Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings • Hacker News Board

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#31

Post by KK7NIL » Tue, Jan 28, 2025, 10:03 AM UTC

kome wrote: post #22

dsheets wrote: post #20

Earlier quoted context omitted.

Why must the money come from future labor? Money can be saved and invested. Let them eat their capital and not their young.

investment is literally future labor expectations. and a risk. in case of crisis the gov routinely starts bailouts and save the financial markets with interest rate operations or open market operations. those operations have deep re-distributive implications. don't think they are free.

> investment is literally future labor expectations. and a risk.

This is simply Marxist crap and outright untrue.

> in case of crisis the gov routinely starts bailouts and save the financial markets with interest rate operations or open market operations. those operations have deep re-distributive implications

This is a rather new phenomenon and not at all necessary for profitable private investment.

It's really completely irrelevant to the discussion.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#32

Post by mxfh » Tue, Jan 28, 2025, 10:03 AM UTC

endymi0n wrote: post #9

kome wrote: post #7

i strongly oppose the American approach to pensions, which is regrettably spreading worldwide. relying on private savings to finance retirement is highly risky, and this is the crux of the article in question. pension systems should be administered through public programs, not turned into moralistic contests in which individuals are penalized if their investments fail for any reason (and it's only their fault... whil…

I agree, but the German one is also pretty dodgy: Basically pay the rents of the old generation from a share of the working one. It's already coming apart due to demographic change and the next few years will be disastrous. If there's an approach to model imho it's the Norwegian one: Actually backed by stocks, but managed and distributed by a central investment fund. It's far easier if the country is smart enough to…

Yeah, like the other model where you pay people to invest money for you that makes everything more expensive (housing, healthcare) and shittier (jobs, concerts, games) or disappear for the sake of ROI that you don't even get the majority off.

PAYGO-style is definitly the more sustainable approach.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#33

Post by YWall39 » Tue, Jan 28, 2025, 10:05 AM UTC

vkou wrote: post #25

YWall39 wrote: post #23

Earlier quoted context omitted.

I am more optimistic. I always suggest automatically dropping x% of ones income into an index fund. At the least it will hedge against the very real chance governments will not be able to deliver on their promises.

> index fund What wealth will your index fund produce when nobody is working, and nobody has the money to buy stuff? However you answer that question , I'll retort with - 'And exactly what will stop the government from taxing that wealth, to keep pensions working?' > At the least it will hedge against the very real chance governments will not be able to deliver on their promises. That's a fair point, there's the very…

I think its worse, the governments will be unable to deliver (my perspective is Europe). Think one needs to consider many strategies to avoid starving when retired. But I fully expect my EU government to give me no pension, no matter what they say today.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#34

Post by ben_w » Tue, Jan 28, 2025, 10:05 AM UTC

YWall39 wrote: post #23

vkou wrote: post #19

Earlier quoted context omitted.

Basic demographic analysis will point out that in a world with a declining and aging population, private investments are probably not going to be doing so hot, either. Wealth creation requires work. Retirees don't work, but still require a portion of the wealth that workers create to live. It doesn't matter if it's a government pension or a 401K investment, a declining worker population will mean that you'll have the…

I am more optimistic. I always suggest automatically dropping x% of ones income into an index fund. At the least it will hedge against the very real chance governments will not be able to deliver on their promises.

Only hedging to the extent that the corporations are not themselves dependent on the government. (Edit: or have a common risk factor).

Demographic shifts in particular are something that hurts both.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#35

Post by vkou » Tue, Jan 28, 2025, 10:08 AM UTC

YWall39 wrote: post #33

vkou wrote: post #25

Earlier quoted context omitted.

> index fund What wealth will your index fund produce when nobody is working, and nobody has the money to buy stuff? However you answer that question , I'll retort with - 'And exactly what will stop the government from taxing that wealth, to keep pensions working?' > At the least it will hedge against the very real chance governments will not be able to deliver on their promises. That's a fair point, there's the very…

I think its worse, the governments will be unable to deliver (my perspective is Europe). Think one needs to consider many strategies to avoid starving when retired. But I fully expect my EU government to give me no pension, no matter what they say today.

Even in the worst case scenario, a 100% haircut sounds incredibly unlikely.

Unless you actively elect a government that pursues such a policy. Or unless someone somehow puts all that money in a large bag, and flies off to Cyprus (If that's a real concern in your society, there is no guarantee that your brokerage or bank won't do something similar). Bad governance and theft can ruin anything, just ask anyone who has lived in 90s Russia - where the government could not hold up it's end of the social contract, but neither could any of the thousands of thieves and fraudsters that spun up in the privatized financial sector.

As it turns out, when the economy collapses to the point that a government can't[1] pay it's bills, everything else goes to shit, too.

---

[1] The budget brinkmanship the Republican party practices every year isn't a matter of 'cant' - it's a matter of 'politically expedient to pretend that they wont'. But that cycles back to not electing people who govern poorly...

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#36

Post by Ekaros » Tue, Jan 28, 2025, 10:08 AM UTC

vkou wrote: post #19

YWall39 wrote: post #15

Earlier quoted context omitted.

European pensions are predominantly unfunded, and promises typically amount to 3.5 times GDP. The prevailing view among those who have looked at this is that nobody under the age of 40 will get anything close to what is promised. The only exception is Netherlands, and maybe Sweden. Leaving private pensions the only option.

Basic demographic analysis will point out that in a world with a declining and aging population, private investments are probably not going to be doing so hot, either. Wealth creation requires work. Retirees don't work, but still require a portion of the wealth that workers create to live. It doesn't matter if it's a government pension or a 401K investment, a declining worker population will mean that you'll have the…

I think I need to start looking into African index funds... Or just figure out the way out when I have run out of money...

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#37

Post by Ekaros » Tue, Jan 28, 2025, 10:10 AM UTC

vkou wrote: post #35

YWall39 wrote: post #33

Earlier quoted context omitted.

I think its worse, the governments will be unable to deliver (my perspective is Europe). Think one needs to consider many strategies to avoid starving when retired. But I fully expect my EU government to give me no pension, no matter what they say today.

Even in the worst case scenario, a 100% haircut sounds incredibly unlikely. Unless you actively elect a government that pursues such a policy. Or unless someone somehow puts all that money in a large bag, and flies off to Cyprus (If that's a real concern in your society, there is no guarantee that your brokerage or bank won't do something similar). Bad governance and theft can ruin anything, just ask anyone who has l…

100% hair cut leads to violent revolutions. And 70 year old can still do some things that will hurt those in power.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#38

Post by dsheets » Tue, Jan 28, 2025, 10:10 AM UTC

kome wrote: post #22

dsheets wrote: post #20

Earlier quoted context omitted.

Why must the money come from future labor? Money can be saved and invested. Let them eat their capital and not their young.

investment is literally future labor expectations. and a risk. in case of crisis the gov routinely starts bailouts and save the financial markets with interest rate operations or open market operations. those operations have deep re-distributive implications. don't think they are free.

If you redefine everything as deriving value from labor and labor alone, OK. Government intervention is not a given, is not universal, and its impact on labor isn’t unique.

There are other investment vehicles besides equity and other ways to take value from past into future that are neither garnishing the wages of children and grandchildren (most current state systems) nor investing in artificially inflated markets.

Just as a thought experiment, consider if all state pension contributions were just used to immediately purchase gold on the open market that was then put into a vault labelled with the year of birth of the contributor. Please explain how this (obviously naive) strategy is dependent on future labor. As far as I can tell, this system would be completely market-based and future labor would likely benefit as their “gold” might be cheaper as there would be less demographic demand.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#39

Post by Ekaros » Tue, Jan 28, 2025, 10:11 AM UTC

lm28469 wrote: post #17

endymi0n wrote: post #9

Earlier quoted context omitted.

I agree, but the German one is also pretty dodgy: Basically pay the rents of the old generation from a share of the working one. It's already coming apart due to demographic change and the next few years will be disastrous. If there's an approach to model imho it's the Norwegian one: Actually backed by stocks, but managed and distributed by a central investment fund. It's far easier if the country is smart enough to…

> If there's an approach to model imho it's the Norwegian one You just need to have a tiny population and be the 3rd biggest gas and 5th biggest oil exporter, easy peasy

Not to forget huge amount hydro power compared to population...

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#40

Post by HPsquared » Tue, Jan 28, 2025, 10:12 AM UTC

kome wrote: post #22

dsheets wrote: post #20

Earlier quoted context omitted.

Why must the money come from future labor? Money can be saved and invested. Let them eat their capital and not their young.

investment is literally future labor expectations. and a risk. in case of crisis the gov routinely starts bailouts and save the financial markets with interest rate operations or open market operations. those operations have deep re-distributive implications. don't think they are free.

Building a machine that does useful work is not "future labour". That kind of automatic production by machine is absolutely dominant today, none more so than in software.