Monday, August 20, 2012

Declining TFR and Pensions

The future of pensions for tomorrow's elderly is in Box 4, "Continue Working"; Box 6, "Children as Pension" and Box 7, "Financial Pensions"

When I was a kid, Box 6 was dominant. In the years to come because of Box 5, "Declining TFR" those who are successfully financially will enjoy Box 7. Most will be forced into Box 4 and the minority with many kids and strong family relationships will live with Box 6.

For Box 4 to be sustainable, medical costs per head must fall and healthcare revenue will still be much bigger because the market would be much larger than today. The pharma and health therapies sectors will not be allowed to price themselves like they do now because politics eventually trumps the markets.

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