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December 29, 2016


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I agreed with you in principle. We 'should' be a country of personal responsibility, where people have to save for themselves. If they didn't work, or were unable to work, then Social Security would kick in. The thing is that unless we are wiling to accept massive increases in homelessness, or begging, then the government is going to have to make people save (by taking some of their salary in advance) as people are dumb. People won't save. You or I may save plenty and not like this reality but a large enough percentage of the population won't, so unless we are willing to let them suffer we will have to do something.

Its the same thing with health care. We like to think we are a country of personal responsibility, but if you show up at the hospital bleeding to death, and you don't have insurance, we still treat you. I'm not saying I disagree, but we are either a country where the government takes care of the basics and worst case scenarios, or we are a place that values 'personal responsibility' and everybody makes their own choice. We (generally the right) talk as if we are the later, but the reality is we aren't ready to accept people bleeding to death in the hospital because they don't have insurance.

Same goes for retirement. We aren't ready to see thousands of senior starving because they don't have savings.

Wow, really coming off as a conservative jerk with this article. The middle class has been gutted and until that gets righted, of course there's going to be a problem with retirement.

"Third, getting the government involved in just about anything decreases efficiency by about 50%"

And what an idiotic generalization.

In general this is the worst article I've read on this blog. "Are we trying to solve an issue that doesn't exist?" You need to get out more.

So much for personal responsibility...

Government has to get involved because a large number of people do not have any personal responsibility. That is a fact of life.

Cameron is spot on with his comments. I believe (hope?) we, as a society, will not allow widespread homelessness and poverty as existed before Social Security. We all know that long term the current social security system is insolvent. So, either we figure out a way to force people to save for themselves, or like the person showing up at an emergency room door we will be funding Soc Sec at a higher level that we all will pay. That is what we have had so far - increasing Soc Sec taxes because of a lack of personal responsibility. Promoting individual savings (as systems such as this have been shown to do) will help to alleviate the long term issues, even if it doesn't resolve it completely.

I thought SS was supposed to solve this problem? Rather than an entirely new program how about SS reform? Seems you can fill the coffers by increasing the income cap to be way higher than $118k and means test to phase out benefits when net worth exceeds $X ($5M?).

Seems like programs like this are trying to protect people from themselves...but allowing an opt-out defeats the purpose. I know a lot of people who think like the person at 1:30 in this clip:

Oh my gosh. I am so embarrassed for you right now. Are you really so closed minded you can't see beyond your personal situation? It's really easy to save when you have an education and make a decent salary. It's really, really hard to save when your rent is more than half of your income and your husband has left you to care for the kids. Only,now your mom needs help paying for her medications. Now, you have to work 2 jobs which means your kids aren't getting the parenting they deserve so the cycle repeats. This is not my personal situation, but situations like these are so much more common than you, apparently, think.

I've been following you for years. Years. But, I don't know if I want to now. With this post, you're coming off as a privileged, unempathetic judgmental person.


You can always take the extreme case and make a cause for anything.

The #1 reason there's a "retirement crisis" isn't the example you gave. It's because people spend way more than they should and do not save for the future. I'm embarrassed for you that you don't know that.

If the government gets involved, it's going to mean additional costs. Our federal budget is already way over-spent, so where do you find the extra money? Nothing is free and someone has to pay. IMO the government is not here to take care of 95% of the population that can't retire at 65 because they failed to save.

Should we take care of the outliers like in your example? Sure. But you don't develop a plan for the whole world just to care for the outliers. You develop special programs for them that only they have access too.

It's a philosophical difference for sure -- what the government should do and not do. I error on the side of less involvement and more personal responsibility. I also advocate more personal generosity among the wealthy -- you know, GIVING money away to help the less fortunate -- which, if you've been following me for YEARS, know that I do personally. So sad that you would forget all that over one post, but that's what the world is today when it comes to political issues.

So to me, smaller government + personal responsibility + private giving is better than big government + free-spending + little to no private giving. If you think that is being "privileged, unempathetic, and judgmental", I can't help that as I don't see it that way.

Yes, yes, yes FMF!! I feel the same as you. I'm sick and tired of people expecting the government to take care of them, and the lack of personal responsibility these days.

I have heard calls for financial education since Y2K. What does the government do? The big companies want malleable people, not self-reliant, educated people. 2017 could see a stop in passing the buck.

The government at this time is mostly really inefficient from top to bottom. Of course a govt employee can say some nice words like "entrepreneurial" "responsible" and "ownership" on TV and lift public opinion. But we know reality, it takes tons and tons of pork to pass reforms. And of course reforms can be gutted.

Those things being said, I think a portion of corporate tax cuts should be directed into employees 401K's and HSA's. This isn't the best free market thought in the world. But its better than letting government do nothing or worsen things, and try to reason with people addicted to "news", moronic commentary, brainless entertainment, and pleasing yet counterproductive communication disguised as "education."

Cutting off welfare and make-work programs for people able to work is a great idea too as some troublemakers are on welfare.

So let's be guided by self-reliance not by the ungrateful socialists who have had the run of the mill the last 8+ years (with too much RINO support).

Yes, the government does need to step in. There clearly is a problem as laid out in this article with some great data:

If a problem is this widespread, like it or not, only government has the power to step in and address it.

The article seems to blame the 401k for the problems we have now.

Hey, wasn't the 401k a government-developed program?

Also interesting that Reagan tried to kill it...

This is all about a simple govt requirement that employees have some of their own money put into a retirement fund by default. This is not a very large requirement by the govt and doesn't actually cost the govt anything. It's just a law. It simply changes the system from opt-in to opt-out. People are lazy and many just stick with the default without thinking.

So what does this result in.

1. Govt forces people to have to ask not to save for retirement. Lazy people, stupid people, unknowing people, will have some of their own money forced into a retirement savings plan. Downsides to this? I can think of none.

2. People who have alternatives or who don't want to do this can opt-out. So they have no less options or freedoms than they do today.

3. What happens if we don't do something to get people to save more of THEIR OWN money? They retire will little to nothing (already happening). People and politicians clammer for more government funding of people's retirement (already happening). Politicians propose increasing payouts for social security for lower income seniors (already happening). Politicians and people propose raising social security taxes and cutting social security payments for those who have saved so there is more for those who have not (already happening).

Even people who advocate for less govt and for people to take care of themselves ask for govt money to help with the issue:

1. See DIY$ above who is asking for higher SS taxes and cutting payments to those who have saved.
2. See David above who wants to cut welfare but would like some of his own welfare by redirecting corporate tax cuts into his and everyone else's 401k as a govt subsidy. Subsidies are bad for welfare people but good for me is a common idea that people buy into.

To me the idea is simple. As others above have stated, this country and our govt is not going to let seniors starve or die due to lack of funds. So we can pick our poison. The govt can start to force people to save for retirement (and this is hardly a force since it is optional but its a start), or the govt will force those of us who have saved to give up some of our social security and to fund increased govt payments to those who did not save. This really shouldn't be surprising to people. The govt has been involved in redistribution for a century or more.

Too many of those who support small govt come at it from a purist standpoint. We should not have the govt involved at all because govt messes things up. Well I hate to break the news to everyone but the govt is not going to sit on the sidelines. The question is not if they will be involved but how and when. Why not get them involved in making people be responsible with their own money rather than letting them punish those who were responsible by making them bail out those who were not. That is where we always end up when people need a bail out. When was the last time the govt decided not to bail people out of their mistakes?

To me, a govt requirement that people do something responsible with their money, especially when those of us on here are already doing exactly that and making the case that everyone should do that, is a very good idea, one that has zero negative consequences on those of us who are financially responsible, and will help everyone involved as those who are forced to save will be better off in retirement and those who were already planning to save will be less likely to face future consequences that will reduce their wealth to bail out those who did not save.

People should be responsible for themselves. The govt should not have to force them to do so. But people rarely do what they should and since our govt will put the consequences of the irresponsible onto the backs of the responsible the only responsible thing to do is to force the irresponsible to be responsible in order to protect those who are already responsible.


Here's what I'm afraid of:

1. How many issues start with "all this is about" and "simple" and then grow into some complex formula? Probably most. It would be interesting to see how many bills make it through Congress without a single amendment.

2. Unintended consequences (UC). I'm sure you know what that is, but just in case you don't, here's a link:

Often good-sounding, well-intentioned programs end up costing us in ways we didn't anticipate.

Two examples:

1. The 401k. Read the WSJ link above and you'll see the 401k was one of the things that actually made retirement saving WORSE.

2. Social Security. this one is loaded with UC but the biggest to me is the idea that Americans are "entitled" to retire at 65 (or 67, etc.). When SS was developed, it was meant as a safety net to cover those (few) who made it to 65 and wanted to retire.

Now it's set the expectation that this is "retirement age" and it's done so in an age when a lot more people are living well past 65.

So do I have confidence that even any "simple" government intervention will make things better and not worse? Nope.


However the current system exists as it is.

Social security allows retirement as early as age 62. Most people shouldn't take it then but many people do at reduced benefits and then don't have enough money later in life.

The 401-k system exists and it and the IRA system is what we currently have. People are not saving nearly enough using them.


1. Given that those are the systems we currently have.
2. Given that the expectations they have set are already there.
3. Given that people are reaching retirement without enough funds using those systems.
4. Given that politicians are already calling for the need for more funds for seniors who are in that situation.

What do you propose?

Do you think if we do nothing that the politicians won't eventually try to increase entitlements and handouts to those who didn't save?

Many people were not happy with the choices we had in the most recent election. The lesser of two evils was a phrase tossed around a lot. And yet those were the choices. We can argue all year long about what could have or should have been the choices, but while many chose to sit it out or make a third choice, the election went on all the same and the choice was made and one of the two won despite hope for some miracle third choice. As always hope was not a strategy.

I am not trying to be confrontational. I am trying to understand what people of good conscience and people who likely share my economic value system think we should do?

I do get the uneasiness about the govt trying to "fix" the problem. I get it, I truly do. I share it. But the tsunami is coming none the less.

Here is what I am afraid of. 50 million people reach retirement with inadequate funds and the govt feels compelled to solve the crisis by creating more programs to "solve" the issue in the name of fairness. And those of us who have saved will just need to pay our fair share to solve it.

Are you suggesting we sit out the retirement tsunami that is coming?

I am a pragmatist. I am not like Bobby Kennedy and George Bernard Shaw who see the world as it could be and ask why not. I see the world as it is and say well crap, what now?

So that is what I am asking. Well crap, what now?

I would be looking for something that will work not something that could work if people would just behave a certain way. We now have behavioral economics because we found out that traditional economics relies on the rational actor and it turns out people are not rational actors. So we can't rely on them to be rational no matter how much we educate them. People are simply not rational.

So yeah, crap, what now?

Can I be Pollyanna for a bit?

Ultimately, I'd like to get back to "retirement" as it was in the "old days". How did someone "retire" in 1850? Who took care of them when they were old and feeble?

It wasn't the government...I think you know where I'm headed.

But then we convinced people that it was their "right" to retire. Jeesh, we even invented retirement. Then the government started getting involved -- in ALL areas of life. And people began to look less to themselves and their families and to the government for solutions.

If there was a way to get back to where we were -- where people and families took care of themselves -- that's what I'd like to shoot for.

I too am a pragmatist and maybe there's no choice. But if we keep denying personal responsibility then we're going to wake up 30 years from now and either be broke or have 50%+ tax rates. Far better to try and head off the train now than later.

I desire for the same thing you do. Unfortunately I don't trust Pollyanna. I suspect she may be related to Pinocchio.

History looks to me like things move from freedom towards dependency and going back seems to require revolution. Thus I prefer to slow that movement to a crawl. That is why I am willing to entertain anything that takes the current system and forces people to be more responsible on their own without infringing upon my freedom because the alternative is that my freedom will be infringed in the future to equalize a situation that becomes something a majority finds unpalatable. So if I can force them to behave in any way that would have any qualities in common with the 1850 responsibility you refer to I am willing to take that path to delay the other path I am nearly certainly will eventually come. (See what I mean about me not trusting to Pollyanna).

I am hoping to delay those 50% tax rates for my and my immediate posterity if possible by pushing the responsibility back onto people themselves by force if necessary. And I agree that it is better to try to head off the train now than later. That is why I would favor forcing better behavior now rather than waiting for the train wreck (switching to your analogy here) that is coming.

Perhaps we have a slightly different perspective because I don't hold out hope for a return of the 1850s, 1950s, or even 1980s for that matter. I am just trying to keep the 2010s from becoming the 2040s any sooner than they have to.

In response to all the "but not everyone has money to save!" arguments in the comments. Wouldn't the government forcing you to contribute to a retirement fund make your situation even harder? Let's say your take home pay is $500/paycheck after taxes, social security, etc. Now imagine that another $25 is taken out for social security v2.0. Your difficult situation to make end's meat just got tougher.

We should all be scared whenever we hear the words "government" and "force" used together.


What do you call higher taxes to pay for those who didn't save. If you have govt you will have force. It's simply a matter of which force.

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