Grandpa Had a Pension. This Generation Has Cryptocurrency(mobile.nytimes.com)
mobile.nytimes.com
Grandpa Had a Pension. This Generation Has Cryptocurrency
https://mobile.nytimes.com/2017/08/03/style/what-is-cryptocurrency.amp.html
14 comments
dupe https://news.ycombinator.com/item?id=14925135
So much hype for a crypto lately. Crypto is not a solution, it is a simple, violent and uncertain option.
If you want to bet your pension on Crypto cool, but diverse your packages. Bet amount you can lose (let say 10% of your fund). At worst you will have a more humble life when you are old.
If you want to bet your pension on Crypto cool, but diverse your packages. Bet amount you can lose (let say 10% of your fund). At worst you will have a more humble life when you are old.
Violent? Do you mean volatile?
I would say violent, but volatile as well. Violent in the meaning of the market lack of regulation causes it to be potent on to manipulators and power houses with tools to wipe out market value in a blink of an eye, attack targets and act when they could quickly benefit.
So not violent at all except in your unique definition of violent.
Traditional pensions are much less volatile. Cryptos might be dangerous as pensions.
Wayyy more dangerous than pensions. I love the idea of BTC as retirement fund, and that's kinda how I treat it now -- throwing money occasionally into it and hoping it's a nice sum in 20 years. But at least I know it's likely gone.
Really ? I think you vastly overestimate the security of pensions.
There's 2 factors. Firstly, inflation. Inflation targets are 2% per year, and despite the last few years, we've generally been above that level. At 3,2% inflation, real money halves every 20 years (government calculators assume 7.5%). So if you're promised, say $60k per year at age 20, what you're actually being promised at 65 is a little under 1/4th of that, or $15k per year, and by the time you die at 85 or so, about 1/8th of that amount.
Secondly, at this point loads of people in Greece [2], Austria, Poland, and various American states (most famously [1]) have seen ridiculous reductions in pensions, to the rate of having their pensions reduced by something like 75%, sometimes more.
Given how well pensions are funded, this has to happen to a lot of pensions in the near future (public, and private alike). There's 2 options: either the pension funds themselves go insolvent, and you're screwed, or your pension is inflated away (most likely option) and the amount stays the same but it's not worth much anymore.
Some reading for the interested:
[1] https://www.forbes.com/sites/georgeleef/2016/08/05/who-will-...
[2] https://www.ft.com/content/f6be12b2-f3ae-11e6-8758-687615182...
There has not been any state I know of that has always kept it's pension promises, even in the short time they have existed (mostly since WWII). The US hasn't. No European state has (I checked 5 northern European ones, the Netherlands hasn't, France hasn't, Belgium hasn't, the UK (let's just shut up about the UK, it's just sad), Germany hasn't. Now just so we're clear: what I mean by this is that, for instance, they retroactively changed (lowered) the pensions they originally promised to public sector workers in their contract (happened to my father). If any private employer did this is would be fraud and theft, but of course governments see no issues.
If you are <40 today, I would say the odds of you actually seeing your pension are about 50/50 at best, less if you're in Europe. And I'm talking about that 1/4th inflated away amount of the amount you were promised, not more.
There's 2 factors. Firstly, inflation. Inflation targets are 2% per year, and despite the last few years, we've generally been above that level. At 3,2% inflation, real money halves every 20 years (government calculators assume 7.5%). So if you're promised, say $60k per year at age 20, what you're actually being promised at 65 is a little under 1/4th of that, or $15k per year, and by the time you die at 85 or so, about 1/8th of that amount.
Secondly, at this point loads of people in Greece [2], Austria, Poland, and various American states (most famously [1]) have seen ridiculous reductions in pensions, to the rate of having their pensions reduced by something like 75%, sometimes more.
Given how well pensions are funded, this has to happen to a lot of pensions in the near future (public, and private alike). There's 2 options: either the pension funds themselves go insolvent, and you're screwed, or your pension is inflated away (most likely option) and the amount stays the same but it's not worth much anymore.
Some reading for the interested:
[1] https://www.forbes.com/sites/georgeleef/2016/08/05/who-will-...
[2] https://www.ft.com/content/f6be12b2-f3ae-11e6-8758-687615182...
There has not been any state I know of that has always kept it's pension promises, even in the short time they have existed (mostly since WWII). The US hasn't. No European state has (I checked 5 northern European ones, the Netherlands hasn't, France hasn't, Belgium hasn't, the UK (let's just shut up about the UK, it's just sad), Germany hasn't. Now just so we're clear: what I mean by this is that, for instance, they retroactively changed (lowered) the pensions they originally promised to public sector workers in their contract (happened to my father). If any private employer did this is would be fraud and theft, but of course governments see no issues.
If you are <40 today, I would say the odds of you actually seeing your pension are about 50/50 at best, less if you're in Europe. And I'm talking about that 1/4th inflated away amount of the amount you were promised, not more.
The odds of BTC yielding anything in 20 years are hard to quantify, but I think 50/50 sounds about right.
Paid news. With crypto to hype crypto.
What a strange article and outlook by the subjects. I cannot fathom the insanity or genius of cashing out and putting everything in a second tier cryptocurrency!
right.. pensions invest in bonds and insurance products (=slow steady returns... allegedly). Crypto (which I do invest in), is a highly volatile and speculative instrument which may gain or lose value quickly. It's not the type of thing I would invest my 401K in, but with a little bit of money, it's possible to hold it and see what happens. I think the advantage is of this (for the avg retail investor like me) is that it's brand new and wall street hasn't completely sucked the value (volatility?) out of the instrument (yet) so it may be possible to make a little extra with it (assuming it continues to be make progress into the financial infrastructure).
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