The trouble with getting old

If you’ve got an subscription you should read Martin Wolf’s article about population and pension provision from 6 Jan. He nicely lays out the main issues (with charts) and illustrates a) that we need to make some really bold changes if we’re going to avoid pension meltdown and b) that no single measure will solve the problem – we need to raise the retirement age, get more women into the workplace, boost the birthrate and increase immigration.

The main problem with these tough decisions is that politicians can’t (I mean just can’t) make them because they fall into that category of decisions that have really big benefits in the long-term but are really unpleasant in the short term. Long-term: the next generation (or the one after it) all get adequate pensions for twenty or thirty years of healthy old age. Short-term: our generation has to work until we’re 70 and have more kids while we’re at it and the usual suspects will get hot under the collar about a larger immigrant population.

My conclusion is that political short-termism means we’re going to have to go quite a long way into our own National pensions crisis (a lot of people – mostly poor, under-insured people – will have to suffer) before we’ll actually do anything about it. Meanwhile, go and talk to your pensions advisor about boosting those contributions (if you don’t want to subscribe to, Brad DeLong provides more quotes – because he is a good person and can be bothered).