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Comment by jacquesm | Hacker News Reader

The time to start worrying is long past. If you aren't worried yet then you've been ignoring the tell tale signs that are all over the business world. Safeguards instigated after the last close call are being relaxed, whole asset classes (including regular savings) are no longer viable and pensions are being cut while at the same time the age at which you get are eligible is being raised.

2008 wasn't the worst crisis ever, that doesn't mean we've seen the bottom of the pit yet.

If you are counting on others for your old age then maybe think again.

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This isn't an article about pensions and retirement savings. It's an article about financial indicators, which pension funds, with their enormous amounts of funds under management, have a unique perspective on. Most of your comment isn't responsive to this article at all.

On the contrary. This is all about the 'solvability' demands on pension funds, which are driven to a large degree by computations involving future yields, which in turn depend on interest rates and other market indicators. The trends has been - for years - that the combined elements of demographic time bombs and historically low yields spell out that pension funds will likely not be able to fulfill their obligations.

So if you are going to depend on one of these for your future sustenance you need to re-do your homework or you may end up with a real problem in old age.

Prior to social security and pensions, people had kids to care for them in their old age. In order to do that, parents would save and the children would inherit the wealth they had created.

Now society is different. Older folks don't rely on children anymore, they rely on corporations and the government. They reverse mortgage their homes instead of leaving them to their children.

The family has broken down. Extrapolate that to communities. Companies. Friends.

Our society is broken for everyone but the wealthy in power and they don't want to help anyone else either.

> people had kids to care for them in their old age

Bringing kids in this world to take care of you when you are old is probably the most selfish thing you can do.

it is called evolution

edit: I appreciate your downvote but please read about evolutionary processes

Then humans have been selfish since time immemorial.

In many third world countries this is still the case. One of the biggest indicators of how wealthy a country is is to see what the average number of children per couple is. It's the first thing to drop once the feeling that the country will be able to deal responsibly with its elderly is established.

I don't think pension funds will full fill their obligations except that the Feds will pick up the slack minus some haircut. This happens all the time when a corporation wants to offload their pensions. It will happen with cities and state governments.. Ultimately the Fed will pay out.

Depends on what country you are in. I suspect a lot of old people will end up falling back on their children, like in the old days. Imagine if all of those baby boomers will live to 99. It will be quite an interesting societal change.

I think defined benefit schemes will be all changed to defined contributions schemes, for this reason - people live too long. Minimum retirement age will also keep getting adjusted. Most private sector pensions in the UK are already DC schemes.

The invested savings future retirees accrue in DB plans run out before the beneficiaries are 99, and those schemes will collapse unless bailed out.

Healthcare costs will also be a huge problem with extended life spans, unless technology miraculously guarantees healthy life until death.

In such scenario you can't count on traditional investments either.

Traditional: stocks, bonds, savings, real estate. Some of those work, some don't and some of them are best avoided unless you plan on making a life around the theme of investing (and even then you will most likely get burned one day).

Question would be: what would be a solid and reliable alternative that is also affordable by regular people? I hear "buy property or build a house" a lot, but that doesn't seem like an easy affordable alternative.

What works against the pension funds works to your advantage if you can leverage some funds. Depending on your location you may be able to leverage a relatively small amount of money (20-30%) to buy a property that will give you more than enough return to pay for the interest and the pay-off on the principal. You need to be relatively young for that to work though, if you are close to retirement age then this isn't going to generate enough yield compared to the sum invested.

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