- cross-posted to:
- economics@lemmy.world
- cross-posted to:
- economics@lemmy.world
cross-posted from: https://lemmy.world/post/6837465
Even though right-wing politicians decry immigration (because it’s a populist viewpoint), they secretly or openly want more. Countries without low immigration will lag economically compared to countries with high immigration such as the US.
Original link: https://www.ft.com/content/de913edd-71d1-4a36-b897-091125596952
Why would you assume that the fund would be kept in cash? That’s not how pension funds work.
Because otherwise you run into the problem of having to get additional revenue from somewhere else.
The current problem is that there aren’t enough young people working well paying enough jobs to fund pensions, because if they aren’t funding them it’s just an account you throw money into and then draw out of later.
You can either provide an alternative source of additional funds or tell grandma it’s not your fault she put her money into a box instead of an investment vehicle to fund her retirement.
I have described a system that would have prevented the problem in the first place while still providing the actuarial benefits of pooling resources.
I am not offering a solution for how to transition from the current system where the young pay for the old.
What I don’t like is the hyper-neoliberal approach where each person lives in an island and resources aren’t pooled at all, because it benefits the rich at the cost of the poor.
It’s still losing money though, unless each cohort is able to operate it as an investment vehicle it’s no different than a generational shoebox in terms of what the money is doing while you’re waiting to pull out of it.
The point of a pension fund is for the ongoing contributions of currently working folks to bring in enough new capital that people withdrawing don’t feel the effects of their contributions from 40 years ago having lost value against inflation.
No, that is not how long term investments work. Try reading about the subject and improve your own finances along the way. Investments typically grow faster than inflation, so the longer the original investment was made, the more money you have today.