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News & ArtsFriday, January 13, 2012
Economy The Dream of the Market Providing Everything
Posted by Charles Mudede on Fri, Jan 13, 2012 at 8:22 AM
WaPo:
Though the recession has thinned the ranks of other generations in the workforce, more people older than 55 are employed than ever before, according to the latest figures from the Bureau of Labor Statistics.The reasons for the surge of older workers are complex, experts said, but one of the primary economic forces behind it is the growing fear among older Americans that they lack the means to support their retirement needs.
The phenomenon is closely linked to the broad shift in the United States that began in the ’80s away from reliance on company pensions toward the adoption of 401(k) plans and other personal savings.
When an American first explained a 401(k) plan to me (around 1989), I laughed right in his face. I could not believe anyone could be dumb enough to build a retirement plan on something as unstable as the market. Clearly, millions of Americans did not understand what a market is. Did American high schools lack something like an O Level commercial studies? I recall telling this deluded fellow (the conversation happened in Harrisburg, Pennsylvania) that a much safer bet would be to buy a piece of land with a cave, so that your old bones could crawl in to it when the time came. I was not joking.
Then there's this: A recession for whites; a depression is for the rest:
As the economy slowly improved last year, the unemployment rate fell for both whites and Latinos.
But at the end of the year the black unemployment rate was 15.8%, exactly where it started out 2011, according to the government's December jobs report released Friday. That's a sharp contrast to the white unemployment rate, which fell to 7.5% last month
1
My retirement plan? Investing in a fancy education for my kids so that when I'm older they can afford to take care of me. Brilliant, I know.
2
Not only does 401k expose your lifetime nest egg to 100% liability (yes, it can go to zero), but it provided all the capital that was then absconded with by the traders.
So...we built the casino and manned the tables and gave away our own money to the winners who took all.
3
@1 this. Mine is going into a house. It was either that or watch it bleed out and continue to die. Both risky investments, but one pretty definitely less so, and more needed now.
4
Charles,
It's funny how you came to that conclusion regarding 401Ks so quickly. They do work. The market does work in beneficent ways. Granted, not for all but for people who are employed, the 401k is a great perk. I'm really glad I have my retirement account. It appears to be steaming along.
Regarding black unemployment, that figure is devastating. But, I believe it is far worse for black males between the ages of 18-24. From my understanding, it is over 20%. That, is of great concern. We are still in a serious crisis.
It's funny how you came to that conclusion regarding 401Ks so quickly. They do work. The market does work in beneficent ways. Granted, not for all but for people who are employed, the 401k is a great perk. I'm really glad I have my retirement account. It appears to be steaming along.
Regarding black unemployment, that figure is devastating. But, I believe it is far worse for black males between the ages of 18-24. From my understanding, it is over 20%. That, is of great concern. We are still in a serious crisis.
5
Buying a property with a cave to crawl into when it's time to die? What are you, a bear?
Actually now that I think of it it's a pretty good idea....It's definitely more dignified than an old-folk's home.
Actually now that I think of it it's a pretty good idea....It's definitely more dignified than an old-folk's home.
6
Most 401Ks give you a choice between riskier investments (stocks) and safer investments (bonds). Any financial planner will tell you that it's OK to play the market early in your career. If you take a hit then your retirement account will have plenty of time to recover. As you get closer to retirement you shift your money into low risk, low return investments like treasury bonds. Retirement savings accounts work fine if you manage them properly.
7
My retirement plan is moving back to Nicaragua and living off the $250 a month pension I'll get from my Teamsters pension. Thanks, Teamsters! That's the only job I ever had that had retirement benefits.
8
Screw caves and 401(k)s. Once I hit 65, I'm going out in a hail of gunfire. I haven't worked out the details, but I have well over thirty years to figure it out.
9
Charles, check into the Swedish retirement plan and its change. Since the 90's the right wing and center-right government have done their very best to dismantle it and turn it into what is basicly an insurance scheme and nothing else.
I checked into my own saved up cash from work to only realize that it was valued to about the same amount of money people I work for have to set into a side account... Since the market is doing poorly, if it goes on like this my pension will be so small that I have to join Hernandez #8 above and basicly try to get some guns.
The kicker is that the current (half market half state) pension scheme costs the state MORE money than the former one since they are tied into reimbursing the banks and insurance companies if those banks investments (with my money in companies like Lundin Oil that made cash from the Ethiopian and Somalian civil war) fall through. Which they have.
Basicly my tax money are spent to reimburs the banks losses so that I will get a shit pension and they are even telling us that this is an "improvement" even though it costs more, gives out less and the "autonomy of choice" they promised as the base argument for changing the pension system is bullshit (pick one of these distrustful identical unstable bastard banks... )
I checked into my own saved up cash from work to only realize that it was valued to about the same amount of money people I work for have to set into a side account... Since the market is doing poorly, if it goes on like this my pension will be so small that I have to join Hernandez #8 above and basicly try to get some guns.
The kicker is that the current (half market half state) pension scheme costs the state MORE money than the former one since they are tied into reimbursing the banks and insurance companies if those banks investments (with my money in companies like Lundin Oil that made cash from the Ethiopian and Somalian civil war) fall through. Which they have.
Basicly my tax money are spent to reimburs the banks losses so that I will get a shit pension and they are even telling us that this is an "improvement" even though it costs more, gives out less and the "autonomy of choice" they promised as the base argument for changing the pension system is bullshit (pick one of these distrustful identical unstable bastard banks... )
10
All the 401k's I've participated in have included the all-important employer matching for the first three or four percent. That's *automatically doubling your money* before it even gets "invested". I've kept all mine in bonds, and it's been a 5.5% return on tax-free investment so far.
It's better than nothing. I haven't heard of any companies offering traditional "retirement plans" is who knows how long.
It's better than nothing. I haven't heard of any companies offering traditional "retirement plans" is who knows how long.
11
@4, Lark is either the typical corporate stooge or a complete idiot: the purpose and original intent of the 401(k) was to screw the workers while providing upfront investment in the company they worked at (and infusion funds for Wall Street).
12
...one of the primary economic forces behind [the surge of older workers] is the growing fear among older Americans that they lack the means to support their retirement needs.
Is the WaPo unaware of the market crash that took place a few years ago? It isn't a theoretical fear when you get your statement and find the balance has several fewer digits.
Is the WaPo unaware of the market crash that took place a few years ago? It isn't a theoretical fear when you get your statement and find the balance has several fewer digits.
14
When more blacks decide to go to school and stop smoking crack their unemployment statistic will go down. Oh, never mind. It's white peoples' fault.
15
Pensions are already some of the biggest investors in mutual funds. They also depend on a given company's continued success and existence just to stay solvent. How is that any more reliable than investing in the stock market?
The only way that pensions are superior to 401ks is that they don't leave retirement savings up to the workers, since most won't choose to save enough to retire on.
The only way that pensions are superior to 401ks is that they don't leave retirement savings up to the workers, since most won't choose to save enough to retire on.
16
I'm not sure I understand the difference. Exactly where do you think pension funds kept their money?
Also, as I said in another thread, pensions do go bust. And companies that people worked for for decades go under, stripping workers of their pensions. The 401k at least divorces the worker from his place of work.
Also, as I said in another thread, pensions do go bust. And companies that people worked for for decades go under, stripping workers of their pensions. The 401k at least divorces the worker from his place of work.
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