IF YOU reach the age of 65 in the OECD, you can expect to live for another 19 years or so (more if you are a woman, less if you are a man). If you stop work earlier than 65, and live a bit longer than average, you could easily be retired for 25-30 years, almost as long as you were in work. But people find it very hard to get interested in pensions (even Mrs Buttonwood), even though their financial future depends on them; retirement is too distant a prospect and the issue seems too complicated.
This blog has written a lot on the subject so it is time to summon some farewell thoughts. The executive summary: pensions are more expensive to fund, employers are less willing to do so, so you will need to save more (a lot more) and/or retire later.
All pensions are paid for by the next generation. This may seem counter-intuitive; aren't we contributing money every month? State pensions are paid for by current taxpayers (yes, there is a...Continue reading