Many people like to dream about the things they will do in retirement and count on their pensions and savings to make the dreams come true. For lots of current seniors this has been true but younger people may not get beyond the dream. All the uncertainties of the economic future come to the fore when one starts thinking about pensions.
One hears two major concerns about pensions: most people are not saving enough and too many pensions are based on unfunded liabilities.
The one certainty about retirement futures is that well-being and standard of living will depend upon the quantity of goods and services we are capable of producing and the number of people with whom those goods and services must be shared. Inflation or bankruptcies could easily wipe out pensions and savings. In any case an increasing population and people living longer into retirement will put pressure on pensions.
There are two ways we can try to ensure our futures into retirement – we can work our butts off in an attempt to return to economic growth or we can reduce our expectations so that we don’t need so need so many goods and services. It is possible the second option will be forced upon us. That may not be all bad. This blogger knows from experience that canoe camping is a lot cheaper and more enjoyable than the large cruise ships.. I also have to recognize that camping would be a lot less fun if we had to share the lake with 2,000 people at a time.
Most of us are subject to a lot of media hype about the importance of pensions and saving for retirement. We should keep in mind that we are in for the long-term while the people selling investments are more interested in their next pay cheque. What is good for them may not be good for their customers and by the time you find out you may not even remember their name.
Some people are worried about government pensions and see private investments as the answer. I figure the whole financial system is at risk of either inflation or bankruptcy.
In planning for the future we have to evaluate the potential for a return to economic growth. If one believes we are going to return to growth then it might be okay to put a lot of effort into a pension. . Personally, I think the best long-term investment at this time is a market garden.
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