Mandatory pension funds: What are your thoughts?
in Banking, Insurance & Loans ·
Nicole Collins13 said:He's got a point. It's his money, and he should be allowed to spend it however he damn well pleases. Making these types of funds mandatory is just foolish. If he wants to buy an old steam locomotive and burn fuel with dollars or euros, let him.
Mandatory funds shouldn't exist. If someone wants to save, they should do it their own way. If they don't want to, then they can deal with the consequences later. For those who physically can't save, that's a different issue entirely, which is why Social Security exists.
I've been playing in stocks, commodities, and gold for a long time. I was even messing around with shipping futures before that became a trendy pastime for Americans. Personally, I prefer making my own calls. If I blow it all, so be it. At least I'll know exactly how it happened and who to blame. As long as the game was interesting. 😉
I used to hold similar views, but I eventually realized it’s a bit of a moot point because, at the end of the day, everyone gets a pension regardless of whether they saved or not. For instance, here in the States, you see plenty of people who never set a dime aside for retirement—farmers especially—and yet they all end up receiving benefits. Why? Because they’re voters. When they hit a certain age, they start complaining about being hungry or having nothing to live on, and they find every excuse for why they didn't contribute. Eventually, they find the politicians and parties willing to represent them, and everyone gets their check, whether they saved or not. So, in that light, mandatory saving actually makes some sense.
As for shifting toward investment-based funds, well, that’s a whole different conversation. Given the demographic shifts we're seeing across the West, it was always obvious that systems based purely on generational solidarity wouldn't be sustainable. So, someone had the bright idea to swap them for investment funds and sold it to the public as this amazing alternative.
Honestly, it's nonsense. All that economist babble about the infinite growth of the stock market is just that: babble. Economists are essentially just people who will explain to you tomorrow why what they predicted yesterday didn't happen today. In the end, that savings pool is going to evaporate, much like what happened back in Chile.
The retirement system should still be rooted in the principle of solidarity; the key is simply adjusting pension levels to reality and extending the working life as much as possible.