Re: Retirement Packages

1

Somewhere between 80-99% of the language of those things is confusing word soup primarily designed to insulate against liability. Disclosure -- what can't it do? Why regulate in any other way?


Posted by: Robert Halford | Link to this comment | 10-10-13 8:37 AM
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Sorry, Capitalism takes everything. The dream of a gov't guaranteed pension or decent retirement is going the way of the dodo, first in localities, then states, and nations. We see it happening unevenly already. Greece thought they had pensions, thought they had a welfare state. Soon nation-states will be subject to hostile takeover and liquidation.

I suspect it has a lot to do with the end of war and geo-political competition, where citizens had to be involved in decision-making to generate loyalty. Now the nation-state is just another economic entity, like Exxon or Sony. Capital will rationalize it, and if it isn't generating adequate surplus to and for capital, throw it into Chapter 7.


Posted by: bob mcmanus | Link to this comment | 10-10-13 8:48 AM
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3

1 gets it right.

There are actually existing techniques out there for how to deal with volatility, but they chose to give you bullshit instead.


Posted by: Benquo | Link to this comment | 10-10-13 9:09 AM
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4

You know what would be even more helpful? If I didn't have to gamble with the stock market in order to avoid living in poverty when I'm old.

What would you prefer? That's a serious question. Do you think social security alone could realistically (just thinking about the economics, not the politics) provide enough money to be your sole support in retirement at a standard of living you would consider comfortable?

Fixed-benefit corporate pensions??


Posted by: urple | Link to this comment | 10-10-13 9:09 AM
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5

On the other hand, I'm not sure pushing all your risk into the tail of "government changes its pension policy" is a great deal either.


Posted by: Benquo | Link to this comment | 10-10-13 9:10 AM
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6

4: A Basic Income would help, and is probably workable economically.


Posted by: Benquo | Link to this comment | 10-10-13 9:11 AM
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7

Fixed-benefit corporate pensions, on the other hand, were kind of a terrible idea, at least as usually implemented. (That is, where the counterparty is the employer and not some kind of third party insurer or trust.)


Posted by: Benquo | Link to this comment | 10-10-13 9:13 AM
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6: you mean for everyone, or just expanding SS to more universally cover the elderly?

I agree that would help, but doesn't seem like something that would do anything to address heebie's preference not to have to gamble in the stock markets.


Posted by: urple | Link to this comment | 10-10-13 9:13 AM
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If I didn't have to gamble with the stock market in order to avoid living in poverty when I'm old.

That's why you have children.


Posted by: peep | Link to this comment | 10-10-13 9:13 AM
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10

Right. You get used to living in poverty well before you are old.


Posted by: Moby Hick | Link to this comment | 10-10-13 9:14 AM
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8: Extra payments for categories of people less likely to be able to work, like the elderly and the dismembered, would reduce the amount of savings you'd have to accumulate, and the severity of the outcome if you ended up outlasting your savings. Meaning that there would be less pressure to put your money in high-growth options like the stock market.


Posted by: Benquo | Link to this comment | 10-10-13 9:27 AM
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12

If only there was a way for the government to create a pension system.


Posted by: Cryptic ned | Link to this comment | 10-10-13 9:29 AM
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13

Reallocation and rebalancing both require you to tell them what your other assets are. That's the only way they know what you are allocated to and how balanced it is. It's also, entirely coincidentally, a very good way for them to find out what other funds you keep your money in just in case you would ever like to discussing doing a rollover. And the forms for a rollover are right here.


Posted by: Moby Hick | Link to this comment | 10-10-13 9:31 AM
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But also, right now there are alternatives to putting your money in stocks. Off the top of my head, there are:

Interest-bearing savings accounts (though you can't expect high returns, especially right now)
Bonds
Fixed-rate long-term annuities (or, if you're about to retire, lifetime immediate annuities, which are basically a way to buy a guaranteed pension).

Of course, the expected returns on these are lower, so you'd have to save more to get the same amount out at the end. But if that's the problem, then the complaint in the OP cashes out to "I wish I had more income." To which I can only reply: "Me too!"


Posted by: Benquo | Link to this comment | 10-10-13 9:31 AM
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11: Creating a super Social Security for those over say 85 or 90 would solve that also. Or at least make it less of a worry.


Posted by: Moby Hick | Link to this comment | 10-10-13 9:33 AM
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16

It would probably cause a more few cases of "stuff grandma in the freezer to keep her check" but really if somebody is willing to do that for money, I'd prefer not to meet them behind the register at the grocery store anyway. Pay them to stay home a mutter.


Posted by: Moby Hick | Link to this comment | 10-10-13 9:36 AM
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Indeed. As long as the Super Social Security payments were marginally higher than the 24/7 cost of operating an artificial heart and lung machine, I think there would be a real arbitrage opportunity.


Posted by: urple | Link to this comment | 10-10-13 9:41 AM
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18

What do enlightened topless countries do? Don't they just basically have a well-funded SS system?


Posted by: heebie-geebie | Link to this comment | 10-10-13 9:42 AM
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19

Or government pension system?


Posted by: heebie-geebie | Link to this comment | 10-10-13 9:42 AM
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20

Japan has a fair problem with "SGITFTKHC."


Posted by: Moby Hick | Link to this comment | 10-10-13 9:48 AM
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21

Ooh, this is fun. Some money was deposited in my TIAA-CREF account a week ago. But the current value of the account is smaller than what it was two weeks ago, by an even larger amount. I guess the markets really have been unhappy; I haven't been following.


Posted by: essear | Link to this comment | 10-10-13 9:54 AM
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22

What do enlightened topless countries do?

[Waves hands in air] Annuities! Hooray!


Posted by: apostropher | Link to this comment | 10-10-13 9:55 AM
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23

The markets have actually been rather unhelpfully not crashing as of late. A solid market crash might inspire Congress to stop fucking around.


Posted by: Spike | Link to this comment | 10-10-13 9:56 AM
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14 Interest-bearing savings accounts (though you can't expect high returns, especially right now)

Unless there are savings accounts that are better than the one I have by more than an order of magnitude, calling that an "investment" is kind of laughable.


Posted by: essear | Link to this comment | 10-10-13 9:56 AM
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25

Anyway, 6 seems like the right answer.


Posted by: essear | Link to this comment | 10-10-13 10:00 AM
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26

It's a store of value, at least.


Posted by: Benquo | Link to this comment | 10-10-13 10:02 AM
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23: I just bought some puts on the S&P 500, so I've done my part.


Posted by: Benquo | Link to this comment | 10-10-13 10:03 AM
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If only there was a way for the government to create a pension system.

Exactly. There's no good reason why SS couldn't be expanded to let people bump up their contribution percentage in exchange for a higher benefit.


Posted by: gswift | Link to this comment | 10-10-13 10:04 AM
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29

Obviously we need a better funded and more universal SS system, but I still don't think that helps heebie. I think it's inevitable that she's going to need to save for her retirement, and by "save" I mean "invest". So, to help her, what we really need is a much better regulated financial sector. One with much stricter regulations on fees, plain english disclosures, rules against conflicts of interest, etc., at least when dealing with the retail public. So that normal people could get help making savings decisions. (This is supposed to be how financial planners work, but they are so riddled with conflicts of interest that no one trusts them.) There are ways to take a lot of the "gambling" out of it... such as, e.g., savings products that are backed by insurance companies, where your return matches the overall market but is bounded between something like 0-10%. Meaning, if the market goes down one year, you lose nothing--your balance can't go down. If the market goes up by 5% one year, you get the 5%. If the market goes up by 12% (or 32%) one year, you get 10%. On an actuarial basis this works for the insurer (meaning over 30 years you're losing some fraction of the return), but it helps people feel like they're not gambling as much. Yet lots of people are completely unaware that these products even exist.


Posted by: urple | Link to this comment | 10-10-13 10:07 AM
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30

Moral hazard is for the little people.


Posted by: JP Stormcrow | Link to this comment | 10-10-13 10:07 AM
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31

21 seems crazy to me. My US low fee fund is only down 2.5% over the past two weeks (and less than that if you measure 13 or 15 days ago).


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 10-10-13 10:15 AM
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32

Breaking. Different investment portfolios yield different results.


Posted by: JP Stormcrow | Link to this comment | 10-10-13 10:18 AM
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33

Too bad Shearer has not been around to explain people's realpreferences on these things.

Although his point on the miserable track record of government entities in managing their own pension obligations is correct (his root cause analysis is suspect).


Posted by: JP Stormcrow | Link to this comment | 10-10-13 10:21 AM
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essear's contribution is less than 2.5% of the total portfolio, so say he has $100k and contributed $2000 (


Posted by: SP | Link to this comment | 10-10-13 10:23 AM
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35

Fucking tags.
essear's contribution is less than 2.5% of the total portfolio, so say he has $100k and contributed $2000 (<2.5%) but the portfolio went down 2.5% so his overall account lost about $500 even with the contribution.


Posted by: SP | Link to this comment | 10-10-13 10:24 AM
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36

29- I find this very interesting and would like to subscribe to your newsletter.


Posted by: SP | Link to this comment | 10-10-13 10:25 AM
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37

One shouldn't have an investment profile that loses noticeably more money over some time period than the S&P 500, since any sensible portfolio consists of a low-fee boring-as-possible S&P 500 based fund plus less risky things than stocks. S&P is down a little under 3% over the past two weeks.


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 10-10-13 10:30 AM
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38

All my money is invested in baseball cards and Beanie Babies. Those sectors have been down for a long time, but are likely to rebound any time now.


Posted by: Spike | Link to this comment | 10-10-13 10:30 AM
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39

I wonder if anyone in congress is making a killing in the stock market this week. It's such an amazing inside trading opportunity.


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 10-10-13 10:32 AM
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40

573 in the other thread to 39.


Posted by: SP | Link to this comment | 10-10-13 10:34 AM
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41

With today's surge, the S&P 500 index is unchanged since Sept 30.


Posted by: F | Link to this comment | 10-10-13 10:44 AM
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42

I wonder if anyone in congress is making a killing in the stock market this week. It's such an amazing inside trading opportunity.

To be an insider trading opportunity, insiders have to have more and better price-relevant information than the public. I don't know if that is a given here. The resolution of the shutdown / debt ceiling issues is entirely in the hands of John Boehner right now, and I for one don't believe he knows with any certainty what he will do.


Posted by: knecht ruprecht | Link to this comment | 10-10-13 11:13 AM
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43

Further to 42, I suppose one could trade on knowledge of about-to-be-released leaks.


Posted by: knecht ruprecht | Link to this comment | 10-10-13 11:14 AM
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44

The beauty is that Boehner only need to know what he's going to do tomorrow to make a killing. He doesn't even need a long term plan.


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 10-10-13 11:14 AM
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45

Well, even a representative not in leadership but with enough exposure could probably move markets somewhat. They can buy low, leak info that there's about to be a deal to do something that will make the market go up, sell and sell more short, leak again that the deal fell apart, buy to cover, rinse, repeat. The risk for them is that their action doesn't do what they think it will but as long as they don't overleverage they won't get too screwed.


Posted by: SP | Link to this comment | 10-10-13 11:20 AM
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35 essear's contribution is less than 2.5% of the total portfolio

Something like that. I would have to go through the arithmetic again, since I only eyeballed it -- maybe it didn't actually decrease by quite twice the contribution, but 1.5 times or something.


Posted by: essear | Link to this comment | 10-10-13 12:53 PM
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It is entirely possible that 31 is right but the crazy thing here is that I don't currently contribute enough to my retirement plan. (My employer pays into a different one, so this one only gets my contribution now, but a previous employer used to pay into this one, so it accumulated a lot more then. I don't pay much attention to any of this and will presumably die penniless someday.)


Posted by: essear | Link to this comment | 10-10-13 12:56 PM
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48

Ah ok, that makes sense.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 10-10-13 1:13 PM
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49

Yeah, the markets aren't moving that much yet. If Boehner had billions to bet on a rise in interest rates of a few basis points, or were bribed by those who do have billions to bet...wait a minute.


Posted by: bob mcmanus | Link to this comment | 10-10-13 1:23 PM
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Where Keynesian economics attempts to safeguard the productive economy against the fluctuations of financial capital, neoliberalism installs speculation at the very core of production. --melinda cooper, Life as Surplus

And production, consumption, and identity have fused


Posted by: bob mcmanus | Link to this comment | 10-10-13 2:50 PM
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51

If this thread's not dead, is there a good retirement planning book/website people would recommend? I'm not thinking of "what do you want to do with your life" advice but more boring money management advice. There's a couple of plans here and I should have signed up for one already but haven't. There's also a pension here, but I don't think staying until it vests would be good for my long-term health.


Posted by: fake accent | Link to this comment | 10-11-13 3:25 PM
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Also, political insider trading seems like the kind of thing that's more likely to happen around "issues" that aren't heavily publicized, like the tariff on a commodity in a fairly specialized market where a small change could be a huge deal to a limited audience.


Posted by: fake accent | Link to this comment | 10-11-13 3:30 PM
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4: Here is the alternative . As a matter of public policy, it would be very easy to do better than our current crazy retirement system.

29: You're not talking about variable rate annuities, are you? They are notorious for high fees and other rip-off elements.


Posted by: PGD | Link to this comment | 10-11-13 8:45 PM
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There's bogleheads.org, which is like the flyertalk of personal finance.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 10-11-13 8:54 PM
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Websites where weird subcultures have extended conversations about things I don't care about are strangely compelling.


Posted by: essear | Link to this comment | 10-11-13 9:08 PM
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I totally buy the bogleheads philosophy, which is you don't want to try to outsmart the market, and you certainly don't want to pay someone to try to outsmart the market. Instead you want to invest in a boring way, while minimizing fees and taxes. (Low fee here means something like .07%.)

What I'm doing is 50/20/30 in the lowest fee available domestic stock index, international stock index, and bond index funds available through my employer. Every year it'll automatically rebalance and every 5 years I'll bump up the bonds by 5. That makes me a little overinvested in the US (33/33/33 would be the default plan), but I figure if the US does badly we'll be screwed anyway.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 10-11-13 9:12 PM
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55: New scroll-over text?


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 10-11-13 9:13 PM
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I also like the philosophy because it seems the closest way to approximate the better system where you pay taxes and then get more out in Social Security than you put in because the US economy has grown. You don't want to gamble, you just want to invest in the US economy in general.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 10-11-13 9:17 PM
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The U.S. economy is run by people who will invoke nihilism in an attempt to stop poor people from getting health care. Gambling seems safer.


Posted by: Moby Hick | Link to this comment | 10-11-13 9:22 PM
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Those same people also run the casinos, though.


Posted by: teofilo | Link to this comment | 10-11-13 9:25 PM
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61

Holy shit this fucking baseball game. Kid has now been kept up 2 1/2 hours past bedtime for nothing but ongoing pain.


Posted by: Robert Halford | Link to this comment | 10-11-13 9:57 PM
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... so you're saying that the Cardinals are spoiling her plans for retiring?


Posted by: joyslinger | Link to this comment | 10-11-13 10:10 PM
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63

"Retirement Packages" should be the name of a geriatric pornographic magazine.


Posted by: Mister Smearcase | Link to this comment | 10-12-13 12:17 AM
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Also "Mature Assets."


Posted by: JP Stormcrow | Link to this comment | 10-12-13 1:49 AM
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65

Fixed in come
Debbie does diversification
Social suck-yur-titty


Posted by: SP | Link to this comment | 10-12-13 5:19 AM
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66

Timely for me; I am seriously considering pulling a good chunk of my savings out of a boring investment to out into an early stage company. I know enough of the details to believe that the expected value for this is good, but that includes a good chance of losing all of it.

I wouldn't even consider it if my retirement savings options weren't so poor.


Posted by: Dee Lurking | Link to this comment | 10-12-13 5:34 AM
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Inspired by an earlier suggestion for a Breakfast-at- Tiffany's-based pseud, I was just thinking that Holly Gonaked would be a good stripper name.


Posted by: rob helpy-chalk | Link to this comment | 10-12-13 5:45 AM
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51: How about an index card?


Posted by: Minivet | Link to this comment | 10-12-13 6:25 AM
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Invest in an mutual fund of index card makers.


Posted by: Moby Hick | Link to this comment | 10-12-13 6:41 AM
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61: that's right halford, teach her about life!


Posted by: Turgid Jacobian | Link to this comment | 10-12-13 7:08 AM
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Boring investment is exactly what I'm looking for.


Posted by: fake accent | Link to this comment | 10-12-13 7:20 PM
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