That was the biggest shock to me when visiting the US. Not seeeing tip choices 15,20,25 or bars with parking lots, it was seeing people clearly over 70 working jobs you rarely see anyone over 25 doing elsewhere. Even physical and/or poorly paying jobs (mailmen, cleaning, fast food).
You should have talked to them instead of assuming it was out of necessity. My parents retired in n social security ten years ago. Most of their friends are doing fine with savings and retirement, but they get bored and take a job at Walmart or Applebees. For the most part they enjoy it.
Compared to the rest of the western world, american identity bonds strongly with employment. It's just an unfortunate fact. People find more spiritual grounding with their job than anywhere else. This is just personal anecdata to me but with the eradication of community/third places, people probably look to employment as something to at least do to past the time rather than rot/be lonely.
I friend of mine retired, but decided to do some consulting on the side.
Even though he didn't need the money, he charged his normal rate, because he didn't want to depress the market.
If the friends of your parents are willing to work for birdseed because they don't need the money, then it drives down the salary for those who need a job.
"Didn't want to depress the market seems deeply un-American. They have that religious belief in the market magic hand that auto-regulates everything whatever you do. Me first, the market will solve it.
I could see that, but I think the second half of that statement is pretty interesting too. Why might American seniors enjoy working more than foreign 25 year-olds?
Some people’s identity and occupation are one and the same. A portion of these people fall apart in retirement. They don’t have hobbies, pursuits, or pastimes.
There’s no shock in seeing an old person enjoying a job. The shock is when you see someone who obviously isn’t, who looks like they’re in pain, doing physical jobs.
What's most interesting here is that the promoted solutions are untested. We won't know how well IRA/401k etc works until we get a couple of generations under our belt who use that system instead of pensions. So, unfortunately, I'm thinking the GenX'ers and the Millennials will be the involuntary guinea pigs as they age into retirement. If it doesn't work, there will be little we can do for those generations of retirees.
I can't say whether or not individual funded retirement will work? But just back of the napkin sort of guesstimate at whether a lifetime of saving plus interest can net you 30 years of livable yearly interest or drawdowns (assuming social security) + the necessary medicare supplements/or health insurance? I don't know? It seems unlikely. And again, all that is under the rosy scenario where social security still exists. If social security is changed, the picture is even more bleak.
I could be wrong, but I think people are going to need to acclimate themselves to working through much of retirement. How much will likely depend on how well you did saving. But I suspect a sizable majority of GenX and Millennials will have no choice in the matter.
Watching the current retirees may make us sad, but these scenarios may be nothing compared to what's coming.
They are tested and the results have already been a disaster.
People don't save for 401ks. And why would they? The fact is, when you are living paycheck to paycheck, retirement takes a backseat to rent.
And even when they do save, we are currently looking at a market downturn. The last 5 years have been pretty rough in terms of the stock market with returns being much lower than you might count on.
There is an option, it's fully funding social security by lifting the income cap. It's silly that you get a tax break on SS simply by making too much money.
The biggest threats to the average person being able to retire is the government gutting, dismantling, and/or privatizing Medicaid, Medicare, and social security. With those gone, yeah grandma is going to have to work in the Foxconn factory to avoid eating catfood.
It's not completely hopeless, but people really need to be informed on this. We are running headlong into this problem because neither party wants to raise taxes to fund these essential programs.
This is a government problem to solve which is best solved by a government agency. It will be a disaster if private corporate leaches get involved, matching the current state of healthcare for anyone not disabled or younger than 65.
For anyone that advocates UBI. That's what social security is, UBI (with an age restriction).
I know people in my age group (GenX) who have not saved even a penny for retirement. And these guys are in good jobs in tech with access to generous 401ks. They just spend their whole paychecks, and more via borrowing. If these guys (who definitely have the means to) won't save, I don't understand why we think "personal savings" is overall a viable system for taking care of the elderly. There is going to be a huge amount of either 1. misery or 2. bailouts in the next 30 years as GenX and Millennials start retiring.
People definitely don't save enough for retirement under the current system. The median household entering retirement right now has like $150k, which translates to very little on top of social security. So now without pensions, people's entire retirement strategy is social security and maybe selling a primary residence.
Elder poverty is already high, and will get much higher in the future
> The last 5 years
The last 5 years were freaking amazing for investments. Even including the current small downturn, s&p 500 total returns are up like +160% in the last 5 years.
After factoring inflation it's more like +80% or so? Which is over 10% real returns per year, which is wayyyyy above historical average (closer to 5-7% real returns).
> when you are living paycheck to paycheck, retirement takes a backseat to rent.
Even if you can't afford to save for retirement, you really can't afford not to.
> There is an option, it's fully funding social security by lifting the income cap
That's kinda correct. The income cap on Social Security is effectively a regressive tax. But it won't help fund retirements into the future.
By law, Social Security only invests in Treasuries. This can't provide the returns needed to fund retirements unless the worker-to-retiree ratio massively improves.
Social Security should be allowed to invest in VTI or some other broad-based investment vehicle. This aligns the incentives correctly. We don't want current workers paying for retired workers. We want rising productivity in the economy to do that.
> It will be a disaster if private corporate leaches get involved
+100 company 401k plans are effectively leeches that suck away returns. Detach 401ks from employment and make them like IRAs instead. Cheer as Vanguard drives away the parasites who charge high management fees.
> For anyone that advocates UBI. That's what social security is, UBI (with an age restriction).
That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever.
The fact that the government turned it into a ponzi scheme by raiding its assets, thanks Reagan, doesn't mean it doesn't have qualifications beyond being a certain age, they send a letter yearly, I believe, which details your contributions and expected benefits.
[0] even though, by their own calculations, you are better off financially by putting your money in a literal mattress it is still an investment
> That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever.
Except - just like most progressive taxes, social security costs more for those who make more money and less for those who make less (beyond the income tax, but that's an aside). The only difference between UBI and social security is that, in theory, UBI would require no contributions what-so-ever to earn money out whereas social security requires contributions. The only difference is this makes UBI more progressively taxed than social security.
OASDI and Medicare taxes actually regressive taxes. It costs you less (as a percentage) once you exceed whatever the current threshold is ($178k this year, IIRC).
Remember that the definition of a progressive tax is that the rate goes up as your income goes up, a regressive tax is the opposite. Up to the current year's threshold, your OASDI and Medicare tax rate is constant, and then it drops.
I mentioned the income cap. And no, that is not true. The benefit you get some social security is reduced substantially as you contribute to the upper end of the cap. You might be taxed less proportionally once you exceed the cap but also don’t receive more benefits. The benefits you receive in retirement when drawing on social security are proportionally less.
For example (a few scenarios I ran here) with a “full retirement age” set to 2035 (when you’d be 67)
If you earned a constant wage of $50k/yr, you would be able to draw $2044/mo in SS. Tax per year would be 6.2%, or $3100/yr.
If you earned a constant wage of $150k/yr, you would be able to draw $3843/mo. Tax per year would be $9300/yr.
You receive about 88% more benefits but contribute 300% more money. How is that not progressive taxation?
You're using the term "progressive tax" to talk about the benefit or return, which is not what it actually means.
Progressive, flat, and regressive taxes are not about how the money gets used or redistributed. It's a simple thing: Is the tax rate constant across all incomes? Flat. Does the tax rate increase as income increases? Progressive. Does the tax rate decrease as income increases? Regressive.
OASDI is a regressive tax. Flat for the first $176k, then drops after that.
And you're using far too strict of a definition of tax. Think of it another way: if I make $1, and the government takes $0.10, but then gives me back $0.05 later, but my rich neighbor who makes $10 the government takes $1 and he only gets back $0.10 later... how is my neighbor not taxed more (effectively) than me?
oasdi is extremely regressive (no tax at all above like 2x median household income, vs e.g. income taxes which continue ramping up until closer to 10x median income after becoming flat).
Medicare tax is not capped, and is slightly progressive in that it jumps from 2.9% to (I forget like % higher) at somewhere around 3x median household income.
Ah, you're right about Medicare. Not sure where I got that it was capped from. An extra 0.9% for wages over $200k. But yeah, we agree, the individual I responded to is mistaken in calling OASDI a progressive tax. It's regressive since the rate drops.
That's the thing, social security isn't a tax per se.
If you put more money in you get more money out. Easy peasy. Up to a point then you get to maximum contributions but this isn't something I'm familiar with so YMMV.
UBI is just "take from the rich, give to the poor" or, more likely, take from everybody by devaluing the currency and giving it to everybody but the rich, because we don't believe in "equal protection under the law", so they get nothing.
Yeah, go ahead and downvote me for not pulling the party line...
> And even when they do save, we are currently looking at a market downturn. The last 5 years have been pretty rough in terms of the stock market with returns being much lower than you might count on.
VFIAX S&P500 tracking mutual fund closed at $212.65 five years ago, and closed at $519.60 today. By my math that comes out to an annualized yield of 19.56%, a rate so incredible I'm worried I somehow did the math wrong.
So I'm curious, have I done the math wrong? Or are you saying making 20% per year in an index fund is a rough stock market?
My iOS Stocks app says S&P 500 is up 146.23% over the last 5 years. But isn’t that much too short an interval to evaluate in the first place in consideration for retirement?
A) Retirement creates a better equilibrium, for the economy as a whole. Not just because you flush all the people who have lost a step and yet have enough social/economic power to hide it out of making decisions, but because it clears the way for ambitious younger people who are getting blocked out of advancement opportunities because the generation ahead of them just isn't #%@#$ leaving. Not that I have any experience with that, obviously. You can have a equilibrium where everyone works until they physically can't any more, but that's simply a worse one, for almost everyone.
B) If we're going to have retirement, it is a better equilibrium for our economy as a whole to do it through some sort of enforced group savings plans rather than individuals. The big risk with retirement is outliving your money. If you have a group of a hundred thousand people, you can statistically infer that X% of them will be dead at age 75, and X+Y% of them will be dead at age 76, etc. (1) So you don't need to save as if everyone is going to live to be 90, only some percentage of them. But if retirement is entirely individual responsibility, then everyone needs to save as if they are going to be 90, which leads to an unnaturally high savings rate and that leads to weaker current economies (2) and giant pools of money seeking high returns(3).
1: Yes, improved medicine might change the exact distribution here, but that is projectable, with a small fudge factor you can basically ignore it.
2: That money is saved, not getting spent and turning into your neighbors income!
3: This is what caused all of those boom/bust cycles in our economy over the past 20 years.
I am trying to make the case that something like social security is economically efficient even setting aside any moral case for taking care of vulnerable people. I believe social security pencils out as a huge positive to the overall economy, and that it is emotional "I don't want to help them with my taxes" nonsense that leads people to oppose it. As an example, look at all of the hard work, documented by Katznelson in _When Affirmative Action Was White_ and _Fear Itself_, by lots of racists to keep African-Americans from benefiting from Social Security when that program was created.
Good comment. I would suggest if you get to the point where you want to really analyze your probability of success, you try one of the retirement modeling apps (I use and really like Boldin).
It was VERY eye opening for me in a good way. I have verified my results with several other sources. Its no guarantee of course, but I got some peace-of-mind from doing this.
I was quite surprised on a Florida trip that there were a lot of old (clearly past retirement age) people doing service work in e.g. fast food restaurants and grocery stores. It's rare to see even middle aged people in those where I'm from. Probably largely due to differences in the pension systems.
This happened to several senior colleagues of mine circa 2008. They were overinvested in stocks (for their age and retirement timeline) and when the market took a nosedive several made rash decisions to sell rather than wait. While they may not have recovered within their desired timeframe, they would have been better off waiting and getting something back instead of selling near the bottom.
It only took 6 years for SP500 to return to its peak. If they were planning for a retirement longer than 6 years, they would have gotten a ton more back.
All you have to do is hold bonds or treasuries for the next few years worth of expenses, and then let the federal government take a few years to pump up the markets again. If that doesn’t happen, then you have bigger things to worry about than your 401k balance.
20 an hour USD is what a dev makes in Canada. Crazy he couldn't save up enough in America to retire. Also crazy to read a sob story about the working poor in America and think... "must be nice"
I don't think that's quite true. When I was working for a large/stable/boring company in Calgary, the lowest paid green devs made more than C$56k/year.
Assuming full-time work (40 hour per week, 52 weeks a year with paid leave and holidays), that's about $27/hour CAD or $19/hour USD. If they work more than 40/week then that effective hourly rate drops quickly.
That's what I mean, I was converting US$20/hour to C$/year and assuming 2000 hours/year. None of these people were paid hourly.
I think a starting rate for devs in a software shop is probably closer to C$75k/yr = US$26/hr, at least in this market. Still lower than I expected, but not US$20.
Wow, at that rate I'm surprised we don't see more Canadian startups. Solo SaaS could make 10x that, maybe they don't have many devs that actually ship value?
Right so at those rates why don't more Canadians gamble on running their own shop? Not like a CAN company selling worldwide, paying 1/3 salaries, only makes 1/3 the revenue?
Well, seniors in Vancouver can go for 160k/year (cad), still low for the cost of life, but better.
180 for lead is possible too. Over that I don't know.
# Why No One Touched This Post on Economic Insecurity in Aging America
I just read a sobering TIME article about America's aging workers who can't afford to retire. It profiles 69-year-old Walter Carpenter, working physical jobs despite peripheral neuropathy, bad knees and hips - one of the growing percentage of Americans 65+ still in the workforce (19% today vs 10% forty years ago).
Here's what's interesting: This shouldn't be partisan. The systematic dismantling of retirement security (shifting from pensions to 401(k)s, stagnant wages, rising costs) has created a reality where people work 55 years and still can't stop. As someone who's 59 and facing this reality myself, it's deeply personal.
The most telling quote: "What will happen when, as a friend so aptly put it, I become 'too frail to work and too poor to live?'"
I suspect this post got no traction because:
1. It's uncomfortable - forces us to confront the human cost of our economic system
2. Doesn't fit neatly into tech-optimism or "just learn to code" narratives
3. Reveals the failure of the meritocracy myth many in tech believe in
4. Lacks an easy solution (auto-IRAs are mentioned but too late for current older workers)
5. Hits too close to home for many in their 40s/50s who fear the same fate
The discussion we're avoiding is: what happens when a lifetime of work doesn't guarantee basic security in old age? And what does that say about the system we've built?
That was the biggest shock to me when visiting the US. Not seeeing tip choices 15,20,25 or bars with parking lots, it was seeing people clearly over 70 working jobs you rarely see anyone over 25 doing elsewhere. Even physical and/or poorly paying jobs (mailmen, cleaning, fast food).
You should have talked to them instead of assuming it was out of necessity. My parents retired in n social security ten years ago. Most of their friends are doing fine with savings and retirement, but they get bored and take a job at Walmart or Applebees. For the most part they enjoy it.
So I’m challenging you. Why is it jobs, not volunteering at church or hospitals, where I often see senior citizens in droves
Compared to the rest of the western world, american identity bonds strongly with employment. It's just an unfortunate fact. People find more spiritual grounding with their job than anywhere else. This is just personal anecdata to me but with the eradication of community/third places, people probably look to employment as something to at least do to past the time rather than rot/be lonely.
can only speak for myself but church isn't my thing and hospitals are filled with sick people
Sure, but there are plenty of other places to volunteer outside of those options.
I friend of mine retired, but decided to do some consulting on the side.
Even though he didn't need the money, he charged his normal rate, because he didn't want to depress the market.
If the friends of your parents are willing to work for birdseed because they don't need the money, then it drives down the salary for those who need a job.
"Didn't want to depress the market seems deeply un-American. They have that religious belief in the market magic hand that auto-regulates everything whatever you do. Me first, the market will solve it.
He's British. English to be precise. So yes, un-American.
I have done some fine work for people for free and some average work for people for expensive fees.
People value the work by how much they paid for it.
I could see that, but I think the second half of that statement is pretty interesting too. Why might American seniors enjoy working more than foreign 25 year-olds?
Some people’s identity and occupation are one and the same. A portion of these people fall apart in retirement. They don’t have hobbies, pursuits, or pastimes.
There’s no shock in seeing an old person enjoying a job. The shock is when you see someone who obviously isn’t, who looks like they’re in pain, doing physical jobs.
yea that is like 0.000000076% of them… be real mate
What's most interesting here is that the promoted solutions are untested. We won't know how well IRA/401k etc works until we get a couple of generations under our belt who use that system instead of pensions. So, unfortunately, I'm thinking the GenX'ers and the Millennials will be the involuntary guinea pigs as they age into retirement. If it doesn't work, there will be little we can do for those generations of retirees.
I can't say whether or not individual funded retirement will work? But just back of the napkin sort of guesstimate at whether a lifetime of saving plus interest can net you 30 years of livable yearly interest or drawdowns (assuming social security) + the necessary medicare supplements/or health insurance? I don't know? It seems unlikely. And again, all that is under the rosy scenario where social security still exists. If social security is changed, the picture is even more bleak.
I could be wrong, but I think people are going to need to acclimate themselves to working through much of retirement. How much will likely depend on how well you did saving. But I suspect a sizable majority of GenX and Millennials will have no choice in the matter.
Watching the current retirees may make us sad, but these scenarios may be nothing compared to what's coming.
They are tested and the results have already been a disaster.
People don't save for 401ks. And why would they? The fact is, when you are living paycheck to paycheck, retirement takes a backseat to rent.
And even when they do save, we are currently looking at a market downturn. The last 5 years have been pretty rough in terms of the stock market with returns being much lower than you might count on.
There is an option, it's fully funding social security by lifting the income cap. It's silly that you get a tax break on SS simply by making too much money.
The biggest threats to the average person being able to retire is the government gutting, dismantling, and/or privatizing Medicaid, Medicare, and social security. With those gone, yeah grandma is going to have to work in the Foxconn factory to avoid eating catfood.
It's not completely hopeless, but people really need to be informed on this. We are running headlong into this problem because neither party wants to raise taxes to fund these essential programs.
This is a government problem to solve which is best solved by a government agency. It will be a disaster if private corporate leaches get involved, matching the current state of healthcare for anyone not disabled or younger than 65.
For anyone that advocates UBI. That's what social security is, UBI (with an age restriction).
I know people in my age group (GenX) who have not saved even a penny for retirement. And these guys are in good jobs in tech with access to generous 401ks. They just spend their whole paychecks, and more via borrowing. If these guys (who definitely have the means to) won't save, I don't understand why we think "personal savings" is overall a viable system for taking care of the elderly. There is going to be a huge amount of either 1. misery or 2. bailouts in the next 30 years as GenX and Millennials start retiring.
Everyone already has mandatory defined benefit pensions in the US. It’s called Social Security.
People definitely don't save enough for retirement under the current system. The median household entering retirement right now has like $150k, which translates to very little on top of social security. So now without pensions, people's entire retirement strategy is social security and maybe selling a primary residence.
Elder poverty is already high, and will get much higher in the future
> The last 5 years
The last 5 years were freaking amazing for investments. Even including the current small downturn, s&p 500 total returns are up like +160% in the last 5 years.
After factoring inflation it's more like +80% or so? Which is over 10% real returns per year, which is wayyyyy above historical average (closer to 5-7% real returns).
> when you are living paycheck to paycheck, retirement takes a backseat to rent.
Even if you can't afford to save for retirement, you really can't afford not to.
> There is an option, it's fully funding social security by lifting the income cap
That's kinda correct. The income cap on Social Security is effectively a regressive tax. But it won't help fund retirements into the future.
By law, Social Security only invests in Treasuries. This can't provide the returns needed to fund retirements unless the worker-to-retiree ratio massively improves.
Social Security should be allowed to invest in VTI or some other broad-based investment vehicle. This aligns the incentives correctly. We don't want current workers paying for retired workers. We want rising productivity in the economy to do that.
> It will be a disaster if private corporate leaches get involved
+100 company 401k plans are effectively leeches that suck away returns. Detach 401ks from employment and make them like IRAs instead. Cheer as Vanguard drives away the parasites who charge high management fees.
> Detach 401ks from employment and make them like IRAs instead. Cheer as Vanguard drives away the parasites who charge high management fees.
It would be pretty awesome if they opened TSP to everyone
> For anyone that advocates UBI. That's what social security is, UBI (with an age restriction).
That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever.
The fact that the government turned it into a ponzi scheme by raiding its assets, thanks Reagan, doesn't mean it doesn't have qualifications beyond being a certain age, they send a letter yearly, I believe, which details your contributions and expected benefits.
[0] even though, by their own calculations, you are better off financially by putting your money in a literal mattress it is still an investment
> That's nothing like what a UBI is, you have to "invest"[0] into social security while a UBI is just money from the free money tree or wherever.
Except - just like most progressive taxes, social security costs more for those who make more money and less for those who make less (beyond the income tax, but that's an aside). The only difference between UBI and social security is that, in theory, UBI would require no contributions what-so-ever to earn money out whereas social security requires contributions. The only difference is this makes UBI more progressively taxed than social security.
OASDI and Medicare taxes actually regressive taxes. It costs you less (as a percentage) once you exceed whatever the current threshold is ($178k this year, IIRC).
Remember that the definition of a progressive tax is that the rate goes up as your income goes up, a regressive tax is the opposite. Up to the current year's threshold, your OASDI and Medicare tax rate is constant, and then it drops.
I mentioned the income cap. And no, that is not true. The benefit you get some social security is reduced substantially as you contribute to the upper end of the cap. You might be taxed less proportionally once you exceed the cap but also don’t receive more benefits. The benefits you receive in retirement when drawing on social security are proportionally less.
For example (a few scenarios I ran here) with a “full retirement age” set to 2035 (when you’d be 67)
If you earned a constant wage of $50k/yr, you would be able to draw $2044/mo in SS. Tax per year would be 6.2%, or $3100/yr.
If you earned a constant wage of $150k/yr, you would be able to draw $3843/mo. Tax per year would be $9300/yr.
You receive about 88% more benefits but contribute 300% more money. How is that not progressive taxation?
You're using the term "progressive tax" to talk about the benefit or return, which is not what it actually means.
Progressive, flat, and regressive taxes are not about how the money gets used or redistributed. It's a simple thing: Is the tax rate constant across all incomes? Flat. Does the tax rate increase as income increases? Progressive. Does the tax rate decrease as income increases? Regressive.
OASDI is a regressive tax. Flat for the first $176k, then drops after that.
And you're using far too strict of a definition of tax. Think of it another way: if I make $1, and the government takes $0.10, but then gives me back $0.05 later, but my rich neighbor who makes $10 the government takes $1 and he only gets back $0.10 later... how is my neighbor not taxed more (effectively) than me?
If we're being pedantic:.
oasdi is extremely regressive (no tax at all above like 2x median household income, vs e.g. income taxes which continue ramping up until closer to 10x median income after becoming flat).
Medicare tax is not capped, and is slightly progressive in that it jumps from 2.9% to (I forget like % higher) at somewhere around 3x median household income.
Ah, you're right about Medicare. Not sure where I got that it was capped from. An extra 0.9% for wages over $200k. But yeah, we agree, the individual I responded to is mistaken in calling OASDI a progressive tax. It's regressive since the rate drops.
That's the thing, social security isn't a tax per se.
If you put more money in you get more money out. Easy peasy. Up to a point then you get to maximum contributions but this isn't something I'm familiar with so YMMV.
UBI is just "take from the rich, give to the poor" or, more likely, take from everybody by devaluing the currency and giving it to everybody but the rich, because we don't believe in "equal protection under the law", so they get nothing.
Yeah, go ahead and downvote me for not pulling the party line...
> And even when they do save, we are currently looking at a market downturn. The last 5 years have been pretty rough in terms of the stock market with returns being much lower than you might count on.
VFIAX S&P500 tracking mutual fund closed at $212.65 five years ago, and closed at $519.60 today. By my math that comes out to an annualized yield of 19.56%, a rate so incredible I'm worried I somehow did the math wrong.
So I'm curious, have I done the math wrong? Or are you saying making 20% per year in an index fund is a rough stock market?
My iOS Stocks app says S&P 500 is up 146.23% over the last 5 years. But isn’t that much too short an interval to evaluate in the first place in consideration for retirement?
That doesn't even include dividends. It's more like 166% after dividends
But also yes it's too short of an interval for retirement savings
“Up 146%” is either because your start time is during the 2020 market crash, or the display is actually “150% of the starting value” (up 50%).
I have two thoughts.
A) Retirement creates a better equilibrium, for the economy as a whole. Not just because you flush all the people who have lost a step and yet have enough social/economic power to hide it out of making decisions, but because it clears the way for ambitious younger people who are getting blocked out of advancement opportunities because the generation ahead of them just isn't #%@#$ leaving. Not that I have any experience with that, obviously. You can have a equilibrium where everyone works until they physically can't any more, but that's simply a worse one, for almost everyone.
B) If we're going to have retirement, it is a better equilibrium for our economy as a whole to do it through some sort of enforced group savings plans rather than individuals. The big risk with retirement is outliving your money. If you have a group of a hundred thousand people, you can statistically infer that X% of them will be dead at age 75, and X+Y% of them will be dead at age 76, etc. (1) So you don't need to save as if everyone is going to live to be 90, only some percentage of them. But if retirement is entirely individual responsibility, then everyone needs to save as if they are going to be 90, which leads to an unnaturally high savings rate and that leads to weaker current economies (2) and giant pools of money seeking high returns(3).
1: Yes, improved medicine might change the exact distribution here, but that is projectable, with a small fudge factor you can basically ignore it.
2: That money is saved, not getting spent and turning into your neighbors income!
3: This is what caused all of those boom/bust cycles in our economy over the past 20 years.
So you are proposing… social security?
Indeed I am!
I am trying to make the case that something like social security is economically efficient even setting aside any moral case for taking care of vulnerable people. I believe social security pencils out as a huge positive to the overall economy, and that it is emotional "I don't want to help them with my taxes" nonsense that leads people to oppose it. As an example, look at all of the hard work, documented by Katznelson in _When Affirmative Action Was White_ and _Fear Itself_, by lots of racists to keep African-Americans from benefiting from Social Security when that program was created.
Good comment. I would suggest if you get to the point where you want to really analyze your probability of success, you try one of the retirement modeling apps (I use and really like Boldin).
It was VERY eye opening for me in a good way. I have verified my results with several other sources. Its no guarantee of course, but I got some peace-of-mind from doing this.
I was quite surprised on a Florida trip that there were a lot of old (clearly past retirement age) people doing service work in e.g. fast food restaurants and grocery stores. It's rare to see even middle aged people in those where I'm from. Probably largely due to differences in the pension systems.
Florida has a very large retiree population, that may correspond to a large un-retiree population too.
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Yeah usually the only people over 40 working in a restaurant are the chef or the boss.
> Or perhaps they were on track to quit at 65 until the stock market took a dive.
[and they liquidated all their assets at the bottom of a market against all mainstream advice]
This happened to several senior colleagues of mine circa 2008. They were overinvested in stocks (for their age and retirement timeline) and when the market took a nosedive several made rash decisions to sell rather than wait. While they may not have recovered within their desired timeframe, they would have been better off waiting and getting something back instead of selling near the bottom.
It only took 6 years for SP500 to return to its peak. If they were planning for a retirement longer than 6 years, they would have gotten a ton more back.
All you have to do is hold bonds or treasuries for the next few years worth of expenses, and then let the federal government take a few years to pump up the markets again. If that doesn’t happen, then you have bigger things to worry about than your 401k balance.
20 an hour USD is what a dev makes in Canada. Crazy he couldn't save up enough in America to retire. Also crazy to read a sob story about the working poor in America and think... "must be nice"
I don't think that's quite true. When I was working for a large/stable/boring company in Calgary, the lowest paid green devs made more than C$56k/year.
Assuming full-time work (40 hour per week, 52 weeks a year with paid leave and holidays), that's about $27/hour CAD or $19/hour USD. If they work more than 40/week then that effective hourly rate drops quickly.
That's what I mean, I was converting US$20/hour to C$/year and assuming 2000 hours/year. None of these people were paid hourly.
I think a starting rate for devs in a software shop is probably closer to C$75k/yr = US$26/hr, at least in this market. Still lower than I expected, but not US$20.
Got it, I misunderstood your earlier comment as putting $56k as a lower bound on starting pay.
Wow, at that rate I'm surprised we don't see more Canadian startups. Solo SaaS could make 10x that, maybe they don't have many devs that actually ship value?
That's a junior dev rate, and a low one. A good job for a new grad would be USD 30/hour.
Right so at those rates why don't more Canadians gamble on running their own shop? Not like a CAN company selling worldwide, paying 1/3 salaries, only makes 1/3 the revenue?
Unless corp taxes are 3x US?
Well, seniors in Vancouver can go for 160k/year (cad), still low for the cost of life, but better. 180 for lead is possible too. Over that I don't know.
Market is 1/10th USA size.
Y’all balk at six figures salaries. Most will never see them
# Why No One Touched This Post on Economic Insecurity in Aging America
I just read a sobering TIME article about America's aging workers who can't afford to retire. It profiles 69-year-old Walter Carpenter, working physical jobs despite peripheral neuropathy, bad knees and hips - one of the growing percentage of Americans 65+ still in the workforce (19% today vs 10% forty years ago).
Here's what's interesting: This shouldn't be partisan. The systematic dismantling of retirement security (shifting from pensions to 401(k)s, stagnant wages, rising costs) has created a reality where people work 55 years and still can't stop. As someone who's 59 and facing this reality myself, it's deeply personal.
The most telling quote: "What will happen when, as a friend so aptly put it, I become 'too frail to work and too poor to live?'"
I suspect this post got no traction because:
1. It's uncomfortable - forces us to confront the human cost of our economic system 2. Doesn't fit neatly into tech-optimism or "just learn to code" narratives 3. Reveals the failure of the meritocracy myth many in tech believe in 4. Lacks an easy solution (auto-IRAs are mentioned but too late for current older workers) 5. Hits too close to home for many in their 40s/50s who fear the same fate
The discussion we're avoiding is: what happens when a lifetime of work doesn't guarantee basic security in old age? And what does that say about the system we've built?
> I suspect this post got no traction because:
It's been up for an hour and is still on the front page. Seems a bit early to declare "no traction".
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