Well -
Over the past 50-100 years we've had a massive increase in the global population. We've had massive productively gains with technology and overall the world has been pretty prosperous. A big part of that comes from demographics where you have a population pyramid of more young people supporting not that many old people. You have a huge workforce that is paying payroll taxes (at least in the US) and paying Medicare taxes, ect. And that helps support old people and finance the system. Now birthrates are collapsing globally especially in east Asia and the US. America's population pyramid is all from immigration (we'll see how long that lasts…). But overall we've had an inversion of population pyramids. At least in democracies, the old cohort is going to be a massive voting block and they will continue to vote themselves as many benefits as possible as the younger generations continue to shrink as they don't have as much say in politics. Maybe this will lead to some kind of fascism, I don't know. The whole current financial system is based on population growth, productivity gains and the transfer payments from working individuals to retired individuals. So in 100 years when the population begins to collapse and the taxes are much higher - global stock markets, government debt and taxes to support an aging population globally (this will even come for Africa, too, at some point. They probably have it worse because they have huge birthrates now that will probably reverse), whats going to happen? I imagine its going to be worse - taxes and government debt will be high and the stock market (depending on what is representative of the stock market) may not do as well because you have fewer people working in corporations. The only thing that I think would save us would be some type of new technological revolution which maybe enhances lifestyles or lifespans and makes massive gains in productivity for a shrinking working population. Which is entirely possible. If we don't have massive increases in productivity or reverse this crisis, government finances may be so strained that retirement benefits are cut and maybe the global economy starts to flatten out or decline.
I think you might need to save way more than expected (even with an index strategy), live frugally and work longer than expected (even if its part time)
The social security system is not a savings account. It's a transfer system - The US Social Security system is primarily a transfer system rather than a savings account. It operates on a pay-as-you-go basis, where current workers' payroll taxes fund benefits for current retirees, survivors, and disabled individuals. It doesn't function like a traditional savings account where individuals' contributions are invested and accumulate over time for their own future use. Instead, it redistributes income from current workers to current beneficiaries. The Social Security Administration (SSA) invests a portion of the Social Security trust funds in special-issue, interest-bearing federal government securities, which are essentially government bonds.
This is a whole area of research and analysis for the USA and many other countries that I do not know very well. YES, demographics and intergenerational transfers in many different countries with many complex financial and tax issues.
https://www.nber.org/programs-proje...-disability-research-center?page=1&perPage=50
It's not a Ponzi scheme - it's a transfer system. You to your parents, your parents to your grandparents and your children to you, ect.
