New study: most Americans have not saved enough for their retirement

Building a castle isn't easy - it takes work
Building a castle isn’t easy – it takes work

This story is from CNBC, and I hope it causes you young people to count the cost of your plans.

It says:

A new GAO analysis finds that among households with members aged 55 or older, nearly 29 percent have neither retirement savings nor a traditional pension plan.

“There hasn’t been a significant increase in wages, people have student loans and other debt, and many are continuing to struggle financially,” said Charles Jeszeck, the GAO’s director of education, workforce and income security, which analyzed the Federal Reserve’s 2013 Survey of Consumer Finances to come up with its estimates. “We aren’t surprised that people have not saved a lot for retirement.”

Even among those who do have retirement savings, their nest eggs are small. The agency found the median amount of those savings is about $104,000 for households with members between 55 and 64 years old and $148,000 for households with members 65 to 74 years old. That’s equivalent to an inflation-protected annuity of $310 and $649 per month, respectively, according to the GAO.

Americans underestimate how much money is needed in order to retire:

Estimates about the size and scope of the retirement savings problem vary widely, the GAO found. In addition to examining the Survey of Consumer Finances, it reviewed nine studies conducted between 2006 and 2015 by a variety of organizations, including academics, benefits consultant Aon Hewitt, the Employee Benefit Research Institute (EBRI) and the Investment Company Institute. Based on these reports, it concluded that one-third to two-thirds of workers are at risk of falling short of their retirement savings targets, in part because of the range of assumptions about how much income is required in retirement.

Given that we have been inflating the currency and running low interest rates for the last few years, any savings you have will buy less than they buy today.

Here’s another really key point:

The research that the GAO examined consistently showed that people aged 55 to 64 are less confident about their retirement and plan to work longer to afford retirement. However, a 2012 study by the EBRI found that about half of retirees said they retired earlier than planned because of health problems, changes at their workplace or having to care for a spouse or another family member. This suggests “that many workers may be overestimating their future retirement income and savings,” wrote GAO researchers.

Got that? When young people make plans about the future, they underestimate the risks and overestimate their own abilities.

Don't rely on Social Security, young snowflakes
Don’t rely on Social Security, precious little snowflakes

Investors Business Daily has been posting a lot about Social Security, and they are saying that payouts are going to be dropping sooner than you think.

Look:

Every year, the Social Security Administration releases its Trustees Report, which projects the program’s solvency — how much it will take in, how much it will pay out and how long the “trust fund” can cover revenue gaps — over the next 75 years.

The latest report says that Social Security can meet its financial obligations for about 18 more years. After that, the trust fund will be exhausted, and payroll taxes won’t cover nearly all the benefit costs.

That’s bad enough. But a new study by researchers at Harvard and Dartmouth shows that this day of reckoning will almost certainly come far sooner than that.

The authors compare previous Trustees Report forecasts about life expectancy, fertility rates and other variables to actual results. They found that these forecasts have grown increasingly unreliable.

Worse, since 2000 “the direction of the biases are all in the same direction, making the Social Security trust funds look healthier than they turned out to be.”

For example, Social Security has been consistency underestimating life expectancy, which means that people are living and collecting benefits for longer than predicted. Underestimating life expectancy by just 1.3 years leads to 150,000 more people collecting benefits than predicted, the researchers note.

The Trustees Report has also overestimated the nation’s fertility rate. In 2010, for example, 315,000 fewer children were born than predicted. This error makes the population look younger, which in turn makes Social Security’s financial outlook seem healthier.

Likewise, the report has consistently overestimated the Trust Fund’s assets and solvency.

Many of these forecasts are so bad that the actual results are often worse than the report’s “worst case” scenario, which currently has the program becoming insolvent in just 14 years.

Don’t be depending on Social Security if you are under 50 – it’s not going to be there for you, even though you’re going to be paying into it.

When young people imagine what the future will be like, they almost always underestimate the things that can go wrong. They are so optimistic and inexperienced, that they simply can’t conceive of the possible setbacks, and calculate the probabilities of these occurring. The best way to get around this is to talk to someone who is good at doing what you are trying to do. When I was training as a software engineer, I actually had to take classes in software design to learn how to identify unexpected scenarios. This is because engineers start off the same as everyone else – optimistic. We have to train ourselves to identify dependencies and risks. This is how you design software – by thinking not just of common usage scenarios, but also unexpected disaster scenarios, like power failures and data transmission interruptions and database failures. When it comes to earning and saving money, don’t talk to your inexperienced young friends. Talk to someone a little older who has already been through it, and who is doing a good job at it.

Are secular concerns about overpopulation science-based or science fiction?

Sherlock Holmes and John Watson
Sherlock Holmes and John Watson

Christian apologists should care about this Weekly Standard story, and I’ll explain why at the end of this post.

The story begins by profiling the king of overpopulation hysteria, a man named Paul Ehrlich. Ehrlich’s hysterical predictions were at least partly responsible for rise in public support for secular causes such as abortion, euthanasia, global warming alarmism, eugenics, and so on. But, as the article notes, Ehrlich’s predictions were wrong. Basically, you can think of overpopulation as a the “Left Behind” doomsday story of the left.

One quick example of Ehrlich’s failure at predictions:

Of course, it’s been obvious that Ehrlich was not just misguided, but an actual charlatan, since the 1970s. The late economist Julian Simon spent most of his career exposing Ehrlich’s errors. You may remember the Ehrlich-Simon wager. In 1980, Simon bet Ehrlich $1,000 that over the course of the following decade the price of a basket of commodities—any resources Ehrlich chose—would drop, as proof that Ehrlich’s ravings about the relationship of population to scarcity was wrong.

Simon was correct. Ten years later Ehrlich sent him a check, with no note. Never prone to either civility or introspection—he frequently called people he disagreed with “fools,” “idiots,” “clowns,” and worse—Ehrlich later told the Wall Street Journal, “If Simon disappeared from the face of the Earth, that would be great for humanity.” Hell of a guy.

The part of the article I want to look at it is how this disproved charlatan was supported by the secular left:

In 1990—the same year he lost his bet with Julian Simon—Ehrlich was awarded a million dollar MacArthur “genius” grant and was simultaneously feted across the Atlantic with Sweden’s Crafoord Prize, which was worth just about half a million. In 1993 the Heinz Family Foundation bestowed on him its first Heinz Award. This little trinket came with $100,000 in cash and the most delusional praise possible, claiming that Ehrlich’s “perspective, uncommon among scientists, has made [him and his wife] the target of often harsh criticism—criticism they accept with grace as the price of their forthrightness.” Which is a peculiar way of explaining that Ehrlich was completely wrong and that he responded to all such evidence with ad hominem attacks. Five years later, in 1998, he was awarded the Tyler Prize,which comes with $200,000. The money train kept on rolling.

And it wasn’t just dumb philanthropists. “Serious” organizations continued to honor him. In 2001, the American Institute of Biological Sciences gave Ehrlich its “Distinguished Scientist” award. In 2009, the World Wildlife Fund featured him as a guest lecturer in their flagship speaker series. In 2012, he was inducted into London’s Royal Society, which is Britain’s nearly 400-year-old national academy of science. There is more. So much more.

Paul Ehrlich’s entire career stands as a monument to the ideological imperatives of the world’s elites and the extent to which they exist not just independent from, but in actual opposition to, both science, evidence, reason, and good faith.

So basically, we are dealing with a cult leader who makes false predictions and then is celebrated even as they are falsified. It reminds me of Jehovah’s Witnesses. For just one recent story on the demographic crisis, check out this one about Germany, which has the lowest birth rate in the industrialized world, and is set for long-term decline because of it.

I basically have two issues where I diverge from the consensus view: global warming and fully naturalistic molecules-to-man evolution. Of course, I have scientific reasons to doubt them. But I also have observed for people who support these myths behave – defending their heroes and painting the opposition as crazy. It’s an important lesson to learn. How far will people go to believe what they want to believe and try to convince others to believe it, too?

How is this relevant to Christian apologetics? Well, in Christian apologetics, you don’t just talk about the resurrection. You have to establish your credibility as a truth-seeker, and it’s better if you can do it in some non-religious area. For example, I have a secular Jewish guy who I talk to who is a strong supporter of abortion. He believes in global warming, Darwinism and this overpopulation nonsense, too. If you can show him the evidence that disproves any one of these, it exposes how he has deliberately chosen to believe things that he didn’t have evidence for because he wanted to believe it so badly.

Demonstrating mastery at disproving the secular left’s myths in one area clears the way for getting them to rethink what they believe and why in every area. It’s important for Christians not to appear desperate. We cannot just fixate on the gospel and salvation and try to rush people to a conversion in 5 minutes by threatening them with Hell. We have to show them that Christianity should be adopted because it’s true, because it’s the end result of a process of thinking clearly. Thinking clearly in one area is evidence to our audience that we can at least in principle be thinking clearly about religious issues, too.

And this is another reason to be responsible and wise with your life decisions. Don’t study junk in school. Don’t work easy jobs. Don’t waste all your money on fun and thrills. Don’t lack self-control. People judge your ideas by how successful you have been in your education and profession. So make decisions that show them that you are competent, not crazy. If you present yourself as a an irresponsible, out-of-control thrill seeker who has not succeeded in your education, career and finances, then you’ll have no credibility with a secular audience before you even open your mouth. Be a person who gathers respect because you know what you are doing. If you want to succeed at evangelism, you have to heed this warning and avoid doing the easy thing just because it feels good.

Insurance companies are raising their premiums in response to Obamacare

This story is from Investors Business Daily.

Excerpt:

We pointed out that several states had already tried these “guaranteed issue” and “community rating” reforms, and they’d been a disaster. Higher premiums encouraged the young and healthy to forgo insurance, knowing that they could sign up after they got sick, which drove premiums still higher.

ObamaCare was supposed to avoid this fate by heavily subsidizing insurance premiums and imposing a tax penalty for going uninsured, to get the young and healthy to sign up and keep premiums down.

But when IBD’s Jed Graham looked at the limited number of filings two weeks ago, he noted that insurers were asking for hikes that averaged 18.6%. And as more rate filings became public, that picture hasn’t changed.

In Virginia, for example, just one plan came in with a proposed rate increase below 10%. Three are above 25%. In Texas, Scott & White wants a 32% boost and Humana 30%. Alliance Health Plans in Georgia says that it needs a 37.85% increase.

The reasons given for these huge increases? The insurance pool is older and sicker than expected.

Blue Cross Blue Shield of Illinois, which enrolled more than 329,000 people in the state, wants a 29% hike, saying, “Actual claims experience of the members … is significantly higher than expected.”

CareFirst in Maryland said that its per-enrollee claims shot up 49% in the first year of ObamaCare. WPS Health Plan also cited “the impact of numerous additional taxes and fees imposed upon our plan” as part of the reason why it wants a 19% boost.

It sounds so nice to feelings-oriented voters to cover all kinds of things that some people like, like birth control and sex changes. It sounds so nice to feelings-oriented voters to not turn people away with pre-existing conditions. It sounds to nice to feelings-oriented voters for every plan to cover maternity care – even for people who don’t use it, e.g. – men. But the simple fact of the matter is that when you force insurers to include more coverages and extend coverage to more people, then there will be more claims, and the next rounds of premiums must rise to cover the increased number of claims. That’s how insurance works. Although I doubt the average feelings-oriented Democrat understands that.

More:

What’s more, these big increases are coming before ObamaCare’s temporary industry bailout programs go away. They were specifically designed to protect insurers from big losses, allowing them to keep premiums lower than they might have otherwise.

The cost of claims is going higher. The subsidies to cover the higher claims disappear. The private insurance companies cannot pay the higher claims. The private insurance companies close. The government takes over the health care industry. Taxes go up, to pay for a bloated and wasteful government-run health care system. Patients are forced to wait longer for care, even after paying into the single payer system their whole lives. Conscience protections disappear. More and more unethical behaviors that require health care get covered by the single payer system, encouraging patients to be less responsible since health care is “free”. Tax rates go higher to cover skyrocketing costs of “free” health care. Government decides to cut costs by implementing coerced abortion and euthanasia.

All we have to do is look to Europe and Canada to see how it works. This is how the socialist game plan plays out.