Skip to comments.Yes, Chile's Private Pension Model Works, Big Time
Posted on 09/27/2013 10:02:36 AM PDT by SeekAndFind
Pensions: In Chile, a major study shows the nation's private retirement accounts provide workers pensions worth 87% of their salaries, 73% of that from profits on savings. So much for the canard about the perils of markets.
The story was front-page news in Chile's largest newspapers, El Mercurio and La Tercera, on Sept. 3, a powerful affirmation of what former Republican presidential candidates Newt Gingrich and Herman Cain called "The Chilean Model" of private retirement accounts.
The study of 28,000 households by Dictuc, a consultancy affiliated with the Catholic University of Chile, showed that male workers who contributed just 10% of their salaries to their retirements for 10 years or more on average earned retirement checks worth about 87% of their top salaries. No 401(k) account needed.
That's because in 1981 Chile Labor Minister Jose Pinera replaced the country's bankrupt social security system with this famous system of private accounts.
(Excerpt) Read more at news.investors.com ...
“In Chile, a major study shows the nation’s private retirement accounts provide workers pensions worth 87% of their salaries, 73% of that from profits on savings.”
Culturally this is impossible in the US; we have a whole swath of our population that won’t work and/or save. In the end the ants will still have to feed the grasshoppers.
Not this ant. I intend to pull the legs off the grasshoppers one at a time.
It won’t work in the US because politicians will see a new pot of money and take it.
“Not this ant. I intend to pull the legs off the grasshoppers one at a time.”
A large number of these grasshoppers are on this very forum.
Nice; it works because it is closed to the general public (you don’t have to support grasshoppers). I know some cops that don’t participate in SS as well; good for them.
“It wont work in the US because politicians will see a new pot of money and take it.”
That’s right; they’ll keep some and give some to the grasshoppers.
There are three problems with us going to it.
1. Yeah, there’s around twenty million Americans who depend on social security entirely, and basically have a check for $700 a month, which just gets them to a half-way marginal lifestyle. The fed guys don’t want to admit it, but these folks are screwed completely, and are in survival status with that marginal check.
2. You can’t find a single senator who will go into a forum and debate the merit of staying with social security or going to a private pension. None of them are bright enough or competent enough to debate it...either way. They depend on lobbyists to guide their votes.
3. Finally, you really need to think long-haul if you go to a private pension. That means you, the private guy, accept one recession every eight years, and plan to just live with it. Most folks aren’t that capable, if you ask me.
I’ve enjoyed the IRA deal, and the gov’t TSP deal. In fifteen years....I’ve grown zero to $160,000. No, I didn’t go ultra risk...I just simply played better odds only. I think any guy, with some decent understanding, can do as good a job as some Wall Street joker.
Two years ago, then Cong. Thad McCotter introduced the SAVE SOCIAL SECURITY ACT that he and Peter Ferrara came up with. Based somewhat on the Chilean model, it save Social Security without raising the retirement age, raising the withholding tax, lowering the benefit or privatizing the system. It went NOWHERE because the Federal Government managed the PERSONAL accounts but could not TOUCH them.
Good points; many on pensions are getting screwed as well since the gov’t. under-reports inflation to temper COLA increases for both. Somehow just about everything has gone up in price (except the nest-egg homes that retirees needed to appreciate), and the news gleefully trumpets “Thankfully we don’t have inflation”.
“Based somewhat on the Chilean model, it save Social Security without raising the retirement age, raising the withholding tax, lowering the benefit or privatizing the system.”
So instead we get higher retirement age, raised withholding taxes (by increasing the threshold at which somebody doesn’t need to pay into it) and lower benefits (via unacknowledged inflation).
“Can’t never could. Sounds like you gave up before even trying to fight.”
I’d love to give it a try; how many of Chile’s people haven’t worked in five generations?
RE: It went NOWHERE because the Federal Government managed the PERSONAL accounts but could not TOUCH them.
That was two years ago. Obama was and still is President and Senate was and still is controlled by Democrats.
We need this bill to be re-introduced if ( God willing ) the Dems are voted out of office.
This is exactly how a pension savings plan is supposed to work.
It doesn’t work this way here because wall street, investment advisors and such are all feeding at the trough of our savings and hard work.