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It seems likely that US social security is linked with this: "Elderly poverty in the U.S. decreased dramatically during the twentieth century. Between 1960 and 1995, the official poverty rate of those aged 65 and above fell from 35 percent to 10 percent, and research has documented similarly steep declines dating back to at least 1939." [0]

[0] - https://www.nber.org/aginghealth/summer04/w10466.html

Elderly poverty was once a massive a tragic problem that both impacted the elderly as their ability to work waned, the families of the elderly who attempted to provide care, and the employment market as elderly employees tried to hang on as long as possible.

The conservative and libertarian trains of thought value individual agency above public welfare, which is a convenient point of view for people with the means to sustain themselves.

At the same time as we have seen decreases in income, wealth and home ownership for younger cohorts when measured at the same age. Its just a transfer of wealth from young to old.

For reasons of both bias and curiosity, can you point to your sources for this?

Philosophically, even if there is no greater effect than transfer of wealth from young to old, pretty much everyone who is now young will one day be old.

"Among the savage nations of hunters and fishers, every individual who is able to work is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, and such of his family or tribe as are either too old, or too young, or too infirm, to go a-hunting and fishing. Such nations, however, are so miserably poor, that, from mere want, they are frequently reduced, or at least think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts. Among civilized and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times, more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied; and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire." [0]

[0] Adam Smith, "An Inquiry into the Nature and Causes of the Wealth of Nations", intro.

No generation of social security workers has ever funded itself--each generation has taken out more than it put in. SS is solvent because each subsequent generation has been larger and wealthier than the past.

What we have done is voted in politicians who have promised us SS pensions, but not actually funded those pensions. Instead the debt is going to fall upon young adults who were kids/unborn when said promises were made.

Yes, everyone gets old. That doesn't entitle us to puts debts on people who had no say in the matter. It's really not much different from me borrowing money and promising my child's future earnings to pay it off.

lol

Social security has reduced poverty in every age group.

https://www.cbpp.org/research/social-security-keeps-22-milli...

Also if you want to go even further, you should redistribute from 40-60 to 0-25 and 65+ to enable people to properly raise children and the like.

Unlike becoming billionaires though, most of us will actually be old someday.

Its mostly that elderly people can now afford to stay in their huge family homes until they die, instead of selling them and enabling the next generation of families to live in them.

Previously, elderly people would move into small houses in small towns, or into apartments, in order to free up capital and lower ongoing costs.

Another lesson is to only take any obligations on your business if you're running an LLC.

The plumber boss in question ran unincorporated, so his business's debts are his personal debt. Were he running an LLC, the debt would be on the company only.

I had the same thought. Can anyone in the UK confirm this would have provided sufficient protection there?

The other cases discussed are plumbing firms which were limited companies. The fact they complain that its a problem because they can't sell on the business or pass it to their children tells you that the liability is with the business, not the individual.

That's actually a pretty good situation to be in. Plumbing strikes me as a very easy business to walk away from - just take your contact list with you and you'll be back in business in no time.

Yes - limited liability would shield the owners of those businesses. A personal guarantee would usually be required for something like a bank loan or a line of credit, but not normally for pensions given there are now state-mandated requirements to provide one.

LLC (and LP)’s are great, when there is any outside capital including debt:

all the profits go to you

Yours and other people’s money that you used to pay for things becomes a tax deductions for you

the worst thing that will happen is that the world’s most prestigious reporters will report that you “lost” a billion dollars and nobody will be the wiser that your personal balance sheet contains free and clear money and assets

Creditors are onto this however, and in many cases they will make you sign a personal guarantee.

>>> The moral of the story is that governments and businesses should just abolish all pension, superannuation, 401K plans, etc... and let people manage their own retirement.

That is definitely not the moral of the story.

Aside from that, what exactly do you think a 401k is, if not a vehicle for people to manage their own retirement? The only government involvement in a 401k is non-involvement in the form of allowing you to contribute pre-tax money. And the broker won't be involved either if you're smart and elect to invest in indexes, rather than mutual funds (which can have high fees).

Workers do not have control over the fund choices they have in their 401k. Often, low cost index funds aren’t available. This can be fixed by working with HR and the 401k manager but it’s often an uphill battle and isn’t guaranteed to work.

Despite all that I agree that GP’s comment to abolish 401ks is throwing the baby out with the bath water.

Im certainly living in a bubble, but I've always had the option through my 401k provider to adjust my allocations among a very broad range of options.

You probably work for a sane private corporation.

From what I hear, lots of employers get royally screwed. Namely school districts and other small-gov employers. There is something about public schools that just love buying into high-fee 403b.

In every country there is intentionally a lot of friction if you want to manage your own retirement fund. Often you need to have a minimum amount and you are limited in the kinds of investments that you can make.

Not in the US. You can open an IRA as long as you have earned income. It's essentially the same as a regular brokerage account.

The real issue is the contribution limit is $5500 a year.

> Workers do not have control over the fund choices they have in their 401k.

The easiest way to fix this particular problem would be to make the contribution limit for retirement accounts a combined limit for both IRAs and 401k accounts, and to mandate that in-service rollovers be available free of charge.

>Workers do not have control over the fund choices they have in their 401k.

Cant they just transfer the balace to a 401k of their choice with better options?

401k is stupid (as stupid as employer based health insurance). It should just be an IRA contribution. It’s insane that your employer can choose things like health insurance and retirement saving for you. They should have no business in this.

That's because 401k's dont have employee or independent trustees

I'm with you on 401k. I think the parent was more about pension plans where they are tied to an employer and the employee does not have much say in their retirement. A 401k can be rolled into an individual retirement account, allowing an individual to manage their own retirement money and allows portability between jobs. Pensions are often 'all or nothing'.

Right? I have no idea what OPs talking about with 401Ks. I have all kinds of options in mine.

Maybe in your part of the world. In my part (The Netherlands) we have a decently working system. It's not perfect, but it's one of the best.

And how is the little guy who is not a financial wizard supposed to manage their retirement funds? A lot of people will be easy prey for banks and financial advisors.

I hate this response. It comes up for everything. Someone always says we need government to be there for people who can't make good decisions. Where do we draw the line? A certain percentage of people will be too incompetent to function in a free society.

I hate this response :). Should we also get rid of food safety, airplane safety or health regulations? Considering how long feedback loops are financial decisions a developed society should define a baseline for long term decisions where the individual can rely on some standards. If you make individuals solely responsible for their retirement you will see a lot of people who will be poor in age and a lot of scammers getting rich. I bet already many less people will be able to retire since the move from pensions to 401k.

The thing is, it's not moral to get rid of them. And many of them are in higher places than you'd expect:

https://en.wikipedia.org/wiki/Harry_S._Truman#Financial_prob...

> The former president told House Majority Leader John McCormack in 1957, "Had it not been for the fact that I was able to sell some property that my brother, sister, and I inherited from our mother, I would practically be on relief, but with the sale of that property I am not financially embarrassed."[264] The following year, Congress passed the Former Presidents Act, offering a $25,000 yearly pension to each former president, and it is likely that Truman's financial status played a role in the law's enactment.[265] The only other living former president at the time, Herbert Hoover, also took the pension, even though he did not need the money; reportedly, he did so to avoid embarrassing Truman.[266]

If a former US president is dumb enough to go bankrupt repeatedly post-presidency, what hope do you think the average Joe Sixpack has?

People are bad at managing retirement money. It is better to have a mandatory distributive model like in Germany. That way retirement grows with the economy, everyone has a retirement and nobody can just misappropiate the money.

Disagree, governments on average are terrible at financial management. The U.S. government has raided such coffers before.

There’s just a small buffer, but not much money lying around in such a system. The redistribution is immediate.