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[kerry_h_pechter]: i’m accustomed to

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[ramsey_d_smith]: yeh yeah

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[kerry_h_pechter]: that

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00:00:04,636 –> 00:00:04,777
[ramsey_d_smith]: yeah

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[paul_tyler]: all right high this is paul tyler

6
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[ramsey_d_smith]: yeah

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[paul_tyler]: and welcome to

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00:00:10,806 –> 00:00:11,107
[ramsey_d_smith]: yeah

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[paul_tyler]: another episode of that annuity show

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[ramsey_d_smith]: a

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[paul_tyler]: ramsey good to see you

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[ramsey_d_smith]: a pleasure

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[paul_tyler]: and we’ve got another returning guest today
do you want to do the intro

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[ramsey_d_smith]: absolutely we’re delighted to have cary petto
rejoin us carry for those of you don’t

15
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[ramsey_d_smith]: know and i imagine like anybody was
on this call is probably either at least

16
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[ramsey_d_smith]: heard of carry or s publication the
retirement income journal a very important voice in

17
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[ramsey_d_smith]: the space a thoughtful and a critical
voice in in the life insurance space and

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[ramsey_d_smith]: we’re really lucky to have him here
a m there are lots of there are

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[ramsey_d_smith]: lots of topics in the retirement space
that that that cary can speak to and

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[ramsey_d_smith]: today we’re going to focus on social
security which is um i think we can

21
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[ramsey_d_smith]: never talk too much about it and
care brings a very unique and passionate perspective

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[ramsey_d_smith]: to it so with that cary tell
us

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[kerry_h_pechter]: oh

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[ramsey_d_smith]: tell us a little bit about the
retirement income journal its objectives your mission and

25
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[ramsey_d_smith]: then after that we can really start
hitting on what you think needs to change

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[ramsey_d_smith]: with respect to the discussion on social
security oh

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[kerry_h_pechter]: sure sure yeah i’m founder editor and
publisher

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: of the retirement income journal it was
created in two thousand nine right in at

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[kerry_h_pechter]: the beginning of the recovery from the

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: financial crisis

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: when the financial crisis bottomed and

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: i set out to cover everything

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: involved with retirement income and that would
be everything from personal retirement income planning to

39
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[ramsey_d_smith]: ye

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[kerry_h_pechter]: all the products involved in that the
annuity products as well as

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[ramsey_d_smith]: ah

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[kerry_h_pechter]: bond ladders and and deferred annuities and
uh

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: and also not so much to find
benefit plans but the four o one case

45
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[kerry_h_pechter]: space the social security space the and
then

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[ramsey_d_smith]: ah

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[kerry_h_pechter]: comparative systems around the world to our
retirement system for the sake of comparison so

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[kerry_h_pechter]: i’ve sort of brought

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[ramsey_d_smith]: no

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[kerry_h_pechter]: in whatever seem to be interesting

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: at the time and that

53
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: i

55
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[ramsey_d_smith]: oh

56
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[kerry_h_pechter]: hoped people would give a wider perspective
because i thought that that the

57
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: people should people are buried pretty much
in their silos their sort of their gopher

59
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[kerry_h_pechter]: holes and and the best best thing
i could do to

60
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: to help them would be to give
them a kind of cross

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: silos look

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[paul_tyler]: all right

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[ramsey_d_smith]: well

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[kerry_h_pechter]: ah

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[paul_tyler]: i will

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[ramsey_d_smith]: that’s fantastic go ahead go ahead paul

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[paul_tyler]: no i’ll just roll a ball right
down the center

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[ramsey_d_smith]: m

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[paul_tyler]: lane here challenge the

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[ramsey_d_smith]: oh

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[paul_tyler]: question challenge the answer so

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: yeah

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[paul_tyler]: you know look i’ve got

77
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[ramsey_d_smith]: yeah

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[paul_tyler]: i’m not that far away from return
but it’s still got away as carry i

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[paul_tyler]: don’t

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: yeah

82
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[paul_tyler]: think social security is going to be

83
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[ramsey_d_smith]: oh

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[paul_tyler]: there that safety net that

85
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[ramsey_d_smith]: oh

86
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[paul_tyler]: insurance program started

87
00:03:03,936 –> 00:03:04,179
[ramsey_d_smith]: oh

88
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[paul_tyler]: by the government it’s going broke

89
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[ramsey_d_smith]: m

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[paul_tyler]: what what

91
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[kerry_h_pechter]: m

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[paul_tyler]: help

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[ramsey_d_smith]: oh

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[paul_tyler]: how should i really be thinking about
this how should be framing

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[ramsey_d_smith]: yeah

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[paul_tyler]: this question what’s the real

97
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[ramsey_d_smith]: ah

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[paul_tyler]: what’s real what’s not

99
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[kerry_h_pechter]: well we have to understand that that
social security is important to everyone because you

100
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[kerry_h_pechter]: have to remember that even people who
whose main interest is in investing in the

101
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[kerry_h_pechter]: risky markets that that social

102
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: security acts as kind of a ballast
in their

104
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[ramsey_d_smith]: oh

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[kerry_h_pechter]: retirement income so that if sort

106
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: of you’re professional getting you know somewhere
or a couple getting somewhere between forty and

108
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[ramsey_d_smith]: oh

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[kerry_h_pechter]: eighty thousand dollars a year social

110
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[ramsey_d_smith]: oh

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[kerry_h_pechter]: security minus taxes and meta care

112
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[ramsey_d_smith]: yes

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[kerry_h_pechter]: that you know that’s giving you that’s
opening up a big

114
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[ramsey_d_smith]: he

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[kerry_h_pechter]: space for you to

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: invest that much more money in equities
and not have to worry so you have

118
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[kerry_h_pechter]: to think of it in the context
of the entire uh uh everybody needs to

119
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[kerry_h_pechter]: think about

120
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: social security it’s not as though the
wealthy can can say

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: i mean perhaps the very

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: very wealthy can say but

126
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: even

128
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[ramsey_d_smith]: yeah

129
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[kerry_h_pechter]: the affluent need to think about how
it works as a element in their portfolio

130
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[kerry_h_pechter]: so that’s that’s the way

131
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[paul_tyler]: yeah

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[kerry_h_pechter]: of establishing a larger audience for this
but but as far as the i wrote

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[kerry_h_pechter]: i’m called

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[paul_tyler]: oh

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[kerry_h_pechter]: social securities problems are more political than
financial

136
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: and i’m going to explain

138
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[ramsey_d_smith]: yeah

139
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[kerry_h_pechter]: basically why that’s true and also why

140
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: the financial the financing problems that have
are are easily are not as scary as

142
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[kerry_h_pechter]: they’ve been made out to be the
first thing i have t do is to

143
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[kerry_h_pechter]: acknowledge the economist

144
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[ramsey_d_smith]: m

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[kerry_h_pechter]: jeff brown at the university of illinois

146
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[ramsey_d_smith]: yeah

147
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[kerry_h_pechter]: for for help all of us in
the annuity industry see that the product and

148
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[kerry_h_pechter]: annuity and social security is an annuity
that the that the

149
00:05:02,226 –> 00:05:02,427
[ramsey_d_smith]: yeah

150
00:05:02,830 –> 00:05:05,795
[kerry_h_pechter]: product is insurance

151
00:05:06,156 –> 00:05:06,458
[ramsey_d_smith]: oh

152
00:05:07,566 –> 00:05:11,630
[kerry_h_pechter]: it’s not an investment and so that
and i say

153
00:05:11,676 –> 00:05:11,999
[ramsey_d_smith]: yah

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00:05:11,710 –> 00:05:13,251
[kerry_h_pechter]: that so when people say to

155
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[ramsey_d_smith]: ah

156
00:05:13,311 –> 00:05:19,498
[kerry_h_pechter]: me you know i can invest my
own money better than the ah government can

157
00:05:19,799 –> 00:05:23,445
[kerry_h_pechter]: or an advisor tells me that they’ve
done the math and they’ve shown that anybody

158
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[kerry_h_pechter]: who’s making more than eighty thousand dollars

159
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[paul_tyler]: ah

160
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[kerry_h_pechter]: a year can do better

161
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[ramsey_d_smith]: m

162
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[kerry_h_pechter]: with the investments

163
00:05:28,656 –> 00:05:28,998
[ramsey_d_smith]: oh

164
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[kerry_h_pechter]: than they can over their lifetime with

165
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[ramsey_d_smith]: m

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[kerry_h_pechter]: social security i say well and in
you know in recalling jeff brown observation that

167
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[kerry_h_pechter]: it’s not an investment it’s insurance that
social

168
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[ramsey_d_smith]: yeah

169
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[kerry_h_pechter]: security is yes you can

170
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[ramsey_d_smith]: oh

171
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[kerry_h_pechter]: invest your own money better than

172
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[ramsey_d_smith]: yeah

173
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[kerry_h_pechter]: social security can the government

174
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[ramsey_d_smith]: m

175
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[kerry_h_pechter]: can but you can’t insure yourself against
the things that social security for insurance you

176
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[kerry_h_pechter]: need large numbers

177
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[ramsey_d_smith]: m

178
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[kerry_h_pechter]: and insurance s based on the law
of large numbers the risks and the costs

179
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[kerry_h_pechter]: are

180
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[ramsey_d_smith]: oh

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[kerry_h_pechter]: spread out over not we three

182
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[ramsey_d_smith]: a

183
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[kerry_h_pechter]: hundred you

184
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[ramsey_d_smith]: fish

185
00:06:08,058 –> 00:06:10,983
[kerry_h_pechter]: know two hundred million workers but also
the

186
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[ramsey_d_smith]: ye

187
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[kerry_h_pechter]: you know the long term

188
00:06:12,638 –> 00:06:12,983
[ramsey_d_smith]: yes

189
00:06:13,267 –> 00:06:14,729
[kerry_h_pechter]: infinite lifetime of the united

190
00:06:14,526 –> 00:06:14,766
[ramsey_d_smith]: yeah

191
00:06:14,789 –> 00:06:18,516
[kerry_h_pechter]: states more or less and so you
have an insure

192
00:06:18,275 –> 00:06:18,435
[ramsey_d_smith]: yeah

193
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[kerry_h_pechter]: you’re

194
00:06:18,936 –> 00:06:19,197
[ramsey_d_smith]: oh

195
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[kerry_h_pechter]: having insurance product and this insurance product
not only

196
00:06:22,775 –> 00:06:23,613
[ramsey_d_smith]: yeah much

197
00:06:23,564 –> 00:06:25,207
[kerry_h_pechter]: provides you with a return

198
00:06:25,260 –> 00:06:25,522
[paul_tyler]: yeah

199
00:06:25,327 –> 00:06:25,928
[kerry_h_pechter]: in fact return

200
00:06:26,037 –> 00:06:26,524
[ramsey_d_smith]: thank you

201
00:06:26,369 –> 00:06:28,292
[kerry_h_pechter]: is the wrong way to think about
what

202
00:06:28,326 –> 00:06:28,346
[ramsey_d_smith]: i

203
00:06:28,332 –> 00:06:33,360
[kerry_h_pechter]: you get from self security because you’re
not they get an income you get you

204
00:06:33,460 –> 00:06:39,771
[kerry_h_pechter]: get insurance from longevity risk the risk
of outliving your income you get insurance from

205
00:06:39,911 –> 00:06:43,057
[kerry_h_pechter]: market risk the risk of retiring in
it down turn

206
00:06:42,936 –> 00:06:43,178
[ramsey_d_smith]: oh

207
00:06:43,238 –> 00:06:44,522
[kerry_h_pechter]: also called sequence risk

208
00:06:45,066 –> 00:06:45,267
[ramsey_d_smith]: oh

209
00:06:45,204 –> 00:06:48,254
[kerry_h_pechter]: the you’re protected from inflation risk

210
00:06:48,006 –> 00:06:48,372
[ramsey_d_smith]: yeah

211
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[kerry_h_pechter]: and

212
00:06:49,116 –> 00:06:49,361
[ramsey_d_smith]: oh

213
00:06:50,617 –> 00:06:57,528
[kerry_h_pechter]: and a couple of other risks and
so to not under to think of social

214
00:06:57,588 –> 00:07:02,536
[kerry_h_pechter]: security in terms of average internal rate
of return is ex there the same

215
00:07:02,736 –> 00:07:02,977
[ramsey_d_smith]: yes

216
00:07:02,897 –> 00:07:06,243
[kerry_h_pechter]: making the same mistake is when people
look at an income annuity

217
00:07:05,976 –> 00:07:07,086
[ramsey_d_smith]: yeah

218
00:07:06,443 –> 00:07:07,044
[kerry_h_pechter]: and try to

219
00:07:06,969 –> 00:07:06,990
[paul_tyler]: m

220
00:07:07,665 –> 00:07:08,226
[kerry_h_pechter]: compare

221
00:07:07,716 –> 00:07:07,939
[ramsey_d_smith]: yeah

222
00:07:08,647 –> 00:07:09,228
[kerry_h_pechter]: the internal

223
00:07:09,186 –> 00:07:09,954
[ramsey_d_smith]: yeah

224
00:07:09,288 –> 00:07:11,471
[kerry_h_pechter]: rate of return on average of the
income

225
00:07:11,406 –> 00:07:11,867
[ramsey_d_smith]: oh

226
00:07:11,531 –> 00:07:17,722
[kerry_h_pechter]: annuity to an investment and to the
average long term return to the markets so

227
00:07:18,082 –> 00:07:26,236
[kerry_h_pechter]: so we’re mixing apples and origins and
somehow the narrative about social security has alling

228
00:07:26,296 –> 00:07:36,434
[kerry_h_pechter]: into the hands of the investment folks
which is not altogether surprising but but it’s

229
00:07:36,734 –> 00:07:36,874
[kerry_h_pechter]: it’s

230
00:07:36,996 –> 00:07:37,198
[ramsey_d_smith]: yeah

231
00:07:37,295 –> 00:07:38,878
[kerry_h_pechter]: so it’s been miss it’s mis

232
00:07:38,826 –> 00:07:39,106
[ramsey_d_smith]: oh

233
00:07:38,978 –> 00:07:42,063
[kerry_h_pechter]: characterized it’s the ugly duck in rather

234
00:07:42,366 –> 00:07:42,628
[ramsey_d_smith]: yeah

235
00:07:42,504 –> 00:07:43,345
[kerry_h_pechter]: its portrayed as the

236
00:07:43,506 –> 00:07:43,806
[ramsey_d_smith]: oh

237
00:07:43,706 –> 00:07:48,575
[kerry_h_pechter]: duckling rather than the swan that it
is now that’s i’ve said a lot there

238
00:07:48,755 –> 00:07:52,542
[kerry_h_pechter]: and maybe i can if you still
have some questions about it maybe i can

239
00:07:52,926 –> 00:07:53,646
[ramsey_d_smith]: yeah

240
00:07:53,003 –> 00:07:53,765
[kerry_h_pechter]: unpack it a little

241
00:07:54,705 –> 00:07:58,988
[ramsey_d_smith]: m no i think that’s very clear
and

242
00:07:59,118 –> 00:07:59,261
[kerry_h_pechter]: yeah

243
00:07:59,268 –> 00:07:59,489
[ramsey_d_smith]: you know

244
00:07:59,910 –> 00:08:00,178
[paul_tyler]: oh

245
00:07:59,910 –> 00:08:06,581
[ramsey_d_smith]: i will say personally i agree with
everything you said about the the value proposition

246
00:08:06,921 –> 00:08:09,465
[ramsey_d_smith]: of social security v c v just
about any oth

247
00:08:10,311 –> 00:08:10,394
[kerry_h_pechter]: ah

248
00:08:10,327 –> 00:08:14,013
[ramsey_d_smith]: uh potential source for all the various
reasons that you mentioned now um

249
00:08:14,526 –> 00:08:15,126
[kerry_h_pechter]: oh

250
00:08:15,215 –> 00:08:18,300
[ramsey_d_smith]: one of the one of the the
elements of the

251
00:08:18,369 –> 00:08:18,390
[paul_tyler]: m

252
00:08:18,380 –> 00:08:22,748
[ramsey_d_smith]: current dialogue in the market about social
security as well yeah fine even if i

253
00:08:22,808 –> 00:08:23,570
[ramsey_d_smith]: agree it’s great

254
00:08:25,086 –> 00:08:25,327
[kerry_h_pechter]: yeah

255
00:08:26,716 –> 00:08:33,086
[ramsey_d_smith]: the average consumer is hearing frequently that
that it’s not going to be around i

256
00:08:33,186 –> 00:08:37,213
[ramsey_d_smith]: spoke to i spoke to somebody ho
was doing some work around my house recently

257
00:08:37,313 –> 00:08:38,175
[ramsey_d_smith]: and who mentioned

258
00:08:38,211 –> 00:08:38,374
[paul_tyler]: yeah

259
00:08:38,235 –> 00:08:41,059
[ramsey_d_smith]: that you know that she had just
started taking social security she was sixty two

260
00:08:41,100 –> 00:08:44,966
[ramsey_d_smith]: years old and i said well why
did you do that i mean borrowing a

261
00:08:45,006 –> 00:08:49,013
[ramsey_d_smith]: health reason i said you should do
everything you can she was still employed in

262
00:08:49,073 –> 00:08:51,998
[ramsey_d_smith]: some way you should do everything you
can do hanging on to your seventy and

263
00:08:52,058 –> 00:08:56,407
[ramsey_d_smith]: one of the first things she said
she was concerned about it not being around

264
00:08:56,487 –> 00:09:02,764
[ramsey_d_smith]: for her and she’s only she’s already
sixty two m so how do you think

265
00:09:02,804 –> 00:09:08,175
[ramsey_d_smith]: that perception was created and you know
what do you think we can do to

266
00:09:08,496 –> 00:09:14,263
[ramsey_d_smith]: to alleviate that perception to the people
actually use this this amazing benefit

267
00:09:14,010 –> 00:09:14,252
[paul_tyler]: yeah

268
00:09:14,404 –> 00:09:15,588
[ramsey_d_smith]: more optimately

269
00:09:17,326 –> 00:09:20,472
[kerry_h_pechter]: well it’s interesting that you know people
believe what they hear over

270
00:09:20,436 –> 00:09:20,718
[ramsey_d_smith]: oh

271
00:09:21,153 –> 00:09:24,139
[kerry_h_pechter]: the back fence more readily than they
believe say

272
00:09:24,051 –> 00:09:24,191
[ramsey_d_smith]: yeah

273
00:09:24,599 –> 00:09:27,365
[kerry_h_pechter]: steve goss the chief actuary of social
security

274
00:09:28,446 –> 00:09:28,707
[ramsey_d_smith]: oh

275
00:09:28,726 –> 00:09:32,472
[kerry_h_pechter]: who who’s not as far as i
know shouldn’t speak for him but from the

276
00:09:32,533 –> 00:09:33,574
[kerry_h_pechter]: time that i’ve talked to him

277
00:09:33,746 –> 00:09:33,988
[ramsey_d_smith]: yeah

278
00:09:34,436 –> 00:09:36,018
[kerry_h_pechter]: he’s not particularly concerned

279
00:09:35,616 –> 00:09:35,897
[ramsey_d_smith]: yeah

280
00:09:35,880 –> 00:09:36,484
[paul_tyler]: oh

281
00:09:36,539 –> 00:09:38,122
[kerry_h_pechter]: about so security but her

282
00:09:38,215 –> 00:09:38,457
[paul_tyler]: yes

283
00:09:38,543 –> 00:09:45,634
[kerry_h_pechter]: her she’s where her fear comes from
of course is the ms characterization

284
00:09:45,096 –> 00:09:45,498
[ramsey_d_smith]: oh

285
00:09:45,694 –> 00:09:49,441
[kerry_h_pechter]: is that she’s read but the mis
characterizations are rooted in this

286
00:09:49,296 –> 00:09:49,660
[ramsey_d_smith]: oh

287
00:09:49,601 –> 00:09:54,433
[kerry_h_pechter]: idea that the social security system is
going to he broke in twenty thirty four

288
00:09:55,416 –> 00:09:55,577
[kerry_h_pechter]: and

289
00:09:56,316 –> 00:09:56,537
[ramsey_d_smith]: yeah

290
00:09:56,982 –> 00:09:59,626
[kerry_h_pechter]: that’s ah complete

291
00:09:59,295 –> 00:10:00,576
[ramsey_d_smith]: yeah yeah

292
00:09:59,666 –> 00:10:00,668
[kerry_h_pechter]: mischaracterization

293
00:10:00,666 –> 00:10:00,686
[ramsey_d_smith]: m

294
00:10:00,870 –> 00:10:02,010
[paul_tyler]: yeah

295
00:10:01,369 –> 00:10:07,099
[kerry_h_pechter]: the let’s say that you were buying
a health insurance and the demographics of your

296
00:10:07,239 –> 00:10:15,633
[kerry_h_pechter]: pool changed and the uh insurance company
was no longer to maintain the same level

297
00:10:15,974 –> 00:10:17,877
[kerry_h_pechter]: of protections

298
00:10:17,376 –> 00:10:17,798
[ramsey_d_smith]: oh

299
00:10:18,358 –> 00:10:19,059
[kerry_h_pechter]: unless you went to

300
00:10:19,116 –> 00:10:19,377
[ramsey_d_smith]: yeah

301
00:10:19,139 –> 00:10:20,982
[kerry_h_pechter]: a cheaper unless same expense

302
00:10:20,646 –> 00:10:20,950
[ramsey_d_smith]: oh

303
00:10:21,122 –> 00:10:22,504
[kerry_h_pechter]: and level so you would have

304
00:10:22,446 –> 00:10:22,747
[ramsey_d_smith]: yeah

305
00:10:22,525 –> 00:10:24,267
[kerry_h_pechter]: to either pay higher premium to get

306
00:10:24,180 –> 00:10:24,382
[paul_tyler]: oh

307
00:10:24,648 –> 00:10:27,613
[kerry_h_pechter]: the coverage that you’re getting now or
you would have to

308
00:10:27,765 –> 00:10:27,786
[ramsey_d_smith]: m

309
00:10:28,755 –> 00:10:29,596
[kerry_h_pechter]: take lower benefits

310
00:10:29,256 –> 00:10:29,600
[ramsey_d_smith]: my

311
00:10:30,240 –> 00:10:31,350
[paul_tyler]: yeah

312
00:10:30,398 –> 00:10:33,944
[kerry_h_pechter]: and and the i guess implied there
would be that

313
00:10:33,756 –> 00:10:35,076
[ramsey_d_smith]: yeah

314
00:10:34,304 –> 00:10:38,638
[kerry_h_pechter]: well if the insurance and he does
not either raise you know if you

315
00:10:38,796 –> 00:10:39,606
[ramsey_d_smith]: yeah

316
00:10:39,199 –> 00:10:40,621
[kerry_h_pechter]: do not choose either higher

317
00:10:40,416 –> 00:10:41,256
[ramsey_d_smith]: yeah

318
00:10:40,962 –> 00:10:42,544
[kerry_h_pechter]: premiums or lower benefits

319
00:10:42,186 –> 00:10:42,386
[ramsey_d_smith]: yeah

320
00:10:43,186 –> 00:10:47,673
[kerry_h_pechter]: the insurance company will in effect go
out of business if that’s its only business

321
00:10:47,796 –> 00:10:48,062
[ramsey_d_smith]: yeah

322
00:10:48,414 –> 00:10:52,020
[kerry_h_pechter]: and so so but of course nobody
ever thinks

323
00:10:51,966 –> 00:10:52,288
[ramsey_d_smith]: yeah

324
00:10:52,381 –> 00:10:56,408
[kerry_h_pechter]: when they get a rate increase from
their insurance company or even from their electrical

325
00:10:56,488 –> 00:10:57,469
[kerry_h_pechter]: company they

326
00:10:57,360 –> 00:10:57,601
[paul_tyler]: yeah

327
00:10:57,549 –> 00:11:01,476
[kerry_h_pechter]: may not like it but it does
not mean that the insurance come he is

328
00:11:01,556 –> 00:11:02,558
[kerry_h_pechter]: going to go broke

329
00:11:02,826 –> 00:11:03,007
[ramsey_d_smith]: yeah

330
00:11:03,018 –> 00:11:08,497
[kerry_h_pechter]: in the insurentin the united states of
america is the biggest safest richest

331
00:11:09,126 –> 00:11:10,446
[ramsey_d_smith]: yeah

332
00:11:09,178 –> 00:11:12,884
[kerry_h_pechter]: most stable insurance company that has ever
existed in the

333
00:11:12,936 –> 00:11:13,836
[ramsey_d_smith]: oh

334
00:11:12,944 –> 00:11:18,794
[kerry_h_pechter]: history of the world and so to
say that social security is going to go

335
00:11:18,974 –> 00:11:19,896
[kerry_h_pechter]: broke is like saying

336
00:11:20,265 –> 00:11:20,286
[ramsey_d_smith]: m

337
00:11:20,517 –> 00:11:24,383
[kerry_h_pechter]: that the united states is going to
go broke and and unless you want to

338
00:11:24,423 –> 00:11:27,428
[kerry_h_pechter]: break in here i’ll i’ll go on
with with

339
00:11:27,876 –> 00:11:28,081
[ramsey_d_smith]: yeah

340
00:11:28,410 –> 00:11:31,034
[kerry_h_pechter]: i don’t want to go too much
into the history of social security and the

341
00:11:31,074 –> 00:11:34,358
[kerry_h_pechter]: political reasons why it was set up
the

342
00:11:34,275 –> 00:11:34,296
[ramsey_d_smith]: m

343
00:11:34,418 –> 00:11:36,940
[kerry_h_pechter]: way it was in order to look
something

344
00:11:36,606 –> 00:11:36,992
[ramsey_d_smith]: oh

345
00:11:37,081 –> 00:11:41,285
[kerry_h_pechter]: like a defined benefit pension and the
defined benefit pension can

346
00:11:41,046 –> 00:11:41,247
[ramsey_d_smith]: yeah

347
00:11:42,266 –> 00:11:42,346
[kerry_h_pechter]: you

348
00:11:42,276 –> 00:11:43,305
[ramsey_d_smith]: yeah

349
00:11:42,406 –> 00:11:46,330
[kerry_h_pechter]: know can default on its full

350
00:11:46,335 –> 00:11:46,356
[ramsey_d_smith]: m

351
00:11:46,410 –> 00:11:50,634
[kerry_h_pechter]: benefits but the social security system is
not and there is not

352
00:11:50,676 –> 00:11:50,976
[ramsey_d_smith]: oh

353
00:11:50,834 –> 00:11:51,515
[kerry_h_pechter]: going to be

354
00:11:51,999 –> 00:11:52,179
[ramsey_d_smith]: yeah

355
00:11:52,616 –> 00:11:56,186
[kerry_h_pechter]: a crisis unless you call the like
there’s goin to be no more of a

356
00:11:56,246 –> 00:11:57,891
[kerry_h_pechter]: crisis with so security

357
00:11:58,200 –> 00:11:58,444
[paul_tyler]: oh

358
00:11:58,553 –> 00:12:01,779
[kerry_h_pechter]: in in twenty thirty four then there
was going to be

359
00:12:01,746 –> 00:12:02,826
[ramsey_d_smith]: yeah

360
00:12:02,140 –> 00:12:02,961
[kerry_h_pechter]: a default

361
00:12:02,886 –> 00:12:03,048
[ramsey_d_smith]: oh

362
00:12:03,161 –> 00:12:05,565
[kerry_h_pechter]: of the united states debt in two
thousand eleven

363
00:12:05,877 –> 00:12:06,039
[ramsey_d_smith]: yeah

364
00:12:06,287 –> 00:12:07,308
[kerry_h_pechter]: when we had the

365
00:12:07,383 –> 00:12:07,545
[ramsey_d_smith]: yeah

366
00:12:07,469 –> 00:12:08,230
[kerry_h_pechter]: quote you know

367
00:12:08,346 –> 00:12:08,527
[ramsey_d_smith]: that’s

368
00:12:09,572 –> 00:12:10,654
[kerry_h_pechter]: temper tantrum over the

369
00:12:10,806 –> 00:12:11,066
[ramsey_d_smith]: oh

370
00:12:11,155 –> 00:12:13,479
[kerry_h_pechter]: debt the debt limit yet

371
00:12:13,355 –> 00:12:13,927
[ramsey_d_smith]: yeah oh

372
00:12:13,599 –> 00:12:14,781
[kerry_h_pechter]: we as we have debt limits

373
00:12:14,640 –> 00:12:15,360
[paul_tyler]: yeah

374
00:12:14,841 –> 00:12:21,332
[kerry_h_pechter]: they come and go and so securities
debt limit so to speak will come and

375
00:12:21,392 –> 00:12:28,023
[kerry_h_pechter]: go and but we don’t even we
won’t even necessarily notice it unless people make

376
00:12:28,063 –> 00:12:32,170
[kerry_h_pechter]: a big deal out of it because
social security is already coming

377
00:12:31,866 –> 00:12:32,329
[ramsey_d_smith]: oh

378
00:12:32,370 –> 00:12:35,295
[kerry_h_pechter]: out of part of socialsecurity benefits are
already

379
00:12:35,130 –> 00:12:35,212
[ramsey_d_smith]: ah

380
00:12:35,475 –> 00:12:35,796
[kerry_h_pechter]: kind ing

381
00:12:35,766 –> 00:12:36,027
[ramsey_d_smith]: oh

382
00:12:36,057 –> 00:12:39,179
[kerry_h_pechter]: out of the general fund of the
united states

383
00:12:39,496 –> 00:12:39,777
[ramsey_d_smith]: right so

384
00:12:39,802 –> 00:12:40,224
[kerry_h_pechter]: neiborhood

385
00:12:39,817 –> 00:12:39,957
[ramsey_d_smith]: let’s

386
00:12:39,960 –> 00:12:40,162
[paul_tyler]: yeah

387
00:12:40,117 –> 00:12:41,379
[ramsey_d_smith]: let’s let’s

388
00:12:41,538 –> 00:12:41,658
[kerry_h_pechter]: so

389
00:12:41,619 –> 00:12:41,780
[ramsey_d_smith]: let’s

390
00:12:42,200 –> 00:12:42,361
[kerry_h_pechter]: there

391
00:12:42,321 –> 00:12:42,421
[ramsey_d_smith]: can

392
00:12:42,421 –> 00:12:42,562
[kerry_h_pechter]: was

393
00:12:42,461 –> 00:12:42,841
[ramsey_d_smith]: we break it

394
00:12:42,863 –> 00:12:42,963
[kerry_h_pechter]: no

395
00:12:42,881 –> 00:12:43,442
[ramsey_d_smith]: down a little bit

396
00:12:44,308 –> 00:12:46,096
[kerry_h_pechter]: okay well let’s we need to break
that down

397
00:12:46,026 –> 00:12:46,366
[ramsey_d_smith]: yeah

398
00:12:46,216 –> 00:12:47,803
[kerry_h_pechter]: go ahead and maybe you can me

399
00:12:47,909 –> 00:12:51,535
[ramsey_d_smith]: i want to yeah so let’s because
there’s there’s a lot

400
00:12:51,450 –> 00:12:52,830
[paul_tyler]: yeah

401
00:12:51,615 –> 00:12:54,019
[ramsey_d_smith]: of here’s a lot of important elements
to what you’re

402
00:12:53,940 –> 00:12:53,960
[paul_tyler]: m

403
00:12:54,059 –> 00:12:58,486
[ramsey_d_smith]: saying so let’s first start with this
notion of the of the twenty thirty four

404
00:12:58,526 –> 00:13:03,575
[ramsey_d_smith]: dat moves around at twenty four five
every i don’t know periodically it gets updated

405
00:13:04,657 –> 00:13:07,642
[ramsey_d_smith]: but one is just to be clear
on what happens on that date it’s not

406
00:13:07,702 –> 00:13:12,009
[ramsey_d_smith]: that it’s not that social security does
not enough in flows to pay the outflows

407
00:13:12,670 –> 00:13:16,917
[ramsey_d_smith]: it just to pay any outflows is
just that the inflows

408
00:13:16,560 –> 00:13:16,781
[paul_tyler]: oh

409
00:13:16,957 –> 00:13:20,102
[ramsey_d_smith]: will only equal only equal eighty percent
of the outflows

410
00:13:20,100 –> 00:13:20,120
[paul_tyler]: m

411
00:13:20,162 –> 00:13:20,904
[ramsey_d_smith]: and the trust fund

412
00:13:21,356 –> 00:13:21,538
[kerry_h_pechter]: right

413
00:13:21,605 –> 00:13:23,933
[ramsey_d_smith]: the trust won’t be able to make
up the difference is that correct

414
00:13:24,849 –> 00:13:26,117
[kerry_h_pechter]: uh yes i think we’re

415
00:13:26,202 –> 00:13:26,262
[ramsey_d_smith]: is

416
00:13:26,278 –> 00:13:26,660
[kerry_h_pechter]: already

417
00:13:26,343 –> 00:13:26,384
[ramsey_d_smith]: it

418
00:13:27,926 –> 00:13:28,447
[kerry_h_pechter]: out of the

419
00:13:28,509 –> 00:13:28,530
[paul_tyler]: m

420
00:13:28,527 –> 00:13:33,095
[kerry_h_pechter]: interest on the trust fund or the
trust fund is already so

421
00:13:33,156 –> 00:13:33,378
[ramsey_d_smith]: yeah

422
00:13:33,175 –> 00:13:35,259
[kerry_h_pechter]: what is happening now is that the
general

423
00:13:35,014 –> 00:13:35,196
[ramsey_d_smith]: yeah

424
00:13:35,379 –> 00:13:35,680
[kerry_h_pechter]: fund

425
00:13:35,556 –> 00:13:35,817
[ramsey_d_smith]: oh

426
00:13:36,141 –> 00:13:38,325
[kerry_h_pechter]: is redeeming trust fund assets

427
00:13:38,976 –> 00:13:40,056
[ramsey_d_smith]: yeah

428
00:13:39,436 –> 00:13:41,119
[kerry_h_pechter]: in other words the government

429
00:13:41,137 –> 00:13:41,318
[ramsey_d_smith]: right

430
00:13:41,399 –> 00:13:44,244
[kerry_h_pechter]: is paying to redeem those it’s giving

431
00:13:44,079 –> 00:13:44,181
[ramsey_d_smith]: ah

432
00:13:44,344 –> 00:13:45,686
[kerry_h_pechter]: social security money from

433
00:13:45,756 –> 00:13:46,686
[ramsey_d_smith]: oh

434
00:13:45,767 –> 00:13:53,240
[kerry_h_pechter]: the general fund technically to redeem social
securities trust fund but it doesn’t really matter

435
00:13:53,280 –> 00:13:57,347
[kerry_h_pechter]: whether it’s redeeming the trust fund or
not the important thing is to know is

436
00:13:57,447 –> 00:14:03,000
[kerry_h_pechter]: that the money started coming out of
the common of the general fund of the

437
00:14:03,020 –> 00:14:09,277
[kerry_h_pechter]: united states and no one noticed it
it was a purely

438
00:14:09,413 –> 00:14:09,514
[paul_tyler]: ah

439
00:14:09,898 –> 00:14:10,499
[kerry_h_pechter]: technical

440
00:14:10,236 –> 00:14:10,539
[ramsey_d_smith]: oh

441
00:14:10,760 –> 00:14:16,550
[kerry_h_pechter]: event there was no crisis and this
is going to go on until twenty thirty

442
00:14:16,650 –> 00:14:19,314
[kerry_h_pechter]: four whereas in twenty thirty four there
will be a

443
00:14:19,485 –> 00:14:19,506
[ramsey_d_smith]: m

444
00:14:19,494 –> 00:14:20,476
[kerry_h_pechter]: technical limit

445
00:14:20,616 –> 00:14:20,897
[ramsey_d_smith]: oh

446
00:14:20,957 –> 00:14:22,139
[kerry_h_pechter]: to the amount of money

447
00:14:22,326 –> 00:14:22,668
[ramsey_d_smith]: oh

448
00:14:22,680 –> 00:14:24,543
[kerry_h_pechter]: that the general fund can continue

449
00:14:24,585 –> 00:14:24,606
[ramsey_d_smith]: m

450
00:14:24,623 –> 00:14:27,327
[kerry_h_pechter]: to supply to social security because

451
00:14:27,156 –> 00:14:27,176
[ramsey_d_smith]: m

452
00:14:27,648 –> 00:14:28,810
[kerry_h_pechter]: of a technical

453
00:14:28,536 –> 00:14:28,840
[ramsey_d_smith]: oh

454
00:14:29,431 –> 00:14:35,661
[kerry_h_pechter]: law there is nothing in the world
to stop the united states general fund from

455
00:14:35,762 –> 00:14:38,847
[kerry_h_pechter]: continuing to make up the short fall
in the social

456
00:14:38,850 –> 00:14:39,840
[paul_tyler]: oh

457
00:14:38,907 –> 00:14:39,788
[kerry_h_pechter]: security as

458
00:14:39,816 –> 00:14:40,596
[ramsey_d_smith]: oh

459
00:14:39,888 –> 00:14:43,675
[kerry_h_pechter]: they are doing now and there is
no reason for and

460
00:14:43,626 –> 00:14:43,889
[ramsey_d_smith]: oh

461
00:14:43,755 –> 00:14:44,476
[kerry_h_pechter]: to have this

462
00:14:44,406 –> 00:14:44,647
[ramsey_d_smith]: yah

463
00:14:44,977 –> 00:14:47,440
[kerry_h_pechter]: i’m going to get really excited to
hear and i don’t know if that’s a

464
00:14:47,480 –> 00:14:48,182
[kerry_h_pechter]: good thing or not

465
00:14:48,523 –> 00:14:48,543
[ramsey_d_smith]: h

466
00:14:48,822 –> 00:14:50,044
[kerry_h_pechter]: but there is

467
00:14:50,216 –> 00:14:51,018
[ramsey_d_smith]: before you do though

468
00:14:51,156 –> 00:14:53,286
[kerry_h_pechter]: yeah

469
00:14:51,218 –> 00:14:55,205
[ramsey_d_smith]: before you before you do i just

470
00:14:55,167 –> 00:14:55,309
[kerry_h_pechter]: yeah

471
00:14:55,225 –> 00:14:58,290
[ramsey_d_smith]: want to be i just want to
be clear on something because right just

472
00:14:58,566 –> 00:14:59,376
[kerry_h_pechter]: yeah

473
00:14:58,931 –> 00:15:03,561
[ramsey_d_smith]: so there there’s the general fund which
pays which pays the money that ends up

474
00:15:03,621 –> 00:15:04,784
[ramsey_d_smith]: in people’s mail box right

475
00:15:05,406 –> 00:15:05,646
[kerry_h_pechter]: there’s

476
00:15:05,606 –> 00:15:05,747
[ramsey_d_smith]: and

477
00:15:05,827 –> 00:15:06,147
[kerry_h_pechter]: general

478
00:15:06,048 –> 00:15:06,228
[ramsey_d_smith]: eighty

479
00:15:06,207 –> 00:15:06,468
[kerry_h_pechter]: fund

480
00:15:06,288 –> 00:15:06,730
[ramsey_d_smith]: percent of

481
00:15:07,189 –> 00:15:07,950
[kerry_h_pechter]: redeems

482
00:15:07,311 –> 00:15:07,773
[ramsey_d_smith]: i’m going to just

483
00:15:08,311 –> 00:15:13,980
[kerry_h_pechter]: redeems the trust fund assets and then
the social security takes the money

484
00:15:14,136 –> 00:15:16,086
[ramsey_d_smith]: yeah

485
00:15:14,521 –> 00:15:19,792
[kerry_h_pechter]: it gets from the redemption of the
trust fund ass and puts it into people’s

486
00:15:19,852 –> 00:15:21,964
[kerry_h_pechter]: mail boxes virtually

487
00:15:22,207 –> 00:15:28,037
[ramsey_d_smith]: agreed so when when the trust but
assets good to zero right on or around

488
00:15:28,117 –> 00:15:33,586
[ramsey_d_smith]: twenty thirty four then that twenty percent
if that’s the short whatever the show fall

489
00:15:33,686 –> 00:15:33,807
[ramsey_d_smith]: is

490
00:15:33,690 –> 00:15:33,931
[paul_tyler]: yeah

491
00:15:34,187 –> 00:15:35,249
[ramsey_d_smith]: it has to come from

492
00:15:35,319 –> 00:15:35,460
[paul_tyler]: yeah

493
00:15:35,329 –> 00:15:38,254
[ramsey_d_smith]: somewhere it can no longer come from
the trust fund so

494
00:15:38,199 –> 00:15:38,220
[paul_tyler]: m

495
00:15:38,334 –> 00:15:42,521
[ramsey_d_smith]: then some action will have to be
taken and we may agree that it’s likely

496
00:15:42,581 –> 00:15:47,250
[ramsey_d_smith]: that some political action will be taken
but some politica action somebody will have to

497
00:15:47,290 –> 00:15:50,658
[ramsey_d_smith]: do something somebody in the united states
government whether it’s the president our congress or

498
00:15:50,718 –> 00:15:55,908
[ramsey_d_smith]: somebody is gonna have to take some
action to source that money to make up

499
00:15:56,008 –> 00:15:57,790
[ramsey_d_smith]: that short fall that’s now being covered

500
00:15:57,720 –> 00:15:57,740
[paul_tyler]: m

501
00:15:57,810 –> 00:15:58,531
[ramsey_d_smith]: by the trust fund

502
00:15:58,847 –> 00:15:58,969
[kerry_h_pechter]: yea

503
00:15:59,172 –> 00:16:02,035
[ramsey_d_smith]: so how do we think about the
risk around that

504
00:16:03,316 –> 00:16:03,516
[kerry_h_pechter]: well

505
00:16:03,496 –> 00:16:03,958
[ramsey_d_smith]: potential

506
00:16:03,716 –> 00:16:03,917
[kerry_h_pechter]: well

507
00:16:04,199 –> 00:16:05,827
[ramsey_d_smith]: action or inaction in twenty thirty

508
00:16:05,720 –> 00:16:05,880
[kerry_h_pechter]: as i

509
00:16:05,867 –> 00:16:05,987
[ramsey_d_smith]: four

510
00:16:05,980 –> 00:16:10,327
[kerry_h_pechter]: said at the beginning we’re talking about
a political risk in the same sense that

511
00:16:10,407 –> 00:16:11,609
[kerry_h_pechter]: the debt sealing

512
00:16:11,347 –> 00:16:11,508
[ramsey_d_smith]: yeah

513
00:16:12,170 –> 00:16:17,066
[kerry_h_pechter]: involved a political risk it did not
solve it did not involved

514
00:16:16,866 –> 00:16:17,131
[ramsey_d_smith]: oh

515
00:16:17,147 –> 00:16:18,429
[kerry_h_pechter]: the inability

516
00:16:17,826 –> 00:16:18,086
[ramsey_d_smith]: oh

517
00:16:18,930 –> 00:16:20,793
[kerry_h_pechter]: of the united states to make good

518
00:16:21,197 –> 00:16:21,217
[ramsey_d_smith]: h

519
00:16:21,474 –> 00:16:23,878
[kerry_h_pechter]: on it on its promises

520
00:16:23,505 –> 00:16:24,377
[ramsey_d_smith]: h yah

521
00:16:24,339 –> 00:16:25,821
[kerry_h_pechter]: so money

522
00:16:25,889 –> 00:16:26,556
[ramsey_d_smith]: hm

523
00:16:25,901 –> 00:16:27,203
[kerry_h_pechter]: is coming out of the general fund

524
00:16:27,096 –> 00:16:27,439
[ramsey_d_smith]: oh

525
00:16:27,324 –> 00:16:29,728
[kerry_h_pechter]: now we will

526
00:16:29,736 –> 00:16:30,696
[ramsey_d_smith]: yeah

527
00:16:29,788 –> 00:16:31,170
[kerry_h_pechter]: reach a just like

528
00:16:31,200 –> 00:16:31,403
[paul_tyler]: oh

529
00:16:31,210 –> 00:16:31,511
[kerry_h_pechter]: the debt

530
00:16:31,515 –> 00:16:31,536
[ramsey_d_smith]: m

531
00:16:31,571 –> 00:16:32,252
[kerry_h_pechter]: limit we will

532
00:16:32,277 –> 00:16:32,400
[paul_tyler]: yeah

533
00:16:32,312 –> 00:16:33,093
[kerry_h_pechter]: reach a legal

534
00:16:33,162 –> 00:16:33,304
[ramsey_d_smith]: yes

535
00:16:33,173 –> 00:16:36,178
[kerry_h_pechter]: limit that the that more money

536
00:16:36,066 –> 00:16:36,247
[ramsey_d_smith]: yeah

537
00:16:36,319 –> 00:16:39,544
[kerry_h_pechter]: is now coming out of the general
fund than was intended

538
00:16:39,246 –> 00:16:39,547
[ramsey_d_smith]: oh

539
00:16:39,684 –> 00:16:41,487
[kerry_h_pechter]: by the original securities laws

540
00:16:41,395 –> 00:16:41,436
[ramsey_d_smith]: ah

541
00:16:41,948 –> 00:16:45,414
[kerry_h_pechter]: and then as i you know showed
in the analogy to the insurance

542
00:16:45,278 –> 00:16:45,380
[ramsey_d_smith]: ah

543
00:16:45,474 –> 00:16:47,958
[kerry_h_pechter]: company we can either raise premiums

544
00:16:47,676 –> 00:16:48,456
[ramsey_d_smith]: yeah

545
00:16:48,480 –> 00:16:48,500
[paul_tyler]: m

546
00:16:48,696 –> 00:16:49,686
[ramsey_d_smith]: yeah

547
00:16:48,779 –> 00:16:50,242
[kerry_h_pechter]: or we can cut benefits

548
00:16:50,526 –> 00:16:51,546
[ramsey_d_smith]: yeah

549
00:16:50,863 –> 00:16:51,704
[kerry_h_pechter]: and that will

550
00:16:51,666 –> 00:16:52,806
[ramsey_d_smith]: yeah

551
00:16:51,764 –> 00:16:54,708
[kerry_h_pechter]: be a pill litically incredibly ownerous

552
00:16:54,606 –> 00:16:55,596
[ramsey_d_smith]: yeah

553
00:16:54,848 –> 00:16:57,570
[kerry_h_pechter]: process because it’s going to you know

554
00:16:57,636 –> 00:16:57,860
[ramsey_d_smith]: oh

555
00:16:57,750 –> 00:17:02,435
[kerry_h_pechter]: change you know what’s mine and what’s
yours but but i want to establish

556
00:17:02,352 –> 00:17:03,640
[ramsey_d_smith]: hm ah

557
00:17:04,216 –> 00:17:07,401
[kerry_h_pechter]: and this goes back to what i
said before about the different risks that social

558
00:17:07,461 –> 00:17:08,683
[kerry_h_pechter]: security i

559
00:17:08,685 –> 00:17:08,706
[ramsey_d_smith]: m

560
00:17:08,743 –> 00:17:09,524
[kerry_h_pechter]: want to establish

561
00:17:09,189 –> 00:17:09,373
[ramsey_d_smith]: yeah

562
00:17:09,885 –> 00:17:12,830
[kerry_h_pechter]: that even if you’re paying more in

563
00:17:12,786 –> 00:17:13,066
[ramsey_d_smith]: oh

564
00:17:13,030 –> 00:17:17,197
[kerry_h_pechter]: premiums which is what we call the
pay roll tack is what the payroll tax

565
00:17:17,286 –> 00:17:17,946
[ramsey_d_smith]: oh

566
00:17:17,310 –> 00:17:17,553
[paul_tyler]: yeah

567
00:17:17,357 –> 00:17:18,580
[kerry_h_pechter]: is the more

568
00:17:18,906 –> 00:17:19,186
[ramsey_d_smith]: oh

569
00:17:19,802 –> 00:17:22,045
[kerry_h_pechter]: what you even if your premiums go

570
00:17:22,176 –> 00:17:22,845
[ramsey_d_smith]: yeah

571
00:17:22,326 –> 00:17:23,788
[kerry_h_pechter]: up and even if your benefits

572
00:17:23,556 –> 00:17:23,844
[ramsey_d_smith]: oh

573
00:17:23,888 –> 00:17:26,152
[kerry_h_pechter]: go down a little whichever way it
goes

574
00:17:25,956 –> 00:17:26,177
[ramsey_d_smith]: yeah

575
00:17:26,252 –> 00:17:30,097
[kerry_h_pechter]: for you that if it is still

576
00:17:29,663 –> 00:17:30,906
[ramsey_d_smith]: a my

577
00:17:30,658 –> 00:17:32,799
[kerry_h_pechter]: going to be worth it and it’s
going to be

578
00:17:32,916 –> 00:17:33,161
[ramsey_d_smith]: oh

579
00:17:32,920 –> 00:17:34,481
[kerry_h_pechter]: worth it measurably

580
00:17:34,446 –> 00:17:34,729
[ramsey_d_smith]: yeah

581
00:17:34,821 –> 00:17:36,843
[kerry_h_pechter]: in terms of what it would cost
you

582
00:17:37,086 –> 00:17:37,106
[ramsey_d_smith]: m

583
00:17:37,463 –> 00:17:40,376
[kerry_h_pechter]: to go into the private market or

584
00:17:40,356 –> 00:17:41,316
[ramsey_d_smith]: yeah

585
00:17:40,597 –> 00:17:43,141
[kerry_h_pechter]: into the investment market to either save
enough

586
00:17:43,056 –> 00:17:43,317
[ramsey_d_smith]: oh

587
00:17:43,481 –> 00:17:45,705
[kerry_h_pechter]: to insure yourself against those same risks

588
00:17:45,576 –> 00:17:45,596
[ramsey_d_smith]: m

589
00:17:46,246 –> 00:17:47,588
[kerry_h_pechter]: or to buy insurance

590
00:17:47,505 –> 00:17:47,526
[ramsey_d_smith]: m

591
00:17:47,648 –> 00:17:50,573
[kerry_h_pechter]: against those same risks from an insurance
company

592
00:17:50,466 –> 00:17:51,186
[ramsey_d_smith]: yeah

593
00:17:51,334 –> 00:17:54,240
[kerry_h_pechter]: no matter what the premiums go up

594
00:17:54,186 –> 00:17:54,655
[ramsey_d_smith]: oh

595
00:17:54,260 –> 00:17:56,265
[kerry_h_pechter]: we’re talking about a twenty percent gap
no matter

596
00:17:56,166 –> 00:17:56,448
[ramsey_d_smith]: oh

597
00:17:56,345 –> 00:18:01,806
[kerry_h_pechter]: what the premiums go up to or
how much the benefits go down that if

598
00:18:01,906 –> 00:18:03,288
[kerry_h_pechter]: it is still going

599
00:18:03,239 –> 00:18:05,316
[ramsey_d_smith]: ah

600
00:18:03,369 –> 00:18:06,334
[kerry_h_pechter]: to be an incredible value and

601
00:18:06,276 –> 00:18:06,537
[ramsey_d_smith]: yeah

602
00:18:06,834 –> 00:18:08,117
[kerry_h_pechter]: i’m it’s unfortunate

603
00:18:07,681 –> 00:18:07,821
[ramsey_d_smith]: yeah

604
00:18:08,157 –> 00:18:13,085
[kerry_h_pechter]: to me that it seems unfortunate to
me that even the pro social security crowd

605
00:18:13,726 –> 00:18:14,007
[kerry_h_pechter]: or say

606
00:18:14,526 –> 00:18:14,908
[ramsey_d_smith]: oh

607
00:18:14,770 –> 00:18:17,581
[kerry_h_pechter]: the bi partisan policy center that

608
00:18:18,546 –> 00:18:18,772
[ramsey_d_smith]: yeah

609
00:18:19,346 –> 00:18:19,486
[kerry_h_pechter]: that

610
00:18:19,509 –> 00:18:19,530
[paul_tyler]: m

611
00:18:19,846 –> 00:18:20,568
[kerry_h_pechter]: weighs in on this

612
00:18:20,556 –> 00:18:20,801
[ramsey_d_smith]: yes

613
00:18:20,728 –> 00:18:24,855
[kerry_h_pechter]: a lot of times with a lot
of credibility they have all adopted

614
00:18:24,546 –> 00:18:25,536
[ramsey_d_smith]: oh

615
00:18:25,556 –> 00:18:25,656
[kerry_h_pechter]: the

616
00:18:25,686 –> 00:18:26,052
[ramsey_d_smith]: oh

617
00:18:25,756 –> 00:18:27,519
[kerry_h_pechter]: investment view of social

618
00:18:27,516 –> 00:18:27,717
[ramsey_d_smith]: oh

619
00:18:27,539 –> 00:18:31,686
[kerry_h_pechter]: security and saying well it’s not that
much more expensive or

620
00:18:31,776 –> 00:18:33,844
[ramsey_d_smith]: oh

621
00:18:32,207 –> 00:18:37,194
[kerry_h_pechter]: maybe we should invest some of that
money in stocks and they are abandoning

622
00:18:36,936 –> 00:18:37,137
[ramsey_d_smith]: oh

623
00:18:38,646 –> 00:18:41,491
[kerry_h_pechter]: the real the true story

624
00:18:41,745 –> 00:18:41,766
[ramsey_d_smith]: m

625
00:18:41,751 –> 00:18:41,791
[kerry_h_pechter]: of

626
00:18:41,766 –> 00:18:42,636
[ramsey_d_smith]: yeah

627
00:18:42,072 –> 00:18:47,561
[kerry_h_pechter]: the true justification for sociacurity it’s insurance
it’s called social

628
00:18:47,756 –> 00:18:47,857
[ramsey_d_smith]: ah

629
00:18:47,841 –> 00:18:49,224
[kerry_h_pechter]: insurance for

630
00:18:49,084 –> 00:18:49,145
[ramsey_d_smith]: ye

631
00:18:49,384 –> 00:18:56,716
[kerry_h_pechter]: a reason it’s not an investment there
is no fund that’s generating returns an insurance

632
00:18:56,756 –> 00:19:02,085
[kerry_h_pechter]: company doesn’t give you back the money
that you put in it gives you a

633
00:19:02,205 –> 00:19:02,346
[kerry_h_pechter]: cur

634
00:19:02,286 –> 00:19:02,567
[ramsey_d_smith]: oh

635
00:19:02,446 –> 00:19:10,369
[kerry_h_pechter]: and it pays a claim if you
experience an insurable event insurance is not an

636
00:19:10,469 –> 00:19:17,801
[kerry_h_pechter]: investment it’s an offloading of risk and
that offloading of risk is extremely valuable and

637
00:19:18,162 –> 00:19:19,203
[kerry_h_pechter]: in in our investment

638
00:19:19,058 –> 00:19:19,219
[ramsey_d_smith]: is he

639
00:19:19,283 –> 00:19:19,684
[kerry_h_pechter]: world

640
00:19:19,299 –> 00:19:20,102
[ramsey_d_smith]: freezing up for you too

641
00:19:20,245 –> 00:19:25,474
[kerry_h_pechter]: which all attuned to you know because
of our involvement in for one k we

642
00:19:25,574 –> 00:19:26,716
[kerry_h_pechter]: have lost sight of

643
00:19:26,625 –> 00:19:26,646
[ramsey_d_smith]: m

644
00:19:27,397 –> 00:19:28,118
[kerry_h_pechter]: what the value

645
00:19:27,846 –> 00:19:27,966
[ramsey_d_smith]: ah

646
00:19:28,198 –> 00:19:32,465
[kerry_h_pechter]: of insurance is it’s easy to lose
sight of because it’s a call

647
00:19:32,314 –> 00:19:32,475
[ramsey_d_smith]: yes

648
00:19:33,006 –> 00:19:33,106
[kerry_h_pechter]: but

649
00:19:33,146 –> 00:19:33,327
[ramsey_d_smith]: yeah

650
00:19:33,147 –> 00:19:37,774
[kerry_h_pechter]: it’s very easy to lose sight of
the value of the coverage and yet

651
00:19:37,806 –> 00:19:38,067
[ramsey_d_smith]: yeah

652
00:19:37,814 –> 00:19:39,577
[kerry_h_pechter]: we all know what the value of
the coverage is

653
00:19:39,546 –> 00:19:40,536
[ramsey_d_smith]: yeah

654
00:19:39,637 –> 00:19:41,080
[kerry_h_pechter]: every time somebody rams

655
00:19:40,830 –> 00:19:41,092
[paul_tyler]: yeah

656
00:19:41,140 –> 00:19:41,821
[kerry_h_pechter]: into our car

657
00:19:42,178 –> 00:19:42,362
[ramsey_d_smith]: sir

658
00:19:42,602 –> 00:19:44,505
[kerry_h_pechter]: and or burns our hat

659
00:19:44,583 –> 00:19:44,764
[paul_tyler]: yeah

660
00:19:44,647 –> 00:19:44,871
[kerry_h_pechter]: down

661
00:19:44,866 –> 00:19:50,495
[ramsey_d_smith]: all right yeah so we’re going to
agree with you because we were sort of

662
00:19:51,537 –> 00:19:52,038
[ramsey_d_smith]: were focusing

663
00:19:51,870 –> 00:19:52,113
[paul_tyler]: oh

664
00:19:52,058 –> 00:19:58,330
[ramsey_d_smith]: the insurance industry and the the value
one of

665
00:19:58,320 –> 00:19:59,160
[paul_tyler]: oh

666
00:19:58,370 –> 00:20:02,382
[ramsey_d_smith]: the challenges the value of insurance is
sometimes very hard for

667
00:20:02,520 –> 00:20:02,843
[paul_tyler]: oh

668
00:20:03,976 –> 00:20:06,780
[ramsey_d_smith]: people to appreciate or perceive or the
value

669
00:20:06,450 –> 00:20:06,690
[paul_tyler]: oh

670
00:20:06,861 –> 00:20:12,510
[ramsey_d_smith]: of it to them in the first
order and in the second order the real

671
00:20:12,650 –> 00:20:16,677
[ramsey_d_smith]: cost of providing them with that value
i think it’s hard for peopl two to

672
00:20:16,737 –> 00:20:18,560
[ramsey_d_smith]: appreciate and so one of the challenges

673
00:20:18,330 –> 00:20:18,453
[paul_tyler]: ye

674
00:20:19,381 –> 00:20:21,846
[ramsey_d_smith]: carry that i think that the government
will have

675
00:20:22,137 –> 00:20:22,319
[kerry_h_pechter]: yes

676
00:20:22,927 –> 00:20:26,914
[ramsey_d_smith]: is the same one that that we
often have in this industry which is that

677
00:20:27,916 –> 00:20:33,225
[ramsey_d_smith]: um hat in fact this is more
valuable than perhaps you know you not you

678
00:20:33,385 –> 00:20:39,395
[ramsey_d_smith]: but like the sort of the persona
of the consumer can can necessarily sort of

679
00:20:39,455 –> 00:20:45,149
[ramsey_d_smith]: quantify i appreciate and in fact in
a in a strange way you should want

680
00:20:45,269 –> 00:20:50,277
[ramsey_d_smith]: to you should want you should want
a you should want somebody to come to

681
00:20:50,317 –> 00:20:53,463
[ramsey_d_smith]: you and say you know it’s going
to cost you a bit more but it’s

682
00:20:53,523 –> 00:20:58,050
[ramsey_d_smith]: so valuable and i can help you
understand how valuable it is that that you

683
00:20:58,170 –> 00:21:02,257
[ramsey_d_smith]: want you want to be paying more
and you want everybody else in the society

684
00:21:02,297 –> 00:21:06,164
[ramsey_d_smith]: to pay more to maintain this very
sort of very valuable benefit but that is

685
00:21:06,284 –> 00:21:07,045
[ramsey_d_smith]: very hard to do

686
00:21:08,158 –> 00:21:08,339
[kerry_h_pechter]: well

687
00:21:08,236 –> 00:21:08,417
[ramsey_d_smith]: arry

688
00:21:08,560 –> 00:21:08,621
[kerry_h_pechter]: it

689
00:21:08,679 –> 00:21:08,799
[ramsey_d_smith]: it’s

690
00:21:08,721 –> 00:21:08,822
[kerry_h_pechter]: is

691
00:21:08,860 –> 00:21:09,021
[ramsey_d_smith]: very

692
00:21:08,940 –> 00:21:09,690
[paul_tyler]: oh

693
00:21:09,061 –> 00:21:11,616
[ramsey_d_smith]: hard and yeah

694
00:21:11,156 –> 00:21:12,879
[kerry_h_pechter]: it’s well it’s hard to do because

695
00:21:12,776 –> 00:21:12,997
[ramsey_d_smith]: go ahead

696
00:21:13,580 –> 00:21:15,503
[kerry_h_pechter]: for a simple reason social security

697
00:21:15,636 –> 00:21:15,919
[ramsey_d_smith]: oh

698
00:21:15,663 –> 00:21:20,792
[kerry_h_pechter]: you can’t look at social people people
want to look at it it’s very it’s

699
00:21:21,052 –> 00:21:21,793
[kerry_h_pechter]: almost impossible

700
00:21:21,576 –> 00:21:21,857
[ramsey_d_smith]: oh

701
00:21:21,853 –> 00:21:25,927
[kerry_h_pechter]: to look at insurance as an asset
it’s not priced

702
00:21:25,716 –> 00:21:25,958
[ramsey_d_smith]: oh

703
00:21:26,027 –> 00:21:27,389
[kerry_h_pechter]: as an asset it’s not

704
00:21:27,456 –> 00:21:27,738
[ramsey_d_smith]: oh

705
00:21:27,510 –> 00:21:30,715
[kerry_h_pechter]: traded as an asset it’s not inherited
as an asset

706
00:21:30,876 –> 00:21:31,956
[ramsey_d_smith]: oh

707
00:21:31,376 –> 00:21:36,444
[kerry_h_pechter]: it’s it’s and it only pays out
if an insurable event occurs which means you

708
00:21:36,505 –> 00:21:39,880
[kerry_h_pechter]: may never get your money but that
doesn’t

709
00:21:39,666 –> 00:21:39,946
[ramsey_d_smith]: oh

710
00:21:40,021 –> 00:21:43,819
[kerry_h_pechter]: make it less valuable while you have
it

711
00:21:44,106 –> 00:21:44,308
[ramsey_d_smith]: oh

712
00:21:44,160 –> 00:21:48,868
[kerry_h_pechter]: because it by taking certain kinds of
risk off your plate it allows you to

713
00:21:48,948 –> 00:21:52,374
[kerry_h_pechter]: take other risks like invest in

714
00:21:52,807 –> 00:21:53,009
[ramsey_d_smith]: sure

715
00:21:52,834 –> 00:21:57,803
[kerry_h_pechter]: if you you people don’t realize that
if social security went away they might have

716
00:21:57,863 –> 00:22:02,491
[kerry_h_pechter]: to in order to maintain their same
risk profile which everyone understands

717
00:22:02,106 –> 00:22:03,669
[ramsey_d_smith]: oh oh

718
00:22:03,432 –> 00:22:05,415
[kerry_h_pechter]: they would have to put more of
their money into bond

719
00:22:05,226 –> 00:22:06,036
[ramsey_d_smith]: yeah

720
00:22:05,616 –> 00:22:06,758
[kerry_h_pechter]: s because

721
00:22:06,546 –> 00:22:06,790
[ramsey_d_smith]: oh

722
00:22:06,838 –> 00:22:09,563
[kerry_h_pechter]: so security is a bond portfolio

723
00:22:09,456 –> 00:22:09,658
[ramsey_d_smith]: oh

724
00:22:10,365 –> 00:22:17,239
[kerry_h_pechter]: and and and i and i don’t
know why it’s it’s just very difficult to

725
00:22:17,299 –> 00:22:22,392
[kerry_h_pechter]: get this across and and i certainly
don’t want to be the only person saying

726
00:22:22,452 –> 00:22:23,154
[kerry_h_pechter]: this because

727
00:22:23,256 –> 00:22:23,536
[ramsey_d_smith]: oh

728
00:22:23,936 –> 00:22:27,644
[kerry_h_pechter]: i mean no one is going to
believe me alone even though i’m

729
00:22:28,545 –> 00:22:28,705
[ramsey_d_smith]: yeah

730
00:22:28,756 –> 00:22:30,225
[kerry_h_pechter]: right so

731
00:22:31,571 –> 00:22:32,232
[ramsey_d_smith]: and passionate

732
00:22:34,140 –> 00:22:34,830
[paul_tyler]: yeah

733
00:22:34,299 –> 00:22:34,940
[kerry_h_pechter]: and i can

734
00:22:34,986 –> 00:22:35,269
[ramsey_d_smith]: yeah

735
00:22:35,020 –> 00:22:36,763
[kerry_h_pechter]: marshal a lot of evidence for this

736
00:22:36,696 –> 00:22:37,596
[ramsey_d_smith]: oh

737
00:22:36,843 –> 00:22:37,925
[kerry_h_pechter]: and i can bring in people

738
00:22:37,706 –> 00:22:37,866
[ramsey_d_smith]: yeah

739
00:22:37,985 –> 00:22:38,866
[kerry_h_pechter]: who will who are

740
00:22:38,820 –> 00:22:39,046
[paul_tyler]: oh

741
00:22:38,946 –> 00:22:42,012
[kerry_h_pechter]: smarter than me and better qualified than
me to explain it in greater

742
00:22:41,817 –> 00:22:41,958
[ramsey_d_smith]: just

743
00:22:42,052 –> 00:22:47,020
[kerry_h_pechter]: detail but but i believe that the
problem is that social security and its defenders

744
00:22:47,100 –> 00:22:47,701
[kerry_h_pechter]: are playing

745
00:22:47,466 –> 00:22:47,667
[ramsey_d_smith]: oh

746
00:22:48,042 –> 00:22:51,107
[kerry_h_pechter]: the game they’re playing a running they’re
trying to play a running game done

747
00:22:51,006 –> 00:22:51,274
[ramsey_d_smith]: yeah

748
00:22:51,207 –> 00:22:55,194
[kerry_h_pechter]: game running gun game when their actual
game

749
00:22:55,116 –> 00:22:55,776
[ramsey_d_smith]: oh

750
00:22:55,374 –> 00:23:00,480
[kerry_h_pechter]: is a half court game and and
if they can’t if they have to play

751
00:23:00,980 –> 00:23:04,163
[kerry_h_pechter]: the running gun then they’re going to
lose that basketball game

752
00:23:04,746 –> 00:23:04,966
[ramsey_d_smith]: oh

753
00:23:05,264 –> 00:23:08,569
[kerry_h_pechter]: and and go celtic

754
00:23:08,526 –> 00:23:08,746
[ramsey_d_smith]: yeah

755
00:23:08,749 –> 00:23:11,697
[kerry_h_pechter]: because i’m from philadelphia and it might

756
00:23:11,559 –> 00:23:11,580
[paul_tyler]: m

757
00:23:11,737 –> 00:23:14,023
[kerry_h_pechter]: as well be the celtic rather than
the

758
00:23:13,956 –> 00:23:14,296
[ramsey_d_smith]: oh

759
00:23:15,056 –> 00:23:15,761
[kerry_h_pechter]: west coasters

760
00:23:16,552 –> 00:23:19,535
[paul_tyler]: well well you know argue

761
00:23:19,326 –> 00:23:19,587
[ramsey_d_smith]: oh

762
00:23:19,675 –> 00:23:22,117
[paul_tyler]: we’ve already seen those reductions you know
carry and

763
00:23:22,326 –> 00:23:23,406
[ramsey_d_smith]: yeah

764
00:23:22,598 –> 00:23:27,374
[paul_tyler]: tell me how if you think i’m
how you re frame or disagree with my

765
00:23:27,475 –> 00:23:32,523
[paul_tyler]: perspective on this you mentioned cut benefits
we know how popular that is okay

766
00:23:32,526 –> 00:23:32,546
[ramsey_d_smith]: m

767
00:23:32,583 –> 00:23:34,506
[paul_tyler]: we can raise premiums where

768
00:23:35,166 –> 00:23:35,607
[ramsey_d_smith]: oh

769
00:23:35,728 –> 00:23:40,937
[paul_tyler]: we’re kind of getting to and with
that today the third is need base testing

770
00:23:41,157 –> 00:23:41,418
[paul_tyler]: you know

771
00:23:42,216 –> 00:23:42,318
[ramsey_d_smith]: ye

772
00:23:42,660 –> 00:23:46,787
[paul_tyler]: now we saw that the full retirement
age start to creep out that that arguable

773
00:23:46,847 –> 00:23:50,535
[paul_tyler]: was a take away that was a
reduction social security benefits do you think we’ll

774
00:23:50,575 –> 00:23:50,695
[paul_tyler]: see

775
00:23:50,637 –> 00:23:50,801
[kerry_h_pechter]: right

776
00:23:50,776 –> 00:23:55,448
[paul_tyler]: need space is needs base testing an
effective way to make the numbers work better

777
00:23:55,360 –> 00:23:55,441
[ramsey_d_smith]: ah

778
00:23:57,157 –> 00:24:04,183
[kerry_h_pechter]: you have to remember needs base testing
uh would would go along with a complete

779
00:24:04,344 –> 00:24:08,833
[kerry_h_pechter]: overhaul now if you’re in a country
overseas that like

780
00:24:10,146 –> 00:24:10,450
[ramsey_d_smith]: oh

781
00:24:10,326 –> 00:24:12,108
[kerry_h_pechter]: i don’t know spain or

782
00:24:12,396 –> 00:24:12,577
[ramsey_d_smith]: oh

783
00:24:12,709 –> 00:24:13,591
[kerry_h_pechter]: other countries that have

784
00:24:13,716 –> 00:24:14,856
[ramsey_d_smith]: my

785
00:24:13,771 –> 00:24:18,339
[kerry_h_pechter]: gone from a pago system like we
have to a investment system once

786
00:24:18,306 –> 00:24:18,552
[ramsey_d_smith]: yes

787
00:24:18,419 –> 00:24:19,521
[kerry_h_pechter]: you if you have

788
00:24:19,416 –> 00:24:19,436
[ramsey_d_smith]: m

789
00:24:19,581 –> 00:24:23,868
[kerry_h_pechter]: an investment based system a workplace country
ibution system like our far one k

790
00:24:24,420 –> 00:24:25,470
[paul_tyler]: yeah

791
00:24:24,549 –> 00:24:29,397
[kerry_h_pechter]: then you have to think about having
a minimum benefit for people who don’t make

792
00:24:29,457 –> 00:24:32,703
[kerry_h_pechter]: enough money and pay enough in so
it’s it’s the

793
00:24:32,646 –> 00:24:33,169
[ramsey_d_smith]: oh

794
00:24:33,244 –> 00:24:34,105
[kerry_h_pechter]: the minimum

795
00:24:34,296 –> 00:24:35,076
[ramsey_d_smith]: oh

796
00:24:34,346 –> 00:24:34,806
[kerry_h_pechter]: benefit

797
00:24:35,076 –> 00:24:35,558
[ramsey_d_smith]: oh

798
00:24:35,608 –> 00:24:36,970
[kerry_h_pechter]: the means tested benefit

799
00:24:37,056 –> 00:24:39,323
[ramsey_d_smith]: yeah

800
00:24:37,771 –> 00:24:40,215
[kerry_h_pechter]: that is an artifact that is

801
00:24:40,356 –> 00:24:40,641
[ramsey_d_smith]: yeah

802
00:24:40,516 –> 00:24:41,638
[kerry_h_pechter]: a functionality

803
00:24:41,646 –> 00:24:42,014
[ramsey_d_smith]: oh

804
00:24:42,239 –> 00:24:44,963
[kerry_h_pechter]: of a different kind of retirement system

805
00:24:45,495 –> 00:24:45,516
[ramsey_d_smith]: m

806
00:24:45,785 –> 00:24:49,130
[kerry_h_pechter]: and so we i think it would
probably

807
00:24:49,065 –> 00:24:49,086
[ramsey_d_smith]: m

808
00:24:49,230 –> 00:24:50,352
[kerry_h_pechter]: be too expensive

809
00:24:50,256 –> 00:24:51,756
[ramsey_d_smith]: yeah

810
00:24:50,953 –> 00:24:56,723
[kerry_h_pechter]: to guarantee a certain level of you
know say twenty percent of retires who are

811
00:24:56,923 –> 00:25:01,871
[kerry_h_pechter]: may not even qualify right now for
so security benefit if we guaranteed them eight

812
00:25:01,911 –> 00:25:04,315
[kerry_h_pechter]: hundred dollars a month with no on
a means

813
00:25:04,116 –> 00:25:04,356
[ramsey_d_smith]: yeah

814
00:25:04,416 –> 00:25:11,168
[kerry_h_pechter]: tested basis anyway that would that in
itself would would require jumping off of the

815
00:25:11,228 –> 00:25:11,889
[kerry_h_pechter]: pago system

816
00:25:11,646 –> 00:25:11,931
[ramsey_d_smith]: oh

817
00:25:12,872 –> 00:25:13,814
[kerry_h_pechter]: is that is that clear

818
00:25:13,979 –> 00:25:14,222
[ramsey_d_smith]: yes

819
00:25:14,157 –> 00:25:14,670
[paul_tyler]: hm

820
00:25:15,356 –> 00:25:15,757
[kerry_h_pechter]: it’s really

821
00:25:15,740 –> 00:25:15,925
[paul_tyler]: yes

822
00:25:15,817 –> 00:25:16,999
[kerry_h_pechter]: a facet of a different

823
00:25:16,950 –> 00:25:17,092
[paul_tyler]: yeah

824
00:25:17,200 –> 00:25:23,932
[kerry_h_pechter]: kind of financing of retirement so and
then i think that and that brings around

825
00:25:24,073 –> 00:25:26,087
[kerry_h_pechter]: another subject which

826
00:25:26,616 –> 00:25:26,636
[ramsey_d_smith]: m

827
00:25:26,969 –> 00:25:30,179
[kerry_h_pechter]: which we have to consider is that
switching from a pago

828
00:25:30,156 –> 00:25:33,096
[ramsey_d_smith]: yah

829
00:25:30,320 –> 00:25:37,723
[kerry_h_pechter]: system to four or one i mean
a bigger four or one case system with

830
00:25:37,863 –> 00:25:39,806
[kerry_h_pechter]: less risk in it and

831
00:25:39,876 –> 00:25:40,776
[ramsey_d_smith]: yeah

832
00:25:40,307 –> 00:25:42,530
[kerry_h_pechter]: and then bringing in a minimum benefit

833
00:25:42,993 –> 00:25:43,174
[ramsey_d_smith]: yeah

834
00:25:43,010 –> 00:25:48,016
[kerry_h_pechter]: wow the negotiations and the design i

835
00:25:48,015 –> 00:25:48,036
[ramsey_d_smith]: m

836
00:25:48,056 –> 00:25:54,947
[kerry_h_pechter]: mean the amount of work politically and
economic and actuarial and investment and market and

837
00:25:55,545 –> 00:25:55,566
[ramsey_d_smith]: m

838
00:25:55,608 –> 00:25:57,491
[kerry_h_pechter]: i mean the amount of work that
would have to

839
00:25:57,465 –> 00:25:57,486
[ramsey_d_smith]: m

840
00:25:57,551 –> 00:26:06,716
[kerry_h_pechter]: go into that kind of transition utterly
utterly dwarfs the amount of effort it’s going

841
00:26:06,796 –> 00:26:11,504
[kerry_h_pechter]: to take for us to tweak social
security so that there’s a non event

842
00:26:11,886 –> 00:26:12,189
[ramsey_d_smith]: yeah

843
00:26:11,904 –> 00:26:13,832
[kerry_h_pechter]: and that people can stop worrying

844
00:26:13,626 –> 00:26:14,030
[ramsey_d_smith]: oh

845
00:26:13,913 –> 00:26:19,391
[kerry_h_pechter]: about it and and ironically you know
all these people these younger people who aren’t

846
00:26:19,411 –> 00:26:19,772
[kerry_h_pechter]: collecting

847
00:26:19,800 –> 00:26:20,022
[paul_tyler]: yeah

848
00:26:19,832 –> 00:26:22,997
[kerry_h_pechter]: social security they are paying fifteen per
cent into

849
00:26:22,830 –> 00:26:22,850
[paul_tyler]: m

850
00:26:23,057 –> 00:26:26,944
[kerry_h_pechter]: their out of their pay checks and
thinking that they’re not getting

851
00:26:26,686 –> 00:26:26,787
[ramsey_d_smith]: ah

852
00:26:27,084 –> 00:26:28,887
[kerry_h_pechter]: anything when they reach how

853
00:26:28,896 –> 00:26:29,324
[ramsey_d_smith]: ye

854
00:26:29,448 –> 00:26:30,249
[kerry_h_pechter]: insane

855
00:26:30,186 –> 00:26:30,206
[ramsey_d_smith]: m

856
00:26:31,091 –> 00:26:32,974
[kerry_h_pechter]: is that that they’re they’re

857
00:26:33,036 –> 00:26:33,056
[ramsey_d_smith]: m

858
00:26:33,054 –> 00:26:37,561
[kerry_h_pechter]: giving up a sixth of their pay
for something that they don’t believe i mean

859
00:26:37,742 –> 00:26:39,645
[kerry_h_pechter]: why are they not rioting

860
00:26:39,387 –> 00:26:39,467
[ramsey_d_smith]: ah

861
00:26:40,206 –> 00:26:43,998
[kerry_h_pechter]: in the streets instead of paying fifteen

862
00:26:43,659 –> 00:26:43,680
[paul_tyler]: m

863
00:26:43,665 –> 00:26:43,686
[ramsey_d_smith]: m

864
00:26:44,039 –> 00:26:47,952
[kerry_h_pechter]: per cent it makes no sense so
on some level

865
00:26:47,955 –> 00:26:47,976
[ramsey_d_smith]: m

866
00:26:48,000 –> 00:26:48,344
[paul_tyler]: oh

867
00:26:48,052 –> 00:26:50,137
[kerry_h_pechter]: they must believe they’re

868
00:26:50,085 –> 00:26:50,106
[ramsey_d_smith]: m

869
00:26:50,197 –> 00:26:56,908
[kerry_h_pechter]: going to get that benefit or else
i mean i would tell my kids now

870
00:26:57,875 –> 00:27:01,441
[kerry_h_pechter]: it’s time to go to the streets

871
00:27:04,506 –> 00:27:04,686
[ramsey_d_smith]: yeah

872
00:27:04,544 –> 00:27:04,925
[paul_tyler]: time to go

873
00:27:04,926 –> 00:27:05,230
[kerry_h_pechter]: oh

874
00:27:04,966 –> 00:27:06,129
[paul_tyler]: to the streets ramsey

875
00:27:06,526 –> 00:27:06,966
[kerry_h_pechter]: i mean we’re

876
00:27:06,911 –> 00:27:07,052
[paul_tyler]: we’re

877
00:27:07,026 –> 00:27:07,286
[kerry_h_pechter]: talking

878
00:27:07,112 –> 00:27:07,313
[paul_tyler]: at the

879
00:27:07,346 –> 00:27:07,927
[kerry_h_pechter]: about fifteen

880
00:27:07,834 –> 00:27:08,055
[paul_tyler]: near

881
00:27:08,007 –> 00:27:08,327
[kerry_h_pechter]: per cent

882
00:27:08,195 –> 00:27:08,336
[paul_tyler]: near

883
00:27:08,387 –> 00:27:08,727
[kerry_h_pechter]: of pay

884
00:27:08,650 –> 00:27:08,831
[ramsey_d_smith]: yeah

885
00:27:09,268 –> 00:27:11,490
[kerry_h_pechter]: i mean what is more what is
more gut level

886
00:27:11,550 –> 00:27:12,630
[paul_tyler]: yeah

887
00:27:11,570 –> 00:27:13,431
[kerry_h_pechter]: than that i mean don’t take that
money

888
00:27:13,266 –> 00:27:13,428
[ramsey_d_smith]: oh

889
00:27:13,348 –> 00:27:13,531
[paul_tyler]: yeah

890
00:27:13,492 –> 00:27:16,054
[kerry_h_pechter]: from me if you’re if you’re not
going to that’s fraud

891
00:27:15,726 –> 00:27:16,029
[ramsey_d_smith]: oh

892
00:27:16,734 –> 00:27:17,555
[kerry_h_pechter]: okay and

893
00:27:17,506 –> 00:27:17,586
[ramsey_d_smith]: so

894
00:27:17,652 –> 00:27:17,835
[paul_tyler]: right

895
00:27:17,827 –> 00:27:20,412
[ramsey_d_smith]: well how are you getting to the
fifteen per cent that’s the that’s the pica

896
00:27:20,493 –> 00:27:24,522
[ramsey_d_smith]: that somebody sees in their w to
plus the employer contribution together is that how

897
00:27:24,582 –> 00:27:25,524
[ramsey_d_smith]: you get the fifteen per cent

898
00:27:26,767 –> 00:27:28,871
[kerry_h_pechter]: oh yeah because everyone all economists

899
00:27:28,746 –> 00:27:30,015
[ramsey_d_smith]: yeah

900
00:27:28,971 –> 00:27:34,380
[kerry_h_pechter]: agree and and i’m speaking now for
all economists the agree

901
00:27:34,086 –> 00:27:34,287
[ramsey_d_smith]: yes

902
00:27:34,500 –> 00:27:36,323
[kerry_h_pechter]: that that you know whether

903
00:27:36,390 –> 00:27:36,617
[paul_tyler]: yeah

904
00:27:37,285 –> 00:27:42,162
[kerry_h_pechter]: the employ it takes its share of
the pay roll tax out of its compensation

905
00:27:41,588 –> 00:27:41,608
[ramsey_d_smith]: i

906
00:27:42,322 –> 00:27:44,561
[kerry_h_pechter]: budget and so that

907
00:27:44,428 –> 00:27:44,591
[ramsey_d_smith]: sure

908
00:27:44,963 –> 00:27:46,932
[kerry_h_pechter]: whether it whether it would give you
that

909
00:27:47,895 –> 00:27:47,916
[ramsey_d_smith]: m

910
00:27:47,936 –> 00:27:48,477
[kerry_h_pechter]: they it would give

911
00:27:48,486 –> 00:27:48,506
[ramsey_d_smith]: m

912
00:27:48,537 –> 00:27:49,378
[kerry_h_pechter]: you that income

913
00:27:49,596 –> 00:27:49,940
[ramsey_d_smith]: oh

914
00:27:49,618 –> 00:27:54,146
[kerry_h_pechter]: that’s an interesting thought experiment of whether
you would you know you’d get the extra

915
00:27:54,767 –> 00:27:55,989
[kerry_h_pechter]: six percent if the

916
00:27:56,280 –> 00:27:57,270
[paul_tyler]: oh

917
00:27:56,570 –> 00:28:01,518
[kerry_h_pechter]: employer didn’t have to pay any payroll
tax but i’ll tell you believe me when

918
00:28:02,420 –> 00:28:07,128
[kerry_h_pechter]: a country that goes to a defined
defined contribution

919
00:28:07,176 –> 00:28:07,498
[ramsey_d_smith]: oh

920
00:28:07,208 –> 00:28:11,795
[kerry_h_pechter]: plan with minimum benefits those they have
mandatory

921
00:28:10,995 –> 00:28:12,416
[ramsey_d_smith]: m yeah m

922
00:28:12,976 –> 00:28:14,118
[kerry_h_pechter]: employer contributions

923
00:28:14,346 –> 00:28:14,547
[ramsey_d_smith]: yeah

924
00:28:14,779 –> 00:28:16,502
[kerry_h_pechter]: so get real if we’re

925
00:28:16,444 –> 00:28:16,566
[ramsey_d_smith]: yeah

926
00:28:16,622 –> 00:28:18,205
[kerry_h_pechter]: going away to an investment based

927
00:28:18,036 –> 00:28:18,445
[ramsey_d_smith]: oh

928
00:28:18,265 –> 00:28:21,631
[kerry_h_pechter]: system from sociasecurity we’re going to a
new kind

929
00:28:21,465 –> 00:28:21,486
[ramsey_d_smith]: m

930
00:28:21,711 –> 00:28:22,532
[kerry_h_pechter]: of mandatory

931
00:28:22,337 –> 00:28:22,641
[ramsey_d_smith]: yes

932
00:28:22,672 –> 00:28:25,788
[kerry_h_pechter]: it’s not going to be optional under
those circumstances

933
00:28:25,211 –> 00:28:25,293
[ramsey_d_smith]: ah

934
00:28:25,908 –> 00:28:28,052
[kerry_h_pechter]: for employes to benefit and an employe

935
00:28:28,056 –> 00:28:28,318
[ramsey_d_smith]: my

936
00:28:28,092 –> 00:28:35,556
[kerry_h_pechter]: contribution is in australia or israel or
cost erica that’s going to be bigger what

937
00:28:35,676 –> 00:28:39,883
[kerry_h_pechter]: people have to pay now and people
have an option now to whether to contribute

938
00:28:39,923 –> 00:28:42,768
[kerry_h_pechter]: to their social security they’re not going
to it’s going to be more than six

939
00:28:42,868 –> 00:28:47,556
[kerry_h_pechter]: per cent so that’s what i’m saying
when it’s this is just not going to

940
00:28:47,596 –> 00:28:51,262
[kerry_h_pechter]: be like throwing a lever and half
of your social security budget goes into the

941
00:28:51,282 –> 00:28:53,746
[kerry_h_pechter]: stock market no that’s not what’s going
to happen

942
00:28:54,126 –> 00:28:54,146
[ramsey_d_smith]: m

943
00:28:54,167 –> 00:28:55,269
[kerry_h_pechter]: i mean if it does then

944
00:28:55,322 –> 00:28:55,506
[paul_tyler]: yeah

945
00:28:56,130 –> 00:29:00,800
[kerry_h_pechter]: it’s just it’s just making kicking a
problem on the road because then when

946
00:29:00,697 –> 00:29:00,717
[ramsey_d_smith]: m

947
00:29:00,840 –> 00:29:01,061
[kerry_h_pechter]: people

948
00:29:00,960 –> 00:29:01,830
[paul_tyler]: yeah

949
00:29:01,141 –> 00:29:02,023
[kerry_h_pechter]: realize how much risk

950
00:29:01,950 –> 00:29:02,274
[paul_tyler]: oh

951
00:29:02,083 –> 00:29:07,106
[kerry_h_pechter]: they’re carrying that they didn’t use to
carry that they’re going to start either they’re

952
00:29:07,186 –> 00:29:07,687
[kerry_h_pechter]: completely

953
00:29:07,680 –> 00:29:07,700
[paul_tyler]: m

954
00:29:07,827 –> 00:29:12,295
[kerry_h_pechter]: financially illiterate or they’re just going to
start i mean they may absorb it the

955
00:29:12,315 –> 00:29:16,061
[kerry_h_pechter]: way people are now absorbing a fifteen
percent tax without thinking that they’re going to

956
00:29:16,101 –> 00:29:17,984
[kerry_h_pechter]: get anything for it i mean get

957
00:29:17,956 –> 00:29:18,076
[ramsey_d_smith]: well

958
00:29:18,024 –> 00:29:18,145
[kerry_h_pechter]: your

959
00:29:18,096 –> 00:29:21,960
[ramsey_d_smith]: they’re only because hey’re only seeing seven
or eight percent of it right even i

960
00:29:22,040 –> 00:29:25,944
[ramsey_d_smith]: agree with you with the the from
an comes perspective but i think that most

961
00:29:26,044 –> 00:29:30,583
[ramsey_d_smith]: people only see the you know the
face that shows up on their pay check

962
00:29:30,623 –> 00:29:31,546
[ramsey_d_smith]: and that’s painful enough

963
00:29:31,510 –> 00:29:31,691
[paul_tyler]: yeah

964
00:29:32,007 –> 00:29:32,127
[ramsey_d_smith]: so

965
00:29:32,335 –> 00:29:32,516
[paul_tyler]: yeah

966
00:29:32,516 –> 00:29:33,657
[kerry_h_pechter]: i don’t know if they even i

967
00:29:33,642 –> 00:29:33,742
[paul_tyler]: all

968
00:29:33,738 –> 00:29:33,898
[kerry_h_pechter]: don’t

969
00:29:33,803 –> 00:29:33,944
[paul_tyler]: right

970
00:29:33,938 –> 00:29:34,038
[kerry_h_pechter]: know

971
00:29:33,964 –> 00:29:34,125
[paul_tyler]: well

972
00:29:34,098 –> 00:29:37,945
[kerry_h_pechter]: if they even they even think about
it if you’re making enough money so that

973
00:29:37,985 –> 00:29:38,906
[kerry_h_pechter]: you’ve reached your pier

974
00:29:38,736 –> 00:29:40,085
[ramsey_d_smith]: yeah

975
00:29:38,946 –> 00:29:41,791
[kerry_h_pechter]: limit by the middle of february then
you know

976
00:29:41,660 –> 00:29:41,801
[ramsey_d_smith]: yeah

977
00:29:41,911 –> 00:29:42,692
[kerry_h_pechter]: all about pica

978
00:29:42,726 –> 00:29:43,007
[ramsey_d_smith]: yeah

979
00:29:42,773 –> 00:29:45,037
[kerry_h_pechter]: limits but other people you

980
00:29:45,059 –> 00:29:45,199
[ramsey_d_smith]: yeah

981
00:29:45,097 –> 00:29:48,384
[kerry_h_pechter]: know have they don’t even know what
ficus stands for

982
00:29:50,649 –> 00:29:53,582
[ramsey_d_smith]: yeah

983
00:29:51,522 –> 00:29:55,852
[paul_tyler]: all right so hey listen we are
right at time ramsey

984
00:29:56,046 –> 00:29:58,470
[ramsey_d_smith]: yuh

985
00:29:56,132 –> 00:29:58,317
[paul_tyler]: final thoughts questions for carry

986
00:29:58,930 –> 00:30:03,237
[ramsey_d_smith]: carry great having you back on um
and i love to have you on again

987
00:30:04,179 –> 00:30:08,206
[ramsey_d_smith]: to talk about i can think of
three or four things i was reminded your

988
00:30:08,266 –> 00:30:08,987
[ramsey_d_smith]: trip to israel

989
00:30:08,806 –> 00:30:08,826
[paul_tyler]: i

990
00:30:09,227 –> 00:30:11,571
[ramsey_d_smith]: and how enlightening you know the writings

991
00:30:11,280 –> 00:30:12,120
[paul_tyler]: yeah

992
00:30:11,672 –> 00:30:16,039
[ramsey_d_smith]: that came out of that were and
how it was interesting perspective for comparison purposes

993
00:30:16,119 –> 00:30:16,219
[ramsey_d_smith]: so

994
00:30:16,686 –> 00:30:17,436
[kerry_h_pechter]: oh

995
00:30:16,800 –> 00:30:18,242
[ramsey_d_smith]: between between alternative

996
00:30:18,195 –> 00:30:18,216
[kerry_h_pechter]: m

997
00:30:18,303 –> 00:30:18,803
[ramsey_d_smith]: system so

998
00:30:19,266 –> 00:30:19,286
[kerry_h_pechter]: m

999
00:30:19,625 –> 00:30:23,211
[ramsey_d_smith]: thanks for come ing on and and
talking to us about social security and we

1000
00:30:23,271 –> 00:30:28,020
[ramsey_d_smith]: should we should line up you know
some other topics to to go over in

1001
00:30:28,080 –> 00:30:30,464
[ramsey_d_smith]: the end as the year progresses

1002
00:30:30,981 –> 00:30:31,142
[paul_tyler]: yeah

1003
00:30:31,106 –> 00:30:31,767
[kerry_h_pechter]: well i’m blowing to

1004
00:30:31,825 –> 00:30:32,348
[paul_tyler]: absolutely

1005
00:30:31,868 –> 00:30:32,749
[kerry_h_pechter]: iceland in august

1006
00:30:32,469 –> 00:30:32,931
[paul_tyler]: care we’ll put

1007
00:30:32,950 –> 00:30:33,030
[kerry_h_pechter]: and

1008
00:30:32,952 –> 00:30:33,253
[paul_tyler]: the links

1009
00:30:33,090 –> 00:30:33,371
[kerry_h_pechter]: i’ll be

1010
00:30:33,334 –> 00:30:33,434
[paul_tyler]: to

1011
00:30:33,531 –> 00:30:33,912
[kerry_h_pechter]: meeting with

1012
00:30:33,796 –> 00:30:33,876
[paul_tyler]: you

1013
00:30:33,952 –> 00:30:36,818
[kerry_h_pechter]: people there about their system they have
a a

1014
00:30:37,365 –> 00:30:37,976
[ramsey_d_smith]: m oh

1015
00:30:37,900 –> 00:30:42,480
[kerry_h_pechter]: a collective d c that’s it’s going
to be interesting

1016
00:30:43,725 –> 00:30:43,926
[ramsey_d_smith]: yeah

1017
00:30:44,300 –> 00:30:44,983
[paul_tyler]: interesting all right

1018
00:30:44,867 –> 00:30:44,967
[ramsey_d_smith]: i’m

1019
00:30:45,004 –> 00:30:45,144
[paul_tyler]: we’ll

1020
00:30:45,007 –> 00:30:45,147
[ramsey_d_smith]: going

1021
00:30:45,184 –> 00:30:45,406
[paul_tyler]: carry

1022
00:30:45,187 –> 00:30:45,448
[ramsey_d_smith]: to send

1023
00:30:45,486 –> 00:30:45,667
[paul_tyler]: wilt

1024
00:30:45,488 –> 00:30:49,258
[ramsey_d_smith]: you my my last my last and
most successful linked in post in six months

1025
00:30:49,298 –> 00:30:51,243
[ramsey_d_smith]: was about iceland so i’m going to
send it to you

1026
00:30:51,456 –> 00:30:51,977
[kerry_h_pechter]: oh great

1027
00:30:51,853 –> 00:30:52,015
[paul_tyler]: yeah

1028
00:30:52,559 –> 00:30:54,063
[kerry_h_pechter]: great okay it’s always

1029
00:30:53,916 –> 00:30:54,019
[ramsey_d_smith]: ye

1030
00:30:54,103 –> 00:30:54,364
[kerry_h_pechter]: good to

1031
00:30:54,360 –> 00:30:54,542
[paul_tyler]: oh

1032
00:30:54,424 –> 00:30:55,287
[kerry_h_pechter]: talk with you guys

1033
00:30:55,746 –> 00:30:55,766
[ramsey_d_smith]: m

1034
00:30:55,969 –> 00:30:57,272
[kerry_h_pechter]: you give me a lot of leash

1035
00:30:57,096 –> 00:30:57,816
[ramsey_d_smith]: yeah

1036
00:30:57,433 –> 00:30:57,573
[kerry_h_pechter]: so

1037
00:30:57,737 –> 00:30:58,021
[paul_tyler]: okay

1038
00:30:58,686 –> 00:30:59,489
[kerry_h_pechter]: always appreciate it

1039
00:31:00,096 –> 00:31:00,638
[ramsey_d_smith]: uh

1040
00:31:01,757 –> 00:31:01,778
[kerry_h_pechter]: i

1041
00:31:01,880 –> 00:31:02,101
[paul_tyler]: right

1042
00:31:02,085 –> 00:31:02,106
[ramsey_d_smith]: h

1043
00:31:02,261 –> 00:31:04,526
[paul_tyler]: excellent all right well thank you carry
thank you ramsey

1044
00:31:04,266 –> 00:31:04,507
[ramsey_d_smith]: oh

1045
00:31:04,826 –> 00:31:06,610
[paul_tyler]: and thanks to all our listeners join
us again

1046
00:31:06,516 –> 00:31:06,536
[ramsey_d_smith]: m

1047
00:31:06,650 –> 00:31:10,598
[paul_tyler]: next week for another episode of that
annuity show thanks

1048
00:31:11,556 –> 00:31:11,777
[kerry_h_pechter]: oh

The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.