Go Back   Bloggingheads Community > Life, the Universe and Everything
FAQ Members List Calendar Search Today's Posts Mark Forums Read


Life, the Universe and Everything Post comments about everything else here.

Thread Tools Display Modes
Prev Previous Post   Next Post Next
Old 10-29-2011, 02:12 PM
cragger cragger is offline
Join Date: Aug 2007
Posts: 632
Default Re: Maybe this bit of income equalization...

I should add a caveat to what I said, that relates to the question of payouts exceeding contributions. I know, just when it seemed safe to look at the forums. But -

It is of course possible to operate a system with no interest or investment return at all. It's equivalent to stuffing your money into an old tomato can and burying it in the back yard until retirement. In that case, the total payout obviously equals the total contribution, and the annual payout R would just be the annual contribution C times the ratio of the contribution period to the payout period.

It would still be a contributory system, which if I can recall that far back was my original point such as it was, just not a particularly attractive one. No pension system works like that for the obvious reason that providing the defined benefit is more expensive to the provider. As we've seen, even a low rate of return on the order of a couple percent will double the payout for a given rate of contribution due to the long time period of investment.

I'll back away from the keyboard now and go outside for some fresh air.
Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

All times are GMT -4. The time now is 12:59 AM.

Powered by vBulletin® Version 3.8.7 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.