Comment on What the hell is this shit? Instead of pushing for the return to traditional pensions, capitalism is celebrating the idea that Millennials & Gen Z may simply never be able to stop working.

• sqw@lemmy.sdf.org ⁨1⁩ ⁨year⁩ ago

  savings interest rate was less than 0.1% for about the last 10 years so even thats not looking too solid

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• M0oP0o@mander.xyz ⁨1⁩ ⁨year⁩ ago

  If inflation is as high as it currently is compared to the collected interest it does not matter how much compounding is done, the buying power of that savings will flatline. Add to this equation the need to eat and live now, the amount most put away is minimal and when something comes up even those meager savings are wiped out.

  The math in most households is not working out. Debt is becoming peoples rainy day fund, people are unable to even pay their property taxes with the now insufficient government minimum pensions (and a lot of people don’t think these pensions will even be there when they are eligible). This leaves people selling things (reverse mortgage, downsizing, moving to lower COL areas, etc) taking on debt to live now and generally giving up.

  If you put away $50 a week for 10 years you end up with (based on a generous average 2% rate) $28,554.34. This seems like a good amount but keep in mind that you put $26,000 into this. That $2554.24 does not beat the loss of buying power over 10 years. You need much closer or better returns vs inflation for this to work in your favour. I was once told that you would be better off buying some raw metal like lead, or copper as the return on simple materials at least keeps up with costs.

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  • dgriffith@aussie.zone ⁨1⁩ ⁨year⁩ ago

    You’re absolutely right, but I’ll just point out that superannuation (pension) funds in Australia are hitting 8 percent annual returns over a 30 year timeframe. You need a broader investment base to do that, and that’s hard for individuals to do by themselves. How do you diversify your $50 a week investment to maximise return? You can’t.

    Here, superannuation funds do all the heavy lifting for you, it’s mandatory for employers to put a nominal amount of each pay into one. There are no minimum investment amounts with them and fees are waived if the balance is below a few thousand, so even if it’s $10 a week you get something back eventually.

    So it’s possible to have it work if your government sets things up right.

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    • M0oP0o@mander.xyz ⁨1⁩ ⁨year⁩ ago

      Oh I am not saying people should be the ones wholly responsible for their retirement portfolio, and congrats for having a competent government pension option. I would love to have access to something better then the market equivalent to roulette.

      Hell in Canada the pension plan (that you can not get enough at the moment) got a stunning 1.3% return this year. And unlike other plans you need to pay extra for 40 years to get additional funds at the end (no one I know of even thinks of doing this). And some parts of the county want to spin off there own pension plan (Alberta) even though most expect it to perform worse (due to a smaller investment base and using a bad private firm to run it).

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• FlyingSquid@lemmy.world ⁨1⁩ ⁨year⁩ ago

  When over half of Americans live paycheck-to-paycheck, saving is not even a possibility.

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  • dgriffith@aussie.zone ⁨1⁩ ⁨year⁩ ago

    Is there any form of “mandatory” saving in the US? I know you guys have company pension plans of some sort, is there a government version?

    Eg where I live, Australia, employers are required to put in 10 percent of an employee’s wages into a superannuation fund. This is basically “invisible” to workers, it’s a cost that’s factored into the cost to have an employee basically. The superannuation fund can be a “default” one selected by the business, or an employee nominated one, and you can transfer/roll over your accumulated funds between any superannuation fund you like as you hop between jobs. You can draw from it in some specific dire circumstances, but usually you can only access it at retirement age.

    It seems that a lot of things in the US are carefully designed to keep you in servitude to your current employer, which I find a little ironic coming from the land of the free.

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    • FlyingSquid@lemmy.world ⁨1⁩ ⁨year⁩ ago

      That’s essentially what social security is, but it’s constantly being attacked with death by a thousand cuts, so most people under 50 don’t really expect to see much of a return.

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      • dgriffith@aussie.zone ⁨1⁩ ⁨year⁩ ago

        It’s pretty much the opposite in Australia with our setup. Those starting work now will end up with the required 3-ish million at retirement if they work the standard average job here for most of their life.

        But I think what you refer to as “social security” is the government “aged pension” here which is about $550 a week or so. That’s enough for a pensioner to live a very modest lifestyle here if their accommodation has been sorted previously.

        It’s also suffering the same kind of squeeze you mention and is means-tested on a sliding scale so the more you can afford not to have it, the less you get of it.

        Right now most boomers are on the aged pension to some degree because superannuation schemes here only really kicked in during the last 15-20 years of their working lives so they didn’t have much of a balance.

        Probably in the next 30 years or so only the truly destitute will be able to get it and the rest of us will have to rely on what we’ve saved.

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