Dow 30,000

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Poll: Dow 30,000

  • By End of This Year

    Votes: 17 9.9%
  • 1st Half 2020

    Votes: 30 17.4%
  • 2nd Half 2020

    Votes: 31 18.0%
  • 2021 - 2022

    Votes: 22 12.8%
  • Won't Hit It In Next 3 Years, Recession Will Knock It Back

    Votes: 72 41.9%

  • Total voters
    172

Althetuna

Ducky was the best dog.
SuperFanatic
Jul 7, 2012
13,062
11,492
113
Somewhere in the Minneapolis Area
You don't have to save more. You can save the same amount, have significantly more in assets at retirement, take the same dispersements (which is a smaller percentage of your assets), and your kids can keep the equity with individual plans invested in the S&P500.

IPERs 30 year return = 8.64%
S&P 500 30 year return = 10.11%
A 1.47% annualized delta is millions of dollars for a worker who's contributing systematically over 40 years.

The "protection" is a myth that has been sold to workers in DB plans. When markets go bad, everyone feels the pain, not just individual investors.

http://www.pensionrights.org/public...benefits-under-multiemployer-pension-reform-a

View attachment 65156
But the catch is how long the dispersements last.

The protection members receive isn't from the actions of the market. I've already said that. The value of pensions rise and fall. The protection comes from the varying lifespan of it members.
 

Althetuna

Ducky was the best dog.
SuperFanatic
Jul 7, 2012
13,062
11,492
113
Somewhere in the Minneapolis Area
I have seen you make far more hyperbolic comparisons of the state of the American experiment in self-governance to some truly evil and malevolent regimes from the 1930s at present and in the relatively recent past, rather than the garden-variety incompetence and stupidity of Argentina in the 1980s and 1990s and Greece and Venezuela more recently. To be fair, though, Argentina and Venezuela do have some nasty atrocities to their name from that era. It seems overblown historical comparisons are okay when you do it, but mine -- which are much more tightly focused to what happens when the dole runs dry -- are somehow invalid?

Never ascribe to malice what stupidity explains equally well.

That brings up to why I think it eventually runs dry during a crisis. Any reasonable student of American governance in the past few decades would watch a system the lurches from crisis to crisis rather than proactively trying to address developing problems. I have seen very little interest or action out of state and federal policymakers to address our brewing long-term fiscal imbalances with pensions, funding for various state programs (education, infrastructure, etc.), and federal entitlement programs. If anything, and especially federally where there is no balanced budget amendment, the interest seems to be further profligacy (more tax cuts, more defense spending, multi-trillion dollar "free" XYZ programs, etc.) rather than fixing it up.

Are you right these problems are solvable? Yes, in the strictly mathematical sense, but I do not feel they are solvable in the political sense without outside forces forcing it upon us at the absolute last second. The mathematics and the politics become harder the longer we wait, too. This would have been easier in 2005. The most obvious crises that might develop are a major financial crisis, a run on U.S. debt or the dollar, and perhaps even a loss of reserve currency status. Are those extreme? Yes, sure are, but we are practically inviting them on our current trajectory.

Any charges you make about Republican profligacy and hypocrisy are completely correct, by the way -- and hence I have zero faith, trust, or love for them whatsoever.

I've notice a trend in your posts. The longer the post, the less it says.
 
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Althetuna

Ducky was the best dog.
SuperFanatic
Jul 7, 2012
13,062
11,492
113
Somewhere in the Minneapolis Area
DC plans bend and their investors know they do.

DB plans break and their investors pretend they don't.

I have no idea how your investment plan is structured but I can see you've invested heavily in fear mongering.

Fyi, contibutors to db plans get yearly reports on the status of the fund.
 
Last edited:
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NodawayRiverClone

Well-Known Member
May 1, 2018
350
303
63
75
You don't have to save more. You can save the same amount, have significantly more in assets at retirement, take the same dispersements (which is a smaller percentage of your assets), and your kids can keep the equity with individual plans invested in the S&P500.

IPERs 30 year return = 8.64%
S&P 500 30 year return = 10.11%
A 1.47% annualized delta is millions of dollars for a worker who's contributing systematically over 40 years.

The "protection" is a myth that has been sold to workers in DB plans. When markets go bad, everyone feels the pain, not just individual investors.

http://www.pensionrights.org/public...benefits-under-multiemployer-pension-reform-a

View attachment 65156

My disagreement is not with the idea that one can invest in only S&P 500 equities or mutual funds for 30 or more years and have a great nest egg, it's that most people will not. They're just not interested in investing in a way that most advisors do not recommend or they do not have the risk tolerance. If they do have an interest, they'll probably put the minimum in a 401k to get an employer match and then do non-retirement investments - because they love it and/or are good at it.

Comparing IPERS' return on investments to the 30-year S&P 500 return is immaterial. IPERS' retirement benefits are based on a wages and years of service formula. IPERS' investing is geared toward making a long-term annualized return that funds earned benefits and pays down the unfunded liability. Members like it because they get a nice benefit without worrying about how to invest to get a good return.

In fact, IPERS encourages members to also save through other means for retirement where they can take as much or as little risk as they like, or at least as much as the fund choices allow.

The down market risks for defined benefit members is that contribution requirements go up to help recover losses and that political governing bodies, in their ignorance or political stance (IMO), lose their nerve and undermine good governance of db's.
 
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Rabbuk

Well-Known Member
Mar 1, 2011
55,029
42,335
113
Idk why that one dude is getting panned for espousing 3 different savings plans. Banking on ss doesn't seem like a given for people under 40.
 

Sigmapolis

Minister of Economy
SuperFanatic
SuperFanatic T2
Aug 10, 2011
24,873
36,685
113
Waukee
I've notice a trend in your posts. The longer the post, the less it says.

Slander and insult is the last refuge of a crumbling position.

I have no idea how your investment plan is structured but I can see you've invested heavily in fear mongering.

Fyi, contibutors to db plans get yearly reports on the status of the fund.

The risk profile with a DC plan is basically linear... you ride the market.

The risk profile with a DB plan is nonlinear. Under most normal circumstances, you are fine, but if there is an extreme market upset (see 2008 or 1929), then you bet plenty of public and private pensions are not going to be worth all that much.

And yep, my thoughts are influenced by my family's experience with Enron.

I remember you saying your fund can opt to slash benefits in extreme circumstances, which to me makes your fund sound more like a DC fund anyways, even if outwardly structured and managed like a DB plan until something would go wrong.

And that is probably my ultimate thoughts towards this -- not that they are so different, but that they have become more and more similar over the past few decades and, no matter how clever you try to be, they are both constrained by returns. Somebody else even brought up some DB plans are starting to offer benefits or lump sum payments to survivors and heirs...

...just like a DC plan. The lines between them are blurring.

Given those issues, I do not think we are too far apart really.

Idk why that one dude is getting panned for espousing 3 different savings plans. Banking on ss doesn't seem like a given for people under 40.

I would be pleasantly surprised if we receive anything from it (31 me/29 spouse).
 

Bestaluckcy

Well-Known Member
SuperFanatic
SuperFanatic T2
Sep 25, 2009
1,807
1,177
113
My wife being a retired teacher is receiving IPERG. I have never worked for an employer that offered a defined benefit plan, so I have had to take responsibility for my retirement needs. Having left the work force I hope we have the necessary needs covered. Some of the questions that leave one wondering are: Will the politicians screw up something that has worked well for a long time in IPERG? Every major stock market in the world has gone bankrupt in the last 200 years with the exception of two (US & UK); is our luck going to run out also? or do we do it different?

I will let you experts ponder our future. I just hope everyone lives long and prospers. Mrs. Best and I will have to get by irregardless the future. Some of this is beyond ones own doing, and best made plans.
 
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DurangoCy

Well-Known Member
Jul 5, 2010
6,372
4,244
113
Durango, CO
My disagreement is not with the idea that one can invest in only S&P 500 equities or mutual funds for 30 or more years and have a great nest egg, it's that most people will not. They're just not interested in investing in a way that most advisors do not recommend or they do not have the risk tolerance. If they do have an interest, they'll probably put the minimum in a 401k to get an employer match and then do non-retirement investments - because they love it and/or are good at it.

Comparing IPERS' return on investments to the 30-year S&P 500 return is immaterial. IPERS' retirement benefits are based on a wages and years of service formula. IPERS' investing is geared toward making a long-term annualized return that funds earned benefits and pays down the unfunded liability. Members like it because they get a nice benefit without worrying about how to invest to get a good return.

In fact, IPERS encourages members to also save through other means for retirement where they can take as much or as little risk as they like, or at least as much as the fund choices allow.

The down market risks for defined benefit members is that contribution requirements go up to help recover losses and that political governing bodies, in their ignorance or political stance (IMO), lose their nerve and undermine good governance of db's.

The post I was replying to said that you have to save more with an individual account vs. a defined benefits plan to get the same level of "security". That simply isn't true, because in a defined benefits plan your returns will be lower and you've paid for that security in a lesser account value/payout.

You also touch on a good point that it's a years of service/contribution formula, that I would guess further erodes the value of the defined benefits plan. I didn't have time to dig into it and didn't want to speculate originally, but I would guess the ROI on money contributed by the worker and state is less still than the 8.5% gain on the IPERs portfolio once fees and expenses are removed. I think the SS is a 1-2% ROI, which is awful.

As far as the forced savings, that's great, but it will probably be negated by fees and the lesser returns vs. individual accounts to the point where's there's an infinite number of scenarios that we can discuss with the net result is that saving money is smart.

The point several of us were making is that while these plans are fine and they have a place; the comments that they are superior to individual plans fails to look at the pros and cons to each type of retirement plan. That has fallen on deaf ears.
 

Rabbuk

Well-Known Member
Mar 1, 2011
55,029
42,335
113
The post I was replying to said that you have to save more with an individual account vs. a defined benefits plan to get the same level of "security". That simply isn't true, because in a defined benefits plan your returns will be lower and you've paid for that security in a lesser account value/payout.

You also touch on a good point that it's a years of service/contribution formula, that I would guess further erodes the value of the defined benefits plan. I didn't have time to dig into it and didn't want to speculate originally, but I would guess the ROI on money contributed by the worker and state is less still than the 8.5% gain on the IPERs portfolio once fees and expenses are removed. I think the SS is a 1-2% ROI, which is awful.

As far as the forced savings, that's great, but it will probably be negated by fees and the lesser returns vs. individual accounts to the point where's there's an infinite number of scenarios that we can discuss with the net result is that saving money is smart.

The point several of us were making is that while these plans are fine and they have a place; the comments that they are superior to individual plans fails to look at the pros and cons to each type of retirement plan. That has fallen on deaf ears.
SS isn't really predicated on returns, it's mostly reliant on borrowing from younger workers.
 

Sigmapolis

Minister of Economy
SuperFanatic
SuperFanatic T2
Aug 10, 2011
24,873
36,685
113
Waukee
I have never understood "it forces you to save" as a benefit of anything.
 

Sigmapolis

Minister of Economy
SuperFanatic
SuperFanatic T2
Aug 10, 2011
24,873
36,685
113
Waukee
Mostly because we don't want people to die in their old age from having to eat dog food.

I am iffy on the morality of forcing people to do things that are undeniably good for them.

We could greatly improve public health and reduce private and public healthcare costs significantly by banning processed sugars and mandating exercise for all residents.

Yet, we do not. What's the difference?

Forced savings helps reduce a problem for everybody in the long-term, sure, but so would the program that I just described, if "this is ultimately for the best" is your standard.
 

Rabbuk

Well-Known Member
Mar 1, 2011
55,029
42,335
113
I am iffy on the morality of forcing people to do things that are undeniably good for them.

We could greatly improve public health and reduce private and public healthcare costs significantly by banning processed sugars and mandating exercise for all residents.

Yet, we do not. What's the difference?

Forced savings helps reduce a problem for everybody in the long-term, sure, but so would the program that I just described, if "this is ultimately for the best" is your standard.
because everyone undoubtedly needs money to live. It's universally true
 

Sigmapolis

Minister of Economy
SuperFanatic
SuperFanatic T2
Aug 10, 2011
24,873
36,685
113
Waukee
because everyone undoubtedly needs money to live. It's universally true

Is it? Plenty of societies have existed without currency in human history.

Good health is pretty necessary to life, too, or else (like money) that life might be a lot shorter and less pleasant than it could be (back to your example of eating dogfood).
 

Rabbuk

Well-Known Member
Mar 1, 2011
55,029
42,335
113
Is it? Plenty of societies have existed without currency in human history.

Good health is pretty necessary to life, too, or else (like money) that life might be a lot shorter and less pleasant than it could be (back to your example of eating dogfood).
I mean I'd be fine going to a completely bartering society, but that doesn't seem likely.
 

bos

Legend
Staff member
Apr 10, 2006
29,669
5,255
113
What kind of dog food we talking here? Some of that Rachel Ray stuff doesn’t look half bad. Beggin Strips are too salty though.
 
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ArgentCy

Well-Known Member
Jan 13, 2010
20,387
11,176
113
My wife being a retired teacher is receiving IPERG. I have never worked for an employer that offered a defined benefit plan, so I have had to take responsibility for my retirement needs. Having left the work force I hope we have the necessary needs covered. Some of the questions that leave one wondering are: Will the politicians screw up something that has worked well for a long time in IPERG? Every major stock market in the world has gone bankrupt in the last 200 years with the exception of two (US & UK); is our luck going to run out also? or do we do it different?

I will let you experts ponder our future. I just hope everyone lives long and prospers. Mrs. Best and I will have to get by irregardless the future. Some of this is beyond ones own doing, and best made plans.

A stock market cant really go bankrupt. Even Zimbabwe has a soaring market (In nominal local currency).