Thursday, 5 January 2012

Retiring on the Ponzi Plan - Thanks for topping up my cheque, guys.

My first OAP cheque's in the bank, nestled next to one from CPP.
A Ponzi scheme works to pay the first people out with money from the last people in.  This works until you run out of new people coming in.  The charts below are worth a thousand words.  The number of workers (that's the kids) per retiree (that's the parents) is plummeting.  I'm being paid in part with my kids pension money.
   In Canada, the CPP is pretty much a defined contribution plan and may squeak through with larger paycheque deductions from the current crop of working "kids". (Payroll deductions climbed from 2.6% to 9.9%).   Thanks for topping up my cheque, guys.

Projecting further ahead, with Canada included in the graphic:

(In Greece, 100 grandparents have 42 grandchildren –  the family tree is upside down. ).
Added:  The designers had some good intentions which would have worked if most retired workers were still men who had fairly large families and then died off kind of quickly.

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