-20 upvotes, 7 direct replies (showing 7)
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I don’t understand. Listen, if we had a system where from the start you knew that the government wouldn’t give you a pension but instead give you alll the money you earn with a lower tax then everyone would prepare themselves for their retirement.
Comment by Bertensgrad at 04/11/2024 at 09:49 UTC
11 upvotes, 1 direct replies
Kinda have to laugh at this thought. No no they won’t. People living week to week will not use this as an opportunity to invest for a possible tomorrow. Low income families are the ones most in need of a pension.
Comment by imminentmailing463 at 04/11/2024 at 09:47 UTC*
12 upvotes, 1 direct replies
That's just not human nature. Loads of people wouldn't save enough. Additionally, others would never earn enough to save significant sums. So they'd end up very poor. And lots of people being very poor is bad for the economy and bad for the government.
Comment by Questjon at 04/11/2024 at 09:54 UTC
9 upvotes, 0 direct replies
We tried that in Britain in the Victorian era. It doesn't work, if people have more disposable incomes the competition for goods and rent etc just push up prices and poor people remain in poverty, never having anything left over to save.
Comment by ezekielraiden at 04/11/2024 at 09:55 UTC
6 upvotes, 0 direct replies
Even the best preparations sometimes fail. Even the smartest investors sometimes run into problems. As a certain famous starship captain once said, "It is possible to commit no mistakes and still lose. That is not a weakness. That is life."
Now, add in the fact that there are predatory companies out there who are 100% fine gambling away the money of elderly folks just trying to save for retirement on costly, ultra-risky ventures. (Consider, for example, the Enron scandal.) In many cases, the elderly are dependent on good, sound advice from trusted experts, and unscrupulous people prey on that to enrich themselves if they succeed, and dump the loss on those elderly folks if they fail.
Programs like pensions, Social Security (the US program for this purpose), and related things exist because most developed nations have governments that are significantly more reliable stewards of money than private companies would be. Even with the many regulations we have for banking, securities, futures, etc., etc., fraud is still an extremely serious problem in the financial sector, and it can leave literally millions of people high and dry who *thought* they were doing good, sound planning for their future.
The term for programs like this (which also includes disability funds, for example) is a "social safety net." Such programs are designed to ensure that, even if things go catastrophically wrong for any individual person, they still have *something* to fall back on no matter what.
I don't know how Greece does pensions, but I think it rather unlikely that they *forbid* anyone from doing additional retirement planning. Certainly, in the US, building up your own personal retirement fund is considered a top priority for many earners in the 40-60 age bracket even though Social Security exists. Social Security provides an adequate minimum standard of living; it's not great, but it's not *bad* either.
Comment by bobsim1 at 04/11/2024 at 09:49 UTC
3 upvotes, 0 direct replies
No, some absolutely wouldnt. Most would of course try but some will fail to do so. Not even at their mistake but just due to factors outside their control.
Comment by kazosk at 04/11/2024 at 09:58 UTC
3 upvotes, 0 direct replies
If everyone in the world was that sensible, then the world would be a very nice place indeed.
Unfortunately a lot of people are not that sensible and forward looking.
To be a little nicer, people aren't that good at investing their money. For those that are indeed wise enough to squirrel away some money for a rainy day, they may still make mistakes that cause them significant financial issues down the line. For example, they invest everything into property because surely property will always go up and then the GFC hits and they have no retirement money.
Yes, some people are wiser still and hire financial advisers but now we're at least two rungs up the ladder with corresponding drop in number of people who have made it up here.
Evidence? Google pensioners having their retirement wiped out in stock crashes but for a country perspective...
Keep in mind that governments are still run by people for this story. This isn't a statement against or for governments, just a statement that people are fallible, whether it be the common man or the powers that be.
There's this little country called Nauru. They were incredibly wealthy thanks to the phosphate mining on their island. However the government recognised that being a little island, they could not mine phosphate ever as it would eventually run out. So with foresight, they created a sovereign wealth fund to invest the money and ensure a future for the island.
Unfortunately while they had the foresight to do this, they terribly mismanaged the money invested. They lost something like 90% of their portfolio value. So now Nauru has basically no money and no industry.
Comment by tomtttttttttttt at 04/11/2024 at 10:06 UTC
1 upvotes, 0 direct replies
From my perspective in the UK, you only need to look to the victorian era to see how wrong this is.
We brought in old age pensions well before anything else in the modern welfare state, way back in 1908, because simply put most people cannot or do not prepare themselves for retirement.
Even now govt has to give big incentives to get people to pay into pensions, making enrolment at work into a private pension scheme happen by default so you have to opt out of it and giving big tax incentives to pay into your pension.