"We saw in the 1980s a shift from pensions to 401(k)s; that was a raw deal for workers. These retirement plans were marketed as an instrument of financial freedom, but they were really transferring risk from the shoulder of the employers to the backs of the workers."
This is misleading. 401k's are considerably lower risk since they allow you to be diversified instead of putting all your eggs into one basket (ie a company retirement pension).
The problem is the amount of money going into a standard 401k is nowhere near the amount that went into a pension. You had pensions paying out amounts that would require a 401k account with $1MM+ in it. The standard company 401k match these days isn't even peanuts compared to that, and that's if the company even matches at all.
The other problem is that 401ks let you do dumb stuff pensions don't. Dumb stuff like pulling most of your funds in the 2008 crisis and holding it in cash to miss out on the rebound. Or investing in borderline scam products like variable annuities.
401ks are great if you're savvy. They are massively inefficient for society in that they require all the people who use them to understand investing.
This is really bad policy at a society level. People need real, unbiased investing guidance.
Pensions are inherently unsustainable because they guarantee returns. What investor in the world is ever able to guarantee returns, especially at the volume of clients that get served by pensions? It is likelier that the pension:
Another issue with 401ks is if you're like a lot of folks that have had the wonderful luck to work at smaller companies that don't have 401ks or hand out benefits of any sort. An individual IRA maxes out at $5,500/yr so if end up in an industry or at a job that doesn't offer a 401k, you can miss out on years of putting away that money in some sort of tax-deferred account.
I don't think you understand pensions. Pensions are assets that a company has to maintain that are invested professionally (ie diversified investments). Yes pensions have disappeared or been reduced due to fraud or gross mismanagement, but the chances of that happening to a pension are a lot lower than your chances that the average person is adequately maintaining a 401k.
Pension funds are pretty safe if they are sector based instead of just individual companies.
Oh and obviously the government needs to guarantee them as a last resort. That way if a company doesn't hold up its end of the bargain it is not citizens that have to try to collect but the big bad Treasury wolf.
But government is considered evil in the US I know.
I am the sole signer on my 401k. Activist investors, short-term-thinking CEOs, state Republican parties, etc. can and routinely do choose to run pension funds into default. Heck, I trust my employer but I don’t trust it to be solvent in 40 years.
I have an aunt and uncle who do this, but they aren't desperate, they're retired. They travel around the country, visiting places they'd like to see, and taking seasonal jobs as something to do and to help defray expenses. They still own their own house, but they choose not to live there, renting it out to their kids / their kid's friends. They've worked as lighthouse keepers, Amazon warehouse pickers, and as bookkeeping/maintenance for a sugar-beet picking operation (they're a little old for field work). Currently they're wintering over at the Grand Canyon while working at the general store in an rv park.
The point is not all of these nomads are forced into it by desperation or financial necessity; some of them just want to spend their retirement traveling and don't mind a little work along the way.
I hear you, but care must be taken not to dismiss the plight of these people simply because there are those who seek a similar situation by choice. Doing something because you want to versus doing it because you have to can make the same thing a pleasure or torture. Both perspectives are legitimate.
I'm currently looking for a suitable property to live off the grid, and move to more of a subsistence lifestyle (the usual stuff, veggies, few animals). But I realized that the exact same end state is pretty bleak if it's something you were born into.
I love this. Thank you for the link. Reminds me of what the Internet was going to be back in the early 2000s. Tell your aunt and uncle they have a new follower.
> The point is not all of these nomads are forced into it by desperation or financial necessity; some of them just want to spend their retirement traveling and don't mind a little work along the way.
I was about to post the same thing. Not everyone is in desperate need of affordable housing. YouTube is full of channels by RVers of all ages who simply want to travel and experience adventure on the road.
There is a steady stream of these articles describing this as a problem of older people. It isn't. This is about poor people. There are plenty of non-old people living our of RVs, or worse, chasing seasonal work wherever they can find it. An RV is a huge step up from a tent. This is one slightly more pathetic version of an increasingly common story: our modern economy isn't addressing poverty. Poor people of all ages are falling off the cliff. They need help. They don't need classes on writing resumes. They don't need tax breaks. They need cash and a place to live near a reasonable job.
I drove by a closed Amazon.com warehouse in Kansas a few weeks ago. Next to it is a RV campground that is still operating. If you look around on RV websites you can find quite a few reviews from people who went there and other Amazon.com locations to work like this. Those reviews mostly paint a very different picture than what is described in the article.
For many of the Amazon.com camper/workers it was a way to do a lot of work in a few months to help support their retirement travel and the people who were actually doing it seemed to think the pay was pretty good--especially with the overtime.
> "For one thing, Amazon should pay its workers more and give them better working conditions. It’s laughable that the workers get a 15-minute break when they have to spend it walking to the break room. It’s completely insane."
Perhaps the rest of society should be more aware of the darkside(s) of the business models they are supporting?
Plenty of multi-nationals - Nike comes to mind - have been pressured into making changes to practices that were not socially acceptable.
Why isn't Amazon being held to the same measuring stick?
Editorial: Why is the public still so naive about the "hidden costs" of cheaper? Certainly, Walmart (for example) and its darkside would be fresh in the minds of the American public. Instead, it seems, the perception is Amazon is the saviour (from Walmart), when the new boss is really the same as the old boss (sans the glossy high tech paint job).
Because structural problems can not be solved on the individual level.
We will not end world hunger by eating less. We will not stop climate change by turning off the light more often. And we will not fix exploitative employment practices by voting with our wallet.
The cynic in my thinks that the "vote with your wallet" slogan has been coined by those who want to prevent better regulation.
All these things CAN be solved by passing laws and regulation and by building a society that supports and enforces those.
>> Why is the public still so naive about the "hidden costs" of cheaper?
Because it is not true. Apple products are considered luxury goods and the company is known for the horrendous treatment of their workers in Asia. And ALDI is a very cheap supermarket chain in Germany but pays and treats their employees better than some more expensive ones.
There might be a correlation but that means nothing for each individual purchase.
I find it hard to support Amazon in any way knowing how it treats its employees, both in the warehouses and at corporate. For it to span such different contexts suggests how systemic it really is.
Articles like these frighten me. In my thirties, I am deeply worried about retirement, if that ever comes, and surviving in my old age. So much can go wrong. Ever since I read David Raether's story[0] of going from half-a-million a year as a TV writer, to homeless living in a van, I've focused considerable effort to make sure I am never homeless.
I invest in a Roth IRA,
I own a home that I rent out,
I joined a church to build more ties in the community, and
I spend a lot of time staying out of debt, and building savings.
If you are in debt from credit cards, the single greatest thing you can do for your future is to get the hell out of that debt!
It's interesting reading this because I also feel like I've been living a desperate, nomadic life.
There was a period of time in the past 2 years when I didn't have a home and stayed at various places on AirBnb while working remotely. The worst part was when I ran out of money because opportunities dried up on the work platform I was using. At the time I was in Russia with a dependent partner; we had gone there because of the low cost of living brought on by US sanctions. So I can relate to the feeling of being constantly forced to follow the money wherever it takes you. It's stressful and disorientating.
I don't understand how anyone in their 50s can sustain this lifestyle without going insane.
I always think of the remake of Little House on the Prairie series where Pa had to walk for 6 days to the nearest city to find work when the farm wasn't making it.
Not the same thing but sometimes you have to go where the work is.
From a Wired article [0] about one of the couples she talks about:
"Objects they couldn’t bear to part with—including Chuck’s letter from Ray Kroc, framed and hanging on the wall—went to one of Barb’s daughters for safekeeping. (Barb and Chuck each have three kids.)"
They have SIX adult children.
They should be living with family instead of trying to survive hand-to-mouth out of an RV.
its seems a general extrapolation of a purely free market economy where if you cant bootstrap yourself into the bottom of the investor class by the time you get old for whatever reason, you're essentially human trash
I think it's just a commodity. The price of unskilled labor rises and falls with the vagaries of the market, and anyone who relies on it too much gets burned like Alberta got burned when oil crashed.
Some of you are very out of touch. They're not saving for retirement because they can't. First, most of them were not even working jobs with 401k's available. Second, how the hell are you supposed to save when you don't even have enough money to pay your current rent, food, gas, medical expenses? I think some of you imagine everyone is making $80,000-$200,000 a year and they're just being irresponsible and not saving up money because they live beyond their means.
In fact, the number of people who don't have enough for retirement because of this reason is quite small. Most people are there because they or their family had a catastrophic medical event, job loss, and/or some massive loss of value in their home due to the depression (from which they've never recovered).
Sounds like this book has an unfortunate bias of victim hood.
Lost your mortgage? Not your fault.
Didn’t save for retirement? Not your fault.
Only job prospect, after working and training and networking for your entire adult life, is moving boxes in an AMZN warehouse? Not your fault.
I prefer a more objective view, like Studs Terkel’s classic book, Working.
Finally, don’t get me wrong — I have neighbors in the described situation. I care about them. I’m just saying I’d enjoy reading an objective narrative about their hard, and unfortunate situation — something not clouded with the tone of victimization.
Perhaps you meant to write "bias of false victimhood". There is nothing biased about victimhood itself. Many people are really truly and objectively victims.
I think you're underestimating how hard these people have worked their whole lives.
The issue is not one of not working. It's one of lower class wages.
If you work your while life and do all the things society expects of you but still end up screwed. That's a systemic problem not a lazy person problem.
Studs Turkel's book Working is for an America that is gone.
When this current bubble bursts, we will see the truth for all those who belive it's just not enough--what's the word--planning, or solid work ethic?
I was going to say we need a new Working book for the Sharing Economey, but I feel it would be pretty thin, and just say see "Chinese economy", or done other "they do it cheaper" country for more information.
It would be interesting to see a Studs Turkel type writing about a startup that produces absolutely nothing new, or a product that will be decimated by one of the monopolies.
I would like to read how a 1 percenter rationalizes their greedy, and narcissism though; while the safe, predictable, somewhat ethical country they grew up slides into chaos.
[+] [-] billmalarky|8 years ago|reply
This is misleading. 401k's are considerably lower risk since they allow you to be diversified instead of putting all your eggs into one basket (ie a company retirement pension).
The problem is the amount of money going into a standard 401k is nowhere near the amount that went into a pension. You had pensions paying out amounts that would require a 401k account with $1MM+ in it. The standard company 401k match these days isn't even peanuts compared to that, and that's if the company even matches at all.
[+] [-] andrewvc|8 years ago|reply
401ks are great if you're savvy. They are massively inefficient for society in that they require all the people who use them to understand investing.
This is really bad policy at a society level. People need real, unbiased investing guidance.
[+] [-] PakG1|8 years ago|reply
- gets rid of the obligation by selling it to someone else: https://www.forbes.com/sites/joannmuller/2012/06/01/gm-unloa...
- raises more capital or debt to fund the pension (or in the case of government pensions, raise taxes) and kick the can down the road: https://www.wsj.com/articles/gm-to-take-on-3-billion-in-debt...
- just lets bankruptcy kill the obligation: https://mobile.nytimes.com/2006/10/24/business/retirement/24...
[+] [-] JBlue42|8 years ago|reply
[+] [-] georgeecollins|8 years ago|reply
[+] [-] Feniks|8 years ago|reply
Oh and obviously the government needs to guarantee them as a last resort. That way if a company doesn't hold up its end of the bargain it is not citizens that have to try to collect but the big bad Treasury wolf.
But government is considered evil in the US I know.
[+] [-] trophycase|8 years ago|reply
[+] [-] walshemj|8 years ago|reply
[+] [-] closeparen|8 years ago|reply
[+] [-] ProCynic|8 years ago|reply
The point is not all of these nomads are forced into it by desperation or financial necessity; some of them just want to spend their retirement traveling and don't mind a little work along the way.
My aunt and uncle have a blog detailing their travels if anyone is interested: https://whatsnewell.blogspot.com/
[+] [-] FooHentai|8 years ago|reply
I'm currently looking for a suitable property to live off the grid, and move to more of a subsistence lifestyle (the usual stuff, veggies, few animals). But I realized that the exact same end state is pretty bleak if it's something you were born into.
[+] [-] intopieces|8 years ago|reply
[+] [-] avenoir|8 years ago|reply
I was about to post the same thing. Not everyone is in desperate need of affordable housing. YouTube is full of channels by RVers of all ages who simply want to travel and experience adventure on the road.
[+] [-] justicezyx|8 years ago|reply
[+] [-] vinhboy|8 years ago|reply
[+] [-] known|8 years ago|reply
[+] [-] sandworm101|8 years ago|reply
[+] [-] markshead|8 years ago|reply
For many of the Amazon.com camper/workers it was a way to do a lot of work in a few months to help support their retirement travel and the people who were actually doing it seemed to think the pay was pretty good--especially with the overtime.
[+] [-] chiefalchemist|8 years ago|reply
Perhaps the rest of society should be more aware of the darkside(s) of the business models they are supporting?
Plenty of multi-nationals - Nike comes to mind - have been pressured into making changes to practices that were not socially acceptable.
Why isn't Amazon being held to the same measuring stick?
Editorial: Why is the public still so naive about the "hidden costs" of cheaper? Certainly, Walmart (for example) and its darkside would be fresh in the minds of the American public. Instead, it seems, the perception is Amazon is the saviour (from Walmart), when the new boss is really the same as the old boss (sans the glossy high tech paint job).
[+] [-] konschubert|8 years ago|reply
We will not end world hunger by eating less. We will not stop climate change by turning off the light more often. And we will not fix exploitative employment practices by voting with our wallet.
The cynic in my thinks that the "vote with your wallet" slogan has been coined by those who want to prevent better regulation.
All these things CAN be solved by passing laws and regulation and by building a society that supports and enforces those.
[+] [-] badestrand|8 years ago|reply
Because it is not true. Apple products are considered luxury goods and the company is known for the horrendous treatment of their workers in Asia. And ALDI is a very cheap supermarket chain in Germany but pays and treats their employees better than some more expensive ones.
There might be a correlation but that means nothing for each individual purchase.
[+] [-] gdulli|8 years ago|reply
[+] [-] stevenwoo|8 years ago|reply
[+] [-] yeukhon|8 years ago|reply
Nikes outsources manufacture to contractors outside the US where countries with horrible labor practices and labor laws and enforcement.
[+] [-] oceanghost|8 years ago|reply
Is it even be possible to live a moral life?
[+] [-] Overtonwindow|8 years ago|reply
I invest in a Roth IRA, I own a home that I rent out, I joined a church to build more ties in the community, and I spend a lot of time staying out of debt, and building savings.
If you are in debt from credit cards, the single greatest thing you can do for your future is to get the hell out of that debt!
[0]. https://priceonomics.com/what-its-like-to-fail/
[+] [-] jondubois|8 years ago|reply
There was a period of time in the past 2 years when I didn't have a home and stayed at various places on AirBnb while working remotely. The worst part was when I ran out of money because opportunities dried up on the work platform I was using. At the time I was in Russia with a dependent partner; we had gone there because of the low cost of living brought on by US sanctions. So I can relate to the feeling of being constantly forced to follow the money wherever it takes you. It's stressful and disorientating.
I don't understand how anyone in their 50s can sustain this lifestyle without going insane.
[+] [-] ourmandave|8 years ago|reply
Not the same thing but sometimes you have to go where the work is.
[+] [-] brandonmenc|8 years ago|reply
"Objects they couldn’t bear to part with—including Chuck’s letter from Ray Kroc, framed and hanging on the wall—went to one of Barb’s daughters for safekeeping. (Barb and Chuck each have three kids.)"
They have SIX adult children.
They should be living with family instead of trying to survive hand-to-mouth out of an RV.
[0] https://www.wired.com/story/meet-camperforce-amazons-nomadic...
[+] [-] sliverstorm|8 years ago|reply
[+] [-] alphonsegaston|8 years ago|reply
The tech industry is engineering these kind of labor conditions for their own profit. Try blaming them instead of the families of poor people.
[+] [-] crypticlizard|8 years ago|reply
[+] [-] convolvatron|8 years ago|reply
[+] [-] baybal2|8 years ago|reply
You effectively have to run your own pension fund to expect any much significant passive income after you retire.
[+] [-] lamarpye|8 years ago|reply
[+] [-] Kluny|8 years ago|reply
[+] [-] madengr|8 years ago|reply
https://www.google.com/amp/s/www.financialfixation.com/singl...
[+] [-] jnbiche|8 years ago|reply
In fact, the number of people who don't have enough for retirement because of this reason is quite small. Most people are there because they or their family had a catastrophic medical event, job loss, and/or some massive loss of value in their home due to the depression (from which they've never recovered).
[+] [-] dogruck|8 years ago|reply
Lost your mortgage? Not your fault.
Didn’t save for retirement? Not your fault.
Only job prospect, after working and training and networking for your entire adult life, is moving boxes in an AMZN warehouse? Not your fault.
I prefer a more objective view, like Studs Terkel’s classic book, Working.
Finally, don’t get me wrong — I have neighbors in the described situation. I care about them. I’m just saying I’d enjoy reading an objective narrative about their hard, and unfortunate situation — something not clouded with the tone of victimization.
[+] [-] timthelion|8 years ago|reply
[+] [-] pwinnski|8 years ago|reply
[+] [-] DrJones1098|8 years ago|reply
[+] [-] icantdrive55|8 years ago|reply
When this current bubble bursts, we will see the truth for all those who belive it's just not enough--what's the word--planning, or solid work ethic?
I was going to say we need a new Working book for the Sharing Economey, but I feel it would be pretty thin, and just say see "Chinese economy", or done other "they do it cheaper" country for more information.
It would be interesting to see a Studs Turkel type writing about a startup that produces absolutely nothing new, or a product that will be decimated by one of the monopolies.
I would like to read how a 1 percenter rationalizes their greedy, and narcissism though; while the safe, predictable, somewhat ethical country they grew up slides into chaos.