[WS:] This is true of private retirement plans (known as 401k or their nonprofit counterparts 403b) which for the most part replaced the guaranteed benefit pension plans. At this point only state employees (at least in MD) have guaranteed benefit pensions and there is a big push to get rid of those as well.
However, Social Security - which is the basic government-run contributory retirement plan covering all persons who are employed, is still "guaranteed benefit" - you will get a specific adjusted for inflation amount which depends on your contributions and the age of retirement - and it is independent of stock market performance.
In my particular case my expected Social Security benefits will outweigh my 403b benefits by the ratio of approximately 2:1, but my wife who is a state employee will probably get more from her pension (provided it is still there) than from her SS. .
As to your suggestion of getting rid of the stock market - ditto. It is a totally parasitic institution that not only does not create any new value, but destroys value.
Wojtek
On Mon, Aug 8, 2011 at 3:45 PM, Fernando Cassia <fcassia at gmail.com> wrote:
> On Mon, Aug 8, 2011 at 16:18, Wojtek S <wsoko52 at gmail.com> wrote:
>> However, I do not see how a significant stock market downturn has no
>> effect on real economy.
>
> Yes, I know, a total crash, 1930s style surely does. Companies can
> ultimately go bankrupt as its balance sheet is turned inside-out and
> company valuation is reduced to nothing.
>
> But a small one-day downturn ("black monday", "black friday"), really,
> isn´t that just a sudden adjustment?.
>
> Plus, I believe it affects americans more than people in other
> nations. Americans´ savings and retirement money are tied in some
> cases (most cases?) to the stock markets. Thank the heavens that is no
> longer the case down here, after we ended the private pensions system.
> Also, very few of the local companies are listed in the local stock
> markets.
>
> Me? I´d abolish the stock markets. Even in a pure capitalist system,
> the private, family-owned business beats the stocks market craziness
> and short-term quarter-to-quarter outlook and related histeria.
>
> Just my $0.02
>
> FC
> (Buenos Aires, Argentina)
>
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