The company you work for will give X% of your salary each month to Willis Towers Watson or whoever, who invest huge sums of money on behalf of people like you.
Then you move jobs or the start-up fails or whatever, but your old money is still with Towers Watson, hopefully earning a decent return. You contribute to a pension in your new job too.
When it comes to retiring, you cash in your contributions from the pension fund (possibly having done some amalgamating and tidying up from the various jobs you've had) for some class of annuity and possibly a lump sum. All going well, it should be enough to live on in retirement.
If you're working and aren't contributing to a pension, I would strongly recommend it.
The state. Is our physical economy not capable of taking care of old people?
The monetary economy and real economy are less delinked than the populists think, but sometimes....c'mon people. If we can't pay for our old people what does that mean? Saving the money for later is an abstraction, we are not literally stockpiling canned food and adult diapers.
Ultimately if there is is a problem taking care of retirees, it is because we continue to let this ridiculous healthcare system exist. And honestly, I am not sure that is actually a limiting factor, or just a stupidity.
Frankly, as a huge net importer there are very few clear material limits --- port of LA problems have more to do with rate of change or imports than absolute amount. China, Germany, S. Korea, etc. could just stop exporting to us and all hell would break loose here, but it would be pretty weird there too.
Back to retirees. Let's not beancount our way to poverty. To paraphrase Keynes, if we can do it, we can afford it. On the flip side, if don't do it, then we will loose what capacity we had in that area.
If only there were some sort of entity "above" corporations that governed, in some sort of way. They could provide security for society. Nope, that could never work.
Government is not a magic box that just solves problems. It is full of people who are just as flawed and selfish and short-sighted as those running corporations. Look no further than the gaping fiscal hole that is Social Security for evidence of government’s ability to “provide security for society”.
Yep. If you pay very close attention, research, move things when necessary, etc. That's either a cool hobby or a second job.
Here's the thing, most humans find it less than scintillating to devolve ALL their activities to some sort of spreadsheet or algo optimization. World of Warcraft is fun for most until the end-game where discovery and imagination is ripped away and all that is left is actuarial tables and dice rolls.
The social contract between WesternCorp™ and their employees that involved a pension (or, conversely, through a Union), was an unfortunately brief period of history fueled by the tragedy of WWII (this is naturally an incredibly deep topic with many nuances that I'm shamelessly glossing over).
My humble and super-simplified opinion is that the PTSD of WWI fueled the subsequent Great Depression (Versailles, etc.), allowed the build-up to the global cataclysm of WWII, and when the emergent Super Powers were two complete divergent theories of government who had both been surprise attacked just a few years previous...there might be some feels.
Not being an economist, the small-S socialism that created the foundation coming out of the Depression which allowed the US to be the "arsenal of democracy" was slowly eroded by the worst excesses of capitalism, increasingly allowed and then accepted as normal because to protest would be to side with "them". Drunk on the irrational profits from WWII and the hyper-growth of the early post-war years, "Us vs. Them" of the Cold War was good business AND good patriotic politics. When you start to think those irrational margins are the norm, and they start to shrink, you do what you think is required to keep them aloft. With that mindset, sustaining a pension fund for a workforce that is decades out of employment can hardly be thought of as something that is increasing shareholder value (there was a time when a lot of the shareholders were also employees).
To be a savvy investor in the stock market requires both attention and treasure. The partnership between business and employee, always contentious (good!), during the Pax Americana emerged from innovation by firms like Kaiser, the G.I. bill mentality and the Marshall Plan. It ended with us recklessly dunking on a broken Russia for 15 years while "maximizing shareholder value" and ignoring the implications. The US dollar is now pegged to the value of our military to back it (rather than the intrinsic value of our production), which means we spend stupid amounts of blood and treasure while backsliding on the principles that built the Pax Americana to begin with.
At the end of the day, why should it be necessary for a citizen of the most dominant power in human history to toil their whole lives without some well-intentioned guidance and support so that it doesn't end in misery?
> World of Warcraft is fun for most until the end-game where discovery and imagination is ripped away and all that is left is actuarial tables and dice rolls.
You’re overstating the difficulty of investing for retirement. A simple Vanguard target date fund is all you need. Set up a monthly automatic contribution and that’s it. More control is possible but not necessary for decent returns.
most humans find it less than scintillating to devolve ALL their activities to some sort of spreadsheet or algo optimization.
Happy to be the exception that proves the rule: as an undergrad my friends and I would often have to resort to a spreadsheet that allowed anonymous ranking of activities to decide what to do to maximize fun.
