OT: Hurricanes Lounge XLV: Y2K Twenty-Four Years Later

[Svechhammer]

I have been told most of my life that I am unlikely to ever see a SS payment because it'll run out of money before I reach the age to collect. So I've always approached these topics with a very apathetic mindset because I fully believe my generation is already screwed.

The majority of people, and an overwhelming portion of the population who is currently collecting or are currently living paycheck to paycheck just voted for a guy whose policy outright stated he's going to eliminate it. So you know what, do it. Get rid of it, and do it now. Give those people exactly what they want.

I'm tired of spending my time and energy arguing and fighting for the betterment of people who don't want it.

 

[Boom Boom Apathy]

Very possible but at least the people would be wasting the money they earned not the government

I'd say it's more than very possible, it's extremely probable.

On your 2nd point, that's true. It still would leave the US with a significant societal issue though, particularly since companies have stopped having retirement plans and retireee medical plans. Some might argue it's not the government's job to solve that issue, which I won't get into here as that starts going into politics vs. just discussing government spending and social security. Secondly, I believe the government would still be wasting money that the gov't didn't earn and by spending way beyond it's means with or without this. It would have just come from different tax source.

 

[Boom Boom Apathy]

I have been told most of my life that I am unlikely to ever see a SS payment because it'll run out of money before I reach the age to collect. So I've always approached these topics with a very apathetic mindset because I fully believe my generation is already screwed.

I was told the same thing since I was in my 20s so when I started planning my retirement at age 22, I assumed it wouldn't be there.

I suspect what will happen is that they'll increase the retirement age for Social Security for people under the age of X (not sure what that age is maybe 40 or 50?). Instead of 62/67/70, they'll increase it to 65/70/73. This protects congress/senate from pissing off a very large population of baby boomers/Gen X when it comes to the next election, but many people like you, who are apathetic about it may not reflect it in voting. I've read previously that each one-year increase in the full retirement age is equivalent to a roughly 7 percent cut in monthly benefits for all affected retirees. So by moving the retirement age of 3 years, it will save approximately 20% for that population.

Just a guess.

 

[Derailed75]

I'd say it's more than very possible, it's extremely probable.

On your 2nd point, that's true. It still would leave the US with a significant societal issue though, particularly since companies have stopped having retirement plans and retireee medical plans. Some might argue it's not the government's job to solve that issue, which I won't get into here as that starts going into politics vs. just discussing government spending and social security. Secondly, I believe the government would still be wasting money that the gov't didn't earn and by spending way beyond it's means with or without this. It would have just come from different tax source.

All true. Its just the whole premise of "You cant save your money so we will do it for you" Is ironic to me, don't ya think? A little too ironic.


OK I'm dropping that joke I cant go any further.

 

[Svechhammer]

I was told the same thing since I was in my 20s so when I started planning my retirement at age 22, I assumed it wouldn't be there.

I suspect what will happen is that they'll increase the retirement age for Social Security for people under the age of X (not sure what that age is maybe 40 or 50?). Instead of 62/67/70, they'll increase it to 65/70/73. This protects congress/senate from pissing off a very large population of baby boomers/Gen X when it comes to the next election, but many people like you, who are apathetic about it may not reflect it in voting. I've read previously that each one-year increase in the full retirement age is equivalent to a roughly 7 percent cut in monthly benefits for all affected retirees. So by moving the retirement age of 3 years, it will save approximately 20% for that population.

Just a guess.

Maybe

At the end of the day I don't personally care. I took a job right out of college that indoctrinated me into understanding how important a 401k can be and have been investing 10% every year since, so barring a complete collapse of Wall Street, which would completely ruin far more than just myself, I have done well to position myself to not needing SS. But I do know a lot who are going to be dependent upon it and are going to be screwed when those payments don't come. And by in large they all voted for the guy who publicly said he is going to take it away.

And don't get me started on mine and my wife's parents who have spent so much of their lives absolutely loathing the thought of Medicare and are now saying how convenient it is for them to have procedures, treatments and medication completely covered in retirement. Once that coverage is gutted, they're all screwed, and they were all front and center proud to vote for it.

 

[tarheelhockey]

The irony is that the government run SS was supposed to be safe and keep us from blowing/losing our money.

And that is pretty much exactly what it did. Nobody “loses” money on SS, they just fail to realize the gains they could have made on a private market. But, crucially, most people do not invest substantially in private markets — and from time to time, we still see market crashes and Enron-esque scenarios and even old-fashioned Nigerian prince scams where people get cleared out and lose everything. SS ensures that those people have something to fall back on other than retiring to a cardboard box on the sidewalk.

It’s a shitty system not because it was a bad idea, but because we’re going on close to 50 years of deliberate neglect of the simple math that should have been be adjusted to account for generational demographics. But Boomers don’t want to hear about taking a smaller share so their grandkids can have a roof to live under. As always, we get what we vote for. The institution will implode because people chose to let it implode.

 

[Lempo]

All true. Its just the whole premise of "You cant save your money so we will do it for you" Is ironic to me, don't ya think? A little too ironic.


OK I'm dropping that joke I cant go any further.

It's like raaaaa-aaiin on your wedding day,
like governmeeeeent giving you saving tips

 

[Svechhammer]

As always, we get what we vote for. The institution will implode because people chose to let it implode.

The Boomer generation is going to go down as arguably one of the worst in American history. Their parents worked their ass off to give them a great economy with incredibly affordable costs of living and ever growing list of personal freedoms, and all they did was pull up the ladder behind them to prevent their own children from experiencing the same in an effort to maximize their own wealth, to hell with the future. It's the generation of "f*** you I got mine"

 

[Boom Boom Apathy]

And that is pretty much exactly what it did. Nobody “loses” money on SS, they just fail to realize the gains they could have made on a private market.

And it's bigger than that when you look at the full picture of government and private firms. Corporations have scaled back on retiree benefits as well so there will likely be a bigger dependence on SS in the future, not less. Take IBM for example.

Back in the 90s, they have a full retirement plan and full retiree medical benefits as, well as a 401K that matched $0.50 on the dollar for the first 6%. This traditional retirement plan had an incentive to stay with the company beyond 25 years, as the benefit amount increased substantially in year 25-30. If you retired after 30 years, you were set for life and never had to worry. They soon realized that many startups weren't offering retirement plans and didn't have to account for that in their bottom line, so they pivoted in the mid 90s.

They went to what is referred to as a "cash balance" plan for employees who were under a certain age/service time. They essentially came up with a formula to put money into a "savings" account and each year, they'd add a % of the your salary and you'd earn interest, and you took it with you. They also got rid of "retiree" medical and provided a notational account that let you buy insurance only through IBM when you retire. It wasn't real money you could take with you. Overnight, employees who had been there for 15+ years but were under 40 had their whole retirement plan turn upside down.

A few years after that they decided to stop contributing to that, but instead make the 401K the only retirement vehicle and stopped offering the notational account for medical. So no medical at all. They contributed 2% to your 401K off the top and matched $1 for $1 on the first 6%. Not bad as that is 8% of your salary, but employees now had to be diligent (much like if the 12.4% from social security was given to people). I suspect most were, but I suspect some weren't.

Then, they changed again. Staring Jan 2024, they eliminated ALL matching of the 401k. None what-so-ever. They went back to the "cash balance" plan where IBM would put a small % in the plan and then provide interest for it, but here's the kicker. IBM's retirement account was so flush with money, that they could invest that money and get a return LARGER than what they contribute to employees + Interest. Esssentially, they got to a spot where not only do retiree benefits not negatively impact their bottom line, it actually positively does.

Yet employees are essentially left to fend for themselves.

 

[Boom Boom Apathy]

The Boomer generation is going to go down as arguably one of the worst in American history. Their parents worked their ass off to give them a great economy with incredibly affordable costs of living and ever growing list of personal freedoms, and all they did was pull up the ladder behind them to prevent their own children from experiencing the same in an effort to maximize their own wealth, to hell with the future. It's the generation of "f*** you I got mine"

I'm not a boomer, I'm in the earlier phase of Gen-X, but what you wrote is absolute horseshit.

 

[Svechhammer]

Also, y'all be careful out there. Person randomly shooting cars on I-40 this week, police have no idea who is doing it

 

[LostInaLostWorld]

The whole employers offer insurance deal started during WWII when manpower was hard to obtain. So companies began dangling insurance as a perk. Eventually it got baked into the system. So there is that.

On another note, all my R type friends who hate the government and all that socialism handout stuff couldn't wait to get Medicare - a government socialistic program...

 

[MinJaBen]

Also, y'all be careful out there. Person randomly shooting cars on I-40 this week, police have no idea who is doing it

Hadn’t heard that (trying to stay away from news…). Got a link or details?

The whole employers offer insurance deal started during WWII when manpower was hard to obtain. So companies began dangling insurance as a perk. Eventually it got baked into the system. So there is that.

On another note, all my R type friends who hate the government and all that socialism handout stuff couldn't wait to get Medicare - a government socialistic program...

Most who “hate” socialism couldn’t define it correctly.

 

[Svechhammer]

Hadn’t heard that (trying to stay away from news…). Got a link or details?

Raleigh police investigating 6 reports of cars being shot at along I-40 this week

Multiple cars were hit by gunfire on Wednesday morning along Interstate 40 near Chapel Hill Road, adding to similar reports of cars being shot at on Monday.

www.wral.com

In a news conference, an officer said there were six shooting incidents in total – two from Monday and four on Wednesday. The incidents are connected. Police do not have a suspect.

Three incidents happened around 4:58 a.m. on Wednesday, according to the police; no one was injured. Another car was shot at before 6:30 a.m. on I-40 near Gorman Street. On Monday morning, a woman was shot in the leg along I-40 near Chapel Hill Road.

Police believe a handgun was the type of weapon used.

"We’re [going to] be out there until we find who is responsible for this incident," Raleigh Deputy Chief Rico Boyce said. "Obviously, a lot of people do travel that roadway. This is a priority for the Raleigh Police Department, and we’re going to do all we can to find who is responsible."

 

[MinJaBen]

Raleigh police investigating 6 reports of cars being shot at along I-40 this week

Multiple cars were hit by gunfire on Wednesday morning along Interstate 40 near Chapel Hill Road, adding to similar reports of cars being shot at on Monday.

www.wral.com

Thanks!

 

[tarheelhockey]

And it's bigger than that when you look at the full picture of government and private firms. Corporations have scaled back on retiree benefits as well so there will likely be a bigger dependence on SS in the future, not less. Take IBM for example.

Back in the 90s, they have a full retirement plan and full retiree medical benefits as, well as a 401K that matched $0.50 on the dollar for the first 6%. This traditional retirement plan had an incentive to stay with the company beyond 25 years, as the benefit amount increased substantially in year 25-30. If you retired after 30 years, you were set for life and never had to worry. They soon realized that many startups weren't offering retirement plans and didn't have to account for that in their bottom line, so they pivoted in the mid 90s.

They went to what is referred to as a "cash balance" plan for employees who were under a certain age/service time. They essentially came up with a formula to put money into a "savings" account and each year, they'd add a % of the your salary and you'd earn interest, and you took it with you. They also got rid of "retiree" medical and provided a notational account that let you buy insurance only through IBM when you retire. It wasn't real money you could take with you. Overnight, employees who had been there for 15+ years but were under 40 had their whole retirement plan turn upside down.

A few years after that they decided to stop contributing to that, but instead make the 401K the only retirement vehicle and stopped offering the notational account for medical. So no medical at all. They contributed 2% to your 401K off the top and matched $1 for $1 on the first 6%. Not bad as that is 8% of your salary, but employees now had to be diligent (much like if the 12.4% from social security was given to people). I suspect most were, but I suspect some weren't.

Then, they changed again. Staring Jan 2024, they eliminated ALL matching of the 401k. None what-so-ever. They went back to the "cash balance" plan where IBM would put a small % in the plan and then provide interest for it, but here's the kicker. IBM's retirement account was so flush with money, that they could invest that money and get a return LARGER than what they contribute to employees + Interest. Esssentially, they got to a spot where not only do retiree benefits not negatively impact their bottom line, it actually positively does.

Yet employees are essentially left to fend for themselves.

And a major note on this — the public sector is currently making the same changes, one institution at a time. For example, State of NC is gradually eliminating pensions in favor of a version of 401K matching.

The whole argument for going into the public sector used to be, you’ll make less money but the benefits partially make up for it in time, so it makes sense to commit and be a 30-year teacher or cop or whatever. That dynamic is being chipped away, one benefit at a time, to a point where there will soon be no incentive at all to take those jobs, and especially no incentive to make a career of them. This will be especially the case in sectors like public education which are explicit targets for de-funding and dismantlement.

The effect of this shift is enormous and will have multi-generational impacts on the economy and quality of life. Not simply that the institutions themselves are crumbling, but also that an entire sector of the workforce will shift out of stable, career-oriented, retirement-motivated long term employment. Everyone likes to complain about public workers but we are choosing to hurtle toward a reality where there will be no incentive at all to be a teacher or cop or social worker — and therefore the people in those jobs will be taking them as a last resort before unemployment. And anyone remaining in those roles long-term will be wildly behind the curve for retirement. Which means they’ll be a whole new class of people living hand-to-mouth on dwindling social security checks.

We’re talking about a big portion of the population here… over 13% of the workforce, with public education being the largest sector of the workforce by a huge margin. This is a catastrophe that’s just kind of festering under our noses because it’s happening in super-slow-mo, one policy update at a time.