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Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

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Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#41

Post by dachris »

pjc50 wrote: post #11

Under-rated problem. The decline is real, and towards the end of their life many people end up handing a power of attorney to their children or other close relative in order to run their lives. While in the meantime there are so many more internet-enabled scams.

Google site:bogleheads.org elderly scams - the list goes on and on ...

I've also got elderly relatives, and even with their pensions secure (European-style pension system), there's lots of people going after their money. Trying to prepare them for encounters with online and real world scammers is an ongoing process, e.g. by recounting the cases that I read in the news to foster mistrust.

I've lost count how often an elderly family member (who is still sharp as a tack fortunately) told me that the "police", "your beloved niece", or "Microsoft" called them.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#42

Post by ben_w »

dsheets wrote: post #38
kome wrote: post #22

Earlier quoted context omitted.

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.…

> If you redefine everything as deriving value from labor and labor alone

"Alone" seems to be an unnecessary addition for the problem to exist.

And until the AI really can take all our jobs, it's not a redefinition, labour is one of several pillars alongside capital, though specifics vary depending on your school of economics: https://en.wikipedia.org/wiki/Factors_of_production

> 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.

Consider this experiment on an island with just yourself.

You bury the gold. You reach pension age, and stop working. You dig up the gold. You now have gold. What do you spend it on? There's nobody offering services, regardless of how much you offer, therefore cost of goods, services, and other assets has a divide by zero error and inflation is asymptotically infinite.

Similar arguments work when the working population shrinks even if not becoming literally zero: unless technological improvements happen faster than the workforce shrinks, which is complex because tech affects different products at different rates, shrinking populations cause your model to get inflation even with gold as a currency.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#44

Post by nejsjsjsbsb »

ben_w wrote: post #34
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.

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.

The SP500 magic money machine may stop and then everyone is stuck with shitty subpar indexes that lose in real terms. You may need to pensionize 50% to save enough but if everyone does that it is austerity.

AI (the robot kind) may be our main hope.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#45

Post by jeroenhd »

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…

The pension system still works, as long as the pensioners accept that at some point there will be less money to divide between them. Demographic changes don't necessarily cause the pension system to collapse as long as the pensions are adjusted to the income generated by the working generations.

That's the part that causes friction, because (soon to be) pensioners don't want to accept lower pensions, and they still have voting rights, voting in politicians that cater to pensioners over workers.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#46

Post by Ekaros »

dsheets wrote: post #38
kome wrote: post #22

Earlier quoted context omitted.

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.…

The future labour must be willing to accept that gold for their labour. And likely they would ask more of it as there is more demand for their labour and less supply.

It could be that as labour is constrained the inflation in price of labour is higher than investment gains.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#47

Post by dsheets »

ben_w wrote: post #42
dsheets wrote: post #38

Earlier quoted context omitted.

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.…

> If you redefine everything as deriving value from labor and labor alone "Alone" seems to be an unnecessary addition for the problem to exist. And until the AI really can take all our jobs, it's not a redefinition, labour is one of several pillars alongside capital, though specifics vary depending on your school of economics: https://en.wikipedia.org/wiki/Factors_of_production > Just as a thought experiment, conside…

In your simplification, you have removed everything that isn’t labor (i.e. demand for commodities) as well as labor. It is unsurprising that working to bury gold is a bad investment in this scenario. Instead, you should have invested in a farm and some robots. Sorry, there’s no free lunch if you can’t steal it from younger generations.

Edit: you’ve revised history and now added a bit about “similar arguments” and inflation. The answer is simple: yes, you might get back less real value than you put in. Yes, there might be inflation. This is fine and normal and would be preferable to the present system and is not dependent on future labor in the same way as direct redistribution. There are no guarantees. ‘Enforcing’ guarantees is a recipe for disaster as we are now seeing unfold.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#48

Post by dsheets »

Ekaros wrote: post #46
dsheets wrote: post #38

Earlier quoted context omitted.

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.…

The future labour must be willing to accept that gold for their labour. And likely they would ask more of it as there is more demand for their labour and less supply. It could be that as labour is constrained the inflation in price of labour is higher than investment gains.

Yes, it could be! Life is risky. Nothing is guaranteed. I’d rather have the market set the rate of redistribution than have it done by fiat in a completely unsustainable way.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#49

Post by arkh »

tonyedgecombe wrote: post #16
Ekaros wrote: post #14

Earlier quoted context omitted.

Failure in most of these systems were that original contributions were never sufficiently high to actually cover the future outgoings. Whatever those boomers that think they paid say...

More fundamentally the ratio of workers to retirees has shifted. No matter how you fund pensions this will create challenges.

When implemented those scheme goal was to make sure people who could not work anymore would have a decent end of life.

The problem is the baby boomer generation transformed it to the point retirement was "when you started living your real life". People being retired perfectly healthy for more time than what they worked is not an exception for them.

And that generation managed to pile more shit on the next generations: regulations to make housing more expensive, requiring more education for every job meaning people start working later, outsourcing has much as possible. And not having replacement level children.

So now people have to pay a lot more for those privileged generations. Meaning they have less available money to get a stable situation, meaning even less children so the problem will go worse and worse. At least one generation will have to be sacrificed to have a chance for ones after them. Will the Millenials accept to be it, or will they pull a boomer?

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#50

Post by ben_w »

dsheets wrote: post #47
ben_w wrote: post #42

Earlier quoted context omitted.

> If you redefine everything as deriving value from labor and labor alone "Alone" seems to be an unnecessary addition for the problem to exist. And until the AI really can take all our jobs, it's not a redefinition, labour is one of several pillars alongside capital, though specifics vary depending on your school of economics: https://en.wikipedia.org/wiki/Factors_of_production > Just as a thought experiment, conside…

In your simplification, you have removed everything that isn’t labor (i.e. demand for commodities) as well as labor. It is unsurprising that working to bury gold is a bad investment in this scenario. Instead, you should have invested in a farm and some robots. Sorry, there’s no free lunch if you can’t steal it from younger generations. Edit: you’ve revised history and now added a bit about “similar arguments” and inf…

> In your simplification, you have removed everything that isn’t labor (i.e. demand for commodities)

Incorrect, I'm definitely including demand in there.

I'm saying there's no supply.

It's n/0, not 0/0.

> Instead, you should have invested in a farm and some robots. Sorry, there’s no free lunch if you can’t steal it from younger generations.

(1) OK, but that's not what you were saying before

(2) (a) The AI to control those robots does not yet exist, (b) when that AI does exist, we can set the pension age to zero — doing so is called "UBI", and AI is often suggested as both a mechanism to enable it and as an economic transition requiring it.

> Edit: you’ve revised history and now added a bit about “similar arguments” and inflation.

It was intended for clarification, not to "revise history"; FWIW, the para in which you wrote this edit was not present when I clicked "reply".

> This is fine and normal and would be preferable to the present system and is not dependent on future labor in the same way as direct redistribution.

You asked "Please explain how this (obviously naive) strategy is dependent on future labor." — I believe I have demonstrated that it is.

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