Nice chartporn from Kiplingers as to why most Americans will be eating Purina Cat Chow int heir golden years:

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http://www.kiplinger.com/tools/retirement-cost/

Category: Digital Media, Investing

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

52 Responses to “ChartPorn: Cost of Retirement”

  1. mbelardes says:

    When I started in “financial planning” fresh out of college in 2005 I would become extremely frustrated at how many people didn’t save for anything. (I almost limited the statement to retirement).

    I was young and with a low end firm so most of the people I’d meet with had earnings between $50,000-$100,000 for the household. Understood the need for saving for stuff like college for the kids and retirement but absolutely refused to do it unless your really pushed a hard sell. I got sick of having to fight with people to realize that rather than lease two BMWs to impress the neighbors they hate, they should be sacking away money into a 529 and IRA.

    Granted, this was in Orange County California where everyone lives (lived) the high life on borrowed funds, but I can’t imagine it’s much different elsewhere, using the past savings rate as a main data point.

    Now at a known firm, I can see the major difference between the folks I describe above that will struggle as the chart shows and the executives we manage money for that have been smart with their money and saved, even through downturn.

    Not sure if privatizing social security is a good idea, but we do need some sort of additional forced personal savings account for the masses. People would be against that but it seems the likely result is they will later be forced to continue working. What is worse?

    One thing to add is that the above stats may have some serious long term consequences for my generation (I was born in 1983). The unemployment rate among young people graduating from school is a lot higher than the 9.7% national average. I haven’t conducted any sort of data driven study, but I would imagine the erosion of personal retirement along with the downturn in housing will keep many people from retiring, causing less jobs to fill, causing issues for young entrants to the work force. Sure they can accept lower pay, but with student loans to repay and the cost of living still being high, the lower pay with higher expenses is a long term problem.

  2. TexDenim says:

    The $1,000,000 figure is way too high I think, even by the most conservative estimates. Kiplinger has a 1950s view of the world.

  3. patient renter says:

    Tex: You neglect to detail exactly how it is too high. I do not think it is.

  4. Fredex says:

    No cat chow for me. I like fresh meat. I’ll eat your cat.

  5. johnhaskell says:

    The “How Much Does It Cost to Retire” chart is a complete mess. Apparently it is scaled so as to make it appear as if you needed about the same amount of money in each period in order to retire, when of course the reality is far different. Note for example that the distance between 75k and 100k is the same as the distance between 100k and 500k …?!

  6. drocto says:

    Great post mbelardes.

    TexDenim: Care to elaborate? Show us your numbers. Are you familiar with the annuity formula? Care to use it and plug in expected REAL AFTER-TAX rates of return?

    Anyone expecting REAL rates of return during retirement above low single digits is delusional. Disagree? Well then show me how everyone is going to earn real rates of return above real GDP growth?

  7. Winston Munn says:

    Who can actually afford a name brand cat food?

  8. jbforbes says:

    The real elephant in the room here is the ridiculously low rates being paid on fixed income investments, which retirees rely on to generate income. The Fed is punishing savers and retirees by holding interest rates so low. Guess what – redo that chart at 10% interest, and you only need $400,000 instead of a million!

    My money market fund is currently paying less than 1%, and muni bonds are now in low single digits. Meanwhile, the banks are borrowing (our) money from the Fed via the TARP program for zero percent, and turning around and charging taxpayers 14% interest on their credit cards! No wonder that they aren’t lending money to small businesses – why should they? I wish the savers like me could get some of that nice free TARP money….

    FYI – I am retired on less then $1M, and am now living most of the year in Costa Rica. Interest rates here are closer to 15%, so I am living very comfortably off my savings. We need to recognize that our current government policies are part of what is making it so hard to retire in the US, even if you have been contributing a considerable amount to your 401K.

  9. constantnormal says:

    Kind of a deceptive chart … applicable ONLY if one is generating their entire retirement income from savings (as in IRA/401K). But that is rarely the case, as most people (at least for a little while longer) will be able to get something out of Social Security (a damn sight less than they put in, to be sure, but then Social Security never has been a savings plan — it is instead and always has been — a literal Ponzi scheme, dependent upon new contributors to pay the benefits of existing retirees), and again most people will have some meager pension income, despite the severe whackage that corporations have delivered to their pension plans in the past several decades (at least the employee pensions, executive pensions remain robust).

    Instead of looking first at how much you need to save, I think it is much better to try and estimate how much income you will require, then set about building some sort of financial scheme to deliver that income. And as for the amount needed to live on in retirement, I can tell you to expect to spend AT LEAST as much as you were spending when you were working. That old canard about needing less money to live on in retirement is bunk, having been shattered by rising taxes, soaring health care expenses, and a general unpredictability about the future. This may not apply to the uppermost 1%, but they already have their retirement covered, courtesy of a societal money pump that has operated for many decades, delivering a sizable advantage to the wealthy over those less fortunate.

    And as you are constructing your personal models of where your income will arrive from, you may as well steer toward the safe side, and omit Social Security, as about the only remaining approach to preserve that system is to implement later retirement ages, and tax the bejesus out of any individual savings you have managed to accrue.

    And in your retirement planning, don’t forget to consider spending your retirement outside the USofA, in some nation with a working health care system, that doesn’t tax you to death, and has a considerably lower cost of living. Such places exist.

  10. wunsacon says:

    >> This may not apply to the uppermost 1%, but they already have their retirement covered, courtesy of a societal money pump that has operated for many decades, delivering a sizable advantage to the wealthy over those less fortunate.

    ’tis the *original* “constant normal”??

  11. gorobei says:

    With 30 year TIPS yielding 1.8%, you can pretty much give up on the financial planners that talk about “average 8% growth” or whatever. The current world is not constrained by a lack of capital, so don’t expect excess returns because you have $100K to offer for the long term: we arbed that out years ago, and the move to IRAs, etc, was a one-time boost.

    So, you have 50 years (age 20-70) of work to support yourself for 20 years (70-90.) You should be saving around 30% (call Social Security 13%, so please sock away 17% extra per annum.)

    Feel free to adjust if you are in a special situation, e.g. real income growth potential (most people do not.)

  12. marka says:

    I need to save 15% of my pay in order to be comfotable? that seems really high

  13. constantnormal says:

    @wunsacon

    Is there another?

  14. constantnormal says:

    Another thing that strikes me as nonsensical is the assumption in the chart that people will be able to postpone retirement indefinitely. At some point, the inability of the senior employees to change with the business, and learn new ways of doing their jobs (which can be counted on to change radically), will push them out the door into a retirement they are not prepared for, or into a pointless and fruitless quest for minimum wage work, competing with high school kids and illegal aliens.

  15. CitizenWhy says:

    I wonder about the numbers in this scheme. My retirement savings (at 67) shriveled to a piddling $175,000. This gives me a guaranteed minimum of nearly $10,000 per year (higher this year). I get a much higher amount from Social Security. If I play things right I pay no taxes. I have no work expenses, like suits. So my take home income is pretty good, especially since I moved to a nice, big, cheap apartment in a nice minority-majority neighborhood that is gentrification-resistant. And I have no car, with the pubic bus stopping at my door. I do not use prescription drugs but buy certain supplements. I live very modestly but can afford events in the arts, eating out often enough, small luxuries, a gym membership. I never owned a house.

    I am the poor relation but I get along fine. I’d much rather live in my neighborhood than in “prestigious” neighborhoods. People can live more modestly, and better, than they think. Keep things simple.

  16. CitizenWhy says:

    Clarification: My portfolio is now worth about $225,000 so I get more than $10,000. But I am guaranteed nearly $10,000. With the boost in income I will probably have to pay taxes so I may not have gained any real income.

  17. gorobei says:

    marka,

    yes. 15% at the least.

    That’s 1/6th of your income. Like, 5 years of work will cover you for 1 year after you stop working (at the same consumption level.)

  18. CitizenWhy says:

    Another clarification: I am learning to speak Spanish. If need be, Costa Rica here I come.

  19. RW says:

    The living solely on savings AKA million bucks model is simple minded and probably not a good fit for most people or at least those who would consider being sent out to pasture rather tedious.

    For example, accepting the 4% drawdown figure for the moment (not unreasonable), it’s obvious that earning $1000 bucks a month from any other source — part-time work, hobby, eBay, etc. — means you would only need $700,000 in savings to make the same monthly $ nut a million bucks would generate (12,000/yr = 300,000 x 4%).

    If you can reliably (and pleasurably) earn money going forward and have accumulated an adequate disaster fund — major medical, inability to work, go to hell money, that kind of thing — then fretting about how far away you are from a net-worth of a million bucks doesn’t make much sense; it’s not the model you are following.

  20. wunsacon says:

    >> May 30th, 2010 at 8:40 pm … My retirement savings (at 67) shriveled to a piddling $175,000.
    >> May 30th, 2010 at 8:43 pm … My portfolio is now worth about $225,000.

    In just 3 minutes?? That’s the best ROI I’ve seen in my life!

  21. No BS says:

    constantnormal Says:
    May 30th, 2010 at 7:23 pm

    Kind of a deceptive chart … applicable ONLY if one is generating their entire retirement income from savings (as in IRA/401K). But that is rarely the case, as most people (at least for a little while longer) will be able to get something out of Social Security (a damn sight less than they put in, to be sure, but then Social Security never has been a savings plan — it is instead and always has been — a literal Ponzi scheme, dependent upon new contributors to pay the benefits of existing retirees), and again most people will have some meager pension income, despite the severe whackage that corporations have delivered to their pension plans in the past several decades (at least the employee pensions, executive pensions remain robust).
    ————————————————

    Thanks for the wisdom….. and that’s why you are the original and there’s no other……

    Another thing that strikes to me is that aging population will be healthy indefinitely and can keep on working forever (we are kicking the can down forever). And the $1 MM nest egg looks too small to me because we we really believe the CPI numbers are reliable…. and that 4% return will be sufficient forever.

    I think this downturn is definitely making people rethink their lives. People have very little confidence in the markets and are scared (blaming the flash trade or whatever) of playing the markets.

    I think this is good news for BR as people are looking for credible Financial Planner’s with credibility. I thank you for keeping the dialogue going on this blog…………..

  22. Tarkus says:

    I think it is a misnomer to use the word “Save” anymore. What they really mean is “Are you INVESTING properly for retirement?” With rates so low on saving accounts, the Fed is basically forcing you to seek risk just try and maintain parity (“try”, as all investments will entail some risk of loss). Also, the hidden tax of inflation is an incentive to spend now before it is worth less (a “savings” disincentive). It is a treadmill that continues to speed up, and according to Wall St, you must also now become a good, knowledgeable financial analyst because they do not provide good advice (translation – you must do whatever job you happen to be doing, AND do their job better than they do – for yourself).

  23. No BS says:

    I think this is good news for BR as people are looking for credible Financial Planner’s with credibility. I thank you for keeping the dialogue going on this blog…………..
    ——————————————————————————————

    I have to correct myself………people are looking for credible Financial Planner’s …… or…………Financial Planner’s with credibility……

    fast finger’s and a couple of cold ones will do that to you.

  24. franklin411 says:

    I wonder if this chart takes the difference in life expectancy into account. People live about 15 or 20 years longer now than they did in the 1920s. This means that the people who made it to retirement in the 1920s either died quickly or they had really good genes (meaning they had low medical costs in retirement).

    Today, people live longer and having a few bad genes isn’t automatically a death sentence, meaning that medical costs are higher.

  25. mathman says:

    As if we’ll even make it to “retirement” the way the world is spinning out of control on so many fronts.
    We are completely not ready as a species for the epic devolution we’re just at the beginning of with no clue of how to stop or even avoid. Every day we just keep pretending this big lie, this huge global facade called “civilization”, not realizing (or believing) that it’s unwinding and will continue because we’re doing it to ourselves by the way we “live.” Scarcity will become the norm and a lot of people are not going to get live to the ripe old ages of the past.

    Here’s some memorial day reading for you:

    http://www.warsocialism.com/duncan_tscq_07.pdf

  26. The Curmudgeon says:

    But Franklin, no worries, we are all much healthier now that we eat right and get lots of exercise…

    Demographics makes the observations about Social Security being an oxymoron poignant.

    What will happen once the state (i.e., the government at all levels) can no longer keep the promises it has made?

    Optimistically, it may force a return of the family as the foundational societal unit. No more shipping granny off to a nursing home death mill.

  27. drocto says:

    Repost (original not published by site):

    Great post mbelardes.

    TexDenim: Care to elaborate? Show us your numbers. Are you familiar with the annuity formula? Care to use it and plug in expected REAL AFTER-TAX rates of return?

    Anyone expecting REAL rates of return during retirement above low single digits is delusional. Disagree? Well then show me how everyone is going to earn real rates of return above real GDP growth

  28. marka says:

    gorobei,

    do you know if buying a house to live in count as a saving? because owning would reduce your expenses requiring you to have less saved

  29. gorobei says:

    marka,

    re housing: yes, it’s savings. Figure it is an investment like any other (returns are 1-2% real like everything else.)

    So, $500K house paid off counts as $500K saved. At age 65, cash it out and downsize, or accept you have an illiquid assert in your portfolio (maybe its worth $1M, maybe $250K, you can pay the 8%+ transaction fees to know for sure.)

  30. BrookTrout says:

    I was getting all psyched up about the Roth IRA lately. Then it dawned on me that that free lunch will probably be chiseled away at with taxes on goods and services more in the years to come. I am seeing it here in my home state. The issue of substituting higher income taxes with new taxes on services and goods is being voted upon soon. Gee, do you think if that happens then more will not be done to draw more taxes out later on? What were the arguments again about a flat tax?

  31. marka says:

    grobei

    thanks for clearing that up, that should makes the 15% savings figure achievable for a lot more people!

  32. I think CitizenWhy laid out one of the best benefits of retirement. Because you are no longer dependent upon a stationary job you have mobility. Most of the best jobs also are in large population areas which tends to increase your cost of living. By moving to a place that has a smaller population you can reduce your costs. If you move to a warmer climate you can reduce your expenses that way too.

    The chart also lays out what costs look like in 2010. Buy the time most of us are retiring in 10 – 40 years that number will be closer to 2 – 8 million but it is the cash flow that matters most. It is better to get a 20% return on 1 million than it is a 4% return on 3 million.

  33. rileyx67 says:

    Always saved 10% of income, which was the “advice” some years back, and when unable to do so, worked a second part-time job to cover and meet the “deficiency”. Spent last 5.5 years with my company taking a 25% pay cut “building an ESOP, whose value reached over $400,000, but by the time I retired and able to sell, was less than $40,000. Same company( United Airlines) subsequently, in bankruptcy court was permitted to void themselves of all Defined Benefit pension plans, so thus left with one third former from the PBGIC! Am completely comfortable and anxiety free, thanks to that 10% “rule”, plus some sound investing advice from this and other sites.
    Not so sure of that “four percent” number, personally feel three percent a more realistic withdrawal rate in the “new normal”. AND for those “thinking” will need to work past the normal retirement age, good luck with your health to be able to do so…but “good luck” is hardly a PLAN!

  34. dead hobo says:

    TexDenim Says:
    May 30th, 2010 at 4:27 pm

    The $1,000,000 figure is way too high I think, even by the most conservative estimates. Kiplinger has a 1950s view of the world.

    reply:
    ———
    You must live in the Midwest or South in a fine trailer, eat what you grow or catch, and watch antenna TV and plan to die at a convenient age. I think the number is low.

  35. acockbur says:

    Like CitizenWhy, I also think the 4% number is off- it seems to ignore earnings on the principle. To get a better idea, ask how much of an annuity the cash would buy.

    I have a government retirement account which I have been considering converting to an annuity. If I had a million in it, it would purchase $63600/yr. I am only 57; if I wait to 65 it would be $76680.

    This is using the calculator at http://www.tsp.gov/calc/annuity/annuity.cfm. We get good rates, I expect, but they aren’t subsidized.

  36. dead hobo says:

    PS;

    In the Dead Hobo household, over the long term, the savings rate has frequently exceeded 50%. Thanks to this discipline, I haven’t had debt beyond a mortgage in decades and the house is paid for. This has also enabled me to finance out of cash a major self improvement project I just completed and consider helping an elderly relative who can’t stop gamb*ling in the stock market rather then use the savings for food and rent (I have since withdrawn that offer of support and held my own intervention, which has made me unpopular since investing in the stock market is considered a patriotic duty in some circles.)

  37. gorobei says:

    acockbur,

    that assumes a number of things:

    1. it’s an annuity: you get the money until you die: your kids get no inheritance, no charity bequeathment, etc.
    2. nothing for your wife: if you die at age 60, your wife gets nothing – the $1M is gone
    3. no inflation protection for the next 20-30 years
    4. you have credit risk to the counterparty for the next 20-30 years

    It might be right for you, but buying an annuity means you take on a large amount of risk.

  38. The proper question is, “How much does saving for retirement cost in non-financial terms?”

    People sacrifice two-thirds of their lives working in a job they don’t enjoy (or might even hate) to live 10 or 15 years in “financial freedom;” which is often an illusion (or even a delusion).

    This theme is covered in a post published here at The Big Picture last year:
    http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/

    “Money often costs too much.” ~ Ralph Waldo Emerson

  39. acockbur says:

    gorobei- I agree that there are risk issues with annuities. In fact, the federal annuity program lets me cover my wife, buy inflation protection, and arrange to leave the principal balance to my heirs. All of these things reduce the annuity payout, of course. If the counterparty goes bankrupt and federal employees don’t get their annuities we are probably all screwed anyway.

    But my point was that the Kiplinger article didn’t include the earnings on the principle. The annuity calculation is how much an insurance company would be willing to pay out for the rest of my life if I gave them the money. Presumably I could do as well doing it myself. I certainly am not going to take a 50% bath (if I am then I should definitely buy the annuity instead).

  40. dss says:

    The numbers needed for retirement depend almost entirely on where you retire. NYC, it is not enough. Smaller city, it probably works, rural America, it is sufficient. If you have to count your home as part of your retirement savings and you live in an expensive part of the country, you won’t have enough. If you are have a chronic illness you will need more. There are too many variables to consider and that makes the chart a non-starter.

  41. Julia Chestnut says:

    I will do what Babushkas have always done: I will move into a small room in my daughter’s house (or the pool house behind her mansion, let’s hope) and I will take care of her kids, upset the neighborhood by keeping a few chickens, garden, and knit sweaters. I don’t plan to so much retire as become household labor for my daughter in return for room and board.

    It’s what Bubbis do.

    I am not sure what my husband will do, however. ;) He can’t knit worth a damn.

  42. TerryC says:

    The key here is to get to retirement age (50, 60, 70, doesn’t matter, pick one that is right for you) and be DEBT FREE AND OWN YOUR HOME. Americans need to wake up and realize that interest payments on everything they THINK they need but don’t are killing them. So many people are paying $20,000 plus a year on interest (cars, student loans, credit cards, mortgages) that they are draining off the money that they could be saving for retirement. New iphone 4G? New iPad? New suit? Vacation in Bahamas? Eat out every night? No to community colleges or in-state universities? New lease on your “dream car”? Most of this money is going out for crap you don’t need. What you don’t need is to be working when you are 70 as a Walmart greeter for $8/hr. Debt is only good for the loan sharks (I mean bankers-car dealers-mortgage companies-private colleges-credit card companies) NOT for individuals. What we need in our junior highs/high schools/colleges is mandatory courses on how to live within your means and not think you have to be in debt up to your eyeballs in order to enjoy life. Until then, I expect to see lots of 70 year olds checking out my groceries at the store for many years to come.

  43. willid3 says:

    the main scam has been the theory that you can save enough to retire on. and that is really nothing but smoke and mirrors at best. because to do that one must be able to predict how much you will need per year and for how long. one thing you are guaranteed to need is health care because no matter how well you have taken care of your self, you can’t override your genes. and all you may have done is make it so that any age related problems are delayed. they will not go away. the other guaranteed (so far any way. the reform bill may change the calculus but that will be determined later) is that it will cost you more for health care as you will need lots more help than today. the other part of this scam is that you can beat the market. nope it can take it all. in one day. as we have seen it can collapse in a few hours. on any day. so you might have saved a million on Wednesday, and only have 500k on Thursday. and you have done nothing different. but for the vast majority of Americans (all but 1%), they will need social security as they never had a chance. they could live as frugal as possible, and it wouldn’t matter. they don’t make enough to be able to save for that care free retirement. and that does seem to be the new plan for America. just like the old plan from prior to the great depression.

  44. AGG says:

    TerryC is spot on.But I hasten to add that, in the USA, we NEVER REALLY OWN our homes. For example, a person has paid off his house. It is assessed at $350,000. It could be a ranch on 1/3 acre. Property taxes are 2% ( $7,000 a year or $583.34 monthly). This “rent” he is paying the government will always go up, not down. For those who think $584 a month is no big deal, do the math on a $40,000 a year retirement.
    Unless some kind of federal law to protect retirees from rising property taxes is enacted, this could really bite in a high inflation environment where a pension is indexed to phony cost of living raises. The only way I can see around this is the home office scenario where the person is never actually retired so he can deduct “office expenses” from his income taxes. The person would still have to generate a token amount of income for this to work.

  45. Julia Chestnut says:

    AGG, consider moving to Texas. Exceptional protection for homesteads and property taxes generally capped for the elderly.

  46. ronin says:

    @mbelardes

    “but we do need some sort of additional forced personal savings account for the masses”

    I enjoyed your input but completely disagree with this statement. What the masses need is to be forced to take a consumer math class. Apparently, schools have replaced it with “Green Science” or some other garbage study.

    Has anyone seen this video: http://www.youtube.com/watch?v=WAaVK5AkZzI&feature=related

    This is what people in the US financial services industry are dealing with. I live in Asia and was thinking about trying this same idea here just to show the stark contrast in cultures….

    Enjoy!

  47. ashpelham2 says:

    It seems like we should prepare for a time in the future of MUCH higher interest rates, based on all this liquidity during this financial crisis. No one wants to talk about inflation, but it will come, and must come. It is simply the natural balance of things. When and how severe is related to how much more g’ment printing goes on and how we recover, but it will come.

    This is good for fixed income savings. The trouble is high unemployment and slowing home appreciation, if at all. So, there is a cost for that benefit. Plus, almost certainly higher tax rates will proybably “discount” those higher interest rates earned on investments by 20% (10% fed rate, 35% rate earned on fed obligations).

    Just throwing that thought out there.

  48. ashpelham2 says:

    TerryC, thanks for that post. Great levitity on this topic. I am not a certified financial planner, which I think is a bullshit certification anyway (no offense to the original poster). But I spend as much time as I care to talking to people about planning for retirement. What they need to hear is that you simply cannot have everything. You can have nice things. But they need to be paid for with cash, and if you can’t afford with cash, then you can’t have it. Very simply put.

    But it’s a hard lesson to teach. If everyone started living on cash only, we would shut down the country. Then, slowly, it would come back richer and more productive. But oh the pain in the short term. There’d be no banks in business. There’d be no payday loan outfits, much, much, much less auto dealers, one electronics store every 500 miles, 2 Apple stores in the whole damn country, and they would just be service centers.

    And all the jobs lost.

    Nope. cash alone won’t work at all. We all need our neighbors to spend to high heavens. Just not our own household. American hypocrisy at it’s core.

  49. mdanda says:

    I’m surprised that no one mentions the cost of children. If you choose to contribute to the continuity of the human race and the long term survival of our country and culture by having and raising kids, especially multiple kids, all those “extra” funds that could be allocated to retirement savings get diverted to the enormous expense of raising children. Unless you are in the upper extremes of income, you can’t have both kids AND retirement!

  50. hawaiianwaverider says:

    gorobei you sir have no idea about annuities of present. You speak of older annuities from years ago. For my clients who own some annuities where it best fit they can get:

    1) a lifetime income guaranteed which can only rise
    2) all the upside of their subaccounts to increase income, locked in on anniversary
    3) a death benefit of the greatest of either original investment or contract value

    The income base grows at 6% no matter what. The bad thing about annuities is that they are sold by banks, insurance people and financial planners who have no idea what they are doing.

  51. kaleberg says:

    We already have a forced retirement plan. It’s called Social Security, and for the half of the nation that makes less than $50,000 a year it is the only retirement plan they can afford. If nothing else, they can’t afford to take the risks that a lot of people commenting here can. Sure, Donald Trump can lose 50% of his money and not think twice about it. Most of us can’t. Sorry, they cant afford take the risk that the Federal Reserve will peg the interest rate at zero for years on end. They need insurance, not savings. (Besides, they never get paid enough to save. Work the numbers. They aren’t buying Range Rovers. They’re buying ground beef at Walmart.)

    The only place to get that kind of insurance is the government. The private sector would take it on, make big promises, charge high commissions, pay themselves big salaries and bonuses, and then stick the government with the bill anyway. Why not cut out the middleman?

    mdanda is spot on. In a traditional society, children are your savings.