The US government has a $20.4 TRILLION dollars retirement problem

[Svnla]

Work harder and longer, youngins. Retirees are counting on you. Brave New World indeed.

The credit-rating agency Moody's says state, local, and federal governments are about $7 trillion short in funding coming pension payments..The Social Security funding gap is estimated at $13.4 trillion, or 75% of GDP, while the shortfall from the Hospital Insurance component of the Medicare program amounts $3.2 trillion..between the pension shortfall and the benefits shortfall, the US government is $20.4 trillion short in funding for retirees.

http://www.businessinsider.com/us-government-7-trillion-pension-shortfall-2016-4


Edit: Private sector is not doing any better = http://www.businessinsider.com/the-odds-of-a-comfortable-retirement-are-worse-than-you-think-2016-4


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[thraashman]

I have a solution. Hunger Games, elderly edition.

 

[Brovane]

Ok over how many years is that $20 Trillion gap over? That helps a lot in determining the extent of the problem. Did I miss it, because I didn't see any time frame mentioned in the article?

 

[Genx87]

Ok over how many years is that $20 Trillion gap over? That helps a lot in determining the extent of the problem. Did I miss it, because I didn't see any time frame mentioned in the article?

It is like the article is trying to scare us or something. They always leave out the 20 trillion over 75 years part.

I didnt read the article yet. But there is some major issues with some states pension systems. IL is a god damn dumpster fire. If I were a public worker with a pension in IL. May as well burn the statement papers as they are worth more than the pension you can expect.

 

[fskimospy]

It is like the article is trying to scare us or something. They always leave out the 20 trillion over 75 years part.

I didnt read the article yet. But there is some major issues with some states pension systems. IL is a god damn dumpster fire. If I were a public worker with a pension in IL. May as well burn the statement papers as they are worth more than the pension you can expect.

Yes, the article is total clickbait. That being said, you're totally right about some states' pension systems. If you work for a system that uses a pension you might want to check and see what % funded it is. If you're not looking at somewhere around 80% funded at least you might want to think twice.

 

[Sonikku]

The solution is something something slash taxes.

 

[Greenman]

A cop in a nearby town was just in the news, collecting 2 state pensions and a paycheck. Pulls down over $300k a year, plus medical and dental. A sweetheart deal for him, absolutely unsustainable for the small town he works in.

 

[Genx87]

A cop in a nearby town was just in the news, collecting 2 state pensions and a paycheck. Pulls down over $300k a year, plus medical and dental. A sweetheart deal for him, absolutely unsustainable for the small town he works in.

If the small town properly funded the pension it should be totally sustainable.

 

[Blackjack200]

If the small town properly funded the pension it should be totally sustainable.

You must be kidding. It's not possible for municipalities and states to properly fund compensation that's that bloated.

I'm not trying to totally shift the blame here, the governments should have funded more, but this board has no problem blaming the UAW for bringing down the auto industry, and I doubt any "retired" auto workers were hauling down $300k a year.

 

[fskimospy]

You must be kidding. It's not possible for municipalities and states to properly fund compensation that's that bloated.

I'm not trying to totally shift the blame here, the governments should have funded more, but this board has no problem blaming the UAW for bringing down the auto industry, and I doubt any "retired" auto workers were hauling down $300k a year.

I think his point is that there's no amount of pension benefits that is actually unsustainable so long as the pension is correctly structured. That means a combination of how much employees put into it, if the rate of return was around what was projected, and how many years of benefits the average person gets.

I mean you could have a pension that paid everyone $1 million a year so long as your employees were putting in a shitload of money or they only got it for a short time.

 

[Genx87]

You must be kidding. It's not possible for municipalities and states to properly fund compensation that's that bloated.

I'm not trying to totally shift the blame here, the governments should have funded more, but this board has no problem blaming the UAW for bringing down the auto industry, and I doubt any "retired" auto workers were hauling down $300k a year.

A pension system is a retirement system. I would like to see the article showing a small town pension system paying 100K\year per pension + a salary. Anyways the pension system if properly funded shouldnt have a problem paying the pension. That would be true if the pension pays 1500\month or 15k\month. WI and MN fund their state pension systems just fine. Why cant IL?

The UAW is blamed for the auto industry because of their demands to overcompensate their workers which put the auto industry in a position to not be viable. That is totally different than properly funding a pension system.

 

[Genx87]

I think his point is that there's no amount of pension benefits that is actually unsustainable so long as the pension is correctly structured. That means a combination of how much employees put into it, if the rate of return was around what was projected, and how many years of benefits the average person gets.

I mean you could have a pension that paid everyone $1 million a year so long as your employees were putting in a shitload of money or they only got it for a short time.

Yup

 

[momeNt]

Pensions as a flexibly funded able to get deferred salary was never a good idea. Employees or Employers never looked at the statement and the funding % and thought to themselves, "Hey, I didn't get paid this week" because nobody considers it salary or compensation the same way a weekly paycheck is.

How many days would you show up to work unpaid if your employer decided to skip your weekly paycheck? The concept is idiotic and we aren't disciplined enough to not take advantage of the flexibility.

 

[Hugo Drax]

Cut Defense spending by half, cut all foreign aid, cut all corporate welfare (ie electric car subsidies etc..)

The Iraq war for example cost over 1 trillion dollar.

 

[Blackjack200]

I think his point is that there's no amount of pension benefits that is actually unsustainable so long as the pension is correctly structured. That means a combination of how much employees put into it, if the rate of return was around what was projected, and how many years of benefits the average person gets.

I mean you could have a pension that paid everyone $1 million a year so long as your employees were putting in a shitload of money or they only got it for a short time.

Okay, but we're sort of getting into semantics here. I was responding to the idea that a government could support paying pensions where $300k police officers were not out of the ordinary.

Yes, you could theoretically support that by funding the pensions at 45% of the public worker's salaries, but is that realistic? I doubt you could find a government anywhere that's making those kinds of pension payments and humming along just fine.

A pension system is a retirement system. I would like to see the article showing a small town pension system paying 100K\year per pension + a salary. Anyways the pension system if properly funded shouldnt have a problem paying the pension. That would be true if the pension pays 1500\month or 15k\month. WI and MN fund their state pension systems just fine. Why cant IL?

FWIW, I agree that the $300k officer is probably not the norm, I think situations like that are likely the result of some corruption, and your typical officer is probably taking home a much more modest pension.

I can't speak to WI or MN, but for New Jersey, it sort of comes down to game theory. Public pensions are not regulated the way private pensions are. The DoL has strict funding requirements on the private side. So for years, politicians have run on promises of "fixing the public pension problem", but then they get into office and they are either not able or not willing to do it. The public unions are too strong, or there's no willingness to raise taxes.

The UAW is blamed for the auto industry because of their demands to overcompensate their workers which put the auto industry in a position to not be viable. That is totally different than properly funding a pension system.

But the demands of the public employee unions have not put states and municipalities in a position to not be viable?

Pensions as a flexibly funded able to get deferred salary was never a good idea. Employees or Employers never looked at the statement and the funding % and thought to themselves, "Hey, I didn't get paid this week" because nobody considers it salary or compensation the same way a weekly paycheck is.

How many days would you show up to work unpaid if your employer decided to skip your weekly paycheck? The concept is idiotic and we aren't disciplined enough to not take advantage of the flexibility.

It works better than what we had before pensions, which was that old people would starve and freeze to death, but there are lots of obvious problems.

 

[Sonikku]

Damn people collecting pensions. NOBODY should have a pension. Just drop dead if you're not going to produce value for the economy any more.

 

[hal2kilo]

Raise of remove the Social Security tax cap. Problem solved.

 

[dullard]

Raise of remove the Social Security tax cap. Problem solved.

You mean put it back the way that Reagan had it where Social Security covered almost all wages? Republicans would never let that happen.

 

[Greenman]

Damn people collecting pensions. NOBODY should have a pension. Just drop dead if you're not going to produce value for the economy any more.

Doesn't it seem to you that something is wrong when a fellow under 60 is already collecting 2 pensions at around $75k each, and still has a government job paying $150k?

I'd love to see everyone get a guaranteed old age pension, old age being the operative phrase. Retiring at 45 and making bank for the next 40 years is a little over the top. Unless it was me, then it would of course be perfectly acceptable.

 

[echo4747]

I feel nearly all defined benefit plans should be done away with and replaced by defined contribution plans. Even if defined benefit plans are funded properly, it may be just a matter of time, until predicted calculated rates of return may be nowhere near what is needed to sustain benefits promised.

 

[brycejones]

A cop in a nearby town was just in the news, collecting 2 state pensions and a paycheck. Pulls down over $300k a year, plus medical and dental. A sweetheart deal for him, absolutely unsustainable for the small town he works in.

I would love to see documentation that the small town is paying that. Until you provide that I'm calling BS.

 

[DrPizza]

It is like the article is trying to scare us or something. They always leave out the 20 trillion over 75 years part.

I didnt read the article yet. But there is some major issues with some states pension systems. IL is a god damn dumpster fire. If I were a public worker with a pension in IL. May as well burn the statement papers as they are worth more than the pension you can expect.

From what I understand, the NY teacher's retirement pension funds are quite flush with cash - it's being run very well. They're not in trouble. However, we've been informed that there are quite a few forces in action right now that are trying to get their hands on it to use it for other purposes - i.e., use that money now, and figure out some where to repay it from later. At present time, it can't be done due to a small clause in the state constitution, but there are a couple of groups that want that clause changed specifically so they can get their paws on that retirement money.

 

[Svnla]

Meanwhile in the private sector:

According to a recent Google survey study conducted by GOBankingRates, a third of U.S. workers say they have no retirement savings. None. Zero. Yes, that's bad, but the 23 percent who have less than $10,000 saved aren't faring much better.

According to GOBankingRates survey responses, J.P. Morgan Asset Management checkpoints and Census Bureau data on median incomes by age range, a 30-year-old making the median $54,243 should have about $16,273 saved. Not surprisingly, roughly 67 percent of workers that age are well behind that goal.

Last year, a study by financial services firm Edward Jones found that 45 percent of U.S. workers haven't begun saving for retirement. Of that group, only 36 percent plan to do so in the future and almost 10 percent say they never plan on saving for retirement. That former number includes 58 percent of workers 18 to 34 who have not even started a retirement fund, which GOBankingRates and J.P. Morgan says should happen by age 24.

http://www.businessinsider.com/the-odds-of-a-comfortable-retirement-are-worse-than-you-think-2016-4

 

[TheSlamma]

Damn people collecting pensions. NOBODY should have a pension. Just drop dead if you're not going to produce value for the economy any more.

I think we should just print the money and use massive blowers to confetti it out into the streets 24X7

 

[echo4747]

However, we've been informed that there are quite a few forces in action right now that are trying to get their hands on it to use it for other purposes - i.e., use that money now, and figure out some where to repay it from later.

i would tend to believe this. I think its been done before with soc sec fund. (which is very much like a pension)