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The following link has lots of good thoughts and ideas that some may agree with. It hits on a lot of topics that often get discussed in individual threads etc. What do folks think? It comes from the financial community so some may color their thinking accordingly.
Averting a retirement crisis in the U.S. requires fresh thinking, not to mention political will. Ideas range from a restructuring of Social Security to beefing up employer-sponsored retirement plans to creating a new tier of mandated retirement accounts. Vanguard Group founder Jack Bogle, Senior Adviser to the Treasury Secretary Mark Iwry, former SEC Commissioner Harvey Pitt and others share their thoughts on what needs to be done.
The article seems to ask important questions about 'Whether the existing retirement system SHOULD be 'salvaged' or instead scrapped and completely redesigned/replaced.
Isn't this the same question the public should be asking about almost every government-sponsored program... most of which has been hijacked by vote-seeking politicians. It seems like the whole bunch has scrapped any pretense of seeking what is 'right' or in the best interest of the country, in favor of their own self-serving interests. Sadly, most represent the interests of their own small constituency who readily swap votes for pork.
Can this retirement system be saved? .... Seems like the greater question is 'Can this Republic be saved?'
I think -- and I may be wrong -- that our government is controlled by Big Business and Big Pharma and that the middle class is doomed. The middle class and poor are important to the rich only insofar as we make the rich richer.
I was JUST reading an article (in a liberal political magazine, yes) this evening that was written almost 12 months ago. Pre-election and pre-SS and Medicare cuts. Everything the author wrote in the article has come to pass in the last 12 months. And, as liberal as I am, I never would have believed him if I had read his article 12 months ago.
The article seems to ask important questions about 'Whether the existing retirement system SHOULD be 'salvaged' or instead scrapped and completely redesigned/replaced.
Isn't this the same question the public should be asking about almost every government-sponsored program... most of which has been hijacked by vote-seeking politicians. It seems like the whole bunch has scrapped any pretense of seeking what is 'right' or in the best interest of the country, in favor of their own self-serving interests. Sadly, most represent the interests of their own small constituency who readily swap votes for pork.
Can this retirement system be saved? .... Seems like the greater question is 'Can this Republic be saved?'
That question is probably above the pay grade of this forum.
I hate to say it, and this is definitely not in my self interest ... over the next few years the system will need to be rebalanced to be more of a system to aid the indigent. That is going to be harsh medicine.
I was JUST reading an article (in a liberal political magazine, yes) this evening that was written almost 12 months ago. Pre-election and pre-SS and Medicare cuts. Everything the author wrote in the article has come to pass in the last 12 months. And, as liberal as I am, I never would have believed him if I had read his article 12 months ago.
Sorry, but you are mis-informed. As yet, there have been no "SS and Medicare cuts".
Although I've already fallen into this trap, does it make any sense at all to sacrifice quality of life in our healthy and active years, just so we have a ton of money saved to hand over to to incredibly expensive rest homes and health care when we are old? Particular since liberals continue to let government grow and expand this Welfare Society, where those with little money get bailed out by the taxpayer--like Medicaid paying for EVERY health care cost, including incredibly expensive rest homes.
I say this having done exactly that, and now watch those savings being eaten away by inflation/dollar devaluation and zero interest rates, plus the ever-growing threat of even higher tax rates when the money is distributed, or government grabbing some of those 401k savings or even just using them to disqualify us from assistance the non-savers will get? All of these problems will get much worse in the future, as the fiscal irresponsibility of government continues without any possibility of reform thanks to a complacent and uninformed public.
I watched my parents live lives of ridiculous deprivation just so they could pay a fortune to a rest home and health care expenses--expenses that would have been ZERO under Medicaid, if they had just enjoyed life using the money they had (like taking vacations, which they never once did), and spent all their savings before massive health care costs became inevitable. In their elderly years health problems ensured they could do nothing enjoyable that would cost money anyway. It was painful to watch my Dad's life savings be eaten away at a rate of $8,000 a month by a nursing home that often stole his pain medication and left him in agony. It was equally painful to know that a distant family member had never saved any money, and spent the last 20 years of her life in a very nice nursing home, entirely paid for by the taxpayer.
The system is fatally flawed, and unless the Total Welfare State Obama is building is reversed, it WILL collapse as the Baby Boom hits that stage of life.
Last night was one of the regular gatherings of one of the church groups I'm a member of. The question was raised regarding which decade of life was the most satisfying, most favored. All those over 70 said "now". I wondered about this, mainly because within my own family that would not have been the response. Then I realized a pattern: This particular group happens to be made up mostly of retired school teachers, with reasonable pensions. It is a good case study of what should be: People who worked conscientiously for years, spending their elder years secure in the knowledge that they can afford the basics of life and a small amount of humane comfort.
It is interesting to contrast their experience in their elder years with that of others who have to worry about living longer than their retirement savings. Everyone is equally deserving of such financial security. The differences between us, rich to poor, must necessarily be with regard to levels of comfort and luxury, high to low, but basics aren't variables to bargain with, to be traded-away by society in favor of more comfort and luxury for a few. That's clearly not the way the retirement system is now. Why are we allowing the private sector to act in a manner so much less humane and moral than our public sector, in this regard?
The challenge, though, is two-fold: (a) Coming up with a superior system that ensures all the basics are covered while still providing additional rewards for additional savings accumulated; and (b) Figuring out how to move to that system while not letting anyone currently in the system fall though the cracks. It is not acceptable to have some people left by the wayside, casualties of the "natural" churn of a transition.
The reality is that a responsible view of that challenge would help one realize that the transition cannot be made all at once. There simply isn't enough resources to have an overlapping transition that provides that basic safety-net all the way through from one side to the other, even the inadequate safety-net we have today. So the realization is that the system needs to be reformed bit by bit, inched toward where it should go.
Another realization is that there isn't a single common view of what that system should be. There are palpable differences with regard to the objectives. The response to this should be the understanding that the system will need to be a compromise, a give-and-take, between the various interests.
With regard to the original question: Either the system is saved, or we become that prototypical morally-bankrupt society that uses people up and then discards them like used tissues. There are strong forces in our society trying to rationalize pushing us toward the latter, but hopefully humaneness will prevail over avarice.
I read this last night on my iPod and then had to sit back and digest it. I slept on it and read through a few responses here and I want to weigh in as well.
I do not think we need to overhaul the whole system at least in part of the SSA. I do not think that is broken completely except that the Feds seem to think it a kitty with which to take funds from to pay for other programs like Medicaid. I think a tweak on it to make COLA's smaller maybe will be good. Means testing is just another way of redistributing wealth but even I can live with a measure of means testing.
Someone mentioned it is unacceptable to allow people to fall through the cracks, well I do disagree with that one. I don't mean to starve them but they are not entitled to retire on our dime.
On the private accounts like 401k's, since most employers no longer give out pensions and that seemed to be where we were heading we should continue to move in that direction. Give incentives for employers to set them up. Give employees incentives to invest for themselves. I think using index funds is a good way. Yes there are better funds but for the vast majority who want some growth but not so much volatitily an index fund will be good. In example TSP the federal government 401k system uses 5 underlying funds.
G - Government securities
C - S&P - large cap
S - small cap - Willshire 4500
I - international
F - bond fund
They even added it a manager to do what is called lifecycle funds. These are based on a persons estimated retirement date. Because these are indexed funds there is no real management of the funds so fees are very low.
It is just a way I feel we might go. My opinion I know but isnt that what this is about?
I started this thread with several posters in mind some of whom have already responded and I am very pleased by their responses. We often argue and go back and forth on this topic and really end up spinning our emotional wheels. This article gave us some concrete reforms to consider and DISCUSS as folks are doing. My personal feeling is that their is weight to the ideas presented that are worthy of strong consideration as we are facing a national crisis. The ideas are things that put the weight on the individual along with some that create a collective means of addressing the crisis. What the balance or weight between the two should be is TBD for me but I think it gives us a basis to move forward in finding common ground between frequent posters on this topic.
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