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Yes, Chile's Private Pension Model Works, Big Time
IBD ^ | 09/27/2013

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 ...


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Editorial; News/Current Events
KEYWORDS: chile; pension; socialsecurity

1 posted on 09/27/2013 10:02:36 AM PDT by SeekAndFind
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To: SeekAndFind

“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.


2 posted on 09/27/2013 10:05:17 AM PDT by kearnyirish2 (The talking heads have admitted is economic war against white males (and therefore white families).)
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To: SeekAndFind

3 posted on 09/27/2013 10:06:00 AM PDT by SeekAndFind
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To: kearnyirish2
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.

4 posted on 09/27/2013 10:08:13 AM PDT by Bloody Sam Roberts (So Obama "inherited" a mess? Firemen "inherit" messes too. Ever see one put gasoline on it?)
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To: kearnyirish2
We have something similar to the Chilean Model in Galveston, Texas.

Several thousand employees of Galveston County, Texas were allowed to opt out of the Social Security program in the early 1980s, and have their money placed in a private retirement plan instead. While employees who earned $50,000 per year would have collected $1,302 per month in Social Security benefits, the private plan paid them $6,843 per month :


5 posted on 09/27/2013 10:09:54 AM PDT by SeekAndFind
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To: kearnyirish2

It won’t work in the US because politicians will see a new pot of money and take it.


6 posted on 09/27/2013 10:11:41 AM PDT by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: Bloody Sam Roberts

“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.


7 posted on 09/27/2013 10:13:46 AM PDT by RFEngineer
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To: SeekAndFind

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.


8 posted on 09/27/2013 10:15:50 AM PDT by kearnyirish2 (The talking heads have admitted is economic war against white males (and therefore white families).)
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To: xzins

“It won’t 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.


9 posted on 09/27/2013 10:16:33 AM PDT by kearnyirish2 (The talking heads have admitted is economic war against white males (and therefore white families).)
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To: kearnyirish2

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.


10 posted on 09/27/2013 10:23:49 AM PDT by pepsionice
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To: kearnyirish2

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.


11 posted on 09/27/2013 10:24:57 AM PDT by cumbo78
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To: pepsionice

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”.


12 posted on 09/27/2013 10:27:58 AM PDT by kearnyirish2 (The talking heads have admitted is economic war against white males (and therefore white families).)
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To: cumbo78

“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).


13 posted on 09/27/2013 10:29:57 AM PDT by kearnyirish2 (The talking heads have admitted is economic war against white males (and therefore white families).)
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To: kearnyirish2
Can't never could. Sounds like you gave up before even trying to fight.

/johnny

14 posted on 09/27/2013 10:39:20 AM PDT by JRandomFreeper (Gone Galt)
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To: JRandomFreeper

“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?


15 posted on 09/27/2013 10:40:43 AM PDT by kearnyirish2 (The talking heads have admitted is economic war against white males (and therefore white families).)
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To: kearnyirish2
Everyone has excuses why something can't work.

/johnny

16 posted on 09/27/2013 10:58:36 AM PDT by JRandomFreeper (Gone Galt)
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To: SeekAndFind

bump


17 posted on 09/27/2013 11:02:03 AM PDT by WashingtonSource
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To: cumbo78

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.


18 posted on 09/27/2013 12:02:16 PM PDT by SeekAndFind
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To: SeekAndFind
I'm wondering what effect privatizing Social Security would have on the markets? It seems to me the additional capital locked into non-trading blocs would have a long-term stabilizing effect. Anybody know?
19 posted on 09/27/2013 12:06:14 PM PDT by Brad from Tennessee (A politician can't give you anything he hasn't first stolen from you.)
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To: kearnyirish2

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.

401Ks suck.


20 posted on 09/27/2013 12:13:56 PM PDT by Sequoyah101
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To: SeekAndFind

Colombia has a similar system. The “maids” assoc. owns natural gas plants, hospitals, resorts and so on...they are doing VERY WELL!


21 posted on 09/27/2013 12:24:35 PM PDT by rrrod (at home in Medellin Colombia)
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To: JRandomFreeper

“Everyone has excuses why something can’t work.”

Nobody complained here when FReepers illustrated how ObamaCare couldn’t work...


22 posted on 09/27/2013 12:32:35 PM PDT by kearnyirish2 (The talking heads have admitted is economic war against white males (and therefore white families).)
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To: Abathar; Abcdefg; Abram; Abundy; albertp; Alexander Rubin; Allosaurs_r_us; amchugh; ...
We should be ashamed as a country that we did not LEAD here. Instead, we get Uncle Scam. We should at least follow, and try to improve even.



Libertarian ping! Click here to get added or here to be removed or post a message here!

23 posted on 09/27/2013 3:54:29 PM PDT by bamahead (Few men desire liberty; most men wish only for a just master. -- Sallust)
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To: bamahead

bump


24 posted on 09/27/2013 4:02:31 PM PDT by GeronL
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To: SeekAndFind

As a Dave Ramsey listener, I have heard him run an analysis several times. My numbers might be slightly off, but they are relatively accurate for the principles of the discussion.

If a person is stuck for their entire working career at minimum wage, they will have 13% confiscated for SSIP (and Medicare.) Never mind that they would have to be a terrible worker and overall loser to be at minimum wage for 40 years.....If they were to invest that amount in a Growth Mutual Fund retirement account, they would have accumulated about $3M in a retirement fund. This would net them a monthly income of about $10K a month after retirement.

Yet, people fight like mad to prevent that very scenario, so that they can receive their pitiful $1K a month from their government overlords!

SSIP is a purely evil plan!


25 posted on 09/30/2013 8:06:20 AM PDT by CSM (Keeper of the Dave Ramsey Ping list. FReepmail me if you want your beeber stuned.)
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To: kearnyirish2

That can change quickly. Europe had the same problem, then America was born.


26 posted on 10/06/2013 6:41:14 AM PDT by 1010RD (First, Do No Harm)
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