What are the economic implications of ageing populations?

[OddTrader]

I am not sure how to define "external" in this context. They're designed to be somewhat independent. Whether they are in practice or not is another matter entirely.

Obviously, external means not being directly on government payroll. The big-4 accounting firms as well as some biggies in government consulting firms.

https://en.wikipedia.org/wiki/Management_consulting

Government consultants
United Kingdom

In the UK, the use of external management consultants within government has sometimes been contentious due to perceptions of variable value for money. From 1997 to 2006, for instance, the UK government reportedly spent £20 billion on management consultants,[20] raising questions in the House of Commons as to the returns upon such investment.[21]

The UK has also experimented with providing longer-term use of management consultancy techniques provided internally, particularly to the high-demand consultancy arenas of local government and the National Health Service; the Local Government Association's Improvement and Development Agency and the public health National Support Teams; both generated positive feedback at cost levels considered a fraction of what external commercial consultancy input would have incurred.

 

[Martinghoul]

Obviously, external means not being directly on government payroll. The big-4 accounting firms as well as some biggies in government consulting firms.

Well, whose payroll can they be on to be "external"? Ultimately, in a democratic society, the govt and its auditors are on the citizenry's payroll and there's no other way to do it.

 

[OddTrader]

Well, whose payroll can they be on to be "external"? Ultimately, in a democratic society, the govt and its auditors are on the citizenry's payroll and there's no other way to do it.

A public listed company has to appoint an external auditor firm that the company pays for.

Perhaps there would be a new profession based on internal auditing to cover all financials, quality, organisation and methods, internal audits, market research/polls/analytics/forecasting, etc. There should be enough work for whole year every day for them.

 

[murray t turtle]

We’ll Live to 100 – How Can We Afford It?


Han Yik, Head of Institutional Investors, World Economic Forum


http://www3.weforum.org/docs/WEF_White_Paper_We_Will_Live_to_100.pdf

Savings shortfall – breakdown country by country ($ trillions of 2015)

Country
Unfunded government pillar 1 and public employee pension promises
Unfunded corporate pension promises
Individual savings shortfall
Total 2015
Total 2050

Australia
1.5
0
0
1.5
8.7

Canada
2.5
0
0.1
2.7
13.4

China
7.7
0
3
10.7
118.7

India
1.3
0
2.1
3.5
85.4

Japan
6.7
0.2
4.1
11
25.7

Netherlands
1.7
0
0
1.7
6.4

UK
5.9
0.1
2
8
32.8

US
23.2
0.6
4.1
27.8
136.8

Total
50.5
0.9
15.6
66.9
427.8

%%
Can we afford it;yes we can.By the way savings is better than many think .WHY?? Because they dont count brokerage accounts. Like Mr Spock says[Star Trek ] ; ''live long + prosper'' The best minds are NOT in gov-Ronald Reagan

 

[Mtrader]

Can we afford it;yes we can.

No, probably we cannot. Watch my calculations (that are very simplified) to have an idea what the problem will be.
A starts to work at the age of 25 and will work till he/she is 65.
Salary 50K and expenses 40K a year.
A will live till the age of 100 and will need money to survive. We assume A needs only 75% of the expenses he/she had in their active life. So A needs $ 1,050,000 till the age of 100.
A saved $400,000 so A has a shortage of $650,000. Who will pay this shortage? The government? No because the government has no money, all the money comes from citizens paying all kind of taxes. But each citizen has the same problem: a shortage.

On top of that a lot of people will never make 50K or will never save 10K a year. And those who do will not pay for those who don't.
Cost of healthcare will also explode when getting older.
We cannot afford to live to 100.

 

[murray t turtle]

No, probably we cannot. Watch my calculations (that are very simplified) to have an idea what the problem will be.
A starts to work at the age of 25 and will work till he/she is 65.
Salary 50K and expenses 40K a year.
A will live till the age of 100 and will need money to survive. We assume A needs only 75% of the expenses he/she had in their active life. So A needs $ 1,050,000 till the age of 100.
A saved $400,000 so A has a shortage of $650,000. Who will pay this shortage? The government? No because the government has no money, all the money comes from citizens paying all kind of taxes. But each citizen has the same problem: a shortage.

On top of that a lot of people will never make 50K or will never save 10K a year. And those who do will not pay for those who don't.
Cost of healthcare will also explode when getting older.
We cannot afford to live to 100.

View attachment 174187

%%
I see your points, M trader, but i meant by ''we'' =me + people who want to live with wisdom.
Do i think ACA, AKA ObamaCare Is a TRAINWRECK??==============================================================================Sure do ;but not for me. Sara Palin warned of death panels; VA death ''victims''have already seen that. So those that get on the ACA TRAINWRECK will most certainly NOT live to 100@ all, as your bottom line suggests

By the way calling health insurance ''health care'' is like calling tow truck/liability insurance ''car care.''

 

[java]

%%
Can we afford it;yes we can.By the way savings is better than many think .WHY?? Because they dont count brokerage accounts. Like Mr Spock says[Star Trek ] ; ''live long + prosper'' The best minds are NOT in gov-Ronald Reagan

no kidding, if you can figure out how to live on less than the interest and dividends in your savings, you can live forever and just keep getting richer every year. And now not so many greedy little kids getting their hands on it.

 

[sle]

A starts to work at the age of 25 and will work till he/she is 65.
Salary 50K and expenses 40K a year.
A will live till the age of 100 and will need money to survive. We assume A needs only 75% of the expenses he/she had in their active life. So A needs $ 1,050,000 till the age of 100.
A saved $400,000 so A has a shortage of $650,000. Who will pay this shortage? The government? No because the government has no money, all the money comes from citizens paying all kind of taxes. But each citizen has the same problem: a shortage.

You have to assume reasonable interest rates, of course.- Historical average in the US has been around 5.1% with inflation rates on average 2.2%. So really to be drawing 75% of the 40k a year A needs about 650 grand.

 

[java]

And don't forget some of that 650k is reinvesting because he always lives on less than he makes.

 

[HobbyTrading]

No, probably we cannot. Watch my calculations (that are very simplified) to have an idea what the problem will be.
A starts to work at the age of 25 and will work till he/she is 65.
Salary 50K and expenses 40K a year.
A will live till the age of 100 and will need money to survive. We assume A needs only 75% of the expenses he/she had in their active life. So A needs $ 1,050,000 till the age of 100.
A saved $400,000 so A has a shortage of $650,000. Who will pay this shortage? The government? No because the government has no money, all the money comes from citizens paying all kind of taxes. But each citizen has the same problem: a shortage.

On top of that a lot of people will never make 50K or will never save 10K a year. And those who do will not pay for those who don't.
Cost of healthcare will also explode when getting older.
We cannot afford to live to 100.

Mr(s) A does not have any return on investment or dividends? You seem to have assumed 0% per year, for forty years. If A achieved 4% on average during these years (s)he would have collected the required 1.05 M USD by the age of 65. That 1 M USD will continue to fetch returns during the first one or two decades into retirement as well. Probably a bit more than 4% is required to offset the negative influence of inflation.