Comments
Transcript
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TSWall Street has issues with incentives and finance is excessive
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JGSo these professionals gave up the responsibility for their own retirement to government. Mostly I'm sure, they are the same ones who voted for bigger and bigger government. As sad as this is, I think they ultimately got what they voted for. And they/we have not seen anything yet. If you're worried about income disparity between the rich and poor, look no further than our officials talking about bailing out the companies who went into debt to buy their stock back so executives can get a big bonus. I would be in favor if the companies had to first sell all their stock to support their biz and all the executives had their bonuses clawed back for 5 years. But that justice unlikely to happen. End the FED.
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TLThis is really sad. Can't believe people have so little empathy in the comments below and have made it political into republicans vs democrats thing.
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STTrust in big money managers and government is already low but jt will fade away faster than the Arctic ice! Feeling sad for those millions of honest middle class workers who are being cheated by reckless financial engineers
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EKHave been watching this series on Retirement and possibly one of the consequences of these anticipated defaults and tax payer liabilities is that the municipal bond market may get severely roiled. Muni's are regarded (generally speaking) as safe, dependable sources of (low) income often with tax advantages. This landscape could change and become more of a distressed arena.
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JPThis is a huge issue but I have a hard time generating empathy for people receiving reduced pensions. Simple idea: just go back to work, literally anywhere, like every other person would have to do. Working only 37 years and expecting me to pay your bills while I have to raise a family? People should work 50-55 years.
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DHThe sad thing is that I saw this coming decades ago - why do you think corporations were dumping defined benefit plans? I say get rid of pension plans altogether, pay people cash and allow them to fund IRA's. This is worse than if you had just paid them more in cash - even if they didn't save for retirement, they would have had more money to enjoy earlier.
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DHYou know what I like about oversaving and underconsumption? Peace of mind. I may never spend that money, it may all go to others, but I am content knowing the downside is covered. The governments are going to print like mad to at least cover the nominal promises, but gold and gold stocks are going to be the big beneficiary. I have a heavy weighting in Pure Gold Mining.
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FSAll of these US public employee pension plans were known to be over-generous for the past forty years. Oregon PERS is typical. You have government leaders, legislators, judges and teachers all pushing fat benefits through, with no prudent plan of funding, and dollar signs in their eyes. Now they cry of broken promises when there is talk of benefit cuts?
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KTI REALLY enjoyed and got a lot out of these last two weeks. Superb work. An entire 2-week series on retirement and Generation X was barely mentioned. Was there an idea or fact that related specifically to Generation X from this retirement special ... I come up with nothing. Perhaps someone else remembers something? It's not surprising to be ignored by the baby boomers or millennials — but Real Vision is lead and owned by Baby Boomers.
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WPThe Public Employee Unions are as guilty as the Governments for causing this problem. I live in California where both parties continue to dig a deeper hole.
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JCIn a microcosm, this typifies the problem with every major issue in this country: 1. No ownership of the problem- didn't hear one person say they, the teachers, were part of the problem. They extorted the State for unreasonable benefits. 2. No realism of the problem- what reason should the person with no savings, no pension and living on Soc Sec take money out off their pocket to make the teachers whole? 3. No holding the real villains responsible- far as I know the teachers still have their same Union and RI still votes Democrats into office
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KCThere's been a growing argument in the last few years against 401ks and that we should return to the guarantee of pensions. A true argument for that is participants lack financial education and under perform sometimes. This is the counter argument. In a perfect world, government, corporate, and union employees would do their job, would act in a fiduciary manner over these funds. To be man is to err, and these last 70 years plus have been a casebook example of that.
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WSNot on point but the product shift demands a response How many purchased a product prior to today and are feeling unfairly treated by the 5/wk video limit that didn't exist until today? How many feel they should be grandfathered until their subscription runs out and then make the decision to continue at the lower (actually increased by 50+) or accept the "upsell" at 3x the price??
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TKReally enjoy this documentary-style format, would be great to see more of this!
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NAThis is a bit amateurish. The pensions could cut costs and make better investments (mutually exclusive over a full market cycle IMO btw) and still they will fall short of their 6-8% targets. Why? Because interest rates are going to ZERO and the expected returns on all major asset classes are following suit. It's not possible for the whole system to make more than this. Adjust your expectations. Unless you believe in MMT bailout (also likely, but what have we learnt from government promises? Exactly).
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AATakeaway....never trust a promise given by a government entity.
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lcBoomer socialism. Keep blowing bubbles, keep demanding to be bailed out of the bust, keep bitching about other forms of socialism.
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JEI think the people shafted need to get WAY more angry. They seem resigned in a way. That’s not going to win this battle.
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NOThe idea of retirement (long, prosperous and leisurely old age) is very recent, around 60 or so years old. It is an idea that only works with enormous long term savings throughout a career, and very few are willing to do that. Without that, the result must be a longer working life and shorter retirement. We dress it up with complex terminology, but it is simple maths.
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GBEnjoyed this format @realvision. I'm in New Zealand. We have a government funded pension plan, which I think is quite generous at ~ $420pw for a single and $650 pw for a couple. However, it's really expensive to live here so particularly single people, often widows, struggle to live on this amount. Fortunately, most people, but not all, are mortgage free homeowners. We have an increasing number of homeless retired, shameful that our elderly are living in cars and unheated garages. We also have a baby boomer crisis and sooner or later the retirement age will increase from 65. In 2007 the government bought in a self funded pension (superannuation) scheme and employers contribute a portion as well. This is something we should have had 30-40 years ago. The reality is that the current working generations will be taxed to pay for current pensions while saving for their own. I'm a boomer, and I think that is so unfair.
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FGAlways conduct your life as if the pension system would collapse. That's been my modus operandi for the last +20 years and that is why I have underspent when compared to my peers. People don't seem to understand the value of postponing consumption. I don't want any privileged retirees who have lavishly spent during their younger years to take money from me via increased taxation in order to finance their strolling into the sunset. This is a generational fight that the young deserve to win.
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SRMy wife is a retired teacher, so I have some understanding of the pension concerns. However, I believe that the Rhode Island teachers likely supported every government spending proposal. Didn’t they know that the money would come from taxpayers or their pensions? Or maybe both? Do they still support “progressive” policies?
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KCThose of us that had to save for our retirement alone, without employer plans, have a hard time feeling sorry for those that did not save outside of their employer plans. First, no public employee pension (single or married couple) should exceed the average family income. Second, look at all public employee plans within the state and determine which public employee plans are over-funded based on the average family income rule. That should solve the problem and make politicians think because it would be their plans funding the under-funded plans.
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CPGreat series! Pension management and transparency seem like ideal use cases for some sort of decentralized public data layer. Maybe someday someone will develop a network or something like a distributed public ledger that can handle the security and certainty required for suck a task. Perhaps they could also create a platform for some sort of autonomous self implementing contracts on this public ledger to monitor management and release/allocate capital based on performance and necessity. I suppose you would also require some sort of oracle solution to integrate and confirm the legitimacy all of this data. Oh well, maybe we’ll have something like this someday... ;)
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RMReally well done piece. Can see that being turned into a documentary for Netflix. While we listened to pension managers talk this week about the shortfalls in the system, hearing from those getting impacted helps to reflect on their personal challenges as well as the drag on the US economy for this pension mismanagement.
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PVAt least Americans get to live in the greatest country on earth ;)
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GEIs it possible there is a break away economy. Money being redired out of the economy and going some where. What is left is most of the people setting on debt.
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CDThe defined benefit promises made to the boomer generation have been rendered unaffordable due to economic and demographic changes over the years. If they seek to enforce them it is their own children and/or grandchildren that will pay the cost one way or another. Malinvestment by schemes, investment management fees and so on are marginal factors. The greatest harm has been done in the last 12 years by central banks' efforts to nail interest rates to the floor. This has massively increased the liabilities for those presiding over defined benefit promises and killed annuity buying power for those with defined contribution funds seeking a secure and stable income in retirement. My view is central bank intervention went too far and has continued for too long. However for balance I would also observe many of those suffering in terms of a hit to their pension income might just have seen their home equity and/or personal investment portfolios preserved or more likely increased by the same central bank largesse that has harmed their pensions!