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this post was submitted on 25 Sep 2023
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United States | News & Politics
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I blame the removal of pensions and replacement with inadequate 401k plans.
Social security was never meant to be a retirement plan.
Actually, it kind of literally was. Though it's frustrating how common it is for people to share that misconception.
AFAIK it literally wasn't. It was meant to be "one leg" of a "three-legged stool". One leg was Social Securty, one leg was company pensions, and the third leg was personal retirement savings.
The thing is. Not every company had pensions. And almost none do today. The concept of personal retirement savings is not something that has ever been reliable adequate or common throughout most of human history. Both are literally the reason Social Security was enacted. It is literally a retirement syatem/social safety net. To make sure that the elderly do not starve die or fall to homelessness in their old age.
Check out question 4 on this page on the actual Social Security Administration website.
I don't blame anyone for thinking that it isn't though. Fascists/capitalists in the United States have spent decades upon decades. Honestly nearly the last 100 years trying to destroy/raid the fund for their own benefit. And gaslighting everyone else.
Or more accurately, social security should be a proper national pension plan. Fund it by increasing contribution rates and uncapping contributions.
I stick with my underpaid government job solely for my state pension. At 55, I can start to get 70% of my final salary guaranteed, with annual COLA adjustments. I may not be rich in retirement, but I can get by.
401k plans are ripe for abuse by predatory financial advisors.. a smile and a wink and your grandpa's retirement is getting drained.
401k works fine if you actually use it. A big problem is people didn't contribute, where pensions generally had mandatory contributions. Also letting people borrow on them was a bad idea.
And borrowing on them is just a bad idea. At least in the case of my 401k, there's no early payoff, you don't make interest off it while it's borrowed, it really can hurt in the long term unless the loan amount is very small.
I looked out of curiosity because I want to buy a house somewhere in the next 5 years, and immediately ruled out any consideration of borrowing off 401k.