[MontyCarloHall]

Isn't the main problem with pensions today the dramatic increase in life expectancy post-retirement? They were never intended to support decades of retirement: in the old days, you retired at 65 and there was a good chance you'd be dead by 70, at most 75. (When Social Security was established in the 1930s, life expectancy was only 61.) Nowadays, there's a good chance you'll live beyond 90, with expenses increasing disproportionately towards end-of-life. Combine that with a shrinking birthrate, and no feasible increase in ROI/worker contributions can sustain pension-funded retirements of 25+ years.

[hypersoar]

Using overall life expectancy here is misleading, as it includes the risk of childhood mortality. You have to look at life expectancy at a given age. According to the SSA's life tables[0], life expectancy for men at 65 in 1930 and 1940 was about 12 years. In 2020, it was about 17. A significant increase, but not nearly as extreme as you're saying.

[0] https://www.ssa.gov/oact/NOTES/pdf_studies/study120.pdf

[nofriend]

In 1930, if a person starts paying into the pension at 30, at that point they have a life expectancy of 37 years, ie they will benefit from the pension for 2 years. Life expectancy at age 30 goes up to 48 in 2020, which gives them 13 years after retirement, 6.5 times higher. Assuming linearity, the average life expectancy after retirement during the time you are paying into your pension between 30 and 65 would be 7 years in 1930, and 17 in 2020.

[toomuchtodo]

No, the problem was that increased contributions [that would've ensured solvency with lower market returns and/or extended life expectancy] would've cost more sooner, and no one wants to pay more. So, we "extend and pretend" using generous return assumptions and when those assumptions are not borne out in reality, we simply shrug. Similar to $39T in US treasuries someone will need to pay back. Only the top 40% of Americans have enough income to have a federal tax liability, so who is going to pay this debt back? Different sides of the same coin. What is a debt after all besides a promise to pay.

[zeroonetwothree]

At age 65 life expectancy hasn’t gone up as much, only around 6 years more today vs 1930. So it’s still a factor but not as dramatic as you make it seem.

[tmp10423288442]

What is the value in 1930 though? Only 6 years could in fact mean over 100% increase in life expectancy at age 65. There's a reason full Social Security now starts at 67 rather than 65, and you are incentivized to take Social Security at age 70 if possible.

[avidiax]

Ultimately the way we will get out of this is inflation, except that so many pensions have COLA.

Years spent in retirement have roughly doubled, while the pyramid has shrunken from 16:1 workers to retirees in 1950 to 3:1 today.

Means testing and retirement age increases also cause a voter or worker revolt.

Going to be real hard to keep this on the rails.