Originally Posted by fishforfun

You're going to have to show the actual math on this one.

Originally Posted by Nantonaku

How so? If that money we spent on wars the past two decades were put in a Social Security lockbox they could stop taxing us for social security benefits for 100 years. Seems relevant to the topic and relevant to the previous discussion saying he wanted private SS accounts where people could invest their own money. Instead of letting us invest our own money he just borrowed our money and sent our country into perpetual war forever.

Originally Posted by OOfff

If you want to talk about what the returns would have been, yes it matters.

but you don’t, you just want to push your “taxation is theft” nonsense

Originally Posted by SonicFlyer

Taxation IS theft.

Originally Posted by tripled

And yours on social security. Enough.

Originally Posted by NuGuy

With inflation comes high interest rates. High interest rates bring moderate, but very low risk investments not subject to market gyrations. Or exactly the kind of environment that produce low cost annuities.

Everything is cyclical. 401k & DCs cost companies real money every two weeks. Given a return to "normal" interest rates, on a historical basis, it would not surprise me one bit to see some companies go back to annuities/DB plans, at least in part. If they are set up correctly, in the proper environment, they are self funding and even if not, only require "notional" accounting.

A lot of DB plans suffered during the last 12 years because of the historically low interest rates. Simply google "historical interest rates" and you'll see the long period from 2008 to just recently as basically a flat line right above zero. While the actual funds use a blend of investments to generate their returns, ERISA requires them to calculate their funding ONLY by long term interest rates (those plans subject to the PPA2006 are exceptions). So while the "in the bank" part of the funds do OK, the ridiculously low interest rates (basically zero), compounded over the actuarial life of an average participant, drives insane funding requirements. With rates going back towards "normal", many of those funds that had been funding for low interest rates are going to suddenly find themselves seriously overfunded. Not because of some increase in the actual value of the fund, but because of how the math works looking forward for the funding requirement, and it's completely dependent on that long term interest rate number.

We're not there yet. We probably have another 150 basis points to go before we get back to "normal-ish" interest rates on the low end. What's more interesting is what happens to the investing strategies...we have a whole generation of investors that "grew up" with essentially free money. That's probably going to change significantly.