I want to follow up on the retirement thread. I think that the social safety net (social security, company pension, healthcare) is gradually being withdrawn, and a majority of people don’t realize it. Current retirees still enjoy good pension if they’ve worked for a large employer, social security complements that. Many of them enjoy their employer’s retiree healthcare benefit before medicare kicks in. Their housing is worth a lot. Inflation (other than healthcare) is mostly low. Their adult kids probably extrapolate that peaceful retirement into their own old age.

Fast forward 10 to 20 years. Future retirees will rarely have company sponsored healthcare. I see a lot of discussion on pension, but healthcare is even worse a problem. Only a minority of retirees will have employer sponsored pension (defined benefit kind). Medicare by then will very likely run into serious solvency problem. Social Security probably will still be OK. So to have a good retirement, one has to have a house that’s paid for (forget about how much it’s worth), healthcare from somewhere, and enough savings to cover all other expenses. No, a lot of people won’t be able to aford to retire, at least not living the same standard of living.

I have a friend who jokes that since all their money is spent on their kids, their house is their retirement. I guess reverse mortage will be a very popular financial product 10 to 20 years down the road.