Why pessimism on Social Security could come back to bite millennials
When it comes to funding retirement on a societal level, the only two numbers that matter are dependency ratios (the number of working people per non-working person) and productivity (the amount of useful work able to be done by one laborer).  If either of those falls, living standards necessarily have to fall - you have fewer people doing the work of supporting everyone, potentially less efficiently.  If you can get productivity to go up faster than the dependency ratio is falling, you have a chance of offsetting the fall.<p>Every government policy or financial product is just redistributing the pain of falling living standards.  You can dictate that retirees receive transfer payments from working people, as per social security - but it means that they have less money to spend on themselves and their kids.  You can transfer earnings within a corporation from current workers and shareholders to retirees, as per pensions - but it means the company will be a less attractive place for new hires, and risks the financial solvency of the whole company.  401(k)s have their own problems - the price of stocks, at any given instance, is set by the ratio of dollars entering the market to dollars leaving the market, so if all retirees try to pull their money out to fund retirement at once, they&#x27;ll find the stock prices they were counting on crash.