The title is poor and there are a few angry typos but overall this appears closely reasoned. I say appears because it would take a lot of unpicking to be sure.
I'm treating any retirement benefit I have as essentially worthless unless it's a defined contribution cash amount in a fund in my name. For example I'm not realistically planning on my state or military pensions existing in thirty years.
The government already varies state retirement age and pension amount whenever they want. How can you sensibly factor an unknown amount at an unknown age into your retirement planning?
This article is useful for showing how some workers can get screwed in the transition from a pension to a defined contribution plan.
I don't think it's sound on social security. Something needs to happen and nobody really knows how the political system will react. But it seems like the most likely scenario is some combination of deficit spending and more taxes, because cutting benefits is politically untouchable.
It seems nonsensical that American pensions are payed for directly by employers. In the Netherlands, and I think most of europe, pensions are payed out by special and legally separate funds. These are tightly regulated, and in return are fiscally advantageous.
Now, there is some link between a pension fund and the corresponding company, so a downturn in the company can still hit your pension. However, the company does not get to set the pension conditions. Hence they cannot lure people with great but unrealistic pensions and later cut those pensions.
Nothing is politically untouchable. Someone just need to pay enough to make it worthwhile. That may not happen with social security because the "lobbyists" don't care about it. SS is money owed to the people, and they already spent it. When government spending needs to be significantly cut back to pay SS then there will be incentives to touch it.
The cap on taxable SSI wages went up 7% in 2017 and no one really noticed or complained. It's a relatively progressive way to keep things funded. I don't see why we'd need to do much else.
The social security tax is actually regressive to an extent. If you make between $82500 and $128400 your marginal tax rate is higher than someone making between $128400 and $157500. So there is that.
My employer froze pension benefits at current salary level, freezing people out of 20 years of salary growth. I switched 17 years ago to the portable pension plan (annuity), which was probably the wise thing to do. At least I can convert that lump sum to an IRA, or choose a pension (won’t do that).
The really dirty thing they did a few years ago was promise medical benefits to those that retired that year, then promptly pulled them a year later.
At least I have been maxing out my 401k for 20 years.
I once calculated that if the same percentage of the population was eligible for Social Security retirement benefit as when the program started under FDR, the retirement age would be closer to 75.
Physical labor is harder on the body and takes a toll. Retiring at 75 is unreasonable for them, they can’t continue to work like that into their late 60s
