[some_math_guy]

How can we realistically expect pensions to even exist in 35-40 years? I'm no finance expert, but from what i understand a pension fund simply depends on compound interest to fund the eventual withdrawals at retirement. In a nutshell, you contribute x dollars over your working lifetime, which due to compound interest will become many times larger than the sum of your contributions. This large pot of money will continue to generate interest as small monthly disbursements are made from the fund for retirees, effectively stretching out the compounding period even further.

In the post-peak world, there will be significantly reduced economic activity, so won't compound interest as we're used to today just cause massive hyperinflation as money is created to pay interest without the economic growth to generate real wealth?

In Canada where I live, federal legislation prevents anyone from accessing their pension funds until at least age 55 (and even then with severe penalties until age 65). There is a caveat however; you can withdraw all of your funds at any time during the first 2 years of employment with a given employer.

I have almost 10,000$ in my pension fund and am coming up on 2 years with my employer, and am seriously considering withdrawing my retirement funds and using them to mitigate the effects of peak oil for myself and my family over the next 5 years. It's not that much money, but it will buy a lot of canned food, seeds, tools, and who knows what else that may help.

Can anyone discuss the future ramifications of peak oil for pension funds and investments in general? Also I'd like to hear if other people have had the same idea about withdrawing their savings (retirement or not), and how they feel about potentially 'sabotaging' their future (or was it an unrealistic dream anyways??)

Kevin

[untothislast]

The UK has increased the retirement age, mainly on the grounds that people are living longer - and it maintains it can't afford to start paying out the state pension at the earlier threshold.

Those with augmented pensions, are finding that employer schemes are being wound back to avoid the vast financial commitment this will entail in the future.

Both decisions have been made without regard to any additional economic impact which might come along in the wake of peak oil - or even climate change. Therefore, I came to the conclusion a while back, that I'd be better cashing in on my superannuation fund now, and using the money constructively, rather than wait for the day until government ultimately declares it can't meet its commitments - or, I find myself trundling useless cash home in a wheelbarrow, Weimar style.

Sadly, it's locked in until I'm 55. I fear I'll never actually get to spend it..

[Heineken]

What sorts of pensions do you mean? Government pensions or pensions from private companies? Might make quite a difference.

Pensions are a fast-dying institution in America, at least. Instead, companies have increasingly converted to 401(k)s, which are a better deal for companies and a worse deal for employees, since they shift more of the funding burden to the employee. Just another sign of our deteriorating times.

[some_math_guy]

I don't really see much of a difference between private and public pensions in the long run...both are funded by a flawed money system and likely cannot be expected to be sustained. As you say, private companies will likely begin changing their own policies earlier than government just to maintain fiscal solvency, but ultimately I think at some point government will no longer be able to justify financially supporting baby boomers for 30 years with suppressed economic growth and a significantly smaller working population (people are having fewer children and later in life).

I really hate to sound selfish because that's the last thing that will be good for working together to find a way out of this mess, but for young people like myself (I'm twenty-eight), the 'planning for your future' so strongly advocated by banking institutions begins to look more and more like 'planning for our parent's future' upon closer inspection. Heinberg and others have mentioned the possibility of a 'generational divide' that may arise in the future as younger generations experience firsthand the stark realization that a single generation not only squandered the most precious resource on earth, but left their children to financially support them through tax hikes and reductions in social services. I think many would agree that the boomers experienced one hell of a 'have' life. Others would argue that the current generation is the real 'have' generation, but what do we have really outside of a mountain of disposable dollar-store technogarbage? 10's of thousands in student loans, thousands in credit card debt, and superinflated mortgages that will take us 30 years and 40% of our monthly salaries to pay off. It's hard to feel charitable towards the generation that came before us as they wonder who's going to fund the next 30 years of their vacation and leisure activities...

That being said, maybe a more realistic proposition would be to adopt some kind of system where family and community members help to support our elders while making them an important part of the community....in many traditional cultures, the elders are the custodians of knowledge and experience and are highly respected as such. It's only in our disposable culture that people, once no longer pumping money into our economy, are deemed worthless and cast off into 'retirement communities' (ie. prisons for the walking dead)...

[linlithgowoil]

i would never pay anything at all into a pension. total waste of money, plus when you do finally get your pension, if it is worth anything at the end, you are forced to buy an annuity with it which usually gives a paltry income and if you die 2 weeks later, kiss goodbye to your total annuity fund. what a total rip off. plus your income is taxed again!

possibly the exception would be a state backed pension with a government job, but even then, these are all being closed off to new entrants with all the previous workers being the last to have their noses in the trough of the gravy train.

maybe best just to retreat to the forest and eat insects when you retire

[Heineken]

I agree that if we have a total collapse, it won't matter whether one's pension is private or government. But neither will much else then matter.

Still, I'd rather have a pension funded by a private company with a strong business model supplying essential human needs than by a bankrupt government.

BTW, many private pensions are (or used to be) funded entirely by the company. I never paid a penny into mine. So if my company or the economy collapses, at least I suffer no direct loss.

[gnm]

How can interest on pension funds continue to grow in an ever-contracting economy. I think those will collapse. I pulled my 401k in 2001.

Perhaps you could invest in gold bullion?

-G

[Teclo]

I reasoned that since pension funds rely on the stock market they were toast so I stopped paying into my pension about a year ago

What I'm unsure of is what to do with the five - seven thousand pounds that must be in there. Can I take it out? Its 25 years till retirement!
If a meltdown occurs maybe I wouldn't be able to
Then I could spend about £1000 paying off debt and another 1000 to get house projects done and various bits and bobs
The rest I suppose into savings or gold?

OTOH maybe I should leave it in there.
Anyone got any ideas!?

Cheers,
Martin

[Doly]

If you have debt, I think the best thing to do is pay off debt with whatever you can, including your pension fund that is very uncertain if it will be any use.

What you do with the rest is up to you, and will depend on your personal circumstances. A house, land or some kind of inflation-protected investment are all good possibilities.

[redfire]

delete

[TheTurtle]

$this->bbcode_second_pass_quote('linlithgowoil', '
')maybe best just to retreat to the forest and eat insects when you retire

[Heineken]

Delightful avatar, Turtle. I'm one of those crazy coots who stops for turtles crossing or stranded on the road, picks them up, and carries them deep into the woods, where unless the woods are soon converted into ever more cookie-cutter housing tracts, they have a chance of living a few more years.

[TheTurtle]

$this->bbcode_second_pass_quote('Heineken', ' ')I'm one of those crazy coots who stops for turtles crossing or stranded on the road, picks them up, and carries them deep into the woods ...

[Teclo]

According to my policy:
'At the request of the member the policy may be discontinued and a transfer value paid in accordance with the rules of the personal pension scheme, approved by the board of the inland revenue and of which the member has become a member'

Looks like I can't simply cash-in (although it doesn't say I can't maybe I should ask?)

But could I transfer to someone who would?

Anyone know any good on-line financial forums???

Cheers,
Martin