tag:blogger.com,1999:blog-7334408760351487944.post7908920476823878788..comments2023-11-12T06:43:00.060-05:00Comments on Notes on Social Security Reform: Public Pension Deficits Are Worse Than You ThinkAndrew G. Biggshttp://www.blogger.com/profile/16617460431856611873noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7334408760351487944.post-84150954695273078912010-03-23T20:00:41.301-04:002010-03-23T20:00:41.301-04:00Arne Actually the probability is lower than 50%, b...Arne Actually the probability is lower than 50%, because the average return is higher than the median return, and this difference is greater with riskier investments. It would be around a 40% probability of being $100 or higher. If you invested $41.46 in stocks (rather than in govt bonds, as in my example) you'd have around an 85% chance of ending with $100 or more. <br /><br />Colin: Localities don't necessarily follow exact state accounting rules, but it's usually something very close. Both state and local pensions have the same basic accounting problem. I've focused on the states, but local pensions really aren't any better.Andrew G. Biggshttps://www.blogger.com/profile/16617460431856611873noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-73004281721680097072010-03-23T19:29:24.740-04:002010-03-23T19:29:24.740-04:00Very informative article. I have a question - in ...Very informative article. I have a question - in your experience, do most local government pensions follow the accounting rules the state adopts? I'm just wondering how wide-spread the problem is, or if it is largely limited to state pensions.Colin Cameronhttps://www.blogger.com/profile/17504322787079502905noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-71480538563043953002010-03-23T19:27:57.546-04:002010-03-23T19:27:57.546-04:00Is it correct that if you invested the $21.45 your...Is it correct that if you invested the $21.45 your Monte Carlo analysis would give you a 50 percent probability of having the $100? What then would be the probability of having $100 if you invested $41.46 in the market?Arnehttps://www.blogger.com/profile/00796151499106650732noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-72442869107733731602010-03-22T23:48:41.375-04:002010-03-22T23:48:41.375-04:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.com