Pension, retirement redux

from ZH hooligan
"I agree that management fees and charges, plus taxes, changes in legislation, changes in longevity all make pensions solutions complicated. it is true also that income - consumption = savings. were these savings to be simply accumulated then there would be certainty of amount to live on in retirement. Here's the rub though, savings are not accumulated risk free. If they were, the full extent of the rip off perpetrated on the economy by middle men, government and central banks would be apparent. Will you live for 20 years in retirement? Then forget about interest rates, you have a drawdown rate of 5%. Simply put $100,000 buys you $100 a week. You choose how many $100's you need. If you want the average wage of $35,000 a year or $700 a week as a reasonable retirement goal you need $700,000. If you have 35 years to go, that $20,000 a year or $400 a week. That is pension savings for a 30 year old out of net salary before health care, holidays, mortgages, cars, food, utilities etc. There is no con, only desparation by most people trying to get past this massive hurdle, trying to get a rate of return on savings instead of the zero that is the result of taxes, fees and poor markets. Note here again that savings does not = investment, unless the markets allow the recycling of capital to on-going business formation. Once the Government/Fed screws up the system and sponsors zombie banks and coporates like in Japan, then there is no hope of reducing the burden, only deferring it. This is why intervention cannot work and there should no Fed and a law that says Governments cannot run deficits. All they do is create a new political class of those who benefit from intervention or lower interest rates (banks, those heavily in debt and politicians who engage in profligate spending on wars etc) and those who deserve a fair interest rate for the risk they are taking (pensioners and those with savings) . The arguments are simple. The more words that are used and themore complex the argument that is put up, the more you know it is bullshit designed to protect the vested interests."