fate of pensions in small countires? \ stacker news ~econ

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976 sats \ 21 comments \ @stack_harder 22 Apr econ

Ok, so with most pension systems being funded by the young, strapping soy youth of today and the declining birthrates, I think it makes sense to think a pension might not be a guaranteed thing in the future.

But how much worse is it in smaller countries, for example, Bulgaria? Now, I live life in a way that presumes 'no pension' as a default, so I'm not worried, but most people are clueless, and I wonder what stackers think.

At a glance, Bulgaria has:

Shrinking workforce High emigration Low fertility Aging population

The population is estimated at approximately 6.73 million, continuing a steady decline from its peak of nearly 9 million in the late 1980s.

Fertility rate below replacement level at 1.74 children per woman.

No easy resources to sell like oil, gas etc.

So, given this quite grim set of numbers, I don't see how future pensioners aren't totally fucked (this could apply to most smaller EU countires I suppose).

wildcard scenario

Bulgaria seized 213,519 BTC in 2017, and if they still kept (big if) and if (when) bitcoin hits 1 million USD, Bulgaria could become one of the wealthiest countries per capita and do a Norway and build a crypto-fueled sovereign wealth fund and use that to fund social programs and things.

What's the current econ thinking about these issues?

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209 sats \ 3 replies \ @Undisciplined 22 Apr

Most pensions in the US converted to defined contribution, rather than defined benefit, a while ago.

Those are inherently sustainable, regardless of population size, because you only get out what you put in + however much your investments grew.

27 sats \ 1 reply \ @stack_harder OP 22 Apr

is that what a 401k is basically? a shift to a model of what you put in, you get out, would be more sustainable imo

5 sats \ 0 replies \ @Undisciplined 22 Apr

That's right. 401k is one type. I don't know the differences between all the different types, but there are a bunch of them.

0 sats \ 0 replies \ @Solomonsatoshi 22 Apr

If USA loses reserve currency status and hegemony over global financial system then US pensions based on US financial markets decline with that decline of empire.

Defined contributions pension scheme shift all the market risk from the pension plan provider to the retiree... All care and no responsibility is what US defined contributions pension plans are.

Chinas mBridge trade payments protocol looks like it could destroy the Petrodollar...with the Saudis joining the program recently and Iran and Russia already on board selling their oil and gas outside of USD/SWIFT.

152 sats \ 1 reply \ @TheBTCManual 22 Apr

I think the end game for those boomers and X'rs are the first ones out the door get full value, close to full value, the rest get paid back nominally and will have to figure out how to stretch it, yes their will be some that inch out a good life or enough because of the size of their pension

There will be some that get decent value from the spread between deflationary gains in productivity and exposure to more risk assets (I can see it my parents and grandparents porfolio allocations, their firms are adding a lot more equity exposure these days)

the majority get rugged pulled and have to rely on the state to supplement their life in addition to family if that is possible.

0 sats \ 0 replies \ @stack_harder OP 22 Apr

we wont see another generation like the boomers for a while i don't think, more like old people will need to be suported by their children, like in a lot of countires

32 sats \ 5 replies \ @OT 22 Apr

I think it depends on how well new tech replaces the retiring class. One thing for sure is the fiat currency will inflate away leaving the retires with less purchasing power.

12 sats \ 4 replies \ @stack_harder OP 22 Apr

i think fiat might already be dead by then, either a btc standard or some kind of hard money standard

14 sats \ 3 replies \ @OT 22 Apr

I seriously think that the Kingdom of Bhutan could distribute their sats to all their citizens and use it as a national currency. Only because they have mined so much. I think it's at least 1m sats per citizen.

7 sats \ 2 replies \ @stack_harder OP 22 Apr

Bhutan is an interesting one, kind of like the micro strategy of countries

5 sats \ 1 reply \ @OT 22 Apr

They simply mine it with excess electricity. Its like dollar cost averaging.

MicroStrategy are using financial instruments and leverage.

54 sats \ 0 replies \ @stack_harder OP 22 Apr

i mean more in the sense that they're betting heavy on btc

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32 sats \ 1 reply \ @denlillaapan 22 Apr

What's the current econ thinking about these issues?

You're fucked.

0 sats \ 0 replies \ @stack_harder OP 21h

5 sats \ 0 replies \ @purpurato 22 Apr

It's funny I was thinking about that these days and you're definitely right, the system is fully unsustainable and if you're younger than say 50 it's mostly sure you won't get any pension, or maybe just a fraction in value of a fiat worthless currency.

I feel like an idiot contributing to that system, I need to get out ASAP and keep stacking.

5 sats \ 1 reply \ @anon 22 Apr

In my Opinion, gov'ts shouldn't do social programs, health and welfare etc. Those are contradictory to the ideas of freedom, and the purpose of govt for a free people is to secure the common good. That is, protect the weak from the strong, uphold the natural law. Pension funds sound great, but they are terrible idea. They always fail, except where guaranteed by gov't to print the needed money. What could go wrong?

0 sats \ 0 replies \ @Solomonsatoshi 22 Apr

There are always circumstances where people fail to adequately save for retirement - often no fault of the people. Here in NZ we were the first country to provide a pension for people because there were a lot of guys who came here for the gold rush, didn't strike it rich and had no family to care for them. We still provide a basic state pension to anyone who wants it but if you want a comfortable retirement you need to save as well. The sight of old people in poverty is not pretty.

14 sats \ 1 reply \ @Dkryptoenth 22 Apr

So many countries barely pay pension to pensioners and it's quite heartbreaking

0 sats \ 0 replies \ @stack_harder OP 22 Apr

Pensions are a pittance in most places i think, i can see them upping the age to like 70 and then getting penuts, if you live long enough what jobs people are supposed to do until that age is also a mystery, given how fucked most avewrage peopel are even in their 50s

0 sats \ 0 replies \ @Satosora 22 Apr

They dont need to make it a sovereign fund. Arent someof those countries very corrupt, l dont see bitcoin really lasting in those kind of places. Its so easy to transfer and hide.

0 sats \ 0 replies \ @Solomonsatoshi 22 Apr

Does Bulgaria still hold those 213,519 BTC? If so, then it's in a good position!

More broadly an economy operating on a Bitcoin standard will naturally have much higher savings rates and lower debt...so people would be better prepared for retirement.

IMO the state should provide a basic very modest pension but you should need to save during your working life if you want more than that.