$5 billion budget boost for pensions

The noise surrounding retiree benefits is starting to ramp up, and we're essentially missing about a third of the funding—roughly $12 billion—needed to cover pensions.

Based on current payout levels, we're looking at an annual requirement of about €5 billion, though we could realistically trim that down to

around €3.5 billion with just a few policy adjustments; that would satisfy the requirements while keeping everyone happy.

Furthermore, I don't see the logic behind all this drama regarding early retirement and that infamous 20% penalty.

Isn't it enough that someone retires five years early and naturally ends up with a smaller check than if they had stayed until full age, without being slapped with an additional deduction on top of that?!

On the flip side, those who wait for full retirement end up benefiting from higher payouts, effectively subsidized by those who get penalized.

In my opinion, creating such massive disparities simply doesn't make sense.

It seems most equitable to phase out early retirement altogether; given the current economic climate, calculations should be based strictly on years of service and total contributions.

A complete overhaul of the pension system is necessary because the current situation is becoming absurd, especially since many companies are abusing early retirement schemes just to clear out excess staff.

The answer is pretty straightforward: there just isn't any money for this. Funding retirement isn't free—we’re looking at an ever-growing pool of retirees while the actual workforce keeps shrinking. Is that even sustainable? I highly doubt it.
And calling it "only" $12 billion... To pull together "just" $12 billion, we’d have to levy $233 from every single worker in the US every month. That’s roughly $233 per person.

When they were rolling out the pension reforms, why didn't they just set up a system—at least for new hires—where you actually contribute to your own fund, similar to how life insurance works? It feels like right now, you’re just paying into a void without any real idea what you'll actually have waiting for you when you retire.😠

And what about the people who actually put their money in, only to find the fund is empty? I believe Chile privatized their pension system—we really ought to take a closer look at how they structured that transition.

Andrew Booth29 said:And what about the people who actually put their money in, only to find the fund is empty? I believe Chile privatized their pension system—we really ought to take a closer look at how they structured that transition.

It honestly feels like we've already tried to mimic that model, you know, with all that talk about the first and second pillars and everything else.

And there isn't exactly a wealth of profound wisdom to be found here... You have two pillars, right? By letting those from the old system die out, you’re essentially just shifting the weight—increasing the share of the second pillar while shrinking the first. It's a numbers game. Give it thirty years, and maybe you'll be fine.

Taylor Sanchez10 said:The noise surrounding retiree benefits is starting to ramp up, and we're essentially missing about a third of the funding—roughly $12 billion—needed to cover pensions.

Based on current payout levels, we're looking at an annual requirement of about €5 billion, though we could realistically trim that down to

around €3.5 billion with just a few policy adjustments; that would satisfy the requirements while keeping everyone happy.

Furthermore, I don't see the logic behind all this drama regarding early retirement and that infamous 20% penalty.

Isn't it enough that someone retires five years early and naturally ends up with a smaller check than if they had stayed until full age, without being slapped with an additional deduction on top of that?!

On the flip side, those who wait for full retirement end up benefiting from higher payouts, effectively subsidized by those who get penalized.

In my opinion, creating such massive disparities simply doesn't make sense.

It seems most equitable to phase out early retirement altogether; given the current economic climate, calculations should be based strictly on years of service and total contributions.

A complete overhaul of the pension system is necessary because the current situation is becoming absurd, especially since many companies are abusing early retirement schemes just to clear out excess staff.

Oh, there is definitely a difference. A person working five extra years produces value for five more years, whereas a retiree is mostly consuming resources during that same time. It seems like in the US, people sometimes forget that work exists to create products and services, rather than just being a way to collect a paycheck.

Look, the issue with the economy here in the States isn't really about figuring out what to build or how to innovate—it’s more about deciding who to squeeze for a handout so nobody actually has to break a sweat. 🤣
It is pure rent-seeking,
pushed to a level that is frankly absurd.

Andrew Booth29 said:And there isn't exactly a wealth of profound wisdom to be found here... You have two pillars, right? By letting those from the old system die out, you’re essentially just shifting the weight—increasing the share of the second pillar while shrinking the first. It's a numbers game. Give it thirty years, and maybe you'll be fine.

Oh, sure, because calling that a thirty-year fix is being incredibly, wildly optimistic.

Everyone is freaking out about aging populations—especially over in Europe—where people are spending more and more of their lives in retirement... and instead of actually fixing things, our "geniuses" decided to handle factory bankruptcies by basically shoving thirty-year-olds into early retirement. It’s like trying to patch a sinking ship by throwing the crew overboard to lighten the load.🤦

There is absolutely zero chance we dig ourselves out of this absolute dumpster fire in thirty years.😁

I’m all for penalizing early retirement when it isn't actually required by the job. Let’s be real—there are plenty of roles that a 60-year-old just can't handle physically, but that's not the issue here. I know a woman who works at Duke Energy; she’s 56 and already eyeing retirement simply because she doesn't feel like putting in the effort anymore. It's not that she *can't* do the work, she just won't. Honestly, I think those people should face much tougher consequences than they currently do.
What worries me—and I realize this is coming from my own perspective—is what comes next. The new reforms aim to incentivize people to stay on the job past 65. Fortunately (or unfortunately), I work in academia. I started with an Associate's, moved up to a Bachelor's, and I'll have my Master's next year—all while working myself to the bone to study. Realistically, I have zero chance of moving up the ladder. My pay is still stuck at an entry-level rate despite me performing high-level work for the last three years. Why? Because there are three women nearing retirement age—63 and 64—who are occupying the exact positions we need to move into, and they've already made it clear they aren't going anywhere. And why would they? They're pulling in about $2333 in salary, doing absolutely nothing, and taking sick days or vacation whenever they feel like it. Meanwhile, there's constant, justified criticism about how useless the public sector is and how much of a burden it places on the private sector. If this reform goes through, things are only going to get worse. Younger professionals won't be able to break into the field, let alone advance or actually change things for the better in the future. Because these old ladies simply refuse to retire 😠

Just so we can put things into some actual perspective—for those of you tossing around phrases like "it's just 12 billion dollars" and whatnot—let's look at the math. Total annual net wages in the US sit somewhere around $3.5 trillion. Now, the actual amount being paid out is likely higher if you account for everything happening under the table, but I’m just trying to provide a baseline here. It’s worth considering how much income you’d actually have to extract from the population just to scrape together "only" 12 billion.

If we're looking at $100 billion in net take-home pay for off-the-books work, I guess you could wonder what the total money supply would be in dollars once you factor in all the government collections like payroll taxes, healthcare, and various levies.

Andrew Booth29 said:And there isn't exactly a wealth of profound wisdom to be found here... You have two pillars, right? By letting those from the old system die out, you’re essentially just shifting the weight—increasing the share of the second pillar while shrinking the first. It's a numbers game. Give it thirty years, and maybe you'll be fine.

If they actually reformed veteran pensions and cut those massive payouts—which applies to Congressional pensions too—we could hit that stability goal much sooner. Come to think of it, the military owns a ton of real estate; if they sold or leased some of that property, they could probably fund those veteran benefits directly.🤔

If you go ahead and liquidate every scrap of military hardware we own, you aren't going to have a single cent left to fund veterans' benefits next year—not with everything going on right now. 😬
You’re basically tossing a can down the street just hoping it rolls back to you next year. But what exactly are you planning to sell once the cupboards are bare? I suspect the answer is "nothing." Look, I'll admit—and this is a separate issue entirely—there is zero sense in the government sitting on massive piles of assets that just gather dust, but that's a whole different conversation.

I figured renting it out was an option too, whatever makes sense 😉
btw, does anyone have a ballpark figure on how much military hardware actually costs these days?

I honestly haven't the slightest clue... It’s a tough one to call, even if you actually had the full list in front of you. I don't see them going after military pensions with a full-blown audit—that just isn't happening. Instead, they'll likely just aim to trim them down bit by bit. Let's be real: the pushback against a direct audit would be far too intense to handle. If my memory serves me right—and it usually does—wasn't that exactly how things played out recently?

What makes you think selling off military hardware would only cover us for a single year? 🤷 We have assets right on the coast that are worth their weight in gold.
I agree it probably wouldn't last forever, but it could still shave a good chunk off those 30 years... plus, we could always look into leasing or concessions.

Looking for buyers... Let's be honest—the domestic market just can't absorb any significant capital right now, and foreign investors? They're mostly sitting this one out. I think everyone is wildly overestimating the value of coastal real estate. In a place like California, you might have scarcity issues, but here? Coastal land is practically an unlimited resource.

He owns land, but it’s zoned for agriculture, so it’s basically worthless. If it were actually zoned for residential use, nobody would even need to work—we could all just retire on a federal pension 🙂 (and probably live pretty well too)

Right now, pensions are costing us roughly 5 billion Euro. If you wanted to generate a 5 billion Euro annual return from an investment, your net profit—not counting the return itself—would have to exceed that amount, wouldn't it? It seems highly unlikely that anyone could run a tourism business with a net profit margin north of 5%, if they can even hit that mark at all... To justify a return of that scale, total tourism revenue in the States would need to hit somewhere around 100 billion Euro, assuming that slim 5% margin (and even then, there’d be nothing left for the investors, who still need to recoup their initial capital and actually turn a profit). Roughly speaking, we'd need about twenty to thirty million tourists flooding in every summer just to make the math work. 🤣