Too poor to retire, too young to die
February 1, 2016 4:30 PM   Subscribe

America's retirement crisis: 29% of people 55 or older lack savings or pensions, says the Government Accountability Office (GAO). 1 in 4 people aged 65 or older is still working, many because they have no choice but to keep working as Social Security cannot cover their living costs. These working seniors find themselves too poor to retire, too young to die.
posted by so much modern time (217 comments total) 68 users marked this as a favorite
 
This is my mom right now. She and my stepdad never saved anything for their retirement, figuring that Social Security would cover the cost. Now she's 62 soon to be 63, working a clerical job she hates but needs, all the while being the sole fulltime caretaker for my stepdad who has Parkinson's, heart congestion, and failing kidneys. SS gives her some money, Medicaid helps a bit with my dad's medical bills, but if they didn't have the roof over their head my sister and her husband provide for them--and even then, my BIL makes them pay a nominal amount of rent--as well some extra cash, I honestly don't know what would happen to them.

I married into a fiscally responsible family and thank god for it every day. I am about to turn 40 this year and am going to start an RRSP because better late than never and at least I have got twenty years, good health willing, to contribute to it so I am not in the same boat.
posted by Kitteh at 4:34 PM on February 1, 2016 [14 favorites]


One of the great fears.
posted by Going To Maine at 4:38 PM on February 1, 2016 [8 favorites]


This will be me.
posted by computech_apolloniajames at 4:38 PM on February 1, 2016 [33 favorites]


Universal. Basic. Income.
posted by zjacreman at 4:38 PM on February 1, 2016 [92 favorites]


This will be me in 20 years or so, assuming our health holds out that long. Even having been fairly diligent about saving and contributing to retirement funds, the math just doesn't work for our family of four in the long run. In the absence of a defined benefit pension and subject to the vagaries of the market (as in 2008), there's just no way that we can ever save / compound enough money to avoid something close to poverty - or real poverty - in old age.

We already can't afford to buy a place in the berserk housing market our families are both rooted in, and we can look forward to maybe living in a van when we're elderly? I try not to think about it much because I know there's very little we can realistically do about it. We're hardly alone in our immediate circle, either.
posted by ryanshepard at 4:39 PM on February 1, 2016 [9 favorites]


Yeah, this is most likely my fate now for reasons I can't really discuss.
posted by saulgoodman at 4:40 PM on February 1, 2016 [7 favorites]


Universal. Basic. Income.
I wholly reject UBI, as it very likely will come at the price of the overall reduction of funding for specialized social services (which will certainly get defunded to cover UBI) impacting the folks that rely most on them. Having more money wouldn't necessarily be able to cover that stuff either, especially as the specialized stuff is generally very expensive and very heavily subsidized by the gov't. UBI is a bad idea.
posted by and they trembled before her fury at 4:46 PM on February 1, 2016 [16 favorites]


The only thing more depressing than thinking about how this will be me and most of my friends is that climate change will destroy everything before this will be me.
posted by dogwalker at 4:47 PM on February 1, 2016 [11 favorites]


But Collinson stressed the need for more people to calculate their projected retirement needs and to plan ahead accordingly

The idea that one can "plan ahead" in an economy where pensions are rarities and student loans a must, is senseless victim-blaming. My parents didn't "plan ahead" to have a pension upon retirement; that was just what workplaces like theirs offered. And now those workplaces don't. The folks I know whose savings were wiped out by vagaries of the stock market didn't suffer from a lack of planning; they suffered from the fact that retirement income is never, has never been, under the control of workers, but always elsewhere. The control is elsewhere, but the blame is always on the worker.
posted by mittens at 4:49 PM on February 1, 2016 [226 favorites]


The only thing more depressing than thinking about how this will be me and most of my friends is that climate change will destroy everything before this will be me.

Ha, no, don't worry, you'll be poor, overworked, under-insured, AND the weather will be crazy. You can have it ALL!
posted by maryr at 4:51 PM on February 1, 2016 [27 favorites]


and they trembled: that is some next level nihilism there.

UBI can happen, and it needn't happen at the expense of other things. It SHOULD reduce benefits by some proportion, but a good implementation shouldn't take out of specialized services any more than it puts back in.

I'd argue with you in more detail, but its impossible to argue about a non existent policy proposal that isn't going to be a real world legislative possibility anytime soon. I'll just ask you to keep your pessimistic grumbling to yourself till you at least have a thing to critique, rather than whatever straw man it is in your head.
posted by sp160n at 4:55 PM on February 1, 2016 [31 favorites]


The only thing more depressing than thinking about how this will be me and most of my friends is that climate change will destroy everything before this will be me.

In my darker moments, I think about this and say, "hey, at least we aren't likely to freeze to death".
posted by ryanshepard at 4:59 PM on February 1, 2016 [1 favorite]


We are going through this with our parents right now and it is utterly dehumanizing. My MIL is on disability, and as a result hasn't worked in decades, and even when she did work it was retail with no opportunity to save. She has been lucky enough to get by on her monthly disability checks/SNAP/Medicaid up until now, but she is now at an age/situation where she really needs something closer to assisted living care.

It seems like there are basically two types of assisted living places (at least in Seattle):
a. Places that accept Medicaid that are also total shitboxes that are dirty, smelly, and face drug-deal traffic in the hallways at all hours
b. Places that have $100,000+ initiation fees in addition to the $2500/monthly bill for room, board, and care.

For the life of me I can't find places for blue-collar folks who don't have a nest egg to cash out and pay that initiation fee, but who want to live somewhere a little less sketchy than a Medicaid-funded facility. It's outrageous.
posted by joan_holloway at 5:01 PM on February 1, 2016 [13 favorites]


Aw, quit their damn bitching!

And thank god their government spends otherwise available money on the military, which is protecting them from all the dangers of terrorism, socialism, and every other sort of danger lurking out there in the terrifying world they tell them about non-stop.

Food, shelter, and health are so overrated by these people. Ingrates!
posted by lometogo at 5:04 PM on February 1, 2016 [10 favorites]


Totally worried this will be me. I'm saving what I can but cost of living + saving to pay for projected costs comes nowhere close to = salary. :(
posted by CoffeeHikeNapWine at 5:08 PM on February 1, 2016 [1 favorite]


lometogo making a strong showing for the GOP VP spot.

I'm so thankful that my parents are not in this position, because god knows I wouldn't be able to help them. But you can sure as heck bet one of the reasons we aren't having kids is that we've got to spend our 40s and 50s trying to figure out how we can not work into our 70s.
posted by MCMikeNamara at 5:10 PM on February 1, 2016 [4 favorites]


I'm so glad I will most probably die of not having good enough healthcare way before I will die in age-related poverty.
posted by poffin boffin at 5:12 PM on February 1, 2016 [23 favorites]


#thiswillbeme as well. Two parents that Also Were This (until they died Too Young), student loans I'm still paying 10+ years after graduating, a degree that's not worth shit, an incredibly toxic job market.

I took on another job @ minimum wage, I'm just going to try to pay off my student loans, work on boring stuff like my dental health and try (and fail, ultimately) in not being in CC debt ever again.

OK, I think I've haunted this coffee shop long enough "working", guess I'll go home.
posted by alex_skazat at 5:13 PM on February 1, 2016


i mean really president trump will have me hauled off to the gay latino death camps way before either one of those things happens but it's still nice to have options
posted by poffin boffin at 5:14 PM on February 1, 2016 [51 favorites]


If my mother didn't have a very good pension as a teacher (in Ontario) it would have significantly changed not just her life but that of my brother and myself. I started university the year my mom retired and my brother was doing his Master's degree. My parents were both retired and renting an apartment and my dad died the following year. If we had to worry about our mom's living expenses/conditions after our dad died then one or both of us would have probably just started working to contribute. Instead, she was able to buy a house in Toronto by herself and her kids could focus on pursuing higher education and professional degrees. Cut to today and both her kids are doing well for themselves and she is still financially secure, and will be for the rest of her life.

I would love to have a pension plan like my mom does, instead I've got to invest money myself in RRSPs and the like. Her pension plan has averaged an 11% annual return since inception and I'll be happy to get half the returns she does. Her administration fees are minimal because they get spread among all the teachers whereas I have to eat the full cost of whatever my bank charges me. Most importantly she didn't have to worry about any of this stuff because it was all taken care of. I've got a busy job that isn't in finance and small kids and I'm supposed to decide what mix of investments my retirement savings will have, and review this periodically. How is this a good idea?
posted by any portmanteau in a storm at 5:16 PM on February 1, 2016 [15 favorites]


I'm currently scared enough that I've been putting 29% of my gross into my 403b account ever since I turned 50 and was allowed to accelerate my contributions. I still don't think that it'll be enough.
posted by octothorpe at 5:19 PM on February 1, 2016 [3 favorites]


Good lord, this is me in spades. I thought I was going to be...ok-ish...but then some assholes tanked the world economy and my retirement funds took a hit that set me back.

And, then, I saw my mom and my FIL start to deal with old age and what your life becomes if you don't have a secret mountain full of cash somewhere.

The idea that you can adequately predict your future money needs is laughable. There's a good reason the senior population has the highest rate of suicide.
posted by Thorzdad at 5:23 PM on February 1, 2016 [19 favorites]


This will be me if significant changes don't happen soon.
posted by Multicellular Exothermic at 5:24 PM on February 1, 2016 [1 favorite]


then some assholes tanked the world economy and my retirement funds took a hit that set me back.

The market is higher than it was pre-crash, so if you're invested in broad indexes you should be ahead of where you were.
posted by jpe at 5:28 PM on February 1, 2016 [13 favorites]


I'm on track for bankruptcy and losing everything I've spent the last 20 years working for, and I'm in my 40s, so yeah, I'm boned in retirement now. No savings. Only an ever increasing pit of debt and an underwater house I probably won't be able to keep for more than a few more months, if that. Ugh. I'd better stop thinking about this now.
posted by saulgoodman at 5:28 PM on February 1, 2016 [4 favorites]


saulgoodman: In the US, at least, retirement accounts are usually sheltered from bankruptcy. It's one of the main reasons to put a bunch of money away in a retirement account instead of just cash (and of course the tax sheltering is also nice). So bankruptcy shouldn't affect retirement.
posted by ethidda at 5:34 PM on February 1, 2016 [3 favorites]


This IS me. My only hope is that my family's history of heart disease will catch up with me by the time I become no longer gainfully employable.

My only defense against that long harsh fall to utter helpless poverty is whatever basic living skills I can pick up and whatever truly useful tools I can accumulate along the way while I still have any sort of income. I might not have an IRA, but at least I've got an ability to cook tasty/healthy/cheap food and a couple pots and pans to do it in.
posted by Greg_Ace at 5:34 PM on February 1, 2016 [3 favorites]


I'm currently scared enough that I've been putting 29% of my gross into my 403b account ever since I turned 50 and was allowed to accelerate my contributions. I still don't think that it'll be enough.

If you work for a state university, you're usually also eligible for a 457 plan. The limits are non-coordinating with 403b's, so effectively double your contribution limit. Using this, depending on how you account for various things, allows me to save over 50 percent of my income. Sure, I can't really save up for a mortgage, but if I ever need to move for a new job, it's a lot easier to take a retirement account with me than home.
posted by pwnguin at 5:34 PM on February 1, 2016 [2 favorites]


at least I've got an ability to cook tasty/healthy/cheap food and a couple pots and pans to do it in.

Until, of course, I'm too feeble/demented to cook...
posted by Greg_Ace at 5:37 PM on February 1, 2016 [1 favorite]


This is one of many reasons I 'retired' to Chiang Mai, Thailand several years ago.
posted by lometogo at 5:38 PM on February 1, 2016 [12 favorites]


FYI, In the U.S., the Investment Tax Credit for tax years 2015 and 2016 allows lower income earners to claim a 50% credit (credit, not deduction) for the first $2k invested as an IRA. If you couple this with the tax deduction for the IRA, it's like a buying a $2000 investment for about $600.
posted by onesidys at 5:49 PM on February 1, 2016 [11 favorites]


So bankruptcy shouldn't affect retirement

Depends on the context of the bankruptcy. If you're just discharging some painful debts, but still have a healthy income and the ability to keep saving, then yes, absolutely. But we can't ignore that some people go into bankruptcy because they don't have the level of income that would allow them to pay debts now much less save much afterwards, and if they have saved anything for retirement, they may need that cash for immediate living. To say nothing of people who watch their savings be sucked dry by medical expenses, and finding that social services look askance on them being able to save a dime after signing up for help.
posted by mittens at 5:52 PM on February 1, 2016 [5 favorites]


Time to start smoking again.
posted by Automocar at 5:53 PM on February 1, 2016 [17 favorites]


This is still me now, but last year decided to do something about it. I hired a financial planner (which I thought was bullshit...until I did the math myself and realized I needed to do something). She gave me very sound advice and have balanced cash reserves, with solid investments. The cash reserves were small, but you have to start somewhere at age 42. I have been saving for 4 years in and going well.

So, it's not too late for the 40's crowd...you can still start saving, economy be damned. 30's crowd...start now. When I was a kid in the 80's, people seriously talked about the death of the planet...so who cares about saving...we got lot's of years and generations to go.
posted by Benway at 5:56 PM on February 1, 2016 [6 favorites]


Am I the only one that doesn't feel sorry for the generation that fucked themselves and their kids/grandkids over?
posted by Young Kullervo at 6:00 PM on February 1, 2016 [3 favorites]


> Am I the only one that doesn't feel sorry for the generation that fucked themselves and their kids/grandkids over?

You're not obliged to feel anything, but acting like this isn't a systemic problem waiting to bite you in the ass too won't do you any good.
posted by rtha at 6:04 PM on February 1, 2016 [60 favorites]


The median retirement savings at retirement age is $12,000 (the average is higher because there are a few people with very very large balances).

Someone at 65 is supposed to live on $12k from retirement until their death which on average is 25 years later (30 at retirement for people who are now in their forties).
posted by zippy at 6:21 PM on February 1, 2016 [4 favorites]


> Am I the only one that doesn't feel sorry for the generation that fucked themselves and their kids/grandkids over?

There are ways in which my parents benefited from their historical moment, but other ways in which they have been severely screwed. My grandparents did better as members of the "greatest generation" but nothing more luxurious than stable, middle class living with access to some government support, but not nearly enough to negate the need for spending their own savings.

Generational angst is fun, but I put the blame on the kleptocratic top of the wealth pyramid, not the boomers or their parents.
posted by Dip Flash at 6:26 PM on February 1, 2016 [34 favorites]


I have $12k in my IRA now, I contribute to a 403(b) at work and I have at least 20 more years to save - but I'm still afraid this is going to be me, dammit.
posted by EmpressCallipygos at 6:27 PM on February 1, 2016


Someone at 65 is supposed to live on $12k from retirement until their death...

This doesn't make any sense to me, but neither does the proposition that I'm supposed to have been able to save 25 times my annual salary by 65. (Starting salary? Ending salary? Who cares, it's not like it matters!)

OTOH, I do have more than $12k in my 401(k), so I got that goin' for me, which is nice.
posted by spacewrench at 6:28 PM on February 1, 2016 [2 favorites]


I feel so fucking lucky. I fell into a job about a year and a half ago that has a pension in addition to their 401k, which I am contributing to in a big way. Prior to that I had diddly and squat. I should be able to call it a good run at around 70 or so. Hopefully I have retained the long lived genes from my Dad's side of the family.
posted by calamari kid at 7:08 PM on February 1, 2016


Can it really be called a crisis when it's really the planned-for and expected result of 36 years of public policy?
posted by mwhybark at 7:11 PM on February 1, 2016 [46 favorites]


Time to start smoking again.

Looks like I picked the wrong generation to stop sniffing glue.
posted by Greg_Ace at 7:15 PM on February 1, 2016 [23 favorites]


I "reassure" myself about this by thinking about suicide when I can't work and don't have any way to live. Because at least I won't die in a shitty nursing home and drag my kid further into bankruptcy.

Sadly enough, it does make me feel better. Why are we so fucked up in this country?
posted by emjaybee at 7:21 PM on February 1, 2016 [32 favorites]


Jesus Christ this is a depressing thread.
posted by gottabefunky at 7:35 PM on February 1, 2016 [11 favorites]


Jesus Christ this is a depressing thread.

No! I find it heartening to see how many others have 12k in savings and look to suicide as a reassuring escape plan.
posted by sandettie light vessel automatic at 7:41 PM on February 1, 2016 [74 favorites]


like that part in Purge 2 where the granddad sells himself to some rich white people so they can hack him to pieces with machetes and his family will get enough money to live off of for a few years, how far off is that for us? 5 years? 10? by the 2018 midterm elections?
posted by poffin boffin at 7:42 PM on February 1, 2016 [5 favorites]


more importantly how much did he get, was it like 200k because that's a big dent in your grandkid's college debt right there
posted by poffin boffin at 7:43 PM on February 1, 2016 [3 favorites]


Why are we so fucked up in this country?

That's easy -- it's because you're a bad person, Baby Jesus hates you, and the Founding Fathers would probably spit on you if they could do so without impairing their stately demeanor.

...if you would simply bend a knee and kiss the ring of the Job Creators, everything will be fine. For definitions of "fine" that include equally terrible, but have the bonus of letting you blame innocent brown people instead of your own voting patterns.

Yay, America!
posted by aramaic at 7:43 PM on February 1, 2016 [5 favorites]


Why are we so fucked up in this country?

Owing to our long history of violent white supremacy, we were able to build out a somewhat social democractic federal government by pretending that we had an ethnically homogenous society. When black people went "hey you know what, fuck this", and power slowly started being spread out just a tiny bit more equitably, the levers of power hit on making a virtue out of naked self-interest, and now, here we are.

Or was that a rhetorical question?
posted by Automocar at 7:51 PM on February 1, 2016 [58 favorites]


If my mother didn't have a very good pension as a teacher (in Ontario) it would have significantly changed not just her life but that of my brother and myself.

The Ontario Teacher's Pension Plan is a monster even among pension plans. $155B and a lifetime > 10% return. No wonder there's such competition to be a teacher in Ontario.

Anyway, as limited as social security is, imagine the modern US without it. That would be an actual nightmare. it might as well be Logan's Run.
posted by GuyZero at 7:53 PM on February 1, 2016 [1 favorite]


I'm lucky to have more than that average saved up right now. It's not enough, but having a few times that average saved in my 40s is better than nothing. I worry that something is going to hit someday that will force me to drain that money just to stay afloat, but I fortunately have 20+ years to keep saving as long as things stay OK (or as even I, an agnostic would say, "the good Lord willing and the the creek don't rise.)

But that's the thing. I work. I've been working for two and a half decades. I've taken so many hits that have aborted attempts to save. And yet I have to hope that things are OK for the next 20 years so that I'm not living in abject poverty at retirement age. I look at the people who retired while I was at my last job. They retired with SS and a full pension, and a bunch of money in their 401ks. They're getting enough from their pension and SS that they don't even need to touch their 401k savings. Us younger workers got screwed when they froze the pensions. I don't begrudge the retirees for being so well set up. I do begrudge the people who decided that the company wasn't making enough profit this quarter, and hey, we could save money by freezing pensions. So people's retirements got screwed just to keep the stock price up for another quarter. The investors get richer, and they're doing it at much lower tax rates these days. The workers... well, too bad for you. (I got my five years in right before they froze it, so I get at least something, I think $100 a month when I retire. I guess at least it'll pay the power bill, or part of it.)

People are struggling to make ends meet on low paying jobs. There's almost no money for them to save. They're not putting money into 401ks. And it's not because they're being irresponsible. They're just more concerned about making the rent payment this month than they are about retirement in 30-40 years. Pensions used to help prepare for that possibility. Now that pension money is just more profit.
posted by azpenguin at 7:59 PM on February 1, 2016 [10 favorites]


I wish that someone had told me when I was 21 and entering the workforce (in language that 21-year-old me could understand) that the best job to have was one with a pension plan, preferably indexed (like the feds in Canada). I would not have spent 15 years fucking around until I got a job with a pension plan. Didn't matter the job. Shovelling shit? I would do it with my bare hands if the payoff was being able to retire in not-destitution.

And who am I kidding? I'm going to work until I die anyway. If I'm lucky. I honestly don't think the world we live in today is going to exist when it's time for me to retire anyways. Some days I hope for that.
posted by monkeymike at 8:09 PM on February 1, 2016 [7 favorites]


So, what am I supposed to do with this information? Vote?
posted by amanda at 8:15 PM on February 1, 2016 [5 favorites]


I "reassure" myself about this by thinking about suicide when I can't work and don't have any way to live. Because at least I won't die in a shitty nursing home and drag my kid further into bankruptcy.

Sadly enough, it does make me feel better. Why are we so fucked up in this country?


Well, the Kaelon figured out a solution to this. It's one I too find reassuring.
posted by qcubed at 8:19 PM on February 1, 2016 [1 favorite]


"Universal. Basic. Income."

Ain't going to pay the rent. Or the doctor's bill.

Upton Sinclair in 1918:

"You have to do away with the power of any man, anywhere, to make his comfort and his glory out of the necessities of others"
posted by Heywood Mogroot III at 8:22 PM on February 1, 2016 [13 favorites]


I got a government job with a good pension plan a few years ago, and I shudder to think how I would have managed retirement if I hadn't. I'm 43 and still have about a year to go before I'm out from under a ton of credit card debt I accumulated in my final year of grad school. I figure I've paid about $80,000 in interest since then, and basically have nothing to show for it. Once that's done I think most of the money I used to pay towards the debt will have to go into an RRSP, since I don't own property and who knows what rent will be like in 20 years. I'm also perpetually single, so unless that changes I won't have a partner or kids to lean on.

But it would really be nice if I could increase my standard of living beyond the graduate student level at some point before I retire.
posted by sevenyearlurk at 8:22 PM on February 1, 2016


Any one of you is welcome to to come live, much as a cloistered hermit but live all the same, on my retirment parcel with off grid tinyhouse and composting toilet. Once it all comes together I suppose.....
posted by RolandOfEld at 8:24 PM on February 1, 2016 [4 favorites]


I regret not packing away more money before I turned 30, but I'm doing OK. Not great, mind you. My income has more than doubled in the last 5 years, but I've worked at jobs where there's no 401(k) matching, so I'm now way behind where I should be. Still, I wasn't planning on retiring before 70, so there's still time.

My mother, though... no savings, working a terrible job, and but still far from being able to collect a Social Security check that won't be that much less than her current salary. She's really worrying me.

It's kinda nice to know others on this thread have this problem with parents that don't have enough set aside. I don't feel like I'm the crazy one.
posted by dw at 8:27 PM on February 1, 2016


It doesn't matter how well you plan or how hard you work if it all disappears in a divorce.

I've been working at freelance illustration for 30 years but thought I might be ok because we bought our house at the bottom of a local market that's ballooned to 4 or 5 times the prices paid 20 years ago. I got talked into putting all my money and sweat into this place and now I'm in my mid-fifties and because I was the sole earner, all I'll have to show for it are some hemorrhoids and a piece-work career that's mostly behind me. At least we never had kids. Yay.
posted by bonobothegreat at 8:28 PM on February 1, 2016 [10 favorites]


" the Investment Tax Credit for tax years 2015 and 2016 allows lower income earners to claim a 50% credit (credit, not deduction) for the first $2k invested as an IRA"

This is not a credit like the EITC, it only offsets taxes you actually owe, so the window where it works maximally is very small, right around $18,500 for single filers this tax year -- that's the max for the 50% tax credit, which will wipe out the $850 income tax owed for that AGI (with the standard deduction).

The credit is phased out from $1000 to $400 and then $200 pretty quickly, so it's a pretty odd duck.
posted by Heywood Mogroot III at 8:30 PM on February 1, 2016 [6 favorites]


My mom had breast cancer in her 40s and all of her savings, and eventually her house, went towards the thousands of dollars in medical bills.

Now she's 65 and sleeping in her car at the moment (we are desperately trying to get her into a place). Apparently she makes too little for even social services to help her. Her social security will kick in soon, but that's barely enough to pay for half a room. So I don't know what to do to help when I'm barely making money while I'm going to school.

I'm not in a career yet, but at least I started putting money into a Roth IRA so there's that. I'm terrified that I started saving so late/start a career so late that I'm going to be screwed.
posted by littlesq at 8:38 PM on February 1, 2016 [4 favorites]


You shouldn't have to have a Scrooge McDuck money pile to have any comforts in your old age. I refuse to feel bad for getting an education and not going into high finance as a job. I pursued jobs that I had skills and inclination for (but happened to not be high paying), married for love instead of money, and lived frugally but also did pay for some pleasant things like vacations, and godammit, I do not deserve to be sentenced to a miserable old age (and my kid to either bankruptcy or losing me early) for that. No one does.
posted by emjaybee at 8:50 PM on February 1, 2016 [49 favorites]


This is a terrible thread to read right before I go to sleep.
posted by desjardins at 8:51 PM on February 1, 2016 [6 favorites]


well huh

I mean, I guess on some level it's nice to know that my wife and I have as much saved up now at the age of 30 as two median American retirees

wait no what's the other word

horrific
posted by DoctorFedora at 9:03 PM on February 1, 2016 [4 favorites]


Yeah, I'm gonna take this out of my recent activity. Sigh.
posted by rtha at 9:03 PM on February 1, 2016


I will be another in the suicide camp. But before that I'll get married to a nice person who needs an extra bit of SSI. I won't get enough to live on, but I figured maybe my spouse will be ok with theirs and mine combined and whatever else they managed to get together.
posted by Belle O'Cosity at 9:50 PM on February 1, 2016 [2 favorites]


I've had this comic pinned up at my desk this past week. This thread seems like a suitable place to share it. If you're in the mood for gallows humor.
posted by paleyellowwithorange at 10:13 PM on February 1, 2016 [24 favorites]


I'm in my 50s. I have a teenager who is still 5 years from college. The 2008 crash killed my business dead, and I've never restarted manufacturing, because the small business banking world is all but gone. Small, short term loans are a thing of the past, and venture capital isn't interested in small manufacturing unless there are assets to be plundered.

My parents are old, and their pensions were plundered by companies like Bain. I've just been diagnosed with something that will make it almost impossible for me to work anywhere that isn't fairly forgiving...and frankly, I'm pretty sure I'll end up in the camp bed next to Emjaybee. We should just have the metafilter final plate of beans tent at the camp.

This is not the shiny, jet pack future I was promised, I can tell you. If I ever find out who switched the Universe to PK Dick mode, I will give them such a pinch.
posted by SecretAgentSockpuppet at 10:22 PM on February 1, 2016 [22 favorites]


This is not the shiny, jet pack future I was promised, I can tell you. If I ever find out who switched the Universe to PK Dick mode, I will give them such a pinch.

I'm telling you, man, it all happened right before Carter's second term. If you can get yourself back to 1981/82, that is the quickest and easiest tell. Stay in the Carter 2nd term timeline if you can make it there, at all costs.
posted by Meatbomb at 10:53 PM on February 1, 2016 [27 favorites]


Yeah I'm super lucky. I'm a planner at a municipality in Victoria BC, been there since I was 35. I have a pension which my employer matches the contributions to. My wife is a physiotherapist, also with a pension. She's been able to work part time as we have little kids. While I have an RRSP too, the pension security has allowed me to pull back on it a little and contribute to an RESP for my kids, who at 3 and 5 probably have enough in there already to pay university tuition for 5 years each.

We bought a house in 2011, and the combo of insanely low interest rates and crazy housing market means that I've seen about a $200k gain in equity in my house over the last 4 years. My parents were both teachers, my wife's parents were university professors. They all have good pensions and no mortgages, on houses that have gained silly valuations. We have generational wealth backing us, off largely public service jobs, the fortune of good educations, and fluky timing.

I still have day to day struggles as our gains are not seen in cash, and I still have a line of credit and a bit of a visa balance currently, but perspective is important. I worry about those less fortunate around me and the growing divide between the wealthy and the poor. We do what we can to support others in the community, but it's hard to deny that the accumulation of cash well outside the 1% is relentless and compounding. I hope that our politicians have the good sense to slow this, by considering raising minimum wages, increasing basic pension payouts, taxing very high earners more, stopping the insane housing market gains, reducing debt burdens for students, and doing everything else to lower this gap. I remain unconvinced that this will happen.
posted by jimmythefish at 10:53 PM on February 1, 2016 [4 favorites]


SecretAgentSockpuppet: “This is not the shiny, jet pack future I was promised, I can tell you. If I ever find out who switched the Universe to PK Dick mode, I will give them such a pinch.”
I know, right? The Sheep Look Up and Soylent Green were supposed to be cautionary tales, not handbooks. Jesus wept.

The one I really love is people finding it "worrisome" that 62% of Americans have less than $1,000 in savings. Yeah? Try being one of them.
posted by ob1quixote at 11:08 PM on February 1, 2016 [14 favorites]


Australia's solution to this is basically to give anyone over the age of 65 a simple "pension" the gist of it, being, you get $22,500 per year as long as you're over 65, the only restriction is an income test (which has a substitution rate of 50 cents on every dollar earned over $4,000) and a reasonably generous assets test where you can own $350,000 to $450,000 before you get cut off, and this costs the government about $30 billion a year, scale that up to America and you'd be at about $300 billion a year.

You don't pay anything into the system, it's yours by birthright.
posted by xdvesper at 12:24 AM on February 2, 2016 [30 favorites]


Viva Jurgis Rudkus!
posted by mannequito at 12:28 AM on February 2, 2016


This is why I eschew health foods and exercise. Have fun, eat a lot of food that comes wrapped in plastic from a factory with five smokestacks and a questionable environmental record, and have your shovel ready for the driveway during a blizzard in your 64th year.

I call this the Hostess Snack Cake plan. I should write a book.
posted by maxwelton at 2:03 AM on February 2, 2016 [31 favorites]


Before jumping straight to suicide, I have scheduled a few years of Bukowski-style alcoholism. Having suffered from alcoholism, I am certain this will make the transition to suicide easier. I will also have 30+ years of sobriety saved up by that point which I will be able to cash in. So it will be a true return to form, ouroboros style. Why beg for 6% on your 401k when every bottle offers 40%?

Unfortunately, modern America is so bleak that I'm not sure I'm even joking any more.
posted by milarepa at 3:22 AM on February 2, 2016 [15 favorites]


Listen to Lometogo, and move to Thailand.
posted by emf at 3:57 AM on February 2, 2016 [2 favorites]


Australia's solution to this is basically to give anyone over the age of 65 a simple "pension" the gist of it, being, you get $22,500 per year as long as you're over 65

Isn't it something like $22K per single, $35K per couple?

Even the Australian pension (which must seem like some sort of vile socialism to Americans) is pretty crappy, barely enough for rent and bills, much less out of pocket Medicare issues.
posted by Mezentian at 4:27 AM on February 2, 2016


My Social Security tells me that I'll be getting $27,700 a year if I managed to hang on until 67 and keep my current earnings for the next fifteen years which considering that my real salary has been stagnant for over a decade now, is unlikely.
posted by octothorpe at 5:04 AM on February 2, 2016


move to Thailand

What, and be killed by an elephant?
posted by mittens at 5:58 AM on February 2, 2016


Yeah, this is me too. Not much coming in the way of a pension, Social Security is a joke and I can't even collect that before age 68. "Retirement"??? Hahahahah!!! Not bloody likely!

My 'retirement' plan is simply to keel over and die.... keep working right up until the minute I fall down dead. Nothing else is affordable, no intermediate sick or not-working steps are allowed.
posted by easily confused at 6:15 AM on February 2, 2016


heh, this AM I thought of one approach to solve this problem.

Special 30% FICA tax on rents and mortgage interest, put into TIPS, pay out like IRAs (but no early withdrawals).

30% of $1200/mo over 20 years adds up to $86,400.
posted by Heywood Mogroot III at 6:22 AM on February 2, 2016 [1 favorite]


This is me in 6 years. At least the kids'll be out of college and I'll have zero debt to lay on anyone else.

I'll keep working till I die, I guess. I'm about to buy a new/used car, and I didn't realize at first that I was subconsciously looking for one I could sleep in, possibly live in. I think some Wal*Marts lets you park overnight and sleep, no problem. If you see a Kia Soul with a picture of "Bob" on the back, come on over and say hi, we can grill some squirrel or something.

Large Aerospace Corporation, for whom I've worked forever, had a pension plan, but decided, "Nah, we're not going to do that any more. To Stay Competitive."

Bukowski-style drinking sounds like a good final chapter, then out.
posted by sidereal at 6:34 AM on February 2, 2016 [1 favorite]


I hope this is helpful. I turned 59 this week, and I am financially okay. I have worked at low-paying jobs most of the last 25 years, but I was raising two disabled children on my own for part of that, so I never really made the big time. I'm not afraid of retirement poverty (I am afraid of dementia, but that's another topic) because I live in an area with a low cost of living (Northern Kentucky) and any time I've had a windfall of money, I used it to pay off debt (which I have had a lot of at times in the past, and now have only a mortgage payment that's less than $600/month). Even though I'm driving a 16 year old car, sleeping on a collapsed mattress, and yearn for a vacation, I don't spend money I don't have. The peace of mind is worth it. I have one credit card that I keep in a drawer. I carry only cash, a debit card, and my bike rental membership card. I have lots of friends, and cook big Sunday dinners for them every week. I am still earning the same amount I earned in the 1990s - I've never earned more than 40K in a year - but I've contributed to a 401K, and I'm thinking strategically about my future, downsizing all the time. I think I can get by.
posted by tizzie at 6:37 AM on February 2, 2016 [18 favorites]


I think I can get by.

On one hand, that's better than 9/10 of the rest of the world.

On the other hand, it's infuriating that anyone should have to say that when there are people who cannot reasonably fathom how much money they have.
posted by Mooski at 6:48 AM on February 2, 2016 [3 favorites]


Maybe they're not as happy as I am, she said facetiously.
posted by tizzie at 6:56 AM on February 2, 2016 [2 favorites]


These half-jokes about suicide would be a lot funnier if my mom hadn't gone that route after being unable to pay her bills and hold down a job as she approached 70. This isn't America in 10, 20, 40 years. This is America right now for many, many people.
posted by UltraMorgnus at 6:56 AM on February 2, 2016 [36 favorites]


I'm sorry, UltraMorgnus. That's dreadful. And yes - it is the reality right now.
posted by tizzie at 7:03 AM on February 2, 2016 [3 favorites]


Tizzie: wouldn't it be better if instead of "yearning" for a vacation, you could actually have one?
posted by EmpressCallipygos at 7:06 AM on February 2, 2016


These aren't jokes.
posted by snwod at 7:08 AM on February 2, 2016 [15 favorites]


Here's my process. I think about my goal: I want to quit work before I die and have some fun volunteering at theater, music events, ushering at baseball games, and reading to kids at schools, with no money worries. So when a shiny thing distracts me - a car that doesn't take ages for the heat to come on in the winter, for example - I envision the path to my goal, and then the detour to the shiny thing. If it's not worth the detour, I don't go. I stay on my path to what i really want the most.
posted by tizzie at 7:12 AM on February 2, 2016 [2 favorites]


That plan will only work as long as the only detours that come up on the path are "shiny things" that you can choose against. I'm not sure how the "think about whether the detour isn't worth the path to my goal" plan would work if the detour in question is "I have non-Hodgkins' Lymphoma and my insurance doesn't cover the deductible".
posted by EmpressCallipygos at 7:31 AM on February 2, 2016 [17 favorites]


I've stared a retirement account and if I commit to 30 years at my current job will supposedly get a pension provided that everything exists at that point. I'm 30, and have about 8000 or so that's better and almost close to the median of Americans which honestly scares the shit out of me.

I've done work in housibg for those with disability (which is like 8,500 a year) and people get by. But it is a miserably limiting life.
posted by AlexiaSky at 7:52 AM on February 2, 2016


Absolutely, Empress Callipygos. It was a huge setback when Kentucky's horrible new governor came on the scene and announced that he will get rid of the ACA. Now I am committed to buying expensive insurance for the foreseeable future.
posted by tizzie at 7:56 AM on February 2, 2016 [3 favorites]


Tizzie: I think the pushback you're getting is that the "just focus on your goal" approach you're advocating is coming across as a lecture and an implication that people in such difficult circumstances are there because it was entirely their own fault - when the reality is that people have been more so affected by things like "your governor got rid of the ACA", or things like that which are not within your control.

And also, you shouldn't have to choose between paying insurance and having a vacation. You shouldn't have to choose between "having enough to live on after retirement" and "having a better car" - you should be able to afford them both. I mean, it's great that you are, but wouldn't it be better if you didn't have to choose one or the other, but could have them both?

I think so. And the very reason that you are having to make that choice is because one of the biggest safety nets we had for the elderly - a pension - has been all but killed. And the people who killed it are a) corporations trying to save themselves money and b) government people being paid off by the heads of those corporations to vote in legislation that would let them do that.
posted by EmpressCallipygos at 8:04 AM on February 2, 2016 [10 favorites]


My only real worry is that if I am too old when the revolution comes I will not be in fit enough shape to carry away my fair share of the rich people's shit. Hurry up people!
posted by Meatbomb at 8:05 AM on February 2, 2016 [8 favorites]


Oh, I agree! I hate it that this is the way things are now. In a better world, I would have been able to have a better job because there would have been a system in place to care for my children so I could focus on my future. But I was treated badly. I can't undo that now.

I was just responding to the tone of hopelessness in the thread by saying, hey, I have not had a lot of economic advantages but here's how I'm making things work for me. Try to stay hopeful, and don't put your head in the oven. Especially if it's an electric oven. That plan never works.
posted by tizzie at 8:12 AM on February 2, 2016 [12 favorites]


I live in terror that my mother knows all these things and her unspoken retirement plan is that I will just have to take her in. Which, I will be honest, the selfish part of me does not want the burden --- and the practical part of me has no guarantee that I won't cripple myself doing it.
posted by nakedmolerats at 8:23 AM on February 2, 2016 [1 favorite]


There are windfall provisions these days so you cannot collect both a pension abs social security. How dare one try to get ahead in this world.
posted by AlexiaSky at 8:25 AM on February 2, 2016


Yeah, tizzie, but you're talking to people who already were doing that and then life came along and kicked them in the shins and now they're nearly 50 and wondering "but I did everything right and planned stuff out and I'm STILL screwed." They already denied themselves the vacations and the good cars and put things off until they could retire, maybe they tried to plan ahead and put aside a tiny bit extra so that maybe they could finally go see London when they retired as well, but then the curve ball came and so now they are feeling cheated out of that lifelong dream, and that is why people are so despondent, because they were doing exactly what you're saying and it still isn't good enough.
posted by EmpressCallipygos at 8:29 AM on February 2, 2016 [8 favorites]


Me and my wife are savers. We don't spend much and put savings first, modest and not. We drive a car from the last century. My parents are similar. They will take care of themselves.

My wife's parents are irresponsible boomer assholes who bought into the whole cash out refi thing, buy new cars no less than every 18 months and have a familial history of long drawn out expensive deaths on both sides.

They absolutely are expecting us to take care of them when the time comes and it will destroy us financially if we do.
posted by rr at 8:31 AM on February 2, 2016 [8 favorites]


There is an elderly character in a Dickens novel named Betty Higden, and her whole family (children and grandchildren included) is dead, and she has begun to have blackouts/seizures, and she is determined to die out in nature rather than get trapped in a government facility (poor house), where she’ll be abused and humiliated:
‘Do I never read in the newspapers,’ said the dame, fondling the child —‘God help me and the like of me! — how the worn-out people that do come down to that, get driven from post to pillar and pillar to post, a-purpose to tire them out! Do I never read how they are put off, put off, put off — how they are grudged, grudged, grudged, the shelter, or the doctor, or the drop of physic, or the bit of bread? Do I never read how they grow heartsick of it and give it up, after having let themsleves drop so low, and how they after all die out for want of help? Then I say, I hope I can die as well as another, and I’ll die without that disgrace.’

. . .

‘Johnny, my pretty,’ continued old Betty, caressing the child, and rather mourning over it than speaking to it, ‘your old Granny Betty is nigher fourscore year than threescore and ten. She never begged nor had a penny of the Union money in all her life. She paid scot and she paid lot when she had money to pay; she worked when she could, and she starved when she must. You pray that your Granny may have strength enough left her at the last (she’s strong for an old one, Johnny), to get up from her bed and run and hide herself and swown to death in a hole, sooner than fall into the hands of those Cruel Jacks we read of that dodge and drive, and worry and weary, and scorn and shame, the decent poor.’
But remember: studying literature is a waste of time, and higher education should be run like a business. It isn't like we can learn anything from the narratives and literature of human history.
posted by a fiendish thingy at 8:32 AM on February 2, 2016 [19 favorites]


Wait, are we seriously lashing back at a poster who raised two disabled kids and admits she gets by with a lifetime of working low-paying jobs despite not getting herself nice things in the here and now? She has already said that what she does/is doing isn't do-able for everybody, wishes she could change how her life went, and is trying say that sometimes there is a little bit of hope.

If anything, it's the system who created all of our fears about our future retirement that we should be angry at.
posted by Kitteh at 8:33 AM on February 2, 2016 [37 favorites]


buy new cars no less than every 18 months

The question we should be asking ourselves is, should bad car-buying decisions be allowed to drive people into ruin, into desperate poverty as elders? Should bad house refinancing decisions? How much are we going to let some picture of financial morality determine how much pain we allow our senior citizens to suffer? Where will we, as a society, draw the line? "I'm sorry, but you bought that fancy toilet with the heated seat back in your 40s; now you must battle rats in the dumpster for a half-eaten chicken leg."

Why are we so pleased to consign the elderly to frozen starvation, for having the audacity to have spent a little money in their youths?
posted by mittens at 8:38 AM on February 2, 2016 [5 favorites]


AlexiaSky (or anyone), please provide an example of such windfall provisons. I am skeptical of your claim, as Social Security is explicitly designed to operate in conjunction with either income from an IRA or a pension.

Now, I wouldn't put it past 'em. But reports of retirees eating each other to survive and stoking their hearth with the bones have yet to surface on the regular. So I'm guessing that part of the plan hasn't been implemented yet.
posted by mwhybark at 8:39 AM on February 2, 2016


I actually had a horrible sobering thought re: this thread early this morning. I am 39 years old, make about $14K a year, and am now scared to learn that most of my income actually depends on my husband's job. Fuck, that has gotta change or get better before I'm 50 or else I am fucked no matter how you look at it.
posted by Kitteh at 8:45 AM on February 2, 2016


AlexiaSky (or anyone), please provide an example of such windfall provisons. I am skeptical of your claim, as Social Security is explicitly designed to operate in conjunction with either income from an IRA or a pension
The Windfall Elimination Provision (no bias in that name) is what is being referred to here. It only relates to government funded pensions when someone works for the government long enough to receive a pension and has less than 30 years of social security income. It is more fair than it first sounds, because those employees otherwise look to social security like they were low earners because they accumulated low income through their working years -- their government income didn't pay into social security. Those kind of retirees get paid more than they put in -- which isn't really fair when they are "double dipping."
posted by Lame_username at 8:45 AM on February 2, 2016 [1 favorite]


It's also just become apparent to me in the last year, early-40s person with small child at home, that those folks who are talking about "working until they die" may be denied that privilege. As stated upthread, this is happening now. Get laid off in your early 50s? Now go find a new job. There's a big chance you won't get one. Age discrimination. Pace of industry change. Shrinking employment in your lifetime career sector? Too bad. Should've planned for that.

It's miserable.
posted by amanda at 8:47 AM on February 2, 2016 [17 favorites]


If anything, it's the system who created all of our fears about our future retirement that we should be angry at.

That's exactly what I was trying to emphasize.

I understand tizzie's motivation now (she was coming more from a place of trying to cheer people up), and I was trying to clarify the place other people are coming from as well. I don't know if that would as such be "lashing out", so much as "hmmmm, I think maybe the conversation you're trying to have may be different from the one you're actually having".
posted by EmpressCallipygos at 8:47 AM on February 2, 2016


Yeah but I can't put money into social security even if I wanted too.
posted by AlexiaSky at 8:48 AM on February 2, 2016


FWIW Tizzie I found your comment introspective and helpful, thank you. My own thought processes and goals will change as time goes by, and it's interesting to see where they go.

For example, Stuff. Some people can't live without their Stuff, and consider a home or a life without an accumulation of meaningful Stuff to be barren. Not me! Less and less and less. Eventually I'll be able to fit every Stuff object that's really meaningful to me into a couple of motorcycle panniers. I consider that a triumph (npi).
posted by sidereal at 8:49 AM on February 2, 2016 [8 favorites]


Am I the only one that doesn't feel sorry for the generation that fucked themselves and their kids/grandkids over?
Do you imagine that the people who have no money and are having to work in retail cashier positions when they are 65 had a significant role in shaping the future back then?
posted by Lame_username at 8:50 AM on February 2, 2016 [12 favorites]


I've lost the original author/location of this comic, but it definitely applies to this thread.
posted by Greg_Ace at 8:53 AM on February 2, 2016 [5 favorites]


Yes, I guess I sound like George Bailey! Picture me in black and white.
it's the system who created all of our fears about our future retirement that we should be angry at.
Am I the only one that doesn't feel sorry for the generation that fucked themselves and their kids/grandkids over?
There were a lot of people who played by the rules and got screwed anyway. "Employment at will" "Adjustable rate mortgage" - all tripwires to pull the floor out from below us.
But the younger generation is being sabotaged just as well. There used to be opportunities - through unions, through laws that let workers keep their intellectual property and patents, through adequate pensions, lots more - to better yourself as a worker. Now, this "gig economy" - I don't know how anyone can plan a future based on that.
posted by tizzie at 9:01 AM on February 2, 2016 [1 favorite]


I don't plan to retire, whatever. My life is still going to be in the top 1% of nice lives of anyone I was ever related to, so, you know, (relative) victory.
posted by internet fraud detective squad, station number 9 at 9:02 AM on February 2, 2016 [2 favorites]


And the lovely thing about windfall provisions is my wife is on SSDI. If something happens to me, and she were to recieve the pension portion dedicated to her, she looses half herdisability to take the pension. So she may gain 100 dollars total a month after it is all said and done. It might be better for her not to take it at all.

I've paid into SSI for 11 years and would love to continue to do so, but it doesn't allow me to.
posted by AlexiaSky at 9:05 AM on February 2, 2016


I recently negotiated to change my job duties to ones I consider more marketable because I'm terrified of being in my 50s and my job becoming obsolete, and thus being out of work for good.

But of course if I'm in my 50s and jobless no one may be willing to take a second look at me regardless of my skills.

Oh well, provided I'm still able, if I'm jobless before retirement I will have plenty of time to do political activism and zero shits left to give about getting arrested. I'll definitely try that before just offing myself.
posted by emjaybee at 9:11 AM on February 2, 2016 [2 favorites]


maybe we should go back to having lots of kids to support us in our old age
posted by internet fraud detective squad, station number 9 at 9:13 AM on February 2, 2016 [1 favorite]


The Windfall Elimination Provision (no bias in that name) is what is being referred to here. It only relates to government funded pensions when someone works for the government long enough to receive a pension and has less than 30 years of social security income.

More specifically, it only applies to people who had one of the state/local government jobs where you pay into a pension instead of paying into social security, not in addition to doing so. Illinois was like this when I did a couple of interviews there.
posted by ROU_Xenophobe at 9:13 AM on February 2, 2016


But of course if I'm in my 50s and jobless no one may be willing to take a second look at me regardless of my skills.

This is what broke my heart when my mom called, embarrassed and ashamed, to ask us for money last month. She gave up her long term full time job to provide round the clock care for my sick dad, but since SS doesn't provide much for them, she had to scramble to find work only to find that despite her years of office management and experience, no one wants to hire a 60+ woman. She sounds so sad that what she did find pays so poorly that she can't leave it because then there would be no income at all.
posted by Kitteh at 9:18 AM on February 2, 2016 [8 favorites]


The problem with "I'll just work till I die" is that the odds of having a nice tidy sudden death are lousy. People are much more likely to have a long slide downhill from heart disease/lung disease/diabetes complications/other disabilities, which means a period of years (possibly many years) during which they're not well enough to work, but not sick enough to die.
posted by shiny blue object at 9:20 AM on February 2, 2016 [7 favorites]


I'm 52 and I've never had a job that even offered a pension, and I've been working for 30 years. Had one job that matched my contributions to a 403b (that's the nonprofit version of a 401c) and one that let me contribute my own money to one, but that's it. And I cashed that out 9 years ago to buy this house. Now I have nothing but the house, a mountain of unpaid medical bills despite the fact that I've luckily never even been seriously ill - let's not even talk about what insurance doesn't cover, i.e. almost everything - and a retail paycheck that doesn't quite meet the bills. I am genuinely planning to rent the house out & go live in a van. If I can just hold on to the house I will at least have something to leave my kids. Old age just keeps on looking bleaker. And I am bitter - I see my future, I can look at some of my coworkers, well into their 60s and still hefting boxes of books because social security doesn't cover even the most basic needs.

When my aunts dementia got to the point where we couldn't take care of her at home anymore, we moved her into a nice memory care place - that cost $6000 a month. Cash. Medicare or Medicaid won't cover one dime of that, any more than they will cover a home nurse. Thank the gods she had money. I don't. I have told my kids If I get dementia to quietly put me down. I'm not even slightly kidding and we all know it.

I have never been a spendthrift - I've had the same car for 19 years, haven't had a middle class go away for a week vacation since the 90s - hell, I haven't even bought a new pair of shoes for 2 years! But when your income is as low as mine, it doesn't matter. It's expensive to be poor and there isn't any safety net. For years I joked that my retirement plan was a healthy heroin habit and a dumpster full of cats but it's just not funny anymore.
posted by mygothlaundry at 9:20 AM on February 2, 2016 [8 favorites]


My mom, who was of the WWII generation, had a reasonable pension with lifetime health insurance from her twenty-five years work at the Red Cross. With that she was able to have a modest but pretty good life in retirement until dementia hit. After that, the family and actually one of her friends* had to contribute quite a bit of money and especially time to put her into a transitional home and then eventually a nursing home. Without her pension, it would have been much, much worse. I can't think of how bad it's going to be now that no one has a pension, not even Red Cross workers since they started "running it like a business".

*One of her oldest friends, a gay man with no family and quite a bit of accumulated savings, created a trust fund for her and a few other friends to help them with their end-of-life medical bills.
posted by octothorpe at 9:32 AM on February 2, 2016 [1 favorite]


I'm in agreement with Amanda--"working until you die" seems like the optimistic case. I'm fifty-one and last year was the first year that I put some money in savings--a bit more than half of my income tax refund--and didn't touch it all year, although I was tempted. This year, I may put it all in, after reading the above article. But that's pretty much all I've got in terms of emergency funds, save for 401k things that I could cash out with a penalty. I misplaced my phone last weekend and was pretty lucky that I found it (I dropped it outside, in an area that I was unfamiliar with), and until I recovered it I was wondering how many things I'd have to cut or delay in my budget to replace it.
posted by Halloween Jack at 9:33 AM on February 2, 2016 [2 favorites]


Jesus Christ this is a depressing thread.
Nah, this is actually encouraging.
Being one of the few people struggling is terrible.

Being one of millions struggling just means when the transmission is interrupted and everyone realises they're not an island you'll be part of an army!
A grey-haired army shuffling towards the rich ready to fuck their shit up.

Don't look to Soylent Green, look to They Live.
posted by fullerine at 9:37 AM on February 2, 2016 [12 favorites]


Am I the only one that doesn't feel sorry for the generation that fucked themselves and their kids/grandkids over?

God, I hate this. I'm nominally a baby-boomer by a year but my siblings and many of my friends are solidly in that generation and they had nothing to do with that. Why do you blame a whole generation for things that 99% of them had zero control over? They're in the front line of people getting screwed over here, my sixty year old sister has no idea when she can stop working, I'm probably going to end up supporting her as her kids are never going to be able to do that.
posted by octothorpe at 9:37 AM on February 2, 2016 [9 favorites]


This is a heartbreaking thread. Richest country in the world, y'all!
posted by RedOrGreen at 9:38 AM on February 2, 2016 [4 favorites]


I was saving for retirement like a good citizen, then most of it was cashed in to pay divorce lawyers and every penny that would have been saved since then goes to child support, which will end when I'm about 55.
So I'll have a solid 10 years to start over and build my RRSP. right?
posted by rocket88 at 9:51 AM on February 2, 2016 [1 favorite]


Do you imagine that the people who have no money and are having to work in retail cashier positions when they are 65 had a significant role in shaping the future back then?

They voted for Reagan.

Now, I don't think old people should be left to suffer and starve, regardless of their political choices. Even if I didn't have basic human decency (which I hope I do), the collateral damage to others would be too large.

But sixty-five-year-olds now were forty or so in 1980, and forty-four-ish in 1984. They gave Reagan his absurd landslide in the second election. They voted to loot others, especially minorities, and, hey, what do you know, it backfired on them. The would-be looter became the lootee.

Sorry. As I said, I don't think they should starve. But I do blame them, and I don't forgive them.
posted by praemunire at 9:56 AM on February 2, 2016 [4 favorites]


Now, I don't think old people should be left to suffer and starve, regardless of their political choices. Even if I didn't have basic human decency (which I hope I do), the collateral damage to others would be too large. But sixty-five-year-olds now were forty or so in 1980, and forty-four-ish in 1984. They gave Reagan his absurd landslide in the second election. They voted to loot others, especially minorities, and, hey, what do you know, it backfired on them. The would-be looter became the lootee.

fortunately, sixty-five-year-olds are still capable of voting, and maybe we can team with them to correct what happened.

It isn't just millennials who are paying close attention to Bernie Sanders
posted by EmpressCallipygos at 9:59 AM on February 2, 2016 [1 favorite]


All of this talk of armed revolution, taking stuff from the rich...I would come up with a Plan B or C if I were you because you'll be up against virtually limitless surveillance and advanced weaponry outfitted on robots and drones.
posted by The Card Cheat at 10:01 AM on February 2, 2016 [5 favorites]


fortunately, sixty-five-year-olds are still capable of voting, and maybe we can team with them to correct what happened.

Unfortunately, a great many of them seem to have simply developed from a covertly racist narrative to an openly racist one. How many of them connect the dots between the policies they supported and the situation they're in now, as opposed to blaming the lazy/job-stealing immigrant and all those minorities on the endless supply of government freebies?

But I guess we must look for hope somewhere.
posted by praemunire at 10:08 AM on February 2, 2016 [1 favorite]


We had to empty our retirement accounts and all their tax penalties not once but twice- during the dot com crash the first time around when both my husband and I were laid off. Hey, we were in our 20s. Plenty of time to catch up. There wasn't that much in those accounts anyway. Then we had to do it again around 2012-2013. I had been out of work for a year due to health issues and my husband was let go from his job. He eventually found work again, but it was a year and a half without work, much of that without unemployment too. And his current job pays less, though it does offer overtime, which he's working himself to th the bone to try and make as much as he can. He's tired, angry at the world, no longer has much joy in anything. At times feels like he's losing his mind. I still can't work and it's been a slog going through disability. Never mind my own shame. We can't afford to be a single earing household. And every time I have a better day, I think 'maybe I can pick up something part time.' only to physically fall apart later. Yet I can't stop feeling guilt over not being able to contribute and being a huge money sink. We can't even think about saving- medical debt, credit card debt and interest. A mortgage that while not underwater, is more than we can afford. The house has so many little repairs that need to be done too. We should move but are stuck in this state where we're paralyzed with fear, so trying to maintain what we have seems like the only option. I'm now (finally!) getting some relief by way of medicine, but that's after years of expensive inconclusive tests. At $40 a copay, I am fucking losing it having to decide "do I go to this doctor appointment?" And putting off treatment. I just had one yesterday which as far as I could tell was completely pointless. I can't afford physical therapy and occupational therapy- that too as a $40/session copay. I'm trying to work out just a couple visits to the occupational therapist as we now have an idea of what is actually wrong so may get some benefit. The first time through was more or less a waste because they were treating the wrong illness. And I have two MRI orders that I'm just not doing because that's more medical debt. The treatments that have been the most helpful run about $500 out of pocket after insurance. The one surgery that promises relief is just not covered period and I can't see being able to afford paying for it. But we're on the cusp of not quite being so bad off that bankruptcy is an option. On the other hand, we might be soon.

And we're somehow supposed to save for retirement?
posted by [insert clever name here] at 10:08 AM on February 2, 2016 [9 favorites]


It's a relief to see that others see suicide as a viable retirement plan.
posted by cwarmy at 10:12 AM on February 2, 2016 [2 favorites]


College debt is huge in terms of reducing the capacity to save, including the capacity to buy a house. Houses are places to live, but have also acted to build equity. I'm close to retirement age, and not having a mortgage will make it possible for me to survive on social security and savings. Not live particularly well, but better than subsistence.

The market is higher than it was pre-crash, so if you're invested in broad indexes you should be ahead of where you were. Except that if your savings got trashed, if you lost your house, you lost your job, your new job pays less and you have credit card debt from job hunting for 2 years, etc., you didn't have money to invest.

The consumer economy encourages you to want not just a vacation, but a resort vacation, not just a reliable car, but a car that will climb mountains, whether you live near any or not, etc. I try to avoid consumerism. My parents lived through the Great Depression, and my Dad, especially, instilled in me a hatred of debt. So, the idea that I should take some responsibility for my retirement is okay with me. I've seen co-workers cash out pensions for various non-emergency reasons; you can't make people save.

But on the other hand, my employer says Hey, look, we'll match some 401K savings - but they'll only put in 1% and the vesting schedule is long. Not a meaningful approach to funding retirement. Many pension plans were busted up by takeovers. Some savings plans (Enron) were invested in the company itself, and vulnerable to corruption. Fewer companies have meaningful retirement plans. And the stock market is doing well, but if you have a diverse portfolio with some aversion to risk, the alternatives don't look so great. So, try to save for your retirement, but your employer should help.

My biggest worry is that Medicare will get dismantled by the conservatives who want to dismantle all social supports. I quite like beans and rice, but the frugal approach to health care doesn't really exist if you get sick at all. Even health maintenance is spendy.

Whatever you do, vote. Vote for liberals who support social supports. Another Republican majority is going to hurt even more. Many seniors rely on food stamps - they keep getting cut.
posted by theora55 at 10:12 AM on February 2, 2016 [3 favorites]


But sixty-five-year-olds now were forty or so in 1980, and forty-four-ish in 1984. They gave Reagan his absurd landslide in the second election. They voted to loot others, especially minorities, and, hey, what do you know, it backfired on them.
As someone who worked on the Anderson campaign in 1980 because I wasn't quite old enough to vote, I envy the easy certainty you feel about that election. The richer, whiter and more Y chromosomed you were the more likely you were to vote for Reagan. Women voted 54% for either Carter or Anderson. Jews, African-Americans and Hispanics overwhelmingly voted against Reagan. I'm going to bet that minorities and women are disproportunately overrepresented in the poverty-level 65+ cohort too.

I suppose one day subsequent generations will be blamed in sweeping terms for both Bush presidencies, as well. There have always been people fighting against the rich for social justice and they have pretty much always been a minority. If you ask me, blaming everyone of a certain age or blaming people for making poor investment or spending decisions throughout their life is missing the point and doing nothing but helping the ones who are really deserving of your disdain.
posted by Lame_username at 10:13 AM on February 2, 2016 [16 favorites]


I sit in my old car
Same one I've had for years
Old battery's running down
It ran for years and years

Don't like the food I eat
The cans are running out
Same food for years and years
I hate the food I eat
posted by Greg_Ace at 10:21 AM on February 2, 2016 [2 favorites]


My previous comment was very GYOFB-y. My point was that this is happening for all sorts of people around the country. We're lucky in having had any retirement savings to draw from. And we're lucky in that at least insurance coverage is okay even if not great. There is no way we'll have any financial stability in old age when we don't have any now and we're sort of okay. How can anyone?
posted by [insert clever name here] at 10:22 AM on February 2, 2016 [1 favorite]


My wife and I live in Canada, but one of her uncles is almost a parody of straight, white male Boomer entitlement. He grew up in a time of high taxes, which subsidized low university tuition, which enabled him to graduate with an engineering degree with zero debt, land a good job, buy a house and raise a family. Now he's retired and living the good life, but he is. Still. So. Goddamn. Angry. About how much he pays in taxes and how "lazy" young people are these days. There are none so blind as those who will not see, and he absolutely refuses to admit to any connection between his political beliefs (he and his wife were both original and active Reform Party members) and rising levels of income inequality and/or the financially precarious position a lot of Canadians are in.
posted by The Card Cheat at 10:24 AM on February 2, 2016 [10 favorites]


But sixty-five-year-olds now were forty or so in 1980, and forty-four-ish in 1984. They gave Reagan his absurd landslide in the second election. They voted to loot others, especially minorities, and, hey, what do you know, it backfired on them. The would-be looter became the lootee.

Oh, come on. Here are the actual election results from 1980. Yes, Reagan won clear majorities in the 30-and-up age groups, but he also matched or nearly matched Carter in the younger age groups as well. There were lots--lots--of people my age or nearly my age who really and truly believed that Reagan was going to permanently put the country back on track to regain the long postwar economic boom that our parents had enjoyed. Plus, Carter made the incredibly bad move of reinstating Selective Service (draft) registration, while the country was still dealing with the aftereffects of Vietnam; that didn't exactly endear him to young people.
posted by Halloween Jack at 10:55 AM on February 2, 2016 [2 favorites]


Universal. Basic. Income.

On the Record: Bernie Sanders on Basic Income (via)*
posted by kliuless at 11:09 AM on February 2, 2016 [2 favorites]


fortunately, sixty-five-year-olds are still capable of voting, and maybe we can team with them to correct what happened.

Something that took decades to break will take even longer to fix, even if we temporarily assume that it is fixable in the first place. This is not something that can be repaired with a presidential win or two.
posted by aramaic at 11:11 AM on February 2, 2016 [1 favorite]


Sidebar, but medical bills were mentioned several times in this thread so I thought I'd link this very interesting NPR piece about a company that is working in the "comparison shop for medical services" space. Their pitch is that they will pay you to comparison shop for things like x-rays, blood tests, MRIs, etc..
posted by amanda at 11:20 AM on February 2, 2016 [2 favorites]


My retirement plan is an ever-increasing collection of pills. Once I'm no longer "useful" to society, I have no intention of sticking around so that it can abuse me to death.
posted by chonus at 11:20 AM on February 2, 2016 [2 favorites]


The problem with entrenched wealth, as opposed to earned wealth (which is problematic itself when allowed to the extent of a Bill Gates), is that you don't need people to earn money themselves in order to buy the things you create that increase your own wealth. In fact, you want the opposite: a hungry population of serfs grateful for any crumbs, however token they may be.

We need to tax income, but taxing wealth is much more important to the health of a society. Eliminating the tax on, or allowing the sheltering of, estates is a sure sign your democratic society doesn't have much time left.
posted by maxwelton at 11:21 AM on February 2, 2016 [12 favorites]


I meant to add, that is why savvy industrialists look to provide their workers with decent salaries and benefits, while the decedent heirs to those fortunes look to deny their workers those same benefits.
posted by maxwelton at 11:25 AM on February 2, 2016 [6 favorites]


Something that took decades to break will take even longer to fix, even if we temporarily assume that it is fixable in the first place. This is not something that can be repaired with a presidential win or two.

The sooner we start, then, the closer we are to success.

I'm not saying that one vote will be a panacea. Instead, what I'm saying is that if there is some way to concretely tie the economic vagaries of the past 40 years to Reagan, then you show that to the people now in diminished circumstances and say "okay - here's why you're in the hole you're in." And then you show them the path out and let them be part of the group of voters who are already voting this way, rather than having them dismiss us all as "hippies" or "commies" or whatever.
posted by EmpressCallipygos at 11:33 AM on February 2, 2016 [2 favorites]


praemunire: But sixty-five-year-olds now were forty or so in 1980, and forty-four-ish in 1984.
I really hate to point this out, but the 1980 was 36 years ago, not 26.
posted by ob1quixote at 12:20 PM on February 2, 2016 [7 favorites]


If you ask me, blaming everyone of a certain age or blaming people for making poor investment or spending decisions throughout their life is missing the point and doing nothing but helping the ones who are really deserving of your disdain.


In the absence of fraud, if you are not morally responsible for your vote as a mature adult in an election for the highest office in the land, what are you responsible for? Reagan was forthright about his program before the 1980 election, and he was reelected (59% overall, 58% of the female vote, an absurd margin in modern times that has never yet come close to being matched) after an active first term. I don't think you can equate "not ever earning enough money to save for retirement" or "not being able to resist 24/7 all the blandishments of a consumer society" with "voting for a president because he promised to teach those black welfare queens in their Cadillacs a lesson."

Believe me, I've got plenty of disdain for our present-day robber barons, and, fortunately, I think that all people, regardless of political position, deserve safe places to live, healthy food, clean water, affordable and accessible health care, a strong infrastructure...all the blessings of a functioning civil society I'd like us to regain. I don't think penury in old age is a fitting punishment for political errors. So my opinions about some of the historical causes of our present predicament aren't all that relevant to my policy positions now and probably don't require further canvassing here. But, you know, when the question does come up...
posted by praemunire at 12:49 PM on February 2, 2016 [1 favorite]


Yeah, retirement, ahahaahahaahaa. Unless I marry rich (unlikely), 'retirement' is something that simply isn't going to happen for me. Best I can hope for is medical issues to carry me off (likely) before I have to rely on the joke that is the Canadian Pension Plan.
posted by feckless fecal fear mongering at 1:28 PM on February 2, 2016


I almost wish I'd still be around 25 or 30 years from now, to watch Millennials trying to justify their generation's political actions to the current crop of young people loudly shaming them for the state of the world, and to remind them of how righteously indignant they were at previous generations back in the day.
posted by Greg_Ace at 1:40 PM on February 2, 2016 [5 favorites]



But sixty-five-year-olds now were forty or so in 1980, and forty-four-ish in 1984. They gave Reagan his absurd landslide in the second election. They voted to loot others, especially minorities, and, hey, what do you know, it backfired on them. The would-be looter became the lootee.


Oh, yeah, tell that to my mom and dad. Or my elders in the union movement. Or my elders in racial justice movements. Or my elders in GLBTQ movements. You tell them "you voted for Reagan, you deserve what you got," they won't know whether to die laughing or smack you in the mouth.

I always love it when younger people think that everyone who is sixty five is identical - and identically represents this kind of...well, at best, this kind of shallow, ahistorical cariacature.

This is a big country. You can have a Reagan "landslide" and a numerically quite large opposition at the same time.
posted by Frowner at 2:06 PM on February 2, 2016 [21 favorites]


Also, seriously, if someone gets 59% of the vote, then by definition 41% of the voters didn't want him. Do those 41% also deserve what they got because they weren't out watering the tree of liberty with blood on November 3?
posted by Frowner at 2:08 PM on February 2, 2016 [13 favorites]


Yeah I sure as hell didn't vote for him - I also campaigned for Anderson before I could vote - and even my parents, who were in their 50s and comfortably upper middle class, didn't vote for Ronnie, the slick, lying bastard. I remember blaming the olds for all the problems as well - but you know after 30 or so years of marching, protesting, action, voting, etc., etc., here we still are, and if I'm not an old yet by my own standards I'm sure I am by yours. Idiot shitheads come in all age groups, I am sorry to report, and there are way too many of them out there.
posted by mygothlaundry at 2:53 PM on February 2, 2016 [6 favorites]


The problem with "I'll just work till I die" is that the odds of having a nice tidy sudden death are lousy. People are much more likely to have a long slide downhill from heart disease/lung disease/diabetes complications/other disabilities, which means a period of years (possibly many years) during which they're not well enough to work, but not sick enough to die.

Sure, most of my family lives/dies like this.

Either the government supports me, my kid(s) support me, a hospital takes pity on me, or I die of untreated whatever.

This is not an expectation born of ignorance. The idea that you completely self-fund an enjoyable and productive retirement is the outlier.
posted by internet fraud detective squad, station number 9 at 3:20 PM on February 2, 2016 [2 favorites]


(this, by the way, is why means-testing government retirement/old age programs doesn't work--huge moral hazard)
posted by internet fraud detective squad, station number 9 at 3:21 PM on February 2, 2016 [1 favorite]


People are much more likely to have a long slide downhill... during which they're not well enough to work, but not sick enough to die.

A bonus for folks at the top when very ill people get poorer and mentally addled enough to let their life insurance payments lapse.
posted by bonobothegreat at 3:34 PM on February 2, 2016 [3 favorites]


Get laid off in your early 50s? Now go find a new job. There's a big chance you won't get one. Age discrimination. Pace of industry change. Shrinking employment in your lifetime career sector? Too bad. Should've planned for that.

This thought keeps me up at night. I just turned 40 last week and I'm way ahead of the curve for retirement savings with $250k stashed away (but no house), but jobs for people in my field without doctorates are drying up fast, and I'm terrified of being out of work. I keep hearing people on the right saying people just need to retrain to learn new skills, but when you get to a certain age, this becomes a lot more difficult if not impossible. How could I compete against 20 year olds in the newest technical fields? Who would hire a grey-hair when they can hire an energetic young kid who's willing to happily work for much less?

I'm just hoping that wireless internet and VR like the Oculus Rift comes a long way (and gets a lot cheaper) so I can entertain myself if I have to live out of a van someday.
posted by Thoughtcrime at 4:48 PM on February 2, 2016 [2 favorites]


They voted for Reagan.

A little more than half of them did. Can we stop blaming entire generations of people for the problems of their time? Especially when it comes to election results.
And even the ones who did vote for him were deliberately misled by a well-funded propaganda machine.
People are seriously struggling from these problems. Please stop gleefully blaming them.
posted by rocket88 at 5:10 PM on February 2, 2016 [9 favorites]


(Wasn't the unemployment rate over ten percent during Carter's administration? I mean, yes Reagan appealed to racism, but people were actually hurting pretty badly during the Carter years. I think it's possible to see people hoping Reagan would turn things around, without seeing those same people as gleefully cheering the demise of retirement.)
posted by mittens at 5:44 PM on February 2, 2016 [2 favorites]


I met a Marxist activist and teacher couple in India a decade ago. They took the group to a tea plantation, and told the story of what happens when the market comes to you. As cities expanded, indigenous people – the adivasi – were pushed off tribal lands and forests by encroaching developments. Stories about bulldozers at dawn and heavy-handed troops pushing the natives from the forest. They lost not only land, but communities and livelihoods – and made a ready service class in new communities, where they worked in the dark. Whether that was night care, sanitation jobs, or things like cleaning the sewers. Suicides rates rose.

The activists took on the cause of these people, and one of their members found a little-known (at the time) law that allowed people to claim land as private if tea was planted on it. The nuances were detailed and fascinating, however I do not recall them. The activists taught the adivasi how to defend their land by planting tea around the edges. Whole fields were planted around villages, tying up government claims of manifest destiny for years. Not only did the tea serve to protect the land, it also gave the community a cash crop. The idea was that villages could use the cash crops and land ownership rights to transition from sustenance living in the forest, to lifestyles that interacted with the formal economy – but on the villagers' own terms. Agricultural production was far superior to low-value service jobs, the community had land rights, and most importantly it stayed together.

All was fine for a while, until the tea market began liberalising. What were local / domestic tea markets became international tea markets. Multinationals began buying tea plantations. Initially, that was a boon to the communities, for foreign purchases drove up costs. But then, production caught up, and eventually there was a price crash in tea. Many villages were devastated. Whilst the tea provided them with land rights, it also prevented diversifying production. When the price crashed, whole communities found themselves awash in rotting, unsold tea, and the children began to cry with hunger.

One man came to the activists and demanded where he could protest against the overproduction of tea. Who controlled tea production? We will go there. The activist responded that it was not the action of one person, or a local group of people. That the tea market has crashed. The man responded by asking to know where the market was located. He would go there and tell them what was happening to his family, and the other families in the village. He went on to ask what he had done to the market, and why the market had come to him? He had never asked for the market to buy his tea. He had never asked to be part of a market system to buy tea.

The activist learned that day that sometimes, the market comes to you.

Similarly, no London cab driver asked that Apple release the iPhone, software developers created the app store and then an app ecosystem. Driven by network effects, iPhone and Android devices created a large international single market for apps. The technology behind those phones enabled Uber to create a highly-efficient car booking system. Today, cab drivers around the world fight Uber, in what appears to be a losing battle. Another unionised labour force dismantled by the market.

Sometimes, the market comes to you.

I'll never forget that phrase, "where is this market?" In the world of the Indian man, everything in the world had a place. Yet, a market is an intellectual concept that proportions goods and services based on surrounding economic ideologies, methodologies, and systems. It is not a physical thing – not anymore.

Joseph Stieglitz noted the influence of free trade agreements in the following terms. Economic globalisation and liberalisation mean that the average wage of low-skill workers in America and China should fall to parity. For the Chinese worker, that would be a hundred-fold increase. For the American worker, that would be a ten-fold decrease. What is described as the "global market" has drastic human consequences – generally subjective human consequences. Would the average Chinese worker return to a world without free trade agreements? Would the average American worker?

What Donald Trump and Bernie Sanders appear to be capturing with their populist bases are a growing group of Americans that want to yell at the market. People who fulfilled their part of the social contract, only to find social security payments outstripped by rising prices, or that student loan payments outstrip post-graduation income. The spectre may be immigrants, but the problem is ultimately not immigration.

The story is not entirely different in other parts of the world. As the oil price declines, many countries erupt in uncertainty and violence. Systems already stretched by climate change now face the devaluation of their tea plants. The commodity that gave rise to blooms in the desert, now threatens to strangle entire countries. Leaders that six months ago approached the markets with gusto and abandon, now kowtow to each other. Submitting by choice before submitting by necessity. Their people want to yell at the market. Where as the low price of oil is a cause for celebration amongst consumers in Western countries. A diminishing oil price is a bon to retail sales markets, and a disaster for energy markets.

The markets we have built in pursuit of ultimate economic efficiency are working as intended – allocating resources to the places of greatest value, and suffocating those places of low / minimal value. There are two sustainability movements, in fact. One is environmental sustainability. The second is social sustainability. The first looks at how overconsumption is predating on the earth's finite carrying capacity. The second looks at how economic structures both enable and destroy society – or segments of society.

The move toward balance sheet-driven markets with profit as the determiner of value has resulted in record quantity of human innovation, and the truly amazing world that we live in today. It has also placed economic value above any other value – whether environmental or social. Today, we address all manner of ills with comments about the related markets. The problems with rhinos, elephants and poaching? The black markets for ivory in Asia. The drug problem that plagues the borders of Mexico and the United States? The black market for drugs in America. The problem of human trafficking of young women? The black market for prostitution readily serviced by Eastern European gangs.

The problem for younger Americans coming out of college with debt? A slow job market. The problem for older Americans unable to pay rent rises? Either the home rental market, or the financial markets – or both. The stock market crashes. America is the triumph of the free market economy. China's economic miracle came from a centrally-planned economy, an economy that now struggles to transition to a market-economy.

Yet, markets remain wholly unnatural, human constructions. Markets do not exist in nature, for markets require economic exchange. They require, first and foremost, a medium of exchange (currency) and then pricing / valuation. It is markets that enable specialisation, and specialisation that enables efficiency. Efficiency enables growth, and growth enables diversification and dominance. Markets are essential in the rise of human fitness, and in part what have allowed humans to dominate the earth, to the point of having no predators, other than other humans.

However, markets are also a construct enabled by policy and law. Markets require regulation to function. As distortions are introduced, market inefficiencies result. Inefficiencies disrupt markets and lead to uneven exchange. When I read this article, I see the silent victims of uneven exchange. What other reason could there be that a $17T economy – the wealthiest population that the world has even seen – fails to support its aged and elderly?

What reason can there be that the very people who helped build that $17T economy now face lives of desperation, despair, and suicide. If we are to believe that is the triumph of the free market, then the free market is not only cold and unfeeling, it now borders on murderous. It is that concept that lies at the root of the suffering so many now face, and at the society's perceived powerlessness to stop it. What is amazing about America from afar is that we constantly speak of freedom, power, empowerment, and gain, yet we then fail to take care of parents and children. That freedom and power is held up as the example for the world to follow, yet we are powerless to stop massacres of children in our schools. We are powerless to provide our elders with adequate medical care. We have the ultimate power in the world, yet we fail to provide basic security to so many of our own.

We put ultimate faith in our market economy, and now not only has it enslaved us, but it also makes us ill and in an increasing number of cases, drives us to kill – either ourselves or others.

And we act like these factors are part of the natural order. That the cost of the world's greatest society is the despair and death of our children and loved ones. When that is not only untrue, but also a delusion shared across "the most powerful nation on earth". For in Europe and Australia and many other counties, strong social systems sit in place. From social safety nets to social contracts. Functioning societies that look at not only economic growth, but also environmental sustainability and social sustainability.

It is not required that America's ageing population live in these conditions, for many credible examples exist of alternative systems. Some with higher per capita incomes, some with greater longevity. None with such a single-minded focus on economic authority and power. America may be the wealthiest nation in the history of the world, yet it has now become cruel and consuming. We espouse the virtues of democracy on one hand, yet then we fail to provide people with sanitary conditions in which to live and basic medical care.

This hidden suffering is not new, nor is it hidden, if you choose to look for it. It is one of the reasons that we have such a propensity for turning toward mass media – watching perfect manufactured lives, instead of looking at the lives of people in our communities. It is why the wring our hands when children are shot in school, yet claim impotence in the face of the NRA. For gun ownership represents freedom. Yet, in choosing the freedom to posses firearms, we are taking away other's freedom to life itself. Similarly, in choosing a blind allegiance to an economy we call free market, we are choosing to allow our parents to live in dereliction and decay.

Why do we live in a country where a lucky few amass billions of dollars in savings, while entire sections of the society have nothing? Why do those few live in such extreme opulence, while many suffer to the point of suicide? Why do we pursue 3% annual GDP growth, without considering the tremendous human cost of that?

Europeans move to America to get rich and live well. Europeans do not move to America for the outstanding social systems. Americans move to Europe for a greater experience of society and culture. Americans do not move to Europe to get rich and live well.

For, America is the triumph of an idea – hard work and individuality. Yet many of these ageing Americans worked hard, and are still working hard. Yet they have not found success. They have not achieved safety and wholeness. They struggled, and now continue to struggle. And they do so in a society of such tremendous wealth. It is at this point, that we must consider that their poverty is not an accident, for plenty of examples exist where the ageing in high per-capita societies do not live in such difficult conditions. We must consider that their poverty serves someone's agenda and purpose.

That the wealth and value that they do not have access to exists – for they helped to create it – but they they are not a party to it. For, it was lost to changes in the market. Savings in the financial markets. Pensions to the job markets. Housing to the housing markets.

The reality is that the ultimate market failure is the unbridled concentration of wealth and assets. Without functional redistribution mechanisms, regulation, and oversight, we see what happens when markets distort to their logical extremes. People enact untold violence on each other through the very structures of economic exchange that we so prize.

I am not saying this is an easy paradox to resolve, for it is the absolute right of the individual to rise and accumulate wealth that has resulted in the most innovative country that the world has ever seen. Whether driven by the fear of destitution or the desire of accumulation, the American economic structure has driven such tremendous developments in every arena. That an individual can rise from poverty to elite within a lifetime is a true testament to a system that rewards hard work and aspiration.

We must also face the fact that the same system punishes, and we are watching that system punish an increasing number of people – both young and old. The American economic system is both beautiful and brutal, for it enables endless extractions of wealth, for that it all that it prioritises.

And truly, it is no one's fault – there's no market to yell at. Rather, we see market economics tending toward their logical extreme. Where the value of human life can be so carefully calculated and valued, that we also have the ability to extract maximum value from it – crushing people in the process. Leaving them dying or dead, literally exhausted of value. We are so impressed and obsessed with our ability to create economic value, that we cannot bear the thought of its consequences. So enamoured with the potential to create personal economic value, that we shy away from our collective responsibility not only to protect each other, but also to support each other. For, while we care about other people, we cannot bear to care less about ourselves. For, while we believe that older people should have better quality lives, we are not willing to support them through taxes and wealth redistribution.

As I was growing up, I recall the extremists say, "the system is sick. the system is broken." I didn't know what they were talking about, for I failed to comprehend what the system was – what it looked like and how it manifested. Now, it is very obvious what the system is and how it operates and acts. Far from thinking it's broken, I see its actually working very well. Extracting as much value from people as possible, and depositing that value with the people that ultimately control it.

The dark truth of the American economy is that its built on the process of consumption. It's addicted to economic growth at all costs. So much so that the right of citizens to health care is a battle that's taken the majority of my lifetime. So much so that it's a political battle to protect the environment. There's nothing quite as sick as watching a country knowingly poison common resources like air and rivers. And yet nothing can get in the way of economic growth. Nothing.

I've often wondered what it would look like if Bulworth become real. If an American politician came to the forefront and addressed these topics head-on. "If you want to live the way you live, these are the costs. If you want to prioritise personal freedom over human life, you will have guns and dead children. If you want to prioritise economic growth regardless of the consequences, we will have aged people working in inhuman conditions where they cannot pay for either their rent or their medical care. If you want to lead the world in personal wealth, it comes at the cost of your fellow Americans."

I truly believe that America can achieve a society that's not only more economically just and generally kinder, but also more productive. For the accumulation of the 1% shows a market distortion that undoubtably has a drag on the larger economy. Whether the solution is health care, social safety net, universal income, or anything else, the point is solutions exist.

What I see missing is the collective will of the American people to step back from a society wholly dedicated toward economic growth – measured and valued in only economic growth – toward a more humane society that prizes life first. While I do read this article and consider it to be sad and difficult, I do not think that these conditions are accidental. For someone in India liberalised the economy and brought the market to the tea plantation. That was a decision that was made and enacted – a decision that had consequences.

Similarly, America as a nation chooses to put people into this poverty. It chooses to believe an ideology that accepts the destruction of one person is worth the ascension of another.

China is noted for its ability to have moved hundreds of millions people out of poverty within a generation. America will be notable for its decision to let people descend into poverty within a generation. But the most important point is that this is not accidental.

It is not accidental that the 1% have come to dominate civic, cultural, and economic life. It is not accidental that children are murdered in school by automatic weapons. It is not accidental that older workers slip into poverty. It is not accidental that housing markets are pricing vulnerable people out into homelessness. These are not accidental results, or even unintended consequences. These are not the signs of a sick or broken system. These are the signs of a very well-functioning system, for you do not create a $17T economy from a broken system.

There is also nothing to say that a $17T economy is going to be a kind, humane system. An economy that size may be a very abusive, unfair system. It may be a system arduous and destructive to many of the people living within it. There is not way to account for the human experience of a $17T economy, for that's just a measure of the size of the market. Not the human conditions that lie under it.

Ultimately, it's the lack of imagination of the American people that is responsible for this suffering. The lack of imagination that cannot see another way. A country that cannot see itself without guns. Or without an economy that grows at 3% per year. Despite the fact that older people are killing themselves, and people are killing each other, everyone in America seems to look at each other and think that this is simply the way it – the way it had to be. When it's very clear to people that live in the rest of the world that there are many other ways to live that don't involve such violence and exploitation.

It would be easy to say that America chooses to put people in these positions and exploit them – that it is a rational choice that's been made. I doubt that, for I doubt cruelty is implicit within the heart of America itself. It's much harder to accept the fact that the very qualities which made the country successful are creating increasing amounts of divisiveness and suffering. A country that prides itself on being a strong, visionary leader is now failing to protect its own people. In fact, it is feeding on them.

That itself is an affront to the American identity so deep that the country cannot accept it. It can barely stand to look at it. Until it does, there's going to be an increasing number of ageing people who suffer at the hands of poverty, and continue to blame it on the performance of various markets. When the striking reality is that America must – as a whole – consider what it wants to be. How it wants to show up and the world, and what it truly values. I personally believe that American can do much better. I hope that at some point, America itself realises that as well.
posted by nickrussell at 6:41 PM on February 2, 2016 [52 favorites]


I'll preface this by saying I don't remember where I heard this, but it seemed reasonable to my early-20's self at the time:

According to my hazy memory, the reforms that Carter put into place during his presidency didn't actually start slowly turning the economy around until the first part of Reagan's presidency - during which Reagan had already started dismantling those very reforms (in favor of the precepts of the Republican party, i.e. Big Commerce) and then immediately proclaiming "Hey presto, look, the economy's on the mend thanks to me!" Of course it wasn't until after his second election that those changes started manifesting, leading to the shitshow that was America's economy in the 80's and 90's.

In other words, We the People should be taught a better sense of history, including the reality that the Ship of State (and national economies) do not nimbly turn on a dime, and that we need to understand who to actually blame for the current state of the economy. Also, fuck the current attempt at retconning Reagan's incompetent blithering senile presidency.
posted by Greg_Ace at 6:49 PM on February 2, 2016 [1 favorite]


What really turned the 80s around was easing the Volcker punitive interest rates and letting the boomers borrow like they wanted and were able to.

https://research.stlouisfed.org/fred2/graph/?g= 3kFZ

blue is annual consumer borrowing as % of wages, red is "real" fed funds rate

https://research.stlouisfed.org/fred2/graph/?g=3kFU

is total borrowing (all sectors less finance) / GDP, showing the quantum state change that the nation enjoyed in the 80s (and got to repeat in the previous decade).
posted by Heywood Mogroot III at 6:55 PM on February 2, 2016


Nickrussell, wow. I read your comment twice, and it will take a while to sink in. But wow.
posted by tizzie at 6:59 PM on February 2, 2016 [4 favorites]


Wasn't the unemployment rate over ten percent during Carter's administration?

https://research.stlouisfed.org/fred2/graph/?g=3kGi

shows payrolls expanded by 10M jobs 1977-1980.

Problem was the median boomer was born in 1955 so there was a bumrush into the job market in the late 70s (and women were displacing men from jobs for the first time, too).

Also, the Volcker Fed really put the screws on the economy towards the end of Carter's first term.
posted by Heywood Mogroot III at 7:06 PM on February 2, 2016 [1 favorite]


America was pretty f-d up in the 19th century too, until the Progressive Era (which I learned was a center-right third-way reform movement, reacting to both the socialist / red left threat and the robber barons like Rockefeller and the other trusts).

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

is a pretty scary graph, a symptom of a larger problem, or imbalance.

Our economy provides for peoples' wants quite well, but not their needs.

Needs are where the economic rents obtain.
posted by Heywood Mogroot III at 7:10 PM on February 2, 2016


It is not accidental that children are murdered in school by automatic weapons.

How does this country’s failure to control school shootings tie in with our failure to provide a safety net?
posted by Going To Maine at 8:00 PM on February 2, 2016


Lack of mental healthcare, identifying the disaffected and those prone to violence and giving them the help and support (mental, physical, emotional, financial) they need to have a purpose, a desire to leave behind something other than a pile of dead bodies.
posted by feckless fecal fear mongering at 8:28 PM on February 2, 2016 [1 favorite]


The idea that one can "plan ahead" in an economy where pensions are rarities and student loans a must, is senseless victim-blaming. My parents didn't "plan ahead" to have a pension upon retirement; that was just what workplaces like theirs offered. And now those workplaces don't. The folks I know whose savings were wiped out by vagaries of the stock market didn't suffer from a lack of planning; they suffered from the fact that retirement income is never, has never been, under the control of workers, but always elsewhere. The control is elsewhere, but the blame is always on the worker.

Workplace pensions might have made sense in a time when you were signing on to work somewhere for most of your adult life. They don't make any sense today.

What happens to your pension when you change jobs? If you find a better opportunity, or you're laid off, or you need to move so that your wife can follow her career, then what happens to your pension? What if your company goes out of business, or the people who run it want to change the terms of the pension? What if you want to buy a house — you have a lot of money in your pension, but you can't use that to buy a house until you retire.

A government pension can be even worse because the voters can vote to change the terms at any time. Could you really sleep at night knowing that you could be one election away from ruin?

Even the best companies with excellent benefit packages tend not to provide pensions. They give you money to invest yourself. What's safer than that? You know exactly how much it's worth, and you are in control of it.

As jpe points out, the vagaries of the stock market didn't wipe out any prudent investor.

Ultimately, yes, retirement income is totally under the control of workers as you put it. It has nothing to with blame to point out this cold reality.

I would love to have a pension plan like my mom does, instead I've got to invest money myself in RRSPs and the like. Her pension plan has averaged an 11% annual return since inception and I'll be happy to get half the returns she does. Her administration fees are minimal because they get spread among all the teachers whereas I have to eat the full cost of whatever my bank charges me. Most importantly she didn't have to worry about any of this stuff because it was all taken care of. I've got a busy job that isn't in finance and small kids and I'm supposed to decide what mix of investments my retirement savings will have, and review this periodically. How is this a good idea?

You can buy any number of mutual funds that have minimal administration fees. Most Canadian banks offer free financial planning who can explain the basics of risk tolerance. Or you can just buy an index fund like SPY and forget about it. If you're confused, then I suggest taking advantage of friendly internet strangers.
posted by esprit de l'escalier at 4:50 AM on February 3, 2016 [1 favorite]


As jpe points out, the vagaries of the stock market didn't wipe out any prudent investor.

But as it turns out basing an entire nation's retirement system on the prudence of individuals doesn't work that well in practice.
posted by octothorpe at 5:02 AM on February 3, 2016 [6 favorites]


Pensions make sense from a risk mitigation point of view in terms of expected remaining life - if the average person dies at 70, with 90% of people dying between 60 to 80 years old, everyone has to plan to save enough cash to live until 80 and even 10% will not have enough money.

If everyone only saved until 70, half will have saved too much, and half will have saved too little.

If everyone saves until 80, 90% will have saved too much and 10% will have saved too little.

It's hopeless for a single person to try and manage this kind of risk. It leads to unbridled greed - because everyone fears they will never have enough. Even the 1% fear this. You see people accumulating millions of dollars and still feeling they don't have enough. It's a toxic system.

I would think there's a market for a private, defined benefit type pension that pays a percentage of your total contributions into the system - determined by some formula weighting contributions by date - from the date of retirement until your death. Essentially your contributions - via some formula - determine how much you get each month post retirement, but not for how long, it's simply provided for you until your death.
posted by xdvesper at 5:23 AM on February 3, 2016 [2 favorites]


They give you money to invest yourself. What's safer than that?

I think circumstances are answering that question quite well.
posted by mittens at 5:39 AM on February 3, 2016 [8 favorites]


xdvesper: If you're worried about living too long, you can buy longevity insurance. And it's human nature to never feel like you have "enough" (as you can see in this thread). It's not "toxic" in and of itself to be human.

octothorpe, mittens: What?
posted by esprit de l'escalier at 5:48 AM on February 3, 2016


Workplace pensions ... don't make any sense today. Half of my retirement savings comes from workplace pensions. Workplaces need to get rid of unfair vesting programs, which penalize workers who get laid off, move for family reasons, etc. At 1 workplace (a non-profit pleased with its commitment to social justice), the hiring season was October - September, but the vesting period was January - December. If you got laid off Sept 30 because your contract didn't get re-funded, you lost a year of vesting. When workers are terminated, their pension funds should be fully vested.

(In a triumph of procrastination, I never got around to moving those funds, which were well managed and in socially responsible investments. When the organization moved to a new retirement plan, everyone still in the plan got 100% vested, so my funds were doubled.)
posted by theora55 at 5:53 AM on February 3, 2016 [1 favorite]


If you're worried about living too long, you can buy longevity insurance.

Or an annuity.
posted by ROU_Xenophobe at 6:40 AM on February 3, 2016 [1 favorite]


Not sure how people are supposed to save and invest when many of us can barely pay our rent

But ok, you save for retirement, you're a better and smarter person than the dumb losers who are poor and thus have a high need for immediate liquidity

Congrats
posted by internet fraud detective squad, station number 9 at 6:40 AM on February 3, 2016 [13 favorites]


Could you really sleep at night knowing that you could be one election away from ruin?

"Could you really sleep at night knowing that the free-marketist politicians I support might win?"
posted by Rustic Etruscan at 6:49 AM on February 3, 2016 [4 favorites]


A government pension can be even worse because the voters can vote to change the terms at any time. Could you really sleep at night knowing that you could be one election away from ruin?

It's unclear how much "the voters" are in the driver's seat when it comes to these issues, but yes, the political process can change government programs. Then again, the political process can just as easily change many other things about economic policy that affect the entire economy, so I don't see why we should be particularly worried about Social Security or any other government insurance program when that same process can elect someone who could transform economic policy in ways that would make eliminating Social Security seem quaint by comparison.

The details of how these programs are funded and how much people get out of them can and do change over time, but I'm going to have to go [citation needed] on the notion that market-oriented mechanisms will somehow be more certain to protect people.

As jpe points out, the vagaries of the stock market didn't wipe out any prudent investor

Index funds are great, but what about people who needed access to their money in 2009 and 2010, and couldn't ride out the big dip in the economy that affected not just stock funds, but also bond markets and even threatened money markets? Expecting hundreds of millions of people to be "prudent" is fantasy, and people are going to fall through the cracks. It's fantasy to suggest that defined benefit government programs are somehow more uncertain than that.
posted by tonycpsu at 7:00 AM on February 3, 2016 [3 favorites]


I don't see why we should be particularly worried about Social Security or any other government insurance program when that same process can elect someone who could transform economic policy in ways that would make eliminating Social Security seem quaint by comparison.

I am guessing that the spirit of the staircase was referring to the pensions you get from working for the government for umpty years, not social security. These pretty routinely get fucked with by elected officials or just voters directly in the same way that private employers fuck over their employee pensions.
posted by ROU_Xenophobe at 7:47 AM on February 3, 2016 [2 favorites]


OK, but the very same political process created the 401k by which employers were given incentives to transition away from defined benefit pensions and toward investing in the markets, so I don't see why government pensions are particularly vulnerable, aside from the fact that all government spending is vulnerable. But of course the way 401k contributions are taxed is just as variable, and if that changes, employer contributions will change along with those changes.

My point is that political change happens all the time, and goes in many different directions, so I don't see it useful as an argument for or against any particular type of policy intervention.
posted by tonycpsu at 8:00 AM on February 3, 2016


Something held by the state is more liable to vagaries of state policy than something that is actually and legally your property.
posted by ROU_Xenophobe at 8:23 AM on February 3, 2016


Yes, money under my mattress is safer than money I may or may not get from a pension, but that's true for any promise of money in the future in exchange for money now, including all investments.
posted by tonycpsu at 8:29 AM on February 3, 2016


Your idea that electing someone would so transform economic policy that it would ravage your investments is much less likely than someone ravaging a particular pension plan. The reason is that destroying shareholder value is extremely unpopular whereas pilfering the pensions of police officers (for example) is much less unpopular. Anyway, if your'e worried about that, you can shield yourself from unfavorable domestic policy by investing some of your retirement savings in foreign markets or government bonds (which are not controlled by the government paradoxically).

Index funds are great, but what about people who needed access to their money in 2009 and 2010, and couldn't ride out the big dip in the economy that affected not just stock funds, but also bond markets and even threatened money markets? Expecting hundreds of millions of people to be "prudent" is fantasy, and people are going to fall through the cracks. It's fantasy to suggest that defined benefit government programs are somehow more uncertain than that.

That's called risk aversion, and if you're too risk averse for index funds, then invest in blue chip stocks. If you're too risk averse for blue chip stocks, invest in government savings bonds.

Personally, I find it paternalistic to suggest that the government should manage everyone's money because some people are too imprudent to manage it themselves. But worse than paternalistic, it removes control from individuals who understand their own financial situation best.
posted by esprit de l'escalier at 8:38 AM on February 3, 2016


I worked for Vanguard for 5+ years, so I know very well what risk aversion is. And call it paternalism if you like, but the reality of the situation is that people don't actually understand their financial situation best, not when it comes to long-term planning. We may wish they did, but they don't, and we don't build public policy for spherical cow ideal citizens, we build it for the citizens we actually have -- people who are very busy, not necessarily great with budget management, many of them too poor to afford someone to give them sound investment advice.... Relying on the magic of markets doesn't have a solution for these people, and "you should have been more prudent" is not to me an acceptable answer to people who end up living their twilight years in poverty.
posted by tonycpsu at 9:16 AM on February 3, 2016 [12 favorites]


Index funds are great, but what about people who needed access to their money in 2009 and 2010, and couldn't ride out the big dip in the economy that affected not just stock funds, but also bond markets and even threatened money markets?

Assuming you have a portfolio mix of 70/30 stocks/bonds at the start of 2008, when you rebalance at the start of 2009 and 2010, you sell some of your bonds, which shot up in value as yields on new debt tanked. Some of that you keep in cash for living expenses, and the remaining you reinvest in stocks that have now fallen. It's true that AGG was only up up 4 percent while S&P was down 12 percent over the course of 2009, so your total portfolio would have to be more strongly bond focused. If you're as risk averse as espirit implies, a 30/70 stock/bond mix would have been roughly even, but at the very tangible loss of long term returns from equities over the following years.

One of the benefits of regular rebalancing is that you are buying low and selling high while following a simple heuristic. Nearly every retirement account brokerage offers a series of 'lifecycle' funds which automatically transitions from the 70/30 position to the inverse over time, based on a set of retirement dates. I personally think companies charge too much for the service, and the defaults are extremely risk averse, but these are both the related to federal regulation allowing lifecycle funds to be default investments.

I recognize that not everyone is capable of managing this stuff, and that brokerages often have huge incentives to talk their customers into moving funds out of lifecycle funds into ever higher expense ratio funds. But it's not at all clear to me that the history of pensions and social security formulas is any more stable than the markets that fuel them.
posted by pwnguin at 9:21 AM on February 3, 2016 [1 favorite]


But it's not at all clear to me that the history of pensions and social security formulas is any more stable than the markets that fuel them.

The data is very easy to find for SS, so I think the burden of proof is on others to show what the average rate of return is for the median investor, not this regularly-rebalancing financial-advisor-calling ideal investor that is so often pointed to as the model we should all aspire to.
posted by tonycpsu at 9:26 AM on February 3, 2016 [3 favorites]


Personally, I find it paternalistic to suggest that the government should manage everyone's money because some people are too imprudent to manage it themselves.

The problem with “prudent” and “imprudent” is that it adds a rather derisive moral overtone to the whole thing. We want to reward prudence, and if you were imprudent then you deserve what you get. But it also feels minimizing. “Imprudent” -to me, at least- sounds like you made a dumb decision and you suffer some immediate consequences. Google mentions “rash” in its synonyms, and that doesn’t sound that far off. But these are peoples’ lives. To suggest that someone has blown away the chance for peace in their elder years because they were “imprudent” to not understand the complicated ins-and-outs of saving enough money to live on for at least twenty years really downplays the difficulty of that task, or of simply knowing who to trust.
posted by Going To Maine at 9:31 AM on February 3, 2016 [5 favorites]


You know, one can have both a pension and personal investments. Indeed, since it is usually the affluent who complain about pensions and the poor who benefit most from them (when they have them), I imagine that an affluent-type person could manage to sock away quite a lot of retirement money on their own in addition to their pull at the government teat.

Why, you may ask, do we even have any government interest in retirement? Well, it's because outcomes are better for the majority! The government's job isn't to make me feel like a special snowflake for being good at stocks; it's to manage population-level problems.

An interesting case study occurred, famously, when Chile dismantled its public pension system. (I draw on an article of Mark Cooper's from a few years ago.) Everyone except the armed services and certain government employees was forced into a privatized system. (Why do you think the armed services and certain state employees got the guaranteed outcome program? I wonder what the government was expecting to happen....) And of course, the people who had a fixed pension payout were able to retire, and outcomes weren't very good for most other working people. As you might have expected, the idea had been to loot the public coffers and enrich the investment banks.

Public, defined benefit systems work for the overwhelming majority, while still leaving space for people to invest on their own.
posted by Frowner at 9:52 AM on February 3, 2016 [8 favorites]


You know, one can have both a pension and personal investments. Indeed, since it is usually the affluent who complain about pensions and the poor who benefit most from them (when they have them), I imagine that an affluent-type person could manage to sock away quite a lot of retirement money on their own in addition to their pull at the government teat.

No, it has nothing to do with affluence. The problem with pensions for rich and poor people is that you have huge restrictions on what is supposed to be your money. Or do poor people not change jobs? Do poor people never buy houses? Do poor people never get laid off?

An interesting case study occurred, famously, when Chile dismantled its public pension system. (I draw on an article of Mark Cooper's from a few years ago.) Everyone except the armed services and certain government employees was forced into a privatized system.

I looked up this article, and that privatized system forced you to make pension deposits through an oligopoly of private banks. That's totally different than the system you have in most of the western world where your investments are essentially unrestricted.

The problem with “prudent” and “imprudent” is that it adds a rather derisive moral overtone to the whole thing.

It's certainly not intentional on my part. I'm just coldly describing the pros and cons of pensions versus personal investment. You're right, that personal investment isn't easy for some people. Not everyone has the luxury of parents who sat them down when they got their first job to explain to them how much they needed to save. However, there is no need to imbue upon the cold reality this "derisive moral tone".

The fact is that for most people, pensions are more limiting then freely investing your own money for all the ways I described above. You're right that one benefit is that you can't screw it up no matter how bad you are with money. But if you're that bad money, can't you just see a financial advisor one time? —or just buy GICs?

Maybe the problem is reintroducing a complicated system of pensions (what happens when you change jobs, get laid off, want money to buy a house, etc.) Maybe the problem is financial illiteracy. Maybe it should be a mandatory course in high school?
posted by esprit de l'escalier at 10:22 AM on February 3, 2016


Personally, I find it paternalistic to suggest that the government should manage everyone's money because some people are too imprudent to manage it themselves.

the gov't already manages everyone's money :P the question is getting the fed* to work for us and not the banks!

And truly, it is no one's fault... It is not accidental that the 1% have come to dominate civic, cultural, and economic life.

not to nitpick, but just to note that 'we' and the groups of hive minds that we consist of -- our circle of concerns -- expand and contract depending on circumstance and attention, sometimes even of our own making...

also btw, if you're interested in bringing morals to markets, triple bottom lines, benefit corporations, stakeholder capitalism, sustainable wealth, etc. check out: ---
*and if not the fed -- or any other central bank -- then moving fiatcoin, RTGS and ledger systems to platform cooperatives! (like nationalizing uber ;)
posted by kliuless at 10:32 AM on February 3, 2016 [4 favorites]


pensions are more limiting then freely investing your own money for all the ways I described above

When a company decides not to do pensions, do wages increase so that the employee has the equivalent amount of money to invest? My impression has been that they do not; that the dismantling of the pension system has not redirected those funds to employees at all. Certainly I do not see a great gap between wages at companies that offer pensions and those that do not (generally poor pay in government jobs notwithstanding). I would be pleased to be corrected on this, though.
posted by mittens at 10:54 AM on February 3, 2016 [1 favorite]


When a company decides not to do pensions, do wages increase so that the employee has the equivalent amount of money to invest?

Assuming no market failure, remuneration is determined by market forces. So, yes, if a company takes away pensions, they need to pay more in order to retain their workforce.
posted by esprit de l'escalier at 11:04 AM on February 3, 2016


Assuming no market failure, remuneration is determined by market forces. So, yes, if a company takes away pensions, they need to pay more in order to retain their workforce.

Oh, bless your heart.
posted by octothorpe at 11:34 AM on February 3, 2016 [34 favorites]


So, yes, if a company takes away pensions, they need to pay more in order to retain their workforce.

or they pressure the government into free-trade agreements with other countries who have less stringent labor laws, and then move production to those countries.
posted by EmpressCallipygos at 11:38 AM on February 3, 2016 [6 favorites]


So, yes, if a company takes away pensions, they need to pay more in order to retain their workforce.

Or they just don't. Go find another company in the same sector who's not also in a race to the bottom.

On top of that, you'd be the new fish. First in, first out when the hits come.
posted by amanda at 2:43 PM on February 3, 2016


A suggestion to buy index funds for someone wishing they could get the 11% return their mom had access to? Most of my money is in index funds, but I'm not getting 11%.

It is not accidental that children are murdered in school by automatic weapons.

Just to be pedantic, but you mean semiautomatic. Automatic weapons would be far less effective; man-portable ones are mostly only good for suppressive fire.
posted by Thoughtcrime at 4:01 PM on February 3, 2016


A suggestion to buy index funds for someone wishing they could get the 11% return their mom had access to? Most of my money is in index funds, but I'm not getting 11%.

In the past thirty years, from 1986 to now, the annualized total return on the S&P 500 (including reinvesting dividends) has been 10 percent. Over that time span, some of the return is due to inflation, but even over the past five years it's been over 11 percent.
posted by pwnguin at 7:10 PM on February 3, 2016


Inflation eats half of that, and if you choose other start and end dates, you get some far less appealing numbers, which is the whole point here. Retirees don't get the luxury of riding out market troughs or waiting for the next boomlet, and non-retirees often aren't thinking about trying to make things better for years they might not even be around for. No amount of mandatory financial literacy education is going to change human nature.
posted by tonycpsu at 9:44 PM on February 3, 2016 [4 favorites]


Where do you live that inflation is 5%? In the US, inflation is 1.5% as a result of a conservative monetary policy.

This is the problem for young people: capital is much more productive than labor and so the rich get richer. However, the other side of the coin is that any money you do save is growing at 8%, which amazing. One beer you don't drink today, is 8 beers you can have 27 years from now.

Non-retirees who aren't thinking about trying to make things better for years they might not even be around for are probably not going to be able to maintain their standard of living. I don't see why that should be contentious. It is the basic truth of the Ant and the Grasshopper.

or they pressure the government into free-trade agreements with other countries who have less stringent labor laws, and then move production to those countries.

This point has nothing to do with pensions. Anyone who finds a cheaper worker can lower your wages directly. They don't the fancy accounting of removing your pension.

octothorpe: I don't understand your one snide comment after another.
posted by esprit de l'escalier at 2:13 AM on February 4, 2016


octothorpe: I don't understand your one snide comment after another.

In this case, I think that the snide comment would be for all of the folks who have lost their pensions, seen no wage increase, and been unable to do diddly squat about it. (I assume there are numbers for that, because it appeals to my guts and to, well, the poverty described at the heart of the FPP articles, but I’ve got no specifics for you.)
posted by Going To Maine at 2:45 AM on February 4, 2016 [2 favorites]


If you're going to make statements completely divorced from the reality that the majority of Americans experience in their careers, you earn snide remarks. Anyone who's had their pension and other benefits reduced over the years with zero increase in wages would be rightly insulted by your glib assertions that the magic of the market will compensate them. You say that people should just invest more "prudently" for retirement when people in this thread are telling you that they have no money to invest. Personally I've had to put a higher and higher percentage of my income into my retirement because my salary has dropped over the last decade and the matching offered has gotten less and less.
posted by octothorpe at 3:18 AM on February 4, 2016 [9 favorites]


If you're going to make statements completely divorced from the reality that the majority of Americans experience in their careers,

Did you read the article? 71% of Americans have savings or pensions. The article is not about the majority. It is about a minority.

Anyone who's had their pension and other benefits reduced over the years with zero increase in wages would be rightly insulted by your glib assertions that the magic of the market will compensate them.

I never said that. What I said is that they will always earn their market value. The fact is that that market value has gone down for some people. That has nothing to do with pensions or retirement. It has to do with globalization and conservative redistribution. Your anger is misplaced.

You say that people should just invest more "prudently" for retirement when people in this thread are telling you that they have no money to invest.

I never told anyone what to do. I was responding to a specific statement and what I said was that prudent investors were not wiped out by vagaries of the stock market. That is a totally fair statement: If you were risk tolerant, your index funds bounced back; if you weren't, your GICs did alright.

Listen, no one "earns your derision". I understand that no one likes the messenger of bad news, but the ridiculous assertion that pensions disappearing is at the heart of people not saving for retirement is wrongheaded and false. (If you lost your pension, that only proves why pensions are not a good idea.) Stagnant wages and a culture of overspending are probably the biggest culprits.

I understand that people feel blamed for overspending. They say "why can't I take a vacation today… and still have vacations in my retirement?" And the one person in this thread who had the "nerve" to suggest that she is saving for retirement despite a very difficult situation is made out to be blaming everyone else. As if the only question here is a moral one: who is a good person and who is not? No. There are no moral questions here. Everyone in this world is doing his or her best. The question is should you be saving for your retirement. And I humbly suggest that if someone doesn't know the answer to that question that they take advantage of the free resources I posted above to get advice on that.
posted by esprit de l'escalier at 4:03 AM on February 4, 2016


I understand that people feel blamed for overspending. They say "why can't I take a vacation today… and still have vacations in my retirement?"

I'm not sure which "they" we are talking about. What I hear people say is, "why can't I pay student loans today...and still have housing in my retirement?" "why can't I afford this awful divorce today...and still have food in my retirement?" "why can't I pay these exorbitant medical bills today...and still have electricity in my retirement?"

We don't have a culture of overspending. We have a culture of underpaying. It's not simply that blind market forces have put out their ricardian fingers and nudged us towards poverty and our global neighbors into increased wealth; in the midst of our productivity increasing to levels never before seen in the history of work, market forces didn't destroy our pension plans. Viewing pensions as fat piggy banks to be smashed to pay for more CEO fun destroyed our pension plans. That does not argue for pensions being a bad idea; it argues for stronger protections against this sort of piracy.

I would not for a moment argue that people shouldn't save--if anything, this thread convinced me to kick a few more bucks into my plan. But the point is, we have taken a basic protection for our elderly, and stripped it away, replacing it with something that looks and sounds like personal responsibility, but is really just the same bewildering "choice" that we face when trying to judge between cell-phones or cars or anything else, an onslaught of things that look like information but are actually marketing, and expecting people to see through all that to choose some golden perfect strategy or else, failing that, starve.

Sometimes it's good to talk about personal responsibility. Everyone should put on their seat-belts. Everyone should brush and floss. Everyone should sit quietly in the movie theater and turn their phones off. But some things are too big for personal reponsibility--a multidecade savings plan that must be protected from all the expensive tragedy that can happen in a 70+ year life, where precisely the right strategy must be picked, where nothing can be allowed to go wrong. In those cases, we as a society must reject the notion of personal responsibility and fables about ants and grasshoppers, must see it as societal responsibility to protect people and their funds...or must admit that they prefer a colder, crueler world based on a fairy tale.
posted by mittens at 5:38 AM on February 4, 2016 [24 favorites]


Possibly relevant: Canadians don't trust the market, keeping more of their assets as cash. BlackRock survey (referenced in the article) finds a surprisingly large percentage of people view investing as essentially just a different type of gambling.
posted by aramaic at 6:28 AM on February 4, 2016


All right, I'll jump in: yes, there are financial advisors for people to take advantage of to see if they can start saving money, you are correct. But here's what I think you're overlooking: time and maybe shame.

Let's say you already have a long work day, bills to worry about, maybe kids to feed, a mortgage, etc. It can be exhausting and damn near impossible to schedule time off work to see one. Or maybe you can't find a sitter to watch the kids so you and your partner can go see one. It's not easy when you're expected to work so hard for often so little. I work in an financial advisory office and hear firsthand when I contact clients about how they need to pick up a shift or something similar so they can't really make it to talk about how to put more money into their RRSPs right now. Or their wife got sick so right now there's a mound of medical bills that need to be paid not a contribution to their RRSPs.

And don't forget shame. People aren't stupid; they know they should be saving for retirement, for emergencies, for post-secondary education for their kids. But how would you feel if you could make time for meeting an advisor, but knowing full well in your gut that you don't have any extra money to sock away towards a retirement account? That you're scraping by enough as is? I have been a poor adult; I have felt the flush of shame on my face when I just had to call the utilities company to beg for an extension on my bill. Now imagine doing that in front of someone who is trying to set you up with an retirement savings account, who is telling you that if you just contribute this and this amount of money towards it, you might have something when you retire? Especially if you know you absolutely don't have even that meager amount to spare?

Financial advice is all well and good, but it's not as easy as "there are plenty of services, why don't people understand that?".
posted by Kitteh at 7:17 AM on February 4, 2016 [7 favorites]


Did you read the article? 71% of Americans have savings or pensions. The article is not about the majority. It is about a minority.

I think you're misreading the article, actually: of "households with members aged 55 or older...nearly 29 percent have neither retirement savings nor a traditional pension plan." That 71% figure applies only to age cohorts nearing retirement age -- and yet, prudent retirement planning should start much, much earlier. But this article doesn't speak to early financial planning. The percentage figure also only applies to those individuals who have a plan in place -- it makes no judgement on whether that retirement plan is sufficient.

What a lot of people here are saying is that, firstly, having retirement savings isn't the same thing as being ready for retirement. There's a number of Americans aged 55 (or older!) with retirement plans or defined-benefit pension plans who aren't ready to retire -- again, per the article(s) in the FPP:
Estimates about the size and scope of the retirement savings problem vary widely, the GAO found. In addition to examining the Survey of Consumer Finances, it reviewed nine studies conducted between 2006 and 2015 by a variety of organizations, including academics, benefits consultant Aon Hewitt, the Employee Benefit Research Institute (EBRI) and the Investment Company Institute. Based on these reports, it concluded that one-third to two-thirds of workers are at risk of falling short of their retirement savings targets.
We might be talking about a majority of Americans who are not prepared to retire, despite saving for retirement. Looking at Americans (over the age of 18) as a whole, over 7% do not have a bank account (as of 2013). I think it's reasonable to say that that's 7% of Americans who are also not putting (non-cash) money away for retirement -- the main reason given by most people asked was that they did not have enough money, not that they were making an active choice to be un-banked.

Prudent saving should start early, sure. But you need money to save. Stagnant wages are, I agree, a big problem.

No. There are no moral questions here. Everyone in this world is doing his or her best. The question is should you be saving for your retirement.

The moral question is of society's obligation to its citizens. We have Medicare because private markets and personal prudence were, in practice, insufficient to provide adequate medical care to older Americans. It's not a terrible leap to suggest that if people have been, in practice, unable to adequately plan or save for retirement, that, perhaps, that's a weight that falls on society to fix, for this and for future generations, not on older Americans alone.
posted by cjelli at 7:27 AM on February 4, 2016 [6 favorites]


In the US, at least, retirement accounts are usually sheltered from bankruptcy.

All I've got for retirement is a tiny Roth IRA that lost nearly half its value during the financial crisis and never fully recovered. It's not worth even a fifth of what my annual salary has been, so I doubt it's enough to last more than a year or so, even if I moved into a van down by the river or something.
posted by saulgoodman at 8:18 AM on February 4, 2016 [1 favorite]


The moral question is of society's obligation to its citizens. We have Medicare because private markets and personal prudence were, in practice, insufficient to provide adequate medical care to older Americans. It's not a terrible leap to suggest that if people have been, in practice, unable to adequately plan or save for retirement, that, perhaps, that's a weight that falls on society to fix, for this and for future generations, not on older Americans alone.

Totally agree.
posted by esprit de l'escalier at 8:54 AM on February 4, 2016


My parents - middle class, retired - asked their financial adviser if he would see me (minimal savings, minimal debt, white collar job, slowly building a 401K) for investment advice. He basically said it wasn't worth his time. If someone is sorta scraping by, what's the point of seeing a financial adviser? What are they going to tell the person, eat less food?
posted by desjardins at 9:39 AM on February 4, 2016 [6 favorites]


Where do you live that inflation is 5%?

In a world where I was making a point other than the one you seem to think I was making?

The comment I was responding to was one that used two very atypical time intervals (1986-2016 and 2011-2016) to answer a point about how one can't rely on double-digit returns, even on broad index funds. Yes, inflation is low right now, and yes, the S&P500 return climbing out of the nadir of the Great Recession has been robust, but if you use that same calculator picking several other start and end dates, and then compare the % return with and without inflation adjustment, you'll end up seeing that my point holds up. In the long run, assuming you're lucky about when you get in and get out, you can roughly expect yields to hit double digits, but adjusting for inflation, again, depending on what your endpoints are, it's reasonable to expect close to half of that growth to just be keeping up with the CPI.

However, the other side of the coin is that any money you do save is growing at 8%, which amazing.

I guess you fast-forward through the investment commercials on TV where they show the fine print that says "past performance is not indicative of future returns." How many beers you can buy then will depend on the economic conditions between now and then, not a straight line projected skyward extrapolating from current year-over-year numbers. Even Jack Bogle would tell you that.
posted by tonycpsu at 9:41 AM on February 4, 2016 [3 favorites]


In the past thirty years, from 1986 to now, the annualized total return on the S&P 500 (including reinvesting dividends) has been 10 percent.

If you get to cherry pick your dates, I can too. For the past 16 years the return has been a measly 3.5%. That 16 year span is many people's entire adult working career. No wonder people are broke and depressed. The boom years of the 80s and 90s are ancient history for most investors.

The market is higher than it was pre-crash, so if you're invested in broad indexes you should be ahead of where you were.

What you are neglecting with your insulting glib rationalization is that a stock crash and unemployment are highly correlated risks. You lose your job, you are forced to sell low. That is the sort of correlated risks that result from 401(k) plans and corporations blatant scheme for transferring all risk to their employees.
posted by JackFlash at 11:48 AM on February 4, 2016 [12 favorites]


My parents - middle class, retired - asked their financial adviser if he would see me (minimal savings, minimal debt, white collar job, slowly building a 401K) for investment advice. He basically said it wasn't worth his time. If someone is sorta scraping by, what's the point of seeing a financial adviser? What are they going to tell the person, eat less food?

I'm surprised that he didn't offer to see you, simply as a way of keeping his real clients happy (and knowing that you might be the person managing their money down the road). That seems shortsighted at the least. And while someone who is really scraping by might not need much in the way of investment advice, someone just starting with a 401k and with a white collar job would seem like an ideal candidate for that advice.
posted by Dip Flash at 6:35 PM on February 4, 2016


He basically said it wasn't worth his time.

If it wasn't worth his time, that suggests that he is getting paid by commission -- the more money you have to invest, the more commissions he makes, and often the worse the advise you get. You may have dodged a bullet by avoiding this adviser.

You should instead look for a fee-only financial adviser. They get the same fee per hour no matter how much money you have to invest.
posted by JackFlash at 7:20 PM on February 4, 2016


In a world where I was making a point other than the one you seem to think I was making?

The comment I was responding to was one that used two very atypical time intervals (1986-2016 and 2011-2016) to answer a point about how one can't rely on double-digit returns, even on broad index funds.


And yet the question I was responding to was how anyone's mother could possibly have an RRSP that returned 11 percent. 30 years seems like a plausible inception date for a retired mum. Yes, inflation cuts into returns, just as it cuts into said RRSP's returns. Yes, you can cherry pick other ranges where the average is lower. If the plural of anecdote is data, then we should take the average 20 year real return of the S&P500: a smidge above 4 percent. Fortunately, the 'safe' rate of withdrawal from a balanced portfolio is a 4 percent, in nominal terms. Bond investments will rise in bad years to further compensate.

As to my earlier point about pensions, I first defer to the folks discussing looted or failed pensions. Even my own union pension now has four tiers, based on date joined, with ever declining payout formulas for the same contributions in. And there's still questions about the long term viability of promises made. Social Security itself has well known problems. While the size of shortfall is often overstated, 25 percent shortfall is still significant, and political decisions to reduce contributions during the recession only bring that date of reckoning forward. And you can see the volatility in funding formulas for OADI, where contribution rate steadily rise as we collectively discover how substantially we've underestimated the problem at hand. The longer we put off addressing this the more of this shortfall we pass onto younger generations. Which I suppose is fine if you plan to die before 2034.
posted by pwnguin at 10:16 PM on February 4, 2016


Social Security itself has well known problems ... political decisions to reduce contributions during the recession only bring that date of reckoning forward.

Nope. The Social Security Trust Fund was fully reimbursed for the Temporary Payroll Tax Cuts of 2011 and 2012 from the general fund. The tax holiday had zero effect on Social Security solvency.

The Payroll Tax holiday was a much simpler way of doing a general fund tax rebate without the expense of actually having to print and mail checks to wage earners as Bush did in 2008. The rebate came in the form of a bigger payroll check and then the increase was paid for by general funds.
posted by JackFlash at 10:55 PM on February 4, 2016 [1 favorite]


we should take the average 20 year real return of the S&P500: a smidge above 4 percent. Fortunately, the 'safe' rate of withdrawal from a balanced portfolio is a 4 percent, in nominal terms. Bond investments will rise in bad years to further compensate.

Well, your withdrawal should be described as real, not nominal terms, or you are going to be eating Alpo in your old age. But that is just a semantic mistake.

The real problem with your assumption is 4 percent real return from your portfolio. Unless your retirement portfolio is 100% stocks, which would be quite foolish and risky in retirement, your portfolio return is going to be closer to 2% than 4% which blows up your assumption of living off a 4 percent withdrawal.

The last 15 years have been quite cruel to both savers and retirees. Those unlucky enough to have finished school and entered the workforce or left work and retired since 2000 have been sorely put upon.
posted by JackFlash at 8:44 AM on February 5, 2016 [2 favorites]


I keep seeing these advertisements for Quietus popping up when I search for retirement savings calculators.
posted by benzenedream at 5:12 PM on February 7, 2016


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