Comment by mattmanser | Hacker News Reader

Comment by mattmanser | Hacker News Reader

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We've also seen low tax rates for most of the rich countries for the last 20/30 years, meaning they could save more and retire earlier, while underfunding pensions and infrastructure for future generations.

It's not just the government's fault, it's short-term thinking by both the government and the voters. Tax rises became anathema in the UK, even for socialist governments like Tony Blair/Gordon Brown.

My parents and other retired people I know feel they've earnt their retirement, when they really haven't. And will be one of the few generations out of the preceding and following to have this sort of luxury of sitting around for a couple of decades doing effectively nothing. Whether it be the rather middle class cruises, golf days, spas, etc. or sitting down the pub or going to bingo or pottering around gardening or sunning it up in Spain or whatever.

They say things like "I worked hard for 35/40 years", I say "So what? The following generations will have to work 50, 55 or even 60 just to pay for the fact you worked 35/40".

At least until automation/robots/AI whatever free humans from work, if it ever happens.

Then again, being in the industry that I am, and most of us are, I will also probably be one of the lucky ones.

>My parents and other retired people I know feel they've earnt their retirement, when they really haven't.

Hasn't anyone who can afford to retire earned their retirement? What do you mean by "they really haven't"?

> >My parents and other retired people I know feel they've earnt their retirement, when they really haven't.

> Hasn't anyone who can afford to retire earned their retirement? What do you mean by "they really haven't"?

I think what mattmanser is point (if this has to do with state-provided benefits and not strictly employer-provided benefits, though arguments about market performance can be made there) is that, in many cases, these benefits either 1) will not exist at all, 2) exist in a severely reduced form, or 3) will have the goal posts raised periodically (30 years until retirement for you means your children will have to work 50 years until retirement).

If that is a correct interpretation of mattmanser's argument, then he/she is effectively saying that current retirement benefits receivers are receiving their benefits only by encumbering future generations with a greater burden than they bore.

As an aside, this brought to mind the notion that perhaps there is such a thing as time inflation, where past promises don't add up in the future and thus result in moving the goal posts. I've seen this crop up more and more with state pension funds in the United States (which always seem to have assumed the most favorable (and unrealistic) rate of return on their investments).

N.B. My understanding of this stuff is pretty vague, but here's a quick summary of the arguments I've heard on the matter:

I think the grievances might be to do with the amount of money paid into a pension pot versus the size of that pot. At least in the UK, many companies offered generous final-salary pensions, which (as the name suggests) are based on your income and index-linked. These have been basically phased out now, since they're too expensive (i.e. I think they generally cost more to fund than the person originally paid in + any accumulated investment returns). However, for those people who paid into such a scheme, there's no recourse for the scheme providers but to subsidise these expensive pensions with the rest of the communal pot. This means that they necessarily must offer less generous pensions to those who are currently paying in and will draw a pension in future.

I think there are also some arguments in the UK that oil wealth was used for short-term subsidies (e.g. tax cuts), rather than put into a long-term investment fund, like Norway. The people who benefited from that are the people who were alive at the time, and the eventual beneficiaries of their wills.

I don't know how accurate this all is, so would welcome a more informed perspective too.

I'm actually on a final salary scheme but I'm only 33. If I stay in this job for a long time and work for promotions I could end up with a massive sum without even putting anything aside. If I also invest my money into the stock market then I'll be very well off in old age.

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