I'm hoping this post doesn't come across overly-negative. I'm currently putting as much as I can into a pension fund, making sacrifices to put aside money that could otherwise be spent on providing for my family. Even so, online pension projections don't show me being particularly well-off in retirement. I see other people who aren't saving for retirement, and I can't help wondering if I'm setting myself up to be milked.
I've made a few assumptions:
- This state will never allow people to starve; those without an income will be assisted.
- The current worker/pensioner ratio of 5:1 is going to change to 2:1
- A pension fund of €0.3million would be needed to provide the equivalent of the state pension for an individual. €0.6million would be needed to provide the equivalent for a couple.
- When state spending is constrained, the trend is towards progressive actions, such as means testing.
I suppose the last point is the least certain. But if there aren't sufficient workers to pay for pensions, then the only choice is to reduce the overall sum being paid to pensioners. What's more likely - reducing the state benefit (e.g. by half so it's less than unemployment benefit), or ceasing to provide a state pension to "the wealthy" who have made provision for themselves?
Why would a citizen divert significant funds into a pension fund that can be raided by the state at any time, only to wind up losing the state pension through means testing, and end up little better off than if they didn't bother? It might be a different situation if that citizen was in a position to put aside a significantly greater fund than the figures mentioned above, but I don't think very many are.
I've made a few assumptions:
- This state will never allow people to starve; those without an income will be assisted.
- The current worker/pensioner ratio of 5:1 is going to change to 2:1
- A pension fund of €0.3million would be needed to provide the equivalent of the state pension for an individual. €0.6million would be needed to provide the equivalent for a couple.
- When state spending is constrained, the trend is towards progressive actions, such as means testing.
I suppose the last point is the least certain. But if there aren't sufficient workers to pay for pensions, then the only choice is to reduce the overall sum being paid to pensioners. What's more likely - reducing the state benefit (e.g. by half so it's less than unemployment benefit), or ceasing to provide a state pension to "the wealthy" who have made provision for themselves?
Why would a citizen divert significant funds into a pension fund that can be raided by the state at any time, only to wind up losing the state pension through means testing, and end up little better off than if they didn't bother? It might be a different situation if that citizen was in a position to put aside a significantly greater fund than the figures mentioned above, but I don't think very many are.