Mandatory pension funds: What are your thoughts?

granitepilot2 said:It isn't that simple. People want their cash now, but in thirty years when they realize they have zero retirement savings, they’ll happily vote for some populist party—kind of like how people flock to the Democratic Party today—just so they can lean on the government for handouts.

Is a second pillar really the smartest move here? Considering 90% of Americans don't have a college degree—which isn't even the worst part—the issue is systemic. While the market was booming, nobody complained about the second pillar, but the moment things start sliding, suddenly everyone has an opinion. Honestly, hearing someone argue they "lost money" in this climate just tells me they haven't got the slightest clue what's actually happening in the world around them...

Based on everything we've seen, there's a massive chance those funds won't even exist in thirty years.
Forcing someone to hand over money for you to play around with is nothing short of a total shakedown.

Whether I decide to dump my cash into stocks, stack up gold, buy another acre of land every year, or just blow it all on a wild weekend should be entirely my call and nobody else's.

granitepilot2 said:It isn't that simple. People want their cash now, but in thirty years when they realize they have zero retirement savings, they’ll happily vote for some populist party—kind of like how people flock to the Democratic Party today—just so they can lean on the government for handouts.

Is a second pillar really the smartest move here? Considering 90% of Americans don't have a college degree—which isn't even the worst part—the issue is systemic. While the market was booming, nobody complained about the second pillar, but the moment things start sliding, suddenly everyone has an opinion. Honestly, hearing someone argue they "lost money" in this climate just tells me they haven't got the slightest clue what's actually happening in the world around them...

No, you should be offering more secure options too, like pure cash, digital gold currency, bonds, or real estate. Nothing revolutionary there. And just to be clear, I don't consider democracy a great way to run things. Personally, I crave an enlightened absolutism led by someone like Franz Joseph (not two separate people like Frank and Joseph).
I agree that OMF-ov investment structures are conservative, but hey, if someone doesn't want that, let them do what they want. They can starve later. :amerikazemljavelika:

Is the second pillar really the smartest move? Given that 90% of Americans don't even have a college degree, it isn't actually that bad. The problem is systemic. While the market was booming, nobody complained about the second pillar, but the moment things started crashing, everyone suddenly had an issue. To me, the argument that someone lost money in this situation just proves they haven't a clue what's happening around them...

Look, I don't like others overinvesting on my behalf either. Just give me my own money. If I go broke, hey, at least the whiskey was good.

Nicole Collins13 said:He's got a point. It's his money, and he should be allowed to spend it however he damn well pleases. Making these types of funds mandatory is just foolish. If he wants to buy an old steam locomotive and burn fuel with dollars or euros, let him.
Mandatory funds shouldn't exist. If someone wants to save, they should do it their own way. If they don't want to, then they can deal with the consequences later. For those who physically can't save, that's a different issue entirely, which is why Social Security exists.

I've been playing in stocks, commodities, and gold for a long time. I was even messing around with shipping futures before that became a trendy pastime for Americans. Personally, I prefer making my own calls. If I blow it all, so be it. At least I'll know exactly how it happened and who to blame. As long as the game was interesting. 😉

Look, I wasn't expecting much from you—you're talking like a total rookie.
Who exactly decided who gets to choose what???

Before 2000, we only had one single pillar. Just one. It was called the intergenerational solidarity fund. We all contributed via payroll deductions—no questions asked, no voting involved.
With that setup, after 30 or 40 years of working, you'd retire with a pension worth roughly what $700 would buy you today. $267There are plenty of reasons why that math worked, mainly population aging (mortality rates), wars (casualties and displacement), and the ratio of retirees to workers (back in 2001, I think it was about 1:1.34), plus people working under the table to avoid taxes, etc.

Now, we have three pillars. Two are mandatory, and one is voluntary.
Those two mandatory ones work by taking 15% for the first pillar and 5% for the second.

The amount taken out of our paychecks is technically the same, but we really should be seeing a few hundred bucks more.

Nobody was starting threads when the OMF-based funds were doubling in value unrealistically. Now, suddenly, everyone is complaining because they're dropping twice as fast as they should.
And that’s how it’ll go for the next 30 years—up and down, with varying slopes on the curve.

But the bottom line is this: our pensions will still end up being a few hundred dollars higher than if nothing had changed.

Personally, I’d love to have that 5% handed to me so I could manage it myself.
Sure, I might actually outperform my OMF-managed funds, but that’s probably only true for about 1% of the population.
What happens to the other 99%? Some would blow the whole thing on bad investments, some would make a little profit—though likely less than the OMF guys—but I’d bet my life that over 50% of people would just blow that cash on iPhones or cars...
Then, when they hit 60 or 70—assuming they make it that far—how much do you think that threshold will be? They'll be starving on $167 meager pensions, blaming the government and the state for everything, while refusing to take any responsibility themselves.

p.s. I'm definitely not absolving a huge number of incompetent managers of their share of the blame here.

William Mitchell2 said:Look, I wasn't expecting much from you—you're talking like a total rookie.
Who exactly decided who gets to choose what???

Before 2000, we only had one single pillar. Just one. It was called the intergenerational solidarity fund. We all contributed via payroll deductions—no questions asked, no voting involved.
With that setup, after 30 or 40 years of working, you'd retire with a pension worth roughly what $700 would buy you today. $267There are plenty of reasons why that math worked, mainly population aging (mortality rates), wars (casualties and displacement), and the ratio of retirees to workers (back in 2001, I think it was about 1:1.34), plus people working under the table to avoid taxes, etc.

Now, we have three pillars. Two are mandatory, and one is voluntary.
Those two mandatory ones work by taking 15% for the first pillar and 5% for the second.

The amount taken out of our paychecks is technically the same, but we really should be seeing a few hundred bucks more.

Nobody was starting threads when the OMF-based funds were doubling in value unrealistically. Now, suddenly, everyone is complaining because they're dropping twice as fast as they should.
And that’s how it’ll go for the next 30 years—up and down, with varying slopes on the curve.

But the bottom line is this: our pensions will still end up being a few hundred dollars higher than if nothing had changed.

Personally, I’d love to have that 5% handed to me so I could manage it myself.
Sure, I might actually outperform my OMF-managed funds, but that’s probably only true for about 1% of the population.
What happens to the other 99%? Some would blow the whole thing on bad investments, some would make a little profit—though likely less than the OMF guys—but I’d bet my life that over 50% of people would just blow that cash on iPhones or cars...
Then, when they hit 60 or 70—assuming they make it that far—how much do you think that threshold will be? They'll be starving on $167 meager pensions, blaming the government and the state for everything, while refusing to take any responsibility themselves.

p.s. I'm definitely not absolving a huge number of incompetent managers of their share of the blame here.

I agree with the first part—but I can't get behind this idea of what's "real." Something is worth whatever someone is willing to pay for it; that makes both the growth and the crash perfectly real. And these so-called "fundamentals"? They aren't actual foundations—they're just some inductive average from a specific timeframe that shifts constantly throughout history.

But the point remains: our retirement would be a few hundred dollars better than if everything stayed the same.

Not necessarily. If you're lucky enough to hit a global recession right as you retire, you'll face a massive deficit. In America, nobody really talks about how the Baby Boomers' 401(k)s got hammered—but that could easily happen here, too.

I wish they’d just handed me that 5% to manage however I wanted.
I probably could have beaten my OMF returns, but only maybe 1% of people actually could.
What happens to the other 99%? Some would lose everything, some might make a profit—though likely less than the OMFs—and I’d bet over 50% of people would just blow that money on phones and cars...
Then, when they turn 60 or 70—assuming they make it that far—how much will the cost of living have spiked? They'd be starving on their $167 retirement, blaming the government and the state for everything, except themselves.

I unfortunately completely agree with this.

William Mitchell2 said:Look, I wasn't expecting much from you—you're talking like a total rookie.
Who exactly decided who gets to choose what???

Before 2000, we only had one single pillar. Just one. It was called the intergenerational solidarity fund. We all contributed via payroll deductions—no questions asked, no voting involved.
With that setup, after 30 or 40 years of working, you'd retire with a pension worth roughly what $700 would buy you today. $267There are plenty of reasons why that math worked, mainly population aging (mortality rates), wars (casualties and displacement), and the ratio of retirees to workers (back in 2001, I think it was about 1:1.34), plus people working under the table to avoid taxes, etc.

Now, we have three pillars. Two are mandatory, and one is voluntary.
Those two mandatory ones work by taking 15% for the first pillar and 5% for the second.

The amount taken out of our paychecks is technically the same, but we really should be seeing a few hundred bucks more.

Nobody was starting threads when the OMF-based funds were doubling in value unrealistically. Now, suddenly, everyone is complaining because they're dropping twice as fast as they should.
And that’s how it’ll go for the next 30 years—up and down, with varying slopes on the curve.

But the bottom line is this: our pensions will still end up being a few hundred dollars higher than if nothing had changed.

Personally, I’d love to have that 5% handed to me so I could manage it myself.
Sure, I might actually outperform my OMF-managed funds, but that’s probably only true for about 1% of the population.
What happens to the other 99%? Some would blow the whole thing on bad investments, some would make a little profit—though likely less than the OMF guys—but I’d bet my life that over 50% of people would just blow that cash on iPhones or cars...
Then, when they hit 60 or 70—assuming they make it that far—how much do you think that threshold will be? They'll be starving on $167 meager pensions, blaming the government and the state for everything, while refusing to take any responsibility themselves.

p.s. I'm definitely not absolving a huge number of incompetent managers of their share of the blame here.

People should be given the option of a guaranteed pension where the amount is known upfront, even if it ends up being smaller. That’s just game theory, my dear economist. 🙂

It really comes down to two methods: go all-in on one plan, or split it between two. Personally, I’d take nothing at all and just live off rental income, dividends, and my own savings.

driftingstag8 said:Based on everything we've seen, there's a massive chance those funds won't even exist in thirty years.
Forcing someone to hand over money for you to play around with is nothing short of a total shakedown.

Whether I decide to dump my cash into stocks, stack up gold, buy another acre of land every year, or just blow it all on a wild weekend should be entirely my call and nobody else's.

And let's be real, taxes are just another form of theft. Right now, the freest market on Earth is basically Somalia—there are no taxes, but you get to "invest" in some local warlord's militia to keep you safe. At least you get a choice in who you're paying... though if you miss a payment? Well, you're screwed.

granitepilot2 said:And let's be real, taxes are just another form of theft. Right now, the freest market on Earth is basically Somalia—there are no taxes, but you get to "invest" in some local warlord's militia to keep you safe. At least you get a choice in who you're paying... though if you miss a payment? Well, you're screwed.

No, it isn't.

The freest market you'll find right now is in Somalia. There's zero tax, and you get to invest freely in some local warlord's militia for protection. At least you get a choice in who you pay—though if you miss a payment, well, you're screwed.

Las Vegas doesn't have income tax or crime.

Nicole Collins13 said:People should be given the option of a guaranteed pension where the amount is known upfront, even if it ends up being smaller. That’s just game theory, my dear economist. 🙂

It really comes down to two methods: go all-in on one plan, or split it between two. Personally, I’d take nothing at all and just live off rental income, dividends, and my own savings.

🤷
I don't get it.

Fine, I'll be completely blunt and literal here.
If you used to pull in, say, $1667 a salary where $1,000 went to Social Security and you took home $4,000 (I'm exaggerating here, but you get the point).

Now, you still make that same $4,000, but instead of that $1,000 going one way, $750 goes where it always did and $250 shifts over here.

So, how exactly are you getting screwed by this new retirement model? You're probably looking at a few hundred bucks more in your monthly check.

William Mitchell2 said:🤷
I don't get it.

Fine, I'll be completely blunt and literal here.
If you used to pull in, say, $1667 a salary where $1,000 went to Social Security and you took home $4,000 (I'm exaggerating here, but you get the point).

Now, you still make that same $4,000, but instead of that $1,000 going one way, $750 goes where it always did and $250 shifts over here.

So, how exactly are you getting screwed by this new retirement model? You're probably looking at a few hundred bucks more in your monthly check.

I’m concerned about the opportunity cost of my investment, but I’m not talking about my own pocket.

The reality is that some people would rather have a guaranteed check from something like Social Security than chase a higher payout that isn't certain. It’s simple. If a massive recession hits or you deal with an Enron situation right when you’re hitting retirement age, you're stuck. That's just how it is.

Nicole Collins13 said:No, it isn't.

The freest market you'll find right now is in Somalia. There's zero tax, and you get to invest freely in some local warlord's militia for protection. At least you get a choice in who you pay—though if you miss a payment, well, you're screwed.

Las Vegas doesn't have income tax or crime.

Somalia doesn't have any taxes at all.🙂
As for Las Vegas—a pure free market always looks great in places where wages are basically peanuts. You’ve got the Nauru situation too; people live pretty well off phosphate mining, there's zero tax, and by the time the island actually disappears, they won't have a country left—but they'll certainly have the cash.

To me, Somalia is actually more similar to America when it comes to education levels and natural resources compared to Las Vegas or Nauru.😉Unfortunately,😢

Nicole Collins13 said:I’m concerned about the opportunity cost of my investment, but I’m not talking about my own pocket.

The reality is that some people would rather have a guaranteed check from something like Social Security than chase a higher payout that isn't certain. It’s simple. If a massive recession hits or you deal with an Enron situation right when you’re hitting retirement age, you're stuck. That's just how it is.

There isn't a crisis out there where this setup results in a lower value compared to the old-school model. It just doesn't happen.
Unless we're talking about World War III.
But at that point, money won't mean a damn thing anyway.

granitepilot2 said:Somalia doesn't have any taxes at all.🙂
As for Las Vegas—a pure free market always looks great in places where wages are basically peanuts. You’ve got the Nauru situation too; people live pretty well off phosphate mining, there's zero tax, and by the time the island actually disappears, they won't have a country left—but they'll certainly have the cash.

To me, Somalia is actually more similar to America when it comes to education levels and natural resources compared to Las Vegas or Nauru.😉Unfortunately,😢

😂🤣👍
Look, it isn't quite that bleak—but give it about 20 years. We're moving in opposite directions; they're climbing while we're sliding. The lines will probably cross right around 2030.😁

William Mitchell2 said:There isn't a crisis out there where this setup results in a lower value compared to the old-school model. It just doesn't happen.
Unless we're talking about World War III.
But at that point, money won't mean a damn thing anyway.

Yeah, go tell that to the folks at Enron.

But back then, money won't mean anything. It won't be worth a dime.

Why do you think I occasionally stash a gold bar from Canada? 🙂My precioussss...

Nicole Collins13 said:I’m concerned about the opportunity cost of my investment, but I’m not talking about my own pocket.

The reality is that some people would rather have a guaranteed check from something like Social Security than chase a higher payout that isn't certain. It’s simple. If a massive recession hits or you deal with an Enron situation right when you’re hitting retirement age, you're stuck. That's just how it is.

And that’s exactly where the problem lies...
With that kind of investment, the entire first pillar holds all the cash—it's built on intergenerational solidarity—but given all the systemic issues baked into that system, people's money is slowly, but surely, bleeding out.

Nicole Collins13 said:Yeah, go tell that to the folks at Enron.

But back then, money won't mean anything. It won't be worth a dime.

Why do you think I occasionally stash a gold bar from Canada? 🙂My precioussss...

Man, give it a rest—you're just talking nonsense...😁👍
Those bars won't mean much to you—maybe to your grandkids, if you're lucky.🤷

granitepilot2 said:Somalia doesn't have any taxes at all.🙂
As for Las Vegas—a pure free market always looks great in places where wages are basically peanuts. You’ve got the Nauru situation too; people live pretty well off phosphate mining, there's zero tax, and by the time the island actually disappears, they won't have a country left—but they'll certainly have the cash.

To me, Somalia is actually more similar to America when it comes to education levels and natural resources compared to Las Vegas or Nauru.😉Unfortunately,😢

You clearly haven't set foot in Somalia.
I have, just like I've been all over Africa, the Middle East, and even Las Vegas
And every single time, I found myself loving those places the moment I stepped back home.
So it’s not even funny.
At least not to anyone who has actually been down there.

William Mitchell2 said:Man, give it a rest—you're just talking nonsense...😁👍
Those bars won't mean much to you—maybe to your grandkids, if you're lucky.🤷

I don't know. It's grown quite a bit so far, and moderate growth should continue long enough to outpace inflation. I'm not buying into digital gold currencies, but that's an off-topic tangent anyway.

Nicole Collins13 said:I don't know. It's grown quite a bit so far, and moderate growth should continue long enough to outpace inflation. I'm not buying into digital gold currencies, but that's an off-topic tangent anyway.

👍
That’s just a counter-reaction—people are panicking and piling into gold... stocks are weak, so gold climbs...
When stocks were ripping, gold just sat there.

It's basic supply and demand.
Timing the mix of both is where the money is made.

That's how you get those "fake" managers making themselves look smart.😁

driftingstag8 said:You clearly haven't set foot in Somalia.
I have, just like I've been all over Africa, the Middle East, and even Las Vegas
And every single time, I found myself loving those places the moment I stepped back home.
So it’s not even funny.
At least not to anyone who has actually been down there.

Look, we're talking about Somalia, not all of Africa—fine, I'm generalizing. But the point is, Las Vegas already has the wealth and the oil to turn into a tax haven, whereas we just have a bunch of uneducated idiots who think they're somehow smarter than Americans because they watch some YouTube morons who can't tell the difference between Australia and Iran. We don't have mineral wealth; our only real resource is a nice coastline.

granitepilot2 said:Look, we're talking about Somalia, not all of Africa—fine, I'm generalizing. But the point is, Las Vegas already has the wealth and the oil to turn into a tax haven, whereas we just have a bunch of uneducated idiots who think they're somehow smarter than Americans because they watch some YouTube morons who can't tell the difference between Australia and Iran. We don't have mineral wealth; our only real resource is a nice coastline.

🙂, but anyway, let's not get off track.