This is what happens when your population isn't mathematically educated enough to be able to figure out how to plan a defined benefit pension, and there are politicians who are actively trying to destroy a social safety net.
A bit of playing with chatgpt will dump the formulas required and even solve them for a given set of constraints. Basically one takes the average inflation adjusted of an investment vehicle, then solves for what percentage of income for a given timeframe, in order to return a portion of a persons income for another timeframe. Ex: given say the US stock market average return for the past 100 years, one wants to work for 30 years and retire for 30 years with a 70% of the final income, it works out to 8-9% of a persons income. Then shift the numbers to 40/20 years, cap the maximum payout at say the median income, and wow a pension system that grows faster than the rate of inflation, provides for a retirement age of ~60 and the percentage drops to ~5% or less.
People complaining about demographic trends are buying into the idea that the input dollars have to equal the output dollars, and its dumb, and isn't even the way the social security trust fund in the USA works. Which shows that its possible to ride out population bubbles, much less actually providing a long term savings vehicle that if it were run correctly would eventually be indefinitely solvent. But at least in the USA one party has consistently stood in the way for the past 40 years of solving some of these financial problems, and in fact seems to make them worse by flattening the progressive nature of the federal taxes through tax cuts which overwhelmingly target the groups most able to absorb higher tax rates. And the result are cases where single individuals single handily hold 2% of the wealth of their entire generation and the country looks like its falling apart and there is artificial scarcity everywhere.
PS: Now there are a number of ways this breaks, mostly around cases where inflation is eating up most of the compounding growth, but most sovereign governments are fully capable of solving these problems if they choose to.
A bit of playing with chatgpt will dump the formulas required and even solve them for a given set of constraints. Basically one takes the average inflation adjusted of an investment vehicle, then solves for what percentage of income for a given timeframe, in order to return a portion of a persons income for another timeframe. Ex: given say the US stock market average return for the past 100 years, one wants to work for 30 years and retire for 30 years with a 70% of the final income, it works out to 8-9% of a persons income. Then shift the numbers to 40/20 years, cap the maximum payout at say the median income, and wow a pension system that grows faster than the rate of inflation, provides for a retirement age of ~60 and the percentage drops to ~5% or less.
People complaining about demographic trends are buying into the idea that the input dollars have to equal the output dollars, and its dumb, and isn't even the way the social security trust fund in the USA works. Which shows that its possible to ride out population bubbles, much less actually providing a long term savings vehicle that if it were run correctly would eventually be indefinitely solvent. But at least in the USA one party has consistently stood in the way for the past 40 years of solving some of these financial problems, and in fact seems to make them worse by flattening the progressive nature of the federal taxes through tax cuts which overwhelmingly target the groups most able to absorb higher tax rates. And the result are cases where single individuals single handily hold 2% of the wealth of their entire generation and the country looks like its falling apart and there is artificial scarcity everywhere.
PS: Now there are a number of ways this breaks, mostly around cases where inflation is eating up most of the compounding growth, but most sovereign governments are fully capable of solving these problems if they choose to.