Will inflation become big challenge for retired people after 10-20 years? - page 3.

aylabadia05

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Quote from: krishnaverma on April 11, 2024, 04:47:56 AM

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

Fiat has not been able to provide proof that the currency we use every day will not be a problem for us in the future. Those of us who still work to earn money and with the income from our work fulfill all our needs already feel that the value of currency has now decreased compared to when we received money from our parents.

At that time, the nominal amount usually given was enough to buy a few groceries, but now the nominal amount is no longer enough to buy two items.

For our children in the future, they will also face big challenges when we may be old or in retirement. If we can't think from now on, their future will be very difficult. How to invest and teach them to invest in investments that will not lose value.

WatChe

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Quote from: Mate2237 on April 12, 2024, 12:28:50 PM

Now that cryptocurrency has come let the workers in their active service time should invest in bitcoin so that before they will retired, they have saved enough to face the inflation in the society. Preparation is better than being idle.

Bitcoin is a good option to invest in as you continue with your job. Just have some money spared for Bitcoin every week or month (DCA manner) and you are good to go. If you see price chart of Bitcoin then it's very much clear that price has gone up with time and likely this will continue to happen with time. The way inflation is going up it will kill all the monetary benefits that one will be getting on his retirement in near future. It's better to plan accordingly.

stompix

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Quote from: ancafe on April 12, 2024, 10:17:34 AM

The money they earn from the retirement process will be as much as they earned while the price of goods continues to rise so that the value of the currency is no longer meaningful.

Again, I'm asking you, if somebody retires now at 65 and gets 500 000 IDR he will also get 500 000 in 2044?
Because the OECD says they are indexed with the prices:
https://www.oecd.org/els/public-pensions/PAG2023-country-profile-Indonesia.pdf

Or asking you the other way around, somebody that retired in 2000, does he get the same pension as he got then?
Has your parent's pension NEVER increased since they retired?
I'm willing to bet the answer is no!

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Quote from: Kelward on April 11, 2024, 08:08:45 AM

Quote from: krishnaverma on April 11, 2024, 04:47:56 AM

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

This is a problem because where i worked and resigned about 12 years ago, some percentage of our salaries were removed and put into a pension fund to be claimed when we reach certain older years, anyways since then my country's currency has devalued like 1000% till date. I frankly don't know if the pension fund company is going to pay me when I'll be eligible to collect in the old rate when I stopped work or in this current devalued rate, because I believe that they'll pay based on percentage, and it'll be very unfair to use the present devalued rate. If pensioners retirement benefits are not calculated based on the value of their currency in every year of their services, then it's a cheating on them, because if it's done on the present devalued currency, then they won't get everything that they deserves.

He didn't say it isn't. What your company is doing with some of your salary seems normal and is experienced in other companies too, though I don't think this was the reason on why your country's currency's value have declined but this issue is common as well and it was called as inflation.

Each country is suffering from it. Don't worry about your contribution, as you are going to get them when you retire but I think you can also make an early loans once you already paid enough. Their rates are going to be the same. We can only hope that the inflation goes down, so that we can properly enjoy the money that we worked hard for many years.

Mate2237

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You are only talking about retired people what about those who are not working? Those retired people were working so they are not having the feeling of poor or poverty in their service time but those who not not working were facing the challenges of the inflation from the outset. So they have taking inflation as part of their lives and whenever it comes they face it and over come the difficulty and move on.

Now that cryptocurrency has come let the workers in their active service time should invest in bitcoin so that before they will retired, they have saved enough to face the inflation in the society. Preparation is better than being idle.

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Quote from: ancafe on April 12, 2024, 10:17:34 AM

Quote from: stompix on April 12, 2024, 08:41:52 AM

I don't know where you guys live, but in exactly what country if you retire for example with $1000 per month at 65 your pension will be still $1000 even twenty years later, and it's not indexed by at least a bit under the inflation rate? I'm really curious in what system does this happens when it comes to a government pension like the EU model.

I never heard of a country where you get a fixed monthly pension and that value will stay like that till you die.

I live in Indonesia and the average person who retires from the government will find it very difficult to face life because the prices of goods continue to rise. The impact of inflation that I mean is because our currency continues to depreciate so that when the price of goods rises, pension money will not cover living needs and not to mention the costs of other needs such as children's education, health and so on. The money they earn from the retirement process will be as much as they earned while the price of goods continues to rise so that the value of the currency is no longer meaningful.

My parents are both government retirees and they are working hard to meet our family's living expenses. Because relying on pension money will not be enough to fulfill them, this is the reason that makes me say that if pension money is not used to develop other businesses it will make their lives much more difficult.

If someone is dependent on their pension scheme to live their life after their retirement then I am sure it will be a misery. One should start preparing for their retirement after 40 atleast or early as possible then invest then on different sectors from gold, real estate and possibly stocks and cryptos if possible or just go with the traditional ways that can ensure better future with their passive income via their investment portfolio.

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Quote from: krishnaverma on April 11, 2024, 04:47:56 AM

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

The economic crisis is a big problem in the implementation of saving fiat money for the long term, such as preparing for retirement funds. Fiat money can cause loss of wealth because its value can be eroded by inflation. For example, if inflation is 7.5% in a year, then in the next decade the cost of living will increase and the value of the money you save will be much lower than when you first saved.

It should also be noted that fiat money will have a negative impact on output in the economy, besides that it is closely related to interest rate fluctuations which can change the balance of money in the economy. The interest rate can have an impact on reducing the value of fiat money in the future, causing the value of the money you save to decrease accordingly.

So, it is highly recommended that you invest the money allocated for retirement funds in assets such as buying real estate, land, gold and other non-fiat funds to save the value of assets from decreasing in value due to inflation. In conclusion, saving fiat money in the long term will have a negative impact from a macro and individual economic perspective.

knowngunman

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Quote from: Plaguedeath on April 11, 2024, 04:55:33 AM

I use this calculator https://www.usinflationcalculator.com/

If you own $1.32 in 2014, now it's worth $1.
If you own $1.65 in 2004, now it's worth $1.

So imagine you own $50K in 2004, now it's worth around $30K, in 20 years your wealth decrease almost by half! exclude banks monthly fees, charge, etc etc.

If someone didn't dare to invest their money, they will broke in the future.

In this recent time and considering how informed the society has become, do people still save their money in the bank for a long time? I doubt it. This generation is well aware that inflation can erode the value of money over time and also know the importance of investment in order to maintain the purchasing power. I know the risk associated with investment but saving money is not completely safe either.

Investment is not just about making profits but to at least keep up with inflation. For over a long time now, stocks have historically outperform bank savings even when you consider inflation. The issue is that some people think investment is all about cryptocurrency but it is not.

ancafe

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Quote from: stompix on April 12, 2024, 08:41:52 AM

I don't know where you guys live, but in exactly what country if you retire for example with $1000 per month at 65 your pension will be still $1000 even twenty years later, and it's not indexed by at least a bit under the inflation rate? I'm really curious in what system does this happens when it comes to a government pension like the EU model.

I never heard of a country where you get a fixed monthly pension and that value will stay like that till you die.

I live in Indonesia and the average person who retires from the government will find it very difficult to face life because the prices of goods continue to rise. The impact of inflation that I mean is because our currency continues to depreciate so that when the price of goods rises, pension money will not cover living needs and not to mention the costs of other needs such as children's education, health and so on. The money they earn from the retirement process will be as much as they earned while the price of goods continues to rise so that the value of the currency is no longer meaningful.

My parents are both government retirees and they are working hard to meet our family's living expenses. Because relying on pension money will not be enough to fulfill them, this is the reason that makes me say that if pension money is not used to develop other businesses it will make their lives much more difficult.

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Quote from: krishnaverma on April 11, 2024, 04:47:56 AM

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

Inflation is crazy and saving on a bank means you are losing money on long run. It's not that you don't need to have a bank saving, it's required for emergency fund but never put money in bank as investment. Some years, FD might beat inflation but a normal saving account would never. So it's better to invest in various diversified sectors like crypto and stocks if you want a safer future. Don't keep you money idle but put them on income generating investments.

Stepstowealth

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Quote from: kryptqnick on April 12, 2024, 09:20:37 AM

I think inflation is a big challenge when it's very high, and it hits vulnerable people more than other people because they're already struggling and inflation just exacerbates the problems. In my country, the elderly are a big social group, and also a very vulnerable one (with a higher poverty rate than average). So yeah, inflation is a challenge for them, and considering that the Pension Fund is getting smaller, it will be an even bigger challenge in 10–20 years, unless we figure out how to improve the overall economic situation and the pension situation specifically. But that all can be different in another country.

It might just be same situation for every country, it we were to start making comparison because inflation has to do with high prices and am very certain that the pension scheme will maintain a steady figure that is being paid regularly, so a matter of soliciting the pension agency would definitely be out of proportion, unless it is the government who acts to adjust salaries and pensions as the inflation in a country gains momentum.

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Quote from: kryptqnick on April 12, 2024, 09:20:37 AM

I think inflation is a big challenge when it's very high, and it hits vulnerable people more than other people because they're already struggling and inflation just exacerbates the problems. In my country, the elderly are a big social group, and also a very vulnerable one (with a higher poverty rate than average). So yeah, inflation is a challenge for them, and considering that the Pension Fund is getting smaller, it will be an even bigger challenge in 10–20 years, unless we figure out how to improve the overall economic situation and the pension situation specifically. But that all can be different in another country.

the only way is to repurpose that pension fund through investment where it might yield enough to overcome inflation, just remember at the time of pandemic the inflation is really overwhelming even the effect still can be felt until today where the price of commodity and basic needs are sky rocketing and it never come down even after the pandemic itself is finally coming to an end.
inflation will really affect those pension fund that just being kept not reinvested but knowing that even investing might not be the best idea because inherent risk carried also something need to be taken into account too.
there's just really no solution yet to overcome this problem, elderly people are the ones that actually really in need of money aside from fulfilling their basic need such as food and clothing the elderly people are also have their share of problems too, hopefully though there will be solution to this, otherwise the pension fund worth will just get smaller and smaller over the course of the year.

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I think inflation is a big challenge when it's very high, and it hits vulnerable people more than other people because they're already struggling and inflation just exacerbates the problems. In my country, the elderly are a big social group, and also a very vulnerable one (with a higher poverty rate than average). So yeah, inflation is a challenge for them, and considering that the Pension Fund is getting smaller, it will be an even bigger challenge in 10–20 years, unless we figure out how to improve the overall economic situation and the pension situation specifically. But that all can be different in another country.

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Quote from: krishnaverma on April 11, 2024, 04:47:56 AM

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

This could depend on it, some people retire already an early age or in old age if you are the kind of person who doesn't have any savings at all you can't survive inflation instead you will seek assistance to the people surrounding them, if you have a savings, you can sustain at least with the help of your benefits but not in the long run because possible inflation increase year by year and the amount of your savings will be the same but the expenses get increase. The last one is if you have an asset, investment and savings you could easily survive with inflation, your money has a continuous rotation of earnings, expenses and profit so you don't need to worry about inflation for the coming years yet if your investments are still sustainable.

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Quote from: ancafe on April 11, 2024, 12:05:16 PM

In the future, retirement salaries will remain the same and the salaries they have will continue to lose value, making the problem worse in the future.

Quote from: Assface16678 on April 11, 2024, 05:24:41 PM

Not just pensioned people are having a hard time with inflation, and because of the continuing increase in inflation, in no time those pensions will be enough for those who receive them.

Quote from: Queentoshi on April 11, 2024, 06:59:19 PM

Most retired people who worked for the government depend on pension from the government when they are retired. And because of how much inflation is causing the prices of goods to increase, the value of the money that is paid as pension funds to these retired individuals reduces in value even before it is received by the retired personnel.

I don't know where you guys live, but in exactly what country if you retire for example with $1000 per month at 65 your pension will be still $1000 even twenty years later, and it's not indexed by at least a bit under the inflation rate? I'm really curious in what system does this happens when it comes to a government pension like the EU model.
https://www.ecb.europa.eu/press/economic-bulletin/focus/2022/html/ecb.ebbox202201_08~ac43e1199c.en.html

I never heard of a country where you get a fixed monthly pension and that value will stay like that till you die.

Gaza13

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Yes, before retirement arrives, everyone must know why every year the prices of all goods rise, they must be much smarter and wiser or think hard about how to secure their assets. One way that we can win in maintaining our wealth is by investing, even though investments have less stable or fluctuating prices, this method can maintain your wealth and can also grow if you choose the right assets. and how we can generate other sources of income, not just from 1 source of income. Indeed, inflation is the most frightening enemy for all groups of people in the world who are trying to seek prosperity in their lives in this world.

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Rising inflation can definitely become a problem for retired people. As the prices of goods & services increase the purchasing power of their retirement savings may diminish. This means that retired individuals may find it more challenging to afford the same standard of living as inflation rises. It’s important for retirees to carefully manage their finances, consider investment options that provide protection against inflation & adjust their spending habits to mitigate the impact of rising prices.

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Quote from: krishnaverma on April 11, 2024, 04:47:56 AM

It is already causing lot of problems for retired people. How much will this problem intensify in future ?

I understand that inflation is a global phenomenon and it varies in every nation but taking my country as an example and how it is currently suffocating the lives of everyone, saving for one's retirement in fiat is a big joke. I do not expect an improvement, rather the situation will get worse for the elderly retirees as long as they continue to stock up their money in the bank instead of investing in bitcoin, gold, real estate and landed properties.

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Quote from: Uruhara on April 12, 2024, 05:42:01 AM

Quote from: dothebeats on April 11, 2024, 01:36:33 PM

It sure will. If these retirement funds aren't put to use as investments, they will surely get screwed over by inflation over time. These funds stay as it is on their fiat values and isn't adjusted in any way by the banks that hold them. Even if you managed to hold $1M during your career, expect that it will go down by value by at least 10% in a decade. Better hold your assets in precious metals, crypto, or other such assets that can hold value over time if you want your retirement fund to really work out for you.

Storing fiat in the long term is just like letting its value continue to decrease. Because the price of any item in 10 years will even increase above 10% at the normal inflation rate. And if we imagine that the world is experiencing a quite bad economic crisis like what has happened in the last few years. So we can even see a 10% price increase in just a matter of days or weeks or months. High inflation and hyper inflation even haunt several countries, making their currencies worthless. So investing is always the best choice if it is for the long term. And if it's for use in retirement. So wouldn't it be better to invest in property or real estate if you consider the low level of risk? But there's no harm if we put a few percent in bitcoin too.

Well said, That's why I don't recommend to my closest any long term storing of fiat money because the value of our money will possibly didn't keep up with the inflation, imagine 5-10 years from now, the value of the money that you saved via fiat currency will surely decrease as economic crisis still in place. I suggest like what you have mentioned, Investing in a property, gold, real estate and crypto is much needed nowadays, it will serves you as one of your retirement funds for the future.

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It will be a problem indeed if their only income is coming from the government retirement funds. Every person should begin to plan for her/his own retirement when they are in their 20’s. The schools don’t mention any of these problems to their students so it will already be too late when you start wondering about what to do for your retirement.

What you need is a financial fortress which always produces cash under any financial circumstances.

If you start thinking about it in your 20’s or even earlier, you will reach your target wealth in your 40’s or even in your 30’s if you are lucky. Otherwise you’ll wage slaving forever till you die.

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