The entire US economy is currently being propped up by growth in the AI/tech sector. And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs. That means there is a massive bubble that will eventually burst, probably taking the whole US economy with it.
Let’s say, for sake of argument, that I am a typical American. I work a job for a wage, but I’m mostly living paycheck to paycheck. I have maybe a little savings, and a retirement account with a little bit in it, but certainly not enough that I can retire anytime in the near future.
To what extent is it possible for someone like me, who doesn’t buy into the AI hype, to insulate themselves from the negative impact of the eventual collapse?
I haven’t seen a job with a pension in the last 18 years being in the workforce.
I had a pension at my last job about 11 years ago. Then not long after I left with it fully vested congress passed a law allowing companies to creatively value pensions far lower than they should have been able to and most companies “bought out” the pensions for a fraction of their value. My pension got turned to mush, then a few month later congress passed a law “fixing the glitch” after most large corps had done their dirty work. My pension would have paid out about $800/month on retirement (likely not great depending on inflation), but their reassessment made it more like $150/month which probably won’t cover a phone bill when I am retired.
Unions and Government jobs have pensions. But if you have a 401k or any type of IRA, the same people who invest pensions are also doing that investing for you if you aren’t managing it ( IE: mutual fund and etfs) and the investments are pretty much the same for both, so if pensions tank, so will your 401k.
Gov jobs still have them
Sort of. I’m a gov worker (non fed) and mine is a joke. 1% of salary per year of service. Not very significant. The old scheme was 2.5, I think, and before that it was 30 years to full salary. I still work with people on that old one, and they’re about at the full 30. In a generation it’s gone from a nice retirement to being more like a supplement. We do pay into SS now though so I guess that’s meant to replace it.
Been to 3 jobs that offer pensions and they all tell the same story you’re giving.
It’s right in the handbook. Hired before X date and you get 25 years to full salary retirement. Before Y date and 30. Hired after 2008 and it’s all the same. 33 Years gets you 33% of your salary. Which ain’t gonna be worth much thanks to inflation.
I worked next to people who at 60 had a full pension coming in, and then collected a full second salary because they’re allowed to DROP - which means work and collect the pension. One mfer was working on retiring twice to collect 3 paychecks. That is no longer an option for my generation either.
Do you not have a pension saving scheme that gives a tax break when employers pay into it direct from your wages?
In the UK it’s pretty standard. I think it’s even a legal requirement for employers to offer it, even if the amount they put in is paltry.
In the US those’ve been almost universally replaced by 401k plans, which I assume is what they’re referring to.