In Japan I heard of cases of mortgage contracts stretching into next generations. Can't this happen in the US?
good question.
here's another one: if someone pays into a pension fund for 40 years then dies one year into retirement, or even before for that matter, why can't the accrued retirement funds be passable on to kin?
sorry if that's OT. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
Death benefits to be paid under a 403(b) plan depend on when death occurs and who is the designated beneficiary [surviving spouse or other] on the plan. The Internal Revenue Code states that distributions generally must be made from a 403(b) plan by the participants required beginning date, which is April 1 of the year following the year in which the participant attains age 70 1/2. Different rules apply to death benefits depending on whether or not death occurs before the required beginning date.
MRD stands for "minimum required distribution." The Internal Revenue Code established these minimums to ensure that you actually use your Employer Sponsored Retirement Plan account balance for retirement (and not, for instance, to pass onto your heirs). ... If you do not take an MRD from your retirement account each year, the Internal Revenue Code imposes a 50% penalty tax on the amount that should have been withdrawn in each calendar year. This tax is in addition to regular income taxes.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
The view that Social Security is a privilege, a right, or an entitlement is not quite healthful. The phenomenon of pensions as we know them is less than a century old, actually. Social Security was rather created as a social construct to reduce some (elder care) burden for the middle class - and it worked well this way for several decades. The system was far from Ponzi-type problems, because any "baby boom" discrepancy between payers and benefactors did not require exponential corrections. Although politicians claimed that Social Security would "go belly up" by 2018, the actual official estimate was that the system would still receive income by 2018. Many people were truely fooled.
The private pension plans have the disadvantages of higher administrative costs (much higher...), more dramatic reaction to economic downturns and demographic bumps (just because boomers have to buy competitively and then sell competatively). Other difference might be the rule of passing the saving to your descendants. Is it unfair that people dying just at the pension turn pay fully but get nothing? If your main concern is the relative position of everyone participating, that is unfair. If you are mostly enthusiastic with a social mechanism to relieve the productive population somewhat, things become neutral.
In the current political climate, framing pensions as a "fair" payoff helps to phase out the whole idea of public pensions. I would rather admit that Social Security is a bit of a gamble for a reasonable sake of society.
