Wouldn't this fix the soc. security problem?

[Bugs ****ing Bunny]

Originally posted by Dauphin


Are they that bad that you would recommend not having a private pension in principle?

No. I'd just be picky over who I choose. If you're looking at "With Profits" investments you'd be insane to consider anyone other than Aviva, Clerical Medical or Scottish Widows. Standard Life still gets recommended, but I'm dubious.

The problem is that "With Profits" isn't often offered with Stakeholders, but Stakeholder at least offers low charges. Delaying a choice until after the Sandler review is implemented starts to look more attractive.

[Kidlicious]

Originally posted by Arrian
Damnit, man, READ what I type!

I am not a Republican. I do not oppose social programs. I oppose the current implementation of a particular program! Not because I seek to hoard my wealth, but because I hate the idea that my wealth will be wasted.

Vel and I have been bantering about carrier groups. Which party tends to blow silly amounts of money on those? The Republicans. Both do it, but the Republicans tend toward more military pork barrel. So we're *****ing about a typical Republican thing and you "translate" my posts and conclude I'm a Republican?

Reading comprehension. It's a basic skill.

-Arrian

You're fairly right of center Arrian. I've never really seen you post much liberal stuff. On the other hand you always seem to be arguing on the conservative side.

[DanS]

Here's Alan Greenspan on this problem.

Greenspan foresees longer working lives in US
By Andrew Balls in Jackson Hole, Wyoming
Published: August 27 2004 16:06 | Last updated: August 27 2004 20:36

lan GreenspanAlan Greenspan on Friday called for early initiatives to address the economic effects of the retirement of the baby-boom generation to smooth the transition to a new balance of workers and retirees.

“The decade-long acceleration in productivity and economic growth has seemingly muted the necessity of making such choices,” the Federal Reserve chairman told the Fed's annual symposium in Jackson Hole, Wyoming, which this year focuses on ageing populations. But history discouraged the notion that growth would continue to increase, he said.

“If we have promised more than our economy has the ability to deliver, as I fear we may have, we must recalibrate our programmes so that pending retirees have time to adjust through other channels,” he said. “If we delay, the adjustments could be abrupt and painful.”

Productivity growth offered the greatest potential to help boost the economy to a level allowing future retirees to maintain their living standards without over-burdening working people, Mr Greenspan said.

But he warned that recent elevated levels of productivity growth were unlikely to continue.

“For a country already on the cutting edge of technology, to maintain this pace for a protracted period into the future would be without modern precedent,” Mr Greenspan said.

Better health for those over 65 and a greater share of services in the economy should lead to longer working lives. “Policies promoting longer working life could ameliorate some of the potential demographic stresses,” he said.

Rising pressures on retirement income and ever scarcer experienced workers could eventually reverse the trend towards earlier retirement, Mr Greenspan said, while expanded immigration could also increase the US working-age population. The US would need higher savings rates, he said, adding: “Critical to national saving will be the level of government, specifically federal government, saving.”

The growth rate of the US working-age population is expected to slow from an annual pace of about 1 per cent to 0.25 per cent by 2035. The percentage of the over-65 population is expected to rise from 12 per cent to about 20 per cent by 2035.

Mr Greenspan said that Medicare, the US medical programme for the elderly, would soon present more difficulty for US policymakers than Social Security, the federal pension system. Because this is a defined-benefit system “the scale of the necessary adjustments is limited”, he said. “The shortfalls in the Medicare programme, however, will almost certainly be much larger and more difficult to eliminate.”

“If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels,” Greenspan said in prepared remarks at an annual symposium. “If we delay, the adjustments could be abrupt and painful.”

The Fed chief said raising payroll taxes to fund shortfalls in Social Security and Medicare might only worsen the situation by imposing an extra burden on workers. He said altering policy to encourage a longer working life for Americans would help.

Greenspan made no mention of current economic conditions or interest-rate policy in his address to the group of central bankers, academics and economists gathered in at a mountain retreat in Wyoming.

This year’s topic for the annual Jackson Hole symposium is the impact of demographics -- specifically aging populations -- on the global economy.

Greenspan said the United States, which has been relatively open to immigration, is in a better position than some other countries, particularly if American policy-makers and politicians face the need to reform entitlement programs.

“Though the challenges of prospective increasingly stark choices for the United States seem great, the necessary adjustments will likely be smaller than those required in most other developed nations,” Greenspan said.

He said falling birth rates mean population growth in Europe and Japan “have fallen far short of the replacement rate” -- the birth rate needed to keep the population constant in the absence of immigration or changes in lifespans. A potential doubling of the over-65 U.S. population by 2035 will put substantial pressure on U.S. budget deficits and it is important to consider how to deal with the issue to protect the overall economy.

“Financing expected future shortfalls in entitlement trust funds solely through increased payroll taxes would likely exacerbate the problem of reductions in labor supply by diminishing returns to work,” Greenspan warned. He said it would be preferable for Americans to work longer.

“Changes to the age for receiving full retirement benefits or initiatives to slow the growth of Medicare spending could affect retirement decisions, the size of the labor force and saving behavior,” Greenspan said, leaving no doubt that was his preferred option.

[pchang]

SS pays different amounts depending upon when you decide to begin receiving benefits. My latest statement said I would get a bit over $1000 a month if I started receiving benefits at 62, a bit over $1400 a month if I started receiving benefits at 65 and a bit over $1900 a month if I started receiving benefits at 70. So, in a sense, they have already started raising the age limits.

[Arrian]

You're fairly right of center Arrian. I've never really seen you post much liberal stuff. On the other hand you always seem to be arguing on the conservative side.

One's political bias tends to warp one's view of other people's politics. I seem right-of-center to you, because you're a communist. I consider myself a moderate - center-right on fiscal matters and center-left on social issues. I think the totality of my posts here at 'poly OT bear that out.

In short, I think you've got my political leanings all wrong, based on the capitalist/communism threads. Just because I am very much against communism, does not mean I'm a rightwing conservative.

-Arrian

[Kidlicious]

Originally posted by Arrian


One's political bias tends to warp one's view of other people's politics. I seem right-of-center to you, because you're a communist. I consider myself a moderate - center-right on fiscal matters and center-left on social issues. I think the totality of my posts here at 'poly OT bear that out.

In short, I think you've got my political leanings all wrong, based on the capitalist/communism threads. Just because I am very much against communism, does not mean I'm a rightwing conservative.

-Arrian

All that I meant was that you are right of center on economic issues.

[Patroklos]

If you get the exact amount of money that you put in however, and you spend it at the other end, how is there a loss? It just boosts the econom, that helps the investments the pension funds are invested in.

[Velociryx]

Two misconceptions there:

First, you don't get exactly what you put in. Most folks get far more than they put in over the course of their lives (example: based on the paystub I got today, I estimate that social security will take ~$200.00 of my monthly gross pay. A check at my social security earnings statement shows that if I become disabled today, and become eligible to draw social security, I'll make ~$1400 per month. Assume I started work at EXACTLY the same pay I make now--don't I wish--at age 18. In all, that would mean that I've paid into the system $43,200*. It would take me a scant 30 months to collect all the money I had paid into the system).

Second, the first position were true (it isn't...but if it WERE true), the "loss" would be the amount of interest you could have earned on the money had you invested it over X span of time, HOWEVER....in truth, I can't get the kind of return mentioned above on ANY sane investment in the market.

* - I'm 36, and in the example above, that would put me paying $200 per month for 18 years (216 months) $200 * 216 months = $43,200.

Now, if I work until age 65 at exactly the same pay before retirement, I'll have invested $112,800 into the system, and at that pay, it'll take me 80 months (six and a half years) to recoup my entire "investment."

-=Vel=-

[Patroklos]

I understand that the current system would not work like that.

I am talking about what I suggested earlier, where you have your money put in a sort of trust, and then given back to you at retirement age (no need to give it all back at once, to avoid someone blowing their wad).

It is ludacris that you should get so much more back than you put in. That could never have been solvent even when they first made it. Which is why our grand parents and parents are selfish thieves, because this current plight was obvious.

Spifor, I agree the corrective actions are drastic, and I am willing to suffer the corrective consequences. The longer we wait to more painful it will be.

[Velociryx]

The only problem I have with that plan is that every individual's needs are different, and thus, an investment portfolio that "works" for me, might not work so well for you. If the government DOES run some sort of mandatory trust fund scheme, how much individual attention would each forced-investor get?

Little to none, I would venture.

Much better, at that point, to simply not take the money out to begin with, and leave each person to structure their own retirement.

Not to mention the fact that, odds are, the government would just dump vast quantities of the trust money into 1-2 big funds.

When retirement age strikes, and people start withdrawls, those funds will get hit hard.

Letting everybody invest separately spreads the fundage out across the width and bredth of the market, mitigating the financial hit each fund takes when mass retirement withdrawl begin occurring.

-=Vel=-

[Patroklos]

That is the point though, it is a trust not an investment. And an individual trust not a "pool."

You get the exact money you give in. It is like a forced savings account. Now you would get less than you would have from our SS system, but it is solvent. And you would get less than you would from a private scheme, but then we avoid the idiots who are somehow exempt from planning ahead (because people such as the ones here are bent on picking up their slack).

Whatever you get it is more than the current systme will give when it collapses. Nothing.

[Velociryx]

Exact contribution = no interest = less than you put in, in inflation adjusted dollars.



-=Vel=-

[Patroklos]

Do trusts no acrew interest?

[Velociryx]

Trusts are not an investment vehicle unto themselves. Technically, you can set up a trust in any manner you like, including, I would imagine, putting the money in a vault and doling out X dollars at a time.

If you're going to set up a government mandated investment vehicle as a trust, then yes, it would earn whatever rate the investment earned, but again, most ANYTHING can be made into a trust (I know the most about American Century, because that's who I use, but for example, ANY of American Century's investment portfolios can be made into a trust, and your mileage varies according to which particular vehicle you choose).

Again though, this relates back to the problem mentioned earlier.

How much time and effort do you suppose the government is going to put into the almost 300 million trusts it would have to set up?

Probably not terribly much, which means that they'll do some standardized, lowest-common-denominator fund that probably isn't a very good "fit" for your specific retirement objectives....not to mention the administrative nightmare of managing three hundred MILLION individual trust funds.

So the answer to the question is...yes usually. But at that point, why not just let each individual set up their own trust, with their own needs and desires in mind?

-=Vel=-

[Patroklos]

Because we cannot trust people to plan for the future, which is the REAL reason for Social Security.

So like I said, if the trust acrews interest to maintain its value, would you not get exactly what you put in and be provided a mandated nestegg for retirement? Won't be as much but it is solvent and it is something.

I don't think setting up passive savings accounts where withrawls from pay and deposits into accounts are automatic. I set these up in the military all the time and It is very easy, and it is fire and forget.