[pluma]

In Germany at least, public retirement funds are "pay-as-you-go", i.e. you don't pay in to save up money for yourself, you pay in to finance the current payouts to other people who previously paid into the system (and so on). Of course nobody treats it that way -- you'll hear a lot of "my pension" talk especially from people close to retirement and those who are unaware of how low their pensions will be a the current rate.

Theoretically the system could be justifiably stopped at any second and simply drained by the current pensioners (which would probably happen almost instantly). But good luck explaining that to people raised under the false assumption that the public pensions are "safe" (as politicians like to announce so frequently).

Our best bet would probably be "universal basic income for everyone below retirement age" but pensions are "topped up" to parity with basic income. A not-insignificant portion of pensioners already gets pensions below social security levels (meaning it is topped up to social security levels -- not that they get welfare on top). You could then fade out the pension system and replace it with basic income.

[Unklejoe]

Social security works basically the same way in the USA.

Once a system like that is in place, it's very hard to stop the pipeline.

I honestly don't see the purpose of that type of system either.

Why create this pipeline of money anyway? Why not just take the contributions that everyone makes and put them into individual retirement accounts?

Assuming the system is stable (which it's probably not), it seems there would be virtually no difference between me paying for the current retirees (and expecting my children to pay for my retirement) vs. me paying into my own retirement.

I'm not too familiar with these concepts, so maybe someone will school me.

[adwn]

> I honestly don't see the purpose of that type of system either. Why create this pipeline of money anyway? Why not just take the contributions that everyone makes and put them into individual retirement accounts?

Because after WWII, there were no retirement accounts in Germany (simplified and not completely correct, but you get the point). Should they have let old people starve?

[Unklejoe]

Makes sense. And no, but a temporary program could have been put in place I guess.

It seems you're now stuck with a program that was designed to address a problem of 70 years ago.

I'm especially curious about the history of Social Security in the USA. I can read about this on my own time, though.

It does seem like it was a tool used for polotical gain.

[morgante]

I despise social security, mainly because it's a wealth transfer tool masquerading as retirement savings. I would love to eliminate it and have everyone just save their own money.

The reason that it's not done that way is three-fold:

(a) People's contributions are not enough to cover their social security. Instead, they depend on the current workers paying in more than the previous generation did (in a perpetual cycle).

(b) Liberals oppose the idea of personal responsibility. If you don't save any money for retirement, they think society still has an obligation to fund your retirement.

(c) It's a benefit which goes to old people and old people vote a lot.

In reality, it's just a cleverly marketed way of stealing money from the youth and giving it to old voters.

[vidarh]

In reality it was a cleverly marketed way of ensuring old people did not continue to live in utter destitution, given that a substantial proportion of the population even of "wealthy" countries are unable - not unwilling - to save enough to retire without ending deep into poverty.

[r00fus]

I think your point (b) is overly contentious and shows you don't really know much about Liberals.

In fact, most liberals I know are very much about personal responsibility - including towards society and the environment.

[clavalle]

>I despise social security, mainly because it's a wealth transfer tool

Wealth transfer is not necessarily a bad thing.

[morgante]

I don't mind some wealth transfer from the rich to the poor. It's generational wealth transfer (including from poor youth to wealthy elderly) that I oppose.

[eru]

Those systems were put in place when the population was robustly growing.

Also, the pay-as-you-go systems allows the politician to hand out money straight away. Making the programs instantly popular and entrenched.

[dragonwriter]

SS provides a minimum guaranted pension, in large part as a safeguard against the failure of private pensions and retirement investments (adopted after a major financial collapse took out a lot of people's retirement investments); redirecting it into risk-exposed private retirement investments would rather miss the point.