You probably didn't mean to reply to my post which is about the effect of savings and consumption on economic activity, but I'll address the points nonetheless.
Insurance companies who sell annuities are have credit ratings, and some have been around for quite a while. Metlife was founded in 1868, Prudential 1875, or of course Lloyd's of London 1688.
Mental health decline is of course a concern. If you trust your children, or a younger relative, it's a good idea to give them durable financial power of attorney ahead of time.
There's no disputing that a social security scheme, or a paternalistic compulsory saving scheme can decrease poverty in the elderly, especially if people are hyperbolic discounters, but it also has downsides.
1) There's a risk that a compulsory saving scheme can be nationalized by the government, as it happened in Argentina for instance.
2) In social security schemes, the money is typically invested but rather spent directly by the government. The hope being that the future tax base can pay for the liabilities. The model has proven unsustainable and eventually requires that government resort to inflation, fiddle with the retirement age, or cut benefits.
3) The money paid into and out of social security is controlled by the government, which gives it a lot of political power. Governments often use their money for nefarious purposes such as wars, cronyism, corruption, etc. Giving them more control can be a bad thing.
4) There are moral concerns with forcing people to participate in a financial scheme against their will.
Insurance companies who sell annuities are have credit ratings, and some have been around for quite a while. Metlife was founded in 1868, Prudential 1875, or of course Lloyd's of London 1688.
Mental health decline is of course a concern. If you trust your children, or a younger relative, it's a good idea to give them durable financial power of attorney ahead of time.
There's no disputing that a social security scheme, or a paternalistic compulsory saving scheme can decrease poverty in the elderly, especially if people are hyperbolic discounters, but it also has downsides.
1) There's a risk that a compulsory saving scheme can be nationalized by the government, as it happened in Argentina for instance.
2) In social security schemes, the money is typically invested but rather spent directly by the government. The hope being that the future tax base can pay for the liabilities. The model has proven unsustainable and eventually requires that government resort to inflation, fiddle with the retirement age, or cut benefits.
3) The money paid into and out of social security is controlled by the government, which gives it a lot of political power. Governments often use their money for nefarious purposes such as wars, cronyism, corruption, etc. Giving them more control can be a bad thing.
4) There are moral concerns with forcing people to participate in a financial scheme against their will.