposed to opening doors for a way of life. I recently read an article from a financial guru who I have forgotten his name opined an article that struck home with me. He said classes in school are meaningless concerning personal finance. It is not a class, but a way of life that must be instilled at an early age progressing through their formative years. He had a book that laid out the process. Of course the only problem with that is many kids do not have parents engaged in this part of their life, or do not, or are unwilling to learn it themselves.

 

[Gumby]

Maybe some of that education could be directed to this

Finra Finds People Really, Really Want to Be Defrauded - Bloomberg

There are so many complicated flavors of financial fraud and near-fraud that it's good to be reminded that there are plenty of simple flavors, too. An oldie but a goodie is:

• Tell someone you have a great investment opportunity for them.
• "It returns 110% a year! Guaranteed!"
• They get excited and give you money.
• You take it.

"But that would never work," you say for some reason. Maybe you're hard at work designing complex derivatives to eke a tiny bit more edge out of your clients and you can't believe it could be that easy.

Nope, it's that easy.

 

[Fermion]

Yeah Gumby, even I fell for fraud a few years ago buying Chinese stocks.

Here is how it went for me:

But but, the growth!

Shut up and take my money!

What do you mean when you say "cook the books"?

*Google* 10 for 1 reverse split

*Google* pink sheets

The end

 

[ESRwannabe]

Most people will be completely screwed regardless of the complexity.

Most people do not have enough willpower and/or foresight to delay gratification. So they will never be able to save enough money for it to make any difference anyway.

 

[gozer]

My personal experience with teaching personal finance is though it creates exposure, it doesn't carry much follow through in their lives as the students treat the class as something to pass as opposed to opening doors for a way of life. I recently read an article from a financial guru who I have forgotten his name opined an article that struck home with me. He said classes in school are meaningless concerning personal finance. It is not a class, but a way of life that must be instilled at an early age progressing through their formative years. He had a book that laid out the process. Of course the only problem with that is many kids do not have parents engaged in this part of their life, or do not, or are unwilling to learn it themselves.

Completely agree. Basic financial training in my sons case started at 4 involving the use of a bank that had three sections titled spend, save and invest. There were rules on what he had to put in each and things got more involved as he got older. By the time he was in middle school he was beyond budgeting and could read and understand the basics of a fund prospectus and do some analysis of individual stocks. His stock market game team in middle school placed second in the state and they didn't just buy names they knew before research. He also came to the realization on his own that this game was too close to day trading and would be extremely risky with real money. In high school we spent a lot of time on retirement type accounts.

I think basic financial management is the most poorly handled topic in most children's lives. I would vote sex education a close second.

 

[Mulligan]

Most people will be completely screwed regardless of the complexity.

Most people do not have enough willpower and/or foresight to delay gratification. So they will never be able to save enough money for it to make any difference anyway.

I know you are over generalizing the masses to a degree, but I can't help but agree with you. Toss in over the past 30 years increasingly sophisticated marketing efforts designed to tempt the weak, more gadgets that are available to buy and "needed", easy access to credit and that compounds the problem you mentioned above.

 

[haha]

Most people will be completely screwed regardless of the complexity.

Most people do not have enough willpower and/or foresight to delay gratification. So they will never be able to save enough money for it to make any difference anyway.

Socialism is the base reason for this. DId the same people who make up the American majority have any trouble planning for the future or saving money with thrift or doing all the work first, then grabbing a little rest in the 18th century in Europe or Britain? DId the American colonists work against massive odds to accomplish much? Do the Chinese or other Asians today have any trouble being thrifty and planning for the future? China may be a nominally Communist country, but its welfare apparatus is non existent compared to America or other western countries. Few people really want to give up pleasures in the present, but if it really matters, they will. Also, when it really matters, social pressure will see to it that they do because the ants do not want to get stuck will the damage, economic or moral, that the grasshoppers can cause.

It's sometimes breathtaking to me to see what we have let go in moral fiber over the past 75 years or so. People behave lot better if misbehavior is very strongly disapproved; and today it is not. Celebrity, not strength and purpose is what gets attention.

I have said before, folks, we are a dying civilization. Too bad, it was once a good one.

Ha

 

[Midpack]

I have said before, folks, we are a dying civilization. Too bad, it was once a good one.

+1. If you want to be convinced, read The March of the Millennia by Isaac Asimov.

 

[brewer12345]

I have said before, folks, we are a dying civilization. Too bad, it was once a good one.

Ha

In some ways, I agree. In other ways, I think that we are just going through and evolution and those of us who are classically educated or of the older generation may not like the changes that are happening.

Practically speaking, you, I and anyone else cannot change this or alter the path of the change. So a rational person lives their life as they see fit, set up your affairs to shelter from the storm and hopefully take advantage of changes that we can foresee. Its like the tax code.

 

[Chuckanut]

Completely agree. Basic financial training in my sons case started at 4 involving the use of a bank that had three sections titled spend, save and invest. There were rules on what he had to put in each and things got more involved as he got older.

Brilliant!

 

[Mulligan]

Brilliant!

I agree. He is establishing a way of life for his child, not a lesson to be learned and forgot... Lessons taught are not always implemented...I have never met a teenage kid who smoked who did not know it was bad for him to do it. The lesson was taught and understood...just not implemented.

 

[Gumby]

In some ways, I agree. In other ways, I think that we are just going through and evolution and those of us who are classically educated or of the older generation may not like the changes that are happening.

Practically speaking, you, I and anyone else cannot change this or alter the path of the change. So a rational person lives their life as they see fit, set up your affairs to shelter from the storm and hopefully take advantage of changes that we can foresee. Its like the tax code.

As Voltaire's Candide said, "We must cultivate our garden."

 

[Badger]

+1. If you want to be convinced, read The March of the Millennia by Isaac Asimov.

Thanks for the suggestion. I always liked and respected Asimov. And the icing on the cake is the public library has a copy so I put it on reserve. The wait begins.

Cheers!

 

[sengsational]

I agree. He is establishing a way of life for his child, not a lesson to be learned and forgot... Lessons taught are not always implemented...I have never met a teenage kid who smoked who did not know it was bad for him to do it. The lesson was taught and understood...just not implemented.

You can't tell a teenager anything. My finance lessons when my kids were at home was to set them up with a debit card at the credit union in thier early teens. Then I just waited for them to screw up and teach themselves a lesson they'd remember. Part of the process was putting allowance and grade incentive money in the account in the biggest lump sums as I could manage, and letting them run out of money just before the most wonderful opportunity in the world (that costed more than they had) presented itself. That lesson would have worked better if thw DW hadn't caved in with a loan on occasion, but I think it sunk in, even into the teenaged brain!

 

[MRG]

You can't tell a teenager anything. My finance lessons when my kids were at home was to set them up with a debit card at the credit union in thier early teens. Then I just waited for them to screw up and teach themselves a lesson they'd remember. Part of the process was putting allowance and grade incentive money in the account in the biggest lump sums as I could manage, and letting them run out of money just before the most wonderful opportunity in the world (that costed more than they had) presented itself. That lesson would have worked better if thw DW hadn't caved in with a loan on occasion, but I think it sunk in, even into the teenaged brain!

I learned more in the 'School of Hard Knocks', than at home or school. Maybe that was just my hard head nature.

It really sunk in when, we had to choose between eating mac&cheese with liver wurst for sandwiches(for many weeks), vs. having the gas money to go to work.

Our attitudes about managing money changed rapidly after that!

MRG

 

[sengsational]

+1. If you want to be convinced, read The March of the Millennia by Isaac Asimov.

Didn't have it at our library, so I ordered it on half.com. When I'm done, I'll donate it to the library. I hope it's not too depressing!

 

[BLS53]

If you work about 30 years, you get to collect around $1800 a month in SS payments at age 62. That is like a pension of $21,600.

Are public pensions that low?

I can't speak for all "public" pensions, but that is close to the amount the average enlisted member gets from military retirement.

 

[jollystomper]

I haven't read the entire thread, but in response to the OP: the big difference I find is not so much complexity but patience. The most difficult item I have conveying to my own kids, to other kids (when I have had occasions to talk at schools), or to those younger than me that seek my advice is "be patient".

In my view (not saying that it is by any means perfect), I run into a lot of the "I want it all, and I want it yesterday" attitude. This attitude is why I have had difficulties at times with folks ignoring my "simple" advice because it seems so boring and too slow for their expectations. Even
taking the time to read basic finance books and information tends to turn folks off because they see the process as too slow.

Then you add in the attention-grabbing headlines such as "YOUR 401K MAY NOT BE A GOOD DEAL" or "WHEN WILL THE MARKET CRASH AGAIN?", and the impatient ones don't even want to make an effort.

Maybe this is due to moving from and "agricultural" to the "technical" society, where one of the side effects has been the loss of patience. Now that everyone expects instant results, that attitudes trickles over into personal finance, where the 5-10% of things that are simple and will make the most difference don't show results soon enough - or any results are consumed by more "urgent" needs ("yes I know I shouldn't take money from my 401K but I REALLY needed that item!").