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The World Isn't Prepared for Retirement (bloomberg.com) 320

An anonymous reader writes: Most online quizzes are relatively mindless, promising to reveal which vegetable, sandwich or rock band best represents your personality. That was not the case for a short online test given to 16,000 people in 15 countries this year. It revealed just how unprepared a good chunk of the world is for retirement. The three-question test, given as part of the Aegon Retirement Readiness Survey 2018, measured how well people understand basic financial concepts. Many of the participants failed the quiz, with big potential consequences for their future security.

Beyond the sobering lack of financial literacy, there were some rather curious data in Aegon's annual survey, published on Tuesday. For example, some 20 percent of workers surveyed in China envisioned spending retirement with a robot companion. But before we get to that, take a look at this question -- which only 45 percent of people around the world got right: Q. Do you think the following statement is true or false? "Buying a single company stock usually provides a safer return than a stock mutual fund."

The possible answers? True, false, do not know and refuse to answer. Sixteen percent of people got it wrong. "Do not know" was chosen by 38 percent. In the U.S., 46 percent of workers got it right. Good for you, America -- though Germany beat you handily. (The answer, in case you were wondering, is false.) It was an inflation question that had the highest percentage of wrong answers, however. More than 20 percent of workers didn't grasp how higher inflation hurts their buying power. Given that declining health was the most-cited retirement worry, at 49 percent, and health care is an area (in the U.S., especially) with high cost inflation, well, that makes the subject something older folks should have down cold.

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The World Isn't Prepared for Retirement

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  • Q. Do you think the following statement is true or false?

    “Buying a single company stock usually provides a safer return than a stock mutual fund.”

    • The real missing question? TFS helpfully gives us the answer to that but fails to provide the question itself.
      • by turbidostato ( 878842 ) on Sunday June 10, 2018 @01:14PM (#56760678)

        "The real missing question?"

        The real missing question is right there, in the headline: "The World Isn't Prepared for Retirement". What the fucking!!!???

        "The world" is very well prepared for retirement, thank you very much. This, like mass assassinations, is very much a USA-only problem and the solution is, again just like in the mass assassinations case, very much fucking obvious for everybody but USA: you fucking collect taxes, and you pay fucking retirement pensions out of these taxes. Problem solved; no need to understand stock versus mutual funds, compound interests or stock versus public debt evolution.

        • by slew ( 2918 ) on Sunday June 10, 2018 @01:36PM (#56760778)

          "The real missing question?"

          The real missing question is right there, in the headline: "The World Isn't Prepared for Retirement". What the fucking!!!???

          "The world" is very well prepared for retirement, thank you very much. This, like mass assassinations, is very much a USA-only problem and the solution is, again just like in the mass assassinations case, very much fucking obvious for everybody but USA: you fucking collect taxes, and you pay fucking retirement pensions out of these taxes. Problem solved; no need to understand stock versus mutual funds, compound interests or stock versus public debt evolution.

          One small problem in this is that many countries who claim to have this "solved" weren't counting on an aging population. That will make it incredibly difficult to simply collect "fucking" taxes to pay "fucking" retirement pensions.

          As far as I know, only the following countries have universal pensions: Bolivia, Botswana, Brunei, Guyana, Kosovo, Namibia, Netherlands, New Zealand, Samoa, Suriname, Seychelles.

          The others that do have some sort of public pension have some sort of means-test for their pensions and pensioners often rely on private pensions in these countries. This is the case of many of the countries in Europe.

          Unfortunately, because of population dynamics and budgetary indiscretions, some countries which have massive shortfalls in their public pensions have taken drastic steps such as seizing private pension funds to make up for public pension shortfalls (like Argentina, Poland, Portugal, Russia, and Hungary). Expect to see more of this as the aging population dynamics put more pressure on public pension funds. This will of course delay the day of reckoning for government pension plans and they will eventually need to choose between lower benefits (angering the current pensioners) or higher taxes on an increasingly smaller working population (compromising the future).

          Of course voters can (and will) remain blissfully ignorant of stock vs mutual funds, compound interest or stock versus public debt evolution and vote accordingly (as they generally do)...

          • by mrvan ( 973822 )

            The Netherlands do indeed have a universal pension, but it's not an awful lot of money, around 1200$ a month for a single person. Probably enough to live on if you have cheap housing, but not really what I aim my retirement to look like. Moreover, the retirement age is creeping up and there are worries about sustainability as it's a pay-as-you-go system.

            Employees often have mandatory collective retirement funds, which are actually really well funded. They are mandated to have 'coverage' of over 100%, meanin

          • Re: (Score:2, Insightful)

            by Anonymous Coward

            Or we could stop spending so much fucking money on our massive, embarrassing military. We could shave 200 billion off of that and we'd still be spending more than twice that of the next largest military budget.

            All this shit sounds like someone else's problem until you realize that the aging population you're talking about is going to become your responsibility sooner or later. Maybe not responsible for anyone now, maybe never will be directly responsible for anybody in the future, but you will *personally*

    • by raymorris ( 2726007 ) on Sunday June 10, 2018 @09:23AM (#56759802) Journal

      Thanks for posting the question.

      The difference in risk is so much that it's a fundamentally different activity, for the most common types of "single stock" people buy, and the most common type of mutual fund.

      Typically when people buy a single stock they choose a new company with a lot of hype. The "value" of the stock is based on the hype. The most common mutual funds are index funds and the like, where you're invested in not only 100 different companies, but 100 different *mature*, profitable companies. It's very, very likely that in a big group of companies which have been making money for 100 years, most of them will keep doing what they've been doing - making money.

      Investing in an index fund is just that - investing, putting money aside now so you'll have it later, and have more. Trying to guess which new company will do best, indeed trying out OUTguess everyone else, is fundamentally *gambling*, not investing.

      Even if you guess right that Fitbit or Tesla will do well in the future, that expectation os already built into the current stock price. For that investment to be good long term, the company has to do BETTER than everyone expected them to. That's straight up gambling when you buy a single stock and it's a young company.

      • Typically when people buy a single stock they choose a new company with a lot of hype.

        Not true. When people have their entire retirement savings in one stock, it is usually in the company they work for, acquired through an ESOP.

        • by raymorris ( 2726007 ) on Sunday June 10, 2018 @12:54PM (#56760588) Journal

          That is another important and common case, having stock solely in the company one works for. That's uniquely high risk because if something goes bad with the company you can lose your job and your savings, at the same time.

          I will probably soon have an opportunity to get into my employer's stock pre-IPO, and it will probably jump right after the IPO, so it would be a good idea for me to get in. BUT I don't want both my job and my savings to subject to whatever happens with this company, so I'll be looking to get out pretty quick. I'll have to look at the plan details to see how I can do that, and when. I may well keep the stock and switch jobs.

      • by Solandri ( 704621 ) on Sunday June 10, 2018 @02:24PM (#56760956)
        Having a larger pool of companies in the fund changes the probability distribution function. The bell curve gets narrower and taller in the middle the more stocks you put in the fund, meaning you're more likely to get an outcome closer to average, less likely to get an extreme outcome.

        It's a consequence of statistics, nothing to do with stocks. If you roll a 1d6, every number between 1 and 6 has an equal chance of appearing. If you roll a 2d6, the bell "curve" becomes a triangle, with 2 and 12 being the least likely outcome (1 in 36 chance), and 7 being the most likely. A 3d6 turns flat sides of the triangle into a true bell curve. Increasing the number of dice results in the curve narrowing even further [aber.ac.uk]. By the time you get to 10d6, it's virtually impossible to get either of the extreme outcomes (1 in 60 million chance of getting a 10 or a 60).

        So when you put thousands of stocks in a mutual fund like an index fund, it's virtually guaranteed to perform at the market average. Whereas if you buy stock from a single company it could perform average, or you could make a lot more money, or you could lose everything. Insurance companies and casinos rely on the same thing - by grouping lots of insured or gamblers together, the overall outcome becomes much more predictable. The increased accuracy of prediction (outcome closer to the average) allows them to make money despite decreasing their margin (offering a lower price for insurance than the competition).
    • by mysidia ( 191772 )

      Trick question. The risk depends on the specific single stock and the specific Mutual Fund in question.

      Some mutual funds are at a different level of risk than other funds, and some stocks at are a different level of risk than other stocks ---- the highest risk funds can very well have less safety than some of the lower risk stocks.

      • Considering you can buy bitcoin and gold and real estate mutual funds, the embedded risk is much higher than buying almost any fortune 500 company stock.

        When you toss in the broker fees and backend fees many mutual funds charge, espcially the shady actively managed ones.

        Well there's room to say the question is ambiguous.

        However, I suspect that most people being polled are not doing this sort of reflective analysis on the question itself. They just are not sure how one picks a safe mutual fund.

        One the other

        • When you toss in the broker fees and backend fees many mutual funds charge, espcially the shady actively managed ones.

          A wiser strategy is to use a brokerage like Vanguard or Fidelity that doesn't have those things (or doesn't require you to use them). For a simple approach, pick their index fund that matches the S&P 500, park your long-term investments (won't need for 5+ years) in it and leave it alone until you actually need the money. Any dips in the market, even severe ones, will be corrected out by the time you need to pull your funds.

          • If you could figure that out then you would be in the 60% of people who also got the question right. If you can't then the idea of no-load is a meta concept.

            Additionally, have you ever thought about what happens if every one in the world is invested in an index fund? Strange markets. And then when everyone heads for the exit doors, what happens?

            Finally on a more esoteric level, did you know that when cap gains occur because some one else sells their shares, you pay a share of the cap gains they triggered

            • by BLKMGK ( 34057 )

              Think about what happens when monthly pay-ins occur from companies. Think about what happens when companies dump in profit sharing or matching funds at the end of the year. Some companies don't do it that way but more than a few do including mine who OBTW will withold all matching if you leave before Jan 1st - cute huh? 401K haven't been around all that long, what happens when all of those folks who signed up when it began reach retirement age and begin withdrawing? As you pointed out, things are going to g

    • by rsilvergun ( 571051 ) on Sunday June 10, 2018 @10:09AM (#56759952)
      in the stock market [google.com]. And that includes retirement programs. The gig economy, outsourcing & offshoring eliminating middle class jobs and the constant assault on Unions means they have no opportunity and with most living paycheck to paycheck [google.com] they have no opportunity to save.

      And nobody's going to convince me that half Americans are just irresponsible spend thrifts or lazy bums; especially since Europe is having none of these problems. Even if they are, what the hell is wrong with our civilization if that's the case? I thought America was the greatest country on earth. God's country and all that rot. Bullshit. Something's wrong. Something outside our control. And let's face it, we know damn well what it is [google.com]
      • by mysidia ( 191772 ) on Sunday June 10, 2018 @10:46AM (#56760102)

        constant assault on Unions means they have no opportunity and with most living paycheck to paycheck they have no opportunity to save.

        Very many, probably the vast majority of the people supposedly living paycheck to paycheck ARE overpurchasing discretionary items, such as Junk Food, Cable TV, Smartphone Plans/Cellular data, Netflix, extra Gas/Vehicle miles for non-essential travel such as to go out and socialize, other Toys/Games/Entertainment.

        So, even for 99% that claim to live Paycheck-to-Paycheck it IS a choice; they could cancel their cable TV and save $50 a month and make sure NOT to substitute those savings by purchasing anything else, which is $600 a Year saved that will easily grow to a million$ if they keep consistently putting that $50/Month in for 50 years .

        Cancel that non-essential cell smartphone plan and go back to a cheap featurephone, and save another $50. Get the discretionary reduced by $250/Month that go into savings, and the time until $1 Million is saved up goes down to about 37 years.

        • by Zumbs ( 1241138 )

          So, even for 99% that claim to live Paycheck-to-Paycheck it IS a choice; they could cancel their cable TV and save $50 a month and make sure NOT to substitute those savings by purchasing anything else, which is $600 a Year saved that will easily grow to a million$ if they keep consistently putting that $50/Month in for 50 years

          $600 per year x 50 years = $30,000. Where do you get interest rates that makes those savings become $1,000,000?

          • by Alascom ( 95042 ) on Sunday June 10, 2018 @11:38AM (#56760286)

            >$600 per year x 50 years = $30,000. Where do you get interest rates that makes those savings become $1,000,000?

            $50/month for 50 years = $30,000

            $50/month for 50 years earning 9.99% returns* = $869,950.48 (not a million, but close enough).

            In retirement, this can very easily provide and inflation protected $44,000/yr in additional income.

            * S&P 500 30 year period returns (http://www.moneychimp.com/calculator/compound_interest_calculator.htm)
            1926-1956: +10.77%
            1956-1986: +9.63%
            1986-2016: +9.99%

            ** 7% growth - 2% inflation = 5% or $44,000/yr

            • First, what the _hell_ are you doing on /.. I don't think Bernie Madoff could pull that off with a pyramid scheme. You must be some kind of financial genius.

              Second, you do know what inflation is, right? At the current rate you're $1 million saved will have about $140k in buying power in 50 years based on the Cureau of Labor Statistics' calculator. Only inflation is _much_ worse than it was 50 years ago, so better plan on that being $100k.

              Also, better plan on a few major market crashes wiping out yo
              • by mysidia ( 191772 ) on Sunday June 10, 2018 @03:50PM (#56761282)

                Also, better plan on a few major market crashes wiping out your savings.

                No... Markets are cyclical, and crashes are part of it in fact: multiple market crashes are EXPECTED
                to happen over a period of 50 years, and they don't wipe out any savings --- they are a temporary decrease in market value - stock returns will be negative for that year, but on average adding up positive and negative years the result comes out 10% ahead annualized given a sufficiently long time horizon.

                Crashes, the business cycles, and major events are the REASON people don't put 100% of portfolio value in an asset class. For example, you perhaps choose 75% of the savings in company stocks and 25% in Fixed-Income/Bonds, Real-Estate funds, Inflation-Protected Securities, other debt securities, convertibles, or Hedging options, and similar instruments.

                During the years immediately after the "Crash"; the NAV of the Stock position shrinks, and the portfolio's Cash position then becomes overweight --- e.g. You will have less than 75% of the target allocation in stock and more than 25% in cash. Every 1, 3, 6 months, or 12 months, the manager rebalances the portfolio if it deviates from the target allocation by a sufficient threshold% and dollar amount (but usually just perhaps once a year or two to minimize fees), therefore, after a market crash the portfolio will be getting rid of Cash or selling the Hedging assets and BUYING stock to bring the portfolio back to the target percentages, which means you will get maximum advantage of the market crash by purchasing more stock while the price is still low ---- On the other hand, after a year when your funds perform extremely well, then the stock allocation will .exceed 75% of your portfolio value, therefore, when rebalance occurs you will be selling Stock mutual fund shares and buying into your other funds that Hedge the stocks risk

                • it just that. Bullshit. We had decades of stability until Regan came along and started repealing depression era laws designed to stop another depression. Liz Warren's been going around trying to get people to understand that and failing because the media (which has a pro-corporate bias) won't cover her except when Trump calls her names.

                  The big thing is keeping risky Wall Street stuff away from safe Main Street Stuff. Also regulating commodities and keeping crap like High Frequency trading and other paras
              • by MeNeXT ( 200840 )

                I have no idea why your post is informative. His math makes a lot more sense than yours. If you can't pull off a 10-15% return after taking inflation into consideration find a financial advisor. In the last 20 years I think I had 2 or 3 years that gave me a return less than 10% after inflation. He may have exaggerated the return but it would be closer to $1million than your $100k.

          • by mysidia ( 191772 )

            $600 per year x 50 years = $30,000. Where do you get interest rates that makes those savings become $1,000,000?

            Your idea of multiplying each years' payments by 50 is invalid assuming the savings are being invested responsibly, please see Here [investopedia.com] for the formula regarding the future value

            The answer is people buy in a combination of mutual funds that are selected to have an expected average annualized return
            of 10% or higher after fees for periods of 10 years or more with optimal risk, and that's not ve

        • and sitting quietly waiting to go to work (or better yet, working 16 hours a day) then the nasty little heathens deserve what they get. Maybe that's not what you intended, but it's the sentiment you're echoing whether you know it or not. It's a narrative pushed by the ruling class so they can steal all your money. Don't fall for it.

          It's a verifiable fact that Millennials are worse off than their parents and grandparents. It's kind of a big deal, since that's the first time in centuries that's happened.
          • by mysidia ( 191772 ) on Sunday June 10, 2018 @02:49PM (#56761050)

            It's a verifiable fact that Millennials are worse off than their parents and grandparents.

            Not so fast... Millenials are worse off as a group by their own individual choices, because they buy more goods and services that are not really needed and make worse deals than their parents or grandparents --- for example, many of them are swindled into taking on student loan debts by allowing themself to incur expenses that are unjustifiably large VS benefit.

            and sitting quietly waiting to go to work (or better yet, working 16 hours a day) then the nasty little heathens deserve what they get.

            What kind of crap are you spewing? Nobody "deserves" to get anything from anybody other than the agreed upon goods, services, or compensation in exchange for $$$, work, or services provided.

            All i'm saying is the people who claim to be living paycheck-to-paycheck and unable to afford to save at all for retirement or future needs are Full of Shit: if they are spending any money on non-essentials, then they are Not "unable", but they CHOOSE not to --- The fact they DO have the choice to spend the $$$ on Non-Essentials PROVES that the Money would be available to save for their future, BUT they choose to prioritize the Immediate non-essential Luxury as MORE IMPORTANT or PRIORITIZED over saving for Retirement and prioritized over saving to help build an emergency fund or improve their overall Financial well-being.

            The $50 to $80 / Month Cable TV or Netflix bill PLUS exorbitant Smartphones with unnecessary features are GREAT examples, because the purchase is 100% on Audivisual entertainment. The equipment alone (such as Televisions) are luxury items, and so is cable service.
            Millenials' grandparents' likely never owned TVs or Smartphones, let-alone pay an equivalent of $60/Month for such items.

            There are plenty of free ways to be entertained, such as taking walks down the street, or riding a bike to the nearest library, those are also activities that promote thought, higher productivity, and potential aid to professional development.

            That's just two high-ticket examples.... Another example is: What kind of Vehicle people choose to buy. Don't claim to have no choice and be living paycheck-to-paycheck and having purchased a brand New $30K+ vehicle; that has a high loan-servicing cost, a high rate of interest that will be paid over the life of the vehicle, AND a higher insurance rate, when a used $12K vehicle of an appropriate type well-researched purchase (Including the expected lifecycle costs to insure and maintain) would have (A) Met the needs, and (B) Resulted in lower monthly costs: Again, this is a case where "Live paycheck-to-paycheck" was NOT dictated by the marketplace, or by the wage, But it was the result of management decisions made by the individual.

            • You do realize you can have most of those things and not spend much at all right? You don't need a $1000 smartphone to have a smartphone, my kids have $50 ones and a data limit...I think that's maybe $25/mo all in per line. You don't need a $3000 TV, I think my 55" LG was $400ish. This is (adjusted for inflation) far less than your parents and grandparents spent on theirs in the 1970s. You don't need a $80/mo cable package, OTA is free and Netflix is up to what, $14? now. You will need internet but you prob
      • by BLKMGK ( 34057 )

        https://www.theatlantic.com/ma... [theatlantic.com]

        Agreed, something doesn't smell right...

  • by wierd_w ( 1375923 ) on Sunday June 10, 2018 @09:33AM (#56759850)

    The continual slide of wages vs inflation, the endless fun-ride of being 'obsoleted', being excluded through ageism, the effective death of the pension, and a bevy of other factors all align to basically ensure that nobody aside from people on the far upper end of middle class and the wealthy are able to retire.

    Everybody else is just ignored by the system, and when the time comes, those that "have theirs" will fail to comprehend why they (everyone else) failed to save for retirement, will blame the victims who really would have loved to save for retirement, will refuse to take up the slack in society, because "they have theirs", and through it all, the people that have been systematically shafted because they were not born rich enough to get a suitable head start on this fun-ride will become an epicenter for systemic illnesses, and societal drains that the others will refuse to pay for.

    But dont let that bother your little heads too much. Because the downward pressure of this disadvantaged class will further pull the upper middle class down, due to mandated tax increases and a yawning social welfare crisis caused by the earning gap, which will further push the next generation of upper middle class into serfdom.

    Want to prevent this horrible nightmare future? It's really easy in principle, but impossible to implement in reality: Put a stop to the ever increasing wage gap, drive up baseline wages, and drive down top earnings, so that the middle class grows again instead of shrinks.

    No. You are not such an amazing talent that you "deserve" to earn 100 times or more than the average person.

    No. You arent.

    No. NO YOU AREN'T.

    • by AmiMoJo ( 196126 )

      It's already happening. Boomers say the younger generations are irresponsible and lazy and that's why they don't have a golden final salary pension scheme and half million pound house.

      • by clovis ( 4684 ) on Sunday June 10, 2018 @11:40AM (#56760300)

        It's already happening. Boomers say the younger generations are irresponsible and lazy and that's why they don't have a golden final salary pension scheme and half million pound house.

        I am an older baby boomer, and I don't know any baby boomer that honestly believes "the younger generations are irresponsible and lazy ".
        I'm sure there's some out there, but I'm sure there's morons in every generation. I just don't know any.

        The people who are saying these things are almost all younger than we boomers, and/or are liars hoping to steal from whoever.
        What the boomers I know believe is that a fundamentally dishonest media makes up all kinds of shit about people to drive sales.
        They're making up shit about the millennials, and they're making up shit about baby boomers.
        Pick any demographic that you're a part of, and consider the BS that you're being blamed for that you know isn't true. It's the same with the demographic that you're not part of.

        Do you find it confusing when you see a millennial on the news repeating the "millennials are lazy, irresponsible, make bad choices" story?
        I don't. I'm not at all confused when I see a liar; I just see a liar.

    • You are definitely a Westerner. "Deserve" has nothing to do with earnings. Does a person in the UK "deserve" to earn 100 times more than the same person doing the same job in India? Unless you want the UK to look like India that isn't going to happen.
      • Re: (Score:2, Informative)

        by Anonymous Coward

        Does a person in the UK "deserve" to earn 100 times more than the same person doing the same job in India? Unless you want the UK to look like India that isn't going to happen.

        Middle class people in India can afford full-time maids and live-in child care for their four kids. Middle class people in the UK make four times as much, but live in shoebox apartments and can't afford to have children at all, so the government has to encourage immigration to keep the population from dropping.

        Economic classes are not directly comparable country to country. Paper numbers do not make reality.

        • by slew ( 2918 )

          Does a person in the UK "deserve" to earn 100 times more than the same person doing the same job in India? Unless you want the UK to look like India that isn't going to happen.

          Middle class people in India can afford full-time maids and live-in child care for their four kids. Middle class people in the UK make four times as much, but live in shoebox apartments and can't afford to have children at all, so the government has to encourage immigration to keep the population from dropping.

          Economic classes are not directly comparable country to country. Paper numbers do not make reality.

          Depends on what you call the "middle". Median? Mean? I doubt that neither the median nor the mean income in India can support full-time maids and live-in child care.

          Certainly a person with a job in India that has a job internationally-competitive comparable to a "middle" class job in the US or Europe will be able to afford those kinds of things. However, people that have that kind of job in India are definitely not middle class in India, they are definitely in the upper 1% of income earners... The upper

    • by MeNeXT ( 200840 ) on Sunday June 10, 2018 @11:49AM (#56760350)

      I agree with your point of view to some extent but your solution is so vague that most people won't understand how to implement it.

      I would say that people need to understand that money represents debt and that when buying a product the price listed is not what it costs you. If you are in a 50% tax bracket it means that the product is twice as expensive because you need to firs pay the taxman before you can purchase the product. In the same sense if you start saving your money, it will work for you when investing it. The less you will need to earn it. The earlier you start, the greater the benefit.

      The problem is most people want instant gratification and place absolutely no thought on retirement or a rainy day until they get old enough, or in a position where they can no longer do anything about it.. If you are not born rich you will need to place more effort into saving and stop worrying about the latest and greatest. Our society is based on extracting money from people. You need to understand where your money is coming from and where it's going. It takes effort to take control.

      It takes effort to understand that saving, investing, is the most important factor in your life after the necessities (food, shelter). Entertainment comes last. If after all the effort there is no money to save then you need to make changes ASAP. Either to improve your income or reduce your expenses or both.

      Nobody cares about you as much as much as you do. If you can't respect yourself enough to make the changes necessary to improve your life, nobody will do it for you. If you are not saving (investing in yourself) then you are doing it wrong.

      Once you are on the road to saving the next phase is to do a cost analysis on everything you buy. Cheaper isn't always better. Renting sometimes is an option when the use of the product is for temporary use. You don't need to get bogged down on this decision but you need to take some time analyze why you need it.

      Lastly and most importantly it take decades to build, Quick short term gains are rarely beneficial. You need to surround yourself with like mined people that can help and encourage you through the tough times. Politicians always put themselves first. I have yet to see a politician who is in it to improve peoples lives. The proof is in the openness of the process. When decisions are being made in closed door meetings where the discussion are not public, you can be assured they are not thinking of you.

    • the median income crash the economy every 8-10 years like clockwork. How do you build wealth when everytime you start the rug gets yanked out from under you. Meanwhile I get saddled with high taxes to fund their bailouts and the wars needed to protect their foreign investments.
  • by Tony Isaac ( 1301187 ) on Sunday June 10, 2018 @09:38AM (#56759856) Homepage

    Throughout history, people worked until they were physically unable to work.

    The idea of retirement came about through FDR's "New Deal." Even then, the "retirement age" of 65 was considered very old, considering that life expectancy at the time was 61! Since then, life expectancy has risen by at least 10 years, but the "retirement age" has not risen with it.

    Financial literacy is needed, yes. But is "retirement" at 65 a realistic goal for most people?

    • But is "retirement" at 65 a realistic goal for most people?

      It was certainly a realistic goal for the political class to promote during an extremely unusual period in economic history: the glorious middle class years between 1950 and 1980.

      Plus with the boomer bulge, this core demographic was due to control society at the polling stations until right about now. When these industrious, retirement-fund beavers had happy thoughts (whether naive or not) politicians could plan on a second term.

      Reagan was the begin

      • Even assuming that exchange were to happen (it won't), last time I checked crazy uncle Kim has no way of delivering nuclear bombs to the continental USA and that fact is unlikely to change in the next 6 years.

        North Korea has been making crazy threats for decades, his Trumpiness is enough of a troll himself to throw that right back at him vs trying to placate him like previous administrations. I would argue that is the policy we should have had for decades now, much like all of the foreign aid we send to
    • But is "retirement" at 65 a realistic goal for most people?

      It could be. It is not because the prevailing attitude among the majority is to drag everyone else down rather than to build everyone else up.

      I'm one of the lucky ones. I'm 53 and recently retired after a 30 year career as a network specialist for a large public sector employer. I have a good pension, and not only that, I have a well managed pension. It is fully funded and consistently makes large returns on investments so there is no risk to the taxpayers, and being part of government there is no risk

    • "Retirement" has been a part of most cultures for over a thousand years. I wouldn't be surprised if it's been around for as long as humans have stuck together as a family. In most cultures, when your parents/grandparents get too old and frail to do physical labor, they move into your house and you take care of them until they die. (Though a few cultures took the opposite approach and simply killed the elderly [wikipedia.org].)

      Social Security is the exact same thing, except it expands it from direct descendants taking
    • Actually the 65 year requirement is much older than that. It was first put in place by Bismarck. Clearly at the time most epople were expected to be dead by then.
  • by sunking2 ( 521698 ) on Sunday June 10, 2018 @09:39AM (#56759860)

    Company that makes money investing peoples retirements says more people need to use their services in order to retire.

    First, let me say of course retirement is important. But lets be clear, saving for retirement is big business for the financial world. According to them you can never save enough because every penny you aren't saving is money not on their table.

    Every day I go to work I see people who seem to talk about nothing but their retirement savings. And they mock the new generation coming in to replace them because at least according to them they aren't doing anything and in stead are actually living life.

    Somewhere is a happy medium. I'd rather take off to NZ in August for a weeks snowboarding now than take a cruise when I'm 70. Of course there are long term costs associated with that. But that's life, sometimes you have to actually life it.

    • You don't have to go to New Zealand to snowboard. The happy medium is to go somewhere more affordable to snowboard if that is your thing.
      • You don't have to go to New Zealand to snowboard. The happy medium is to go somewhere more affordable to snowboard if that is your thing.

        He could be living in Australia, so NZ might be the more affordable choice than, say, anywhere else in the world. :-)

    • by MeNeXT ( 200840 )

      You don't need anyone's help to invest in your future. Investing early in yourself allows money to work for you. The NZ August trip invested early on(in your 20's) could pay a monthly trip to NZ when you are 60. You may not be in shape to snowboard but then again you will most likely not have the energy to work physically for 8 hours either.

  • by swb ( 14022 ) on Sunday June 10, 2018 @10:09AM (#56759958)

    It's hardly a surprise. In the US we're filled with "financial planners" and other similar people who pitch themselves as helping improve your financial life, when in fact they aren't even really obligated to make their clients fiduciary interests primary. They're nothing more than glorified stock salesmen, pushing high-load, low-yield branded mutual funds, crappy stocks and high-activity trading which they benefit from.

    The sales pitch, even when its half-informative, is often a deceptive lure. Guy with shitty retirement planning breaks down and goes to a financial planner. Is told he's way behind the curve. Guy says "what about a no load mutual fund", and the planner is like "you could do that, but these days they only return 3% and based on my magic spreadsheet you need a more aggressive return, like my portfolio of targeted mutual funds and some individual company stocks where you can get that 10% yield you need to catch up".

    So the guy buys into shitty funds and stocks that mostly likely just help the financial planner retire.

    Financial planning education is non-existent in schools, fixing that would help. It would also help to crack down fucking hard on "financial planning" and require SIMPLE, BOLD PRINT, PLAIN ENGLISH, UP FRONT disclosures that planners are in the business of selling products, not in caring about your outcome. Or better yet, REQUIRE that financial planners (or whatever label you want to invent) MUST PLACE THEIR CLIENTS FIDUCIARY INTERESTS AHEAD OF THEIR OWN. If we had financial services that were about client interests and not just pushing shitty investments it would help everyone.

    Brokers and salesman can continue their line of chicanery and fraud, but at least there would be a legitimate category of financial planners people could trust.

  • by Anonymous Coward

    TFS is ridiculoisly American.
    You can have your own views, of course.
    But don't be surprised, if the world considers your mindsets a bit ... "special".

    In most countries of this planet, people do not even consider stock trading legitimate concepts. (Due to profit essentially being immoral and anti-social, harming society, and being very close if not equal to stealing.)
    Hell, you expect Chinese and other unamerican people to know the intricacies of capitalsim?

    Come-on! I know "you Americans" are not "all like thi

    • by godrik ( 1287354 ) on Sunday June 10, 2018 @11:41AM (#56760314)

      I came to say something similar.
      The summary (haven't read the article of course, this is slashdot afterall) assumes that the world considers money based investments as a way of funding retirement. Not all the world agree with that model.

      In France (for instance), retirement is mostly paid by taxation on the next generation. In many places, the community will take care of you. If my future well being is not based on market investment, why would I even need to understand it. This would be a purely academic skills.

      Now, I am not arguing one model over the other one. I am just arguing that the article should really be entitled "the world does not understand how the American retirement system works". Which is not really surprising.

  • From the result, 80% of people understand how inflation affects the value of their money, and 45% percent understand something about stocks, even though investing in stocks is required to manage retirement money (and only 16% got it wrong). All in all, not bad.

  • ...puts out an online quiz about economics (which very few people understand), gets the results back, and declares that most people don't know how to manage a pension fund.

    Yes, we should definitely all have pensions, especially from you... until the next financial crisis (created by you f**kers) decimates our pensions and makes them next to worthless, and/or you force our governments to impose austerity on us so that our healthcare and social security systems start to fail and people start dying.

    So no, the

  • by getuid() ( 1305889 ) on Sunday June 10, 2018 @11:39AM (#56760294)

    It's the US that isn't prepared, not "the world". Civilised countries with a mentality not stuck in the early 20th century have retirement programs, medical insurance and a social welfare at least trying to offer a dignified retirement to everybody.

    Or at least we try, and in details in which we don't succeed, we recognise that as a problem that's to be fixed.

  • by Notabadguy ( 961343 ) on Sunday June 10, 2018 @12:00PM (#56760386)

    Keep in mind that the control group of people questioned fall into the following category:
    -Surf the internet looking for quizzes to take.
    -Have nothing more important to do than take online quizzes.

    Extrapolating that the world isn't ready for retirement based on a three question survey delivered via online quiz is bad science.

    Here's a better headline:

    The more likely you are to know what kind of fruit represents your personality, the less likely you are to be prepared for retirement.

    That says it all.

  • I retired at age 55, my income now is the same as my take home pay was when I was working. Around $72K USD.
  • by nospam007 ( 722110 ) * on Sunday June 10, 2018 @12:58PM (#56760612)

    it's missing 'I don't give a shit' since I get a pension in Europe where I don't have to care about stocks, the employer and employee both paying the same amount (usually around 8% each) into the employee's state guaranteed pension fund from day 1.

    • by JustNiz ( 692889 )

      You're deluding yourself. I'm also a European and at least in theory will get a state pension. Its so little that it won't even start to pay the bills, and the retirement age keeps being pushed back. Word is that there are so many dependents on the welfare system and its growing, that they wont even be able to pay the tiny pension they are currently promising by the time I get to retire in 12 years or so.
      I'm glad I made my own alternative plans years ago, so I don't actually need to rely on the state pensio

  • Q. Do you think the following statement is true or false?
    “Buying a single company stock usually provides a safer return than a stock mutual fund.”

    A: I work in IT, not the investment business. Considering this is one of those things you REALLY don't want to screw up, I have a financial advisor who is a fiduciary who answers these questions for me. I meet with this person bi-annually to discuss where we are and where we need to be in order for me to retire at 55. Based on the fact that I dump a

  • 100% of the people in the famine stricken land of Somalia failed to answer the simple three question quiz regarding fillet mignon, lobster and foi gras.

    Wages have not kept up with inflation, productivity gains are all going to the top 1%, there is no savings, there is no possibility of savings, there is no possibility of retirement. People are hoping and praying they will stay healthy and employed till the day they die.

    And some idiot is blathering about 2% interest for five years, 1% interest on 2% infla

  • All I ask is the opportunity to prove to the world once and for all that I am financially irresponsible. While proving that money cannot make me happy.

  • ... is bogleheads.org. Yes, it's a cheesy, almost appeal-to-authority name, but bogleheads.org has a ton of info, and a lot of very smart posters, if you want to learn about investing and retirement planning. It's priceless. Check out "getting started" in the wiki, before reading the forums. Read some books by William Bernstein, Larry Swedroe, one of the bogleheads books, and "A Random Walk Down Wallstreet".

    The gist of it all is:
    1) save as much as you can
    2) use low-cost index funds
    3) choose a reasonably app

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