Work 'til You Die and Sunday Open Thread

 

"Wake Up" - Arcade Fire (Live at Reading Festival 2010)

This type of performance is why I am so moved by this band -- it gave me chills the first time I watched it.

Back in town after another road trip -- finally caught a flight that wasn't full.  On Southwest, an empty middle seat is the equivalent of first class.  Of course the flight was an hour and a half late and I rolled in around midnight on Friday night.  Ah, the glamorous life of the road.

I was reading this article in the New York Times yesterday about whether 401(k) plan sponsors should be required by law to provide low cost index fund options in addition to actively managed funds with higher fees.  Earlier in the week USA Today featured an article trumpeting the rise in the average 401(k) balance to $74,900.  Of course, this is an average -- I'd be more interested in seeing the median amount in accounts since, as the same article notes, 56% of workers have less than $25,000 saved for retirement.  Articles like these add to my continued skepticism about the 401(k) as the primary vehicle for the funding of retirement, skepticism based on a host of factors, including 1) the inability of people to defer an adequate amount of wages, especially when left to their own discretion; 2) the dubiousness of entrusting amateurs to make their own investment decisions; 3) the high fees and lack of transparency associated with this model of having individual accounts largely invested with active managers; 4) the excessive accessibility of these assets during one's working life either through termination benefits, hardship withdrawals, and loans, all of which undermine long-term retirement goals; 5) excessive risk concentration for employees whose plans include the option of buying company stock; 6) the lack of guaranteed benefits and the ability to take benefits in the form of lump sums; and 7) the fact that all of the risk associated with these vehicles, both in terms of market performance and life expectancy fall on the individual participant -- the market can crap out at a crucial point in your career or you can live to 95 -- either way it's on you to deal with these exigencies.  Ultimately, people lack expertise in both investing and in analyzing the kinds of savings they will need to generate decent income in retirement, while investment managers and record keepers have an incentive to steer participants into higher fee vehicles.

Another Times article from last fall and a study to which it links lay some of these failings out with some very stark numbers.     About 72% of plan participants are currently not on track to meet the retirement goal of 70% income replacement; instead the average participant is on track to achieve about 55% income replacement, with the bulk of that money coming from Social Security, not the 401(k) account. 

This survey also seems to be skewed in a way that might make the picture actually look better than it is.  Data appeared to be drawn primarily from large employers, many of whom have more sophisticated programs that actively encourage participation in a way that is not true in many smaller businesses.    The median income of those covered by the survey was $53,852, which is more in line with the median household income in the country.  Average income was in excess of $65,000.  Consistent with the USA Today article, the study found an average account balance of $77,464. but the median account balance was a meager $29,390.  The median annual contribution to a 401(k) was about $2,700 per participant or roughly $1.35 per hour, a number that is simply not adequate to fund a decent retirement.   

The median projected retirement income in the survey was $33,500, with Social Security anticipated to provide $19,800 of the income and the 401(k) plan providing about $13,700.  This was providing the median participant about 55% of their pre-retirement earnings.  Obviously, these figures do not really add up to a very comfortable retirement -- especially if it is going to occur in an environment in which out of pocket health care costs are likely to rise. 

So what should be done about this problem?  Sadly, I don't think we re going to see the renaissance of the traditional pension -- although any employees who have them should fight like hell to keep them.  In the absence of such pensions, the government should encourage -- nay, mandate -- more retirement savings.  I would suggest the creation of a national 401(k) plan as an adjunct to Social Security.  I would set it up as a required contribution of 5% deduction from gross wages for all employees who are not putting at least that amount into an employer sponsored program.  I would have the money invested only in index vehicles with age appropriate allocations triggered automatically.  I would not allow any access to this money prior to age 62 unless the individual had been deemed totally and permanently disabled by Social Security.   

Absent a program like this, I foresee a really grim retirement picture for a huge swath of Americans.

What do you think?  Also, feel free to add anything else that has grabbed your attention on this rainy Sunday.  

 

Comments

[Paula B]

Like your proposal but would worry that a required savings plan might encourage some to call for the reduction of or a freeze in Social Security benefits.

[big bad wolf]

we need to do something. did the opt-out idea that cass susstein and obama were suggesting ever get tried? that wouldn't do as much as your suggestion, SC, but it would be a start. i wouldn't expect to see anything talked about till 2013. no one is going to want to suggest talking disposable income away in an election year, no matter how good the idea might be.

a broker/financial consultant on the highway i am on regularly has a big electronic sign upon which he has, for years, been putting all sorts of the worst republican and later tea party ideas. sometimes, i just want to blow the damn thing up, even though i know i believe in free speech. today, for the first time ever, he had a message that made me a bit hopeful. about bin laden, he says "mission accomplished. let's bring our heroes home." okay, let's.

i like the band's performance, SC. win butler's vocals continue not to impress, and it's that that keeps me from getting caught up in arcade fire, at least on record or video. live, i imagine i'd be swept away.

[beckya57]

I see BBW's another Win Butler basher. Me, I love Arcade Fire, Win and all (though many of my favorites are ones in which his wife Renee--can't spell her last name--is singing the lead). I saw them live here last Sept, and it was absolutely awesome.

The retirement situation is indeed a mess. Another example of the Great Risk Shift from business/government to individuals, under the guise of promoting "freedom." Right, freedom to be broke. I read the numbers and am just blown away; I worry that we haven't put enough aside, but we're in the penthouse compared to most people. And they keep wanting to privatize SS too!!!

Have any of you read Deadly Spin by Wendell Potter? It's about the insurance industry, but is pretty eye-opening about business in general in this country.

In the misery-loves-company dept, it's raining here too, Sir C.

[kathy a.]

i think a pay-in similar to social security is a possibility. employers with good benefits packages pay in a decent amount -- and my last office job and my husband's current one, the excellent benefits were sold as offsetting the lower take-home pay offered.

now, of course, everybody's talking about reducing benefits for public employees -- in addition to reducing salaries and issuing pink slips. many jobs have gone from full-time with benefits to essentially contract work -- the worker may take home nearly the same pay, but doesn't have health or retirement benefits. talking about cutting or privitizing social safety nets like medicare, social security, medicaid is icing on the cake.

i'm really dismayed by the operating assumptions that anyone unable to work for pay (or born independently wealthy, or having otherwise achieved unimaginable fortune) is a leech on society, and that the only important thing is preserving the ability of the rich to get richer. people cannot reasonably be expected to work for pay their entire lives, cradle to coffin -- nor do all jobs have the same safety [physical and financial], nor do all lives enjoy the same health, fortune, longevity.

we are social beings, and the benefit of a society is a greater ability to take care of its members -- all of them. our society has long thought that the weaker members need protection against the stronger ones. i'm no expert in economics, but it is abundantly clear that the richest and most powerful among us did not get there without the sweat and suffering of others. somebody born on third base has no right to claim moral superiority, and cast the burden of his peers' economic sins on the backs of the riffraff who made his good life as cozy as it has been.

oh, becky says this better: "the Great Risk Shift from business/government to individuals, under the guise of promoting 'freedom.'"

[kathy a.]

sorry, in the 3d paragraph of my rant, i said "(or born independently wealthy..."). i really meant, excluding those born independently wealthy and etc. really rich people don't have to worry about working, or about their old age or disability.

[beckya57]

Sorry, my bad, the female lead singer of Arcade Fire's name is Regine--and I still can't spell her last name (it's French, she's from Haiti). The band, incidentally, has done a lot of work on Haiti's behalf, and the song "Haiti," which she sings (and I believe she wrote it also), is amazingly powerful, especially live. She sings it in a mixture of French and English. BTW, Sir C, have you ever seen the Youtube of them performing "Wake Up" with David Bowie? It's pretty amazing. Bowie did a lot to promote them in the early days, which is how I got into them, being a major Bowie fanatic.

[Sir Charles]

Paula,

I understand your concern -- on a very micro level we have had the concern over the years with union members where we have both a defined benefit (traditional pension) and a defined contribution (individual account type) plan. It is hard to explain to members sometimes that a benefit from a traditional pension plan that guarantees you $3,000 a month for the rest of your life -- often from age 55 -- and then pays your surviving spouse either 50%, 75%, or 100% of that amount for the rest of her life (in my plans it's her in 99.9% of the time)is worth a hell of a lot more than an individual account in which you have $250,000. People like those gaudy individual account numbers, without really understanding how large a lump sum you would need for the more prosaic $3,000 a month for two lifetimes benefit.

But part of my thought on selling this type of program would be the idea of it complementing the existing Social Security program -- promising people something that could furnish them with a lump sum in addition to the monthly benefit.

You would have to educate people as to the need for both kinds of benefit.

bbw,

This is an idea for down the road a bit. Right now people are too woried about today. But I am convinced of the need.

Win Butler's vocals can be a bit thin. And I don't think the studio recordings always to justice to the epic scale of the songs -- they really do seem like a band best experienced live. I hope to see them -- albeit in a much smaller venue than this. (I'm well past festival age.)

becky,

Whatever Butler's limitations as a vocalist, he is a compelling presence and strikes me as a guy who acts as a kind of spiritual center of this huge collective that seems really based on a very idealistic, artistic vision. It seems preposterously corny in a way -- but he and they really do make you believe in music as a kind of magic.

kathy,

The Great Risk Shift is a terric work -- by Jacob Hacker for those of you who have not read it -- and captures really well what has gone on in this society over the last 25-30 years. The radical free market -- and the chaos and insecurity that it has brought to the lives of so many -- strikes me as a preposterous model for any decent and happy society.

[Sir Charles]

becky,

I love the performance of "Wake Up" with Bowie. And yes, he championed them with a kind of straightforward enthusiasm that seemed surprising for him. (It's doubly interesting given the utter sincerity of Arcade Fire's craft and Bowie's layers of artifice and irony as his artistic signifiers.)

[Sir Charles]

It's interesting, too, how well the Canadians seem to work in these large ensembles -- see also Broken Social Scene and New Pornographers.

[big bad wolf]

one can be not impressed and not be bashing. i meant pretty literally that win's vocals leave no real impression on me. when a song is over, i am left with the tune, but no sense of the vocal. for me that is something that keeps me from being a believer in the band.

[Joe S]

You have to look at Win's voice as being part of the "Wall of Sound" that Arcade Fire sends out. Almost like listening to the Cocteau Twins or Sigur Ros.

I think only then can you really appreciate the Arcade Fire's anthemic nature.

[big bad wolf]

i think that is right, joe; it's just that my wall-of-sound aesthetic, like my pop.rock aesthetic generally privileges vocals. i like my wall of sound with a big voice: ronnie spector, darlene love, tina turner, bruce springsteen, even U2 or sleater-kinney on the woods. it's not a right or wrong; it's just a preference; voices speak to me in pop.rock more strongly than the music or even the lyrics. win seems wan to me and that makes it hard for me to put arcade fire up very high. they have grown on me---i admit my cruel first thought years ago was "beaver brown"---but my privileging of vocals, which demonstrates my bourgeous nature and denial of the people as a force, prevents me from rating arcade fire as high as many do.

[Sir Charles]

bbw,

Your Providence is showing.

[beckya57]

Ooops--and wasn't Brown rated pretty high on the douche list?

[nancy]

Gosh--a little bit too much name dropping in the last couple of weeks for my taste. My grandmother graduated from eighth grade, and Mom from tenth. I get it Becky--you went to U Chicago. That's great. Congrats.

[Krubozumo Nyankoye]

Retirement? Saving for retirement? Social security? I empathize with the large number of people who have these worries I guess, but it is a little hard to say. I have paid the SS taxes on my income over the years and am informed I am vested and due a certain benefit but I doubt if I will ever collect any of that benefit because I will probably work until I die or some other misfortune prevents me from doing anything but vegetating.

My investments, such as they are are not very liquid but I could probably trade off them if I made the effort and leave the liquidity issues to my creditors.

I actually want to work until I die, not for the money but to avoid the tedium. But then my whole life style is so unconventional that none of this is familiar to me in any sense, I have only once or twice worked for someone else in sense of being on a payroll and I did not enjoy it. There is a fair amount not to enjoy about my present circumstances but it is better than living hand to mouth and on the edge of oblivion from month to month. I realize that most people are in that kind of fix whether they like it or not. That may be the saddest commentary that anyone can make about our great society.

But then again, I am outside that society looking in.

I don't mean to make it seem like I have some kind of idyllic existence and not a care in the world, but I have been through enough ugliness to realize that the one thing that accrues to your credit no matter what is an increased ability to cope. So I have a certain confidence in my qualifications in that respect and bolstering that, a certain fatalism about my longevity.

Sorry but I can't relate to any of the music talk - I don't hear it, I don't even have the option to hear it.

[Emma]

Here in Australia we have had compulsory superannuation since 1992, where all employers must pay at least 9% (since 2002, and soon to go up) of each employee's income into a superannuation fund for that employee, either a commercial one, or a government or union/industry-run fund, where it is invested for that person's retirement.

Even my 20-somethings already have money in their superannuation funds, as a result of cafe and retail jobs. My own employer, which is a university, attracts people by contributing 17%. When you are young, it seems like a drag, that you earn income you can't get at till you retire. Facing up to 50, I'm now really glad that there's some money I was forced to save and invest, even though it probably isn't enough due to my career breaks to have (a lot of ) kids.

The earliest I can get this money is at 56, if I retire (which I won't be able to, I'll have a 14 year old). Contributions to super are treated very favourably for tax purposes, and you end up only paying 15% tax on that money. As a result many people contribute more than the minimum. Of course, you still have the problem of volatile stock markets and an industry of parasites that grows up to manage these assets.

We still have an old age pension paid by the government, but it is means tested -- if you can support yourself, you should, but if you run out of money, the safety net is still there. This is funded from general revenue -- we do not have a national insurance or pay in scheme -- so it is targeted to those who need it. There are good and bad things about this.

There are so many different ways to organise all this stuff, around the world. It's a shame we are not all more aware of the alternatives.

[big bad wolf]

okay, arcade fire is off the discussion list, apparently it is far too personal. but douche should be too, especially if one doesn't know the difference between minor 80s bands and ivy leagues schools that i didn't attend.

[Sir Charles]

KN,

With Social Security, I believe that you can begin collecting at age 65 whether or not you are working full time. I can't really imagine working beyond age 65 -- by that time, assuming all goes well I will have been at my present job for 40 years. I am pretty confident that that will have been enough. I find it shockingly easy to amuse myself when I am on vacation, so I hope the same will prove true in retirement.

Emma,

That's an interesting pension scheme -- and sort of what I have in mind it sounds like. Is it all individually invested?

Those of us on the left here have steadfastly opposed means testing of Social Security because we fear that that will make it a welfare program -- something that has never fared terribly well in America.

bbw,

We're both old and provincial clearly.

(For the rest of you, Beaver Brown was a Providence based band that had a brief flirtation with the big time in the mid-1980s -- their very Springsteenian music was fetured in a 1983 movie called "Eddie and the Cruisers" and they had about exactly fifteen minutes of fame.)

http://en.wikipedia.org/wiki/Eddie_and_the_Cruisers

[low-tech cyclist]

Arcade Fire is one of those bands that, regardless of their popularity, just doesn't do much for me. I mean, I won't change the station when WRNR has one of their songs on (which I guess puts them ahead of the Dave Matthews Band in my personal rankings - at this point I'm just plain bored with DMB's sound and wish they'd go away), they're nice enough and all that, but I've never felt the desire to download one of their songs so I could listen to it more often than I'd hear it on the radio.

Don't dislike 'em, but just don't get why everyone else likes them so much.

[low-tech cyclist]

Those of us on the left here have steadfastly opposed means testing of Social Security because we fear that that will make it a welfare program -- something that has never fared terribly well in America.

And the money that would be saved by means-testing Social Security is small compared to the size of the expected shortfall (which isn't that big to begin with).

So not only is means-testing Social Security a bad idea from the larger perspective, but it's a weak idea from the standpoint of practicality.

Although the political tides are running the other way, I'm with Atrios on this: we ought to be looking for ways to expand Social Security, especially as the overall architecture of Americans' retirement security collapses.

[low-tech cyclist]

"we hit the debt ceiling today, and the House is taking the week off."
-Steve Benen

[low-tech cyclist]

But the world's gonna end on May 21, so it doesn't matter. ;^)

[Sir Charles]

l-t c,

I totally agree with you on Social Security. Means testing doesn't get you much and it undermines the program.

The idea that I was proposing here was my thought on a way to expand Social Security in a different fashion. You could also simply increase the Social Security tax and the benefits, but I am not sure that that would fly at this or any point in the near future.

We most certainly are going to need additional retirement support -- the private system is really breaking down at this point.

Re: Arcade Fire -- at some point this comes down to matters of taste and what moves you and doesn't. I find them uneven but compelling -- especially live. DMB, on the other hand, bores me to tears.

But, as you note, as of May 21st none of this will matter. I don't know why I bothered inputting my time this morning.

[low-tech cyclist]

The May 21 thing is fresh on my mind because when Ilya and I went to pick up my wife at National yesterday, there was a guy in a Judgment Day - May 21 t-shirt handing out tracts.

I wish I could afford to cop a Ford Prefect attitude this week - no point in doing anything today, the world's coming to an end - but too much on my plate right now to get away with that, given that the sun will rise as usual on May 22.

[Paula B]

May 21? Judgment Day? Guess I've been cooped up too long to know about this. Or else there's a plot by the right wing to keep people in Massachusetts in the dark...hmmmm.

[kathy a.]

oh, my. The Donald is not going to run for prez. Apparently hosting his reality show is a higher calling.

all this, and the rapture in the same week.

[oddjob]

Paula B, believe it or not the T's been putting the ads on the backs of some of its busses.

[kathy a.]

i was kind of stunned to find that the people behind the rapture are based in oakland, just about 10 miles from here. not seeing a lot of judgement day billboards in my neighborhood. (as a point of cultural reference, berkeley is between oakland and here, and san francisco is a short few miles across the bay from oakland.)

with any luck, they believe their own stuff and have spent all the money in one last blast.

[Paula B]

That's funny! I'm 100+ miles and many cultures west of Boston in the Greenfield area. Sometimes, little towns out here lose power or phone and don't even notice it for a day or two. I hope that will be the case on Rapture Day.

[MR Bill]

Kathy and Paula, here is a Washington Monthly article one the Southern California roots of the politicized strain of Evangelicalism...
As I've said, my buddy Tom (in South Carolina) has an "After the End of the World Party" planned for the night of the 21st.
And the League of Ordinary Gentlemen has a fun satire "the Rapture in Stereo" that sends up this nonsense for the perspective of the Hindu gods...

[nancy]

Well, how is all this bliss supposed to unfold? Do "they" all get raptured up, leaving the rest of us behind to go on about our business in peace? Hmmm. There's something to recommend this.

MR Bill, if the "Party" is planned for the night of, does that mean the stroke of midnight is when the rest of us turn into pumpkins? Wonder if Fox is planning breaking news coverage for the evening. ;-)

[MR Bill]

Nancy, I think the time for the Rupture is earlier, during the day, so it's safe for the heathens to party. (Pretty sure I saw this somewhere, but can't source it..)
Tom is also planned an "After the End of the World Concert" for the night of Dec. 23 2012.

[nancy]

MR Bill--Tom isn't in heaven on Dec. 23 2012? I guess I'm missing the concept here.

I used to live in a part of the country where "speaking in tongues" and snake-handling made sense to a small number of people. I'm actually quite open to faith "generosity", right up until the faithful want to condemn all the people I love to eternal, you know, "damnation". Vacation Bible School was a very scary place when I was 6.

Kevin Philip's book American Theocracy, written in 2006, pretty much ">http://www.amazon.com/American-Theocracy-Politics-Religion-Borrowed/dp/067003486X"> predicted all of what we're now seeing. The Rapturers just missed the oil component.

[kathy a.]

MR Bill, thanks for the link. i was sure it would be to aimee semple mcpherson, and teh foursquare church, but no. i guess they aren't signed up for this session of the rapture.

[Sir Charles]

Vacation Bible School!

Their slogan -- "we're going to make you wish you were back in real school."

[nancy]

No lie--my Bible School teacher's name was Mr. Fightmaster. Feature that. He was later my 4th grade math teacher. Math, no surprise, became my forever Achille's heel. Mr. Fightmaster indeed.

[Krubozumo Nyankoye]

SC - well that is due I am sure to the fundamentally different natures of our chosen pursuits. While no doubt much of our experience is similar in terms of having to contend with forces and ideas and people that are contrary, it appears to me that as a labor lawyer you are already granted or at the least entitled to assume that your fundamental cause is just, that would be defending the rights of laborers. I would agree with that as well. I on the other hand have a different antagonist. Nature.

I think it was Einstein who said something to the effect that nature is obscure but not malevolent. He was right. And the obscurity is the thing that will make me work until I drop, if I can. You never get to know for sure, that is the nature of nature. Yeah at some point I may have to stop traipsing around in jungles and having parasitic worms carved out of my feet. I guess at that point I will try to get some organization imposed upon my amazing collection of several tonnes of rocks from all over the planet, none of which are ordinary.

I have to also admit that I am a pragmatist not a purist. To acquire new knowlede you have to do things, in my case those things include mining. It is a little strange to me that many people seem to think that mining is a more detestable undertaking than faith healing.

As to the rapture, I am ready, I am always ready... except I guess not exactly for what the nutjobs appear to be fixated on. It is certainly possible that the world will end on or about next Saturday. But it is also possible that it ended yesterday and we just don't know it yet.

How people can invest their precious ability to think in such processes to me defies all logic. See y'all on Sunday.

[Mandos]

Being, um, somewhat academical, I'm likely to be in the "work until I drop" category considering that it's really very rare in my experience for old researchers to disappear. University emeriti/ae continue to show up for dept. committee meetings and so on.

[low-tech cyclist]

Apparently the Gropinator fathered a child with one of the household staff, which is why Maria Shriver moved out. I wonder if the media will now give Ahnold the John Edwards treatment.

Yes, I'm being sarcastic. The Villagers won't be bothered by this anymore than they've been bothered by Newt's successive cheating on and ditching of inconvenient wives.