If you're concerned about your future and your inexorable slide toward retirement, assuming you get one, you might want to pay more attention to what's going on in Europe and those incessant promises politicians are always waving in front of voters, especially in this election year.
The story line says it all: "Europe Faces Pension Pinch." The headline writer of this tale should get an award for understatement. Pinch is to soft as tsunami is to storm. And that's what European governments face, a huge shortfall storm that will soon being playing in a neighborhood near you.
Here's a brief paragraph that summarizes the sad tale.
State-funded pensions are at the heart of Europe’s social-welfare model, insulating people from extreme poverty in old age. Most European countries have set aside almost nothing to pay these benefits, simply funding them each year out of tax revenue. Now, European countries face a demographic tsunami, in the form of a growing mismatch between low birthrates and high longevity, for which few are prepared.
Europe’s population of pensioners, already the largest in the world, continues to grow. Looking at Europeans 65 or older who aren’t working, there are 42 for every 100 workers, and this will rise to 65 per 100 by 2060, the European Union’s data agency says. By comparison, the U.S. has 24 nonworking people 65 or over per 100 workers, says the Bureau of Labor Statistics, which doesn’t have a projection for 2060.
Don't let those numbers fool you, 42 per 100 versus 24 per 100. There's no comfort there because government figures are like tout sheets at the race track. You never get what you pay for. This is a crisis. A similar situation faces retirees in the U.S. See state funded retirement plans like Illinois, for example.
The state is broke, but the one thing bureaucrats and Chicago mayor Rahm Emanuel understand is snoozing bears. Death certificates require a signature.
And later this week the European Central Bank will most likely pour some more petrol to the already blazing debt flames with more negative interest rate moves. Martin Wolf should be smiling about then. Negative interest rates in less stuffy circles is just another form of kick the can, the antithesis anything that vaguely looms well for your retirement future.
As the chasm in the future between the young and the elderly grows wider and more hostile, you can thank your bureaucrats and politicians. Meanwhile, with the rise of robots taking more and more jobs, will employers face higher taxes to cover the shortfall? The revenue has to come from somewhere.
Confiscating your retirement, some might call pinching your poke. Either way it'll hardly when it happen feel very soft.
Then I ducked my head, and the lights went out, and two guns blazed in the dark,
And a woman screamed, and the lights went up, and two men lay stiff and stark.
Pitched on his head, and pumped full of lead, was Dangerous Dan McGrew,
While the man from the creeks lay clutched to the breast of the lady that's known as Lou.
These are the simple facts of the case, and I guess I ought to know.
They say that the stranger was crazed with "hooch," and I'm not denying it's so.
I'm not so wise as the lawyer guys, but strictly between us two —
The woman that kissed him and — pinched his poke — was the lady that's known as Lou.
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