620 sats \ 1 reply \ @orthwyrm 5 Sep 2023 \ parent \ on: What is ACTUALLY risky? meta
Or pensions in general, really.
While there are various tax advantages and contribution schemes to make the risk / reward ratio more palatable, pensions are highly vulnerable to regulatory change over the course of decades (haircuts, raising retirement age, etc.) One cannot simply rotate their capital out of pensions to avoid this in the same way you can with bank accounts or commodities.
In UK TradFi circles, the common mantra is to max out pensions above the 40% tax bracket (£50k salary). Personally I think that it's no coincidence that the assets which get the most tax breaks (pensions and real estate) are also the ones where capital is most difficult to liquidate and remove from government control, and that these incentives exist for a reason.
I do not think the risks of pensions are appreciated. I would rather self-custody BTC at a 40% cut than the full amount locked away in a pension I won't see for +40 years (if ever).
The UK is in an interesting place with its current political incumbents seemingly at the mercy of financial market lobbying groups. And as an aside they honestly thought that changing tax thresholds around pensions were going to get a depleted post-COVID workforce back? Lunacy.
I can see from your points how pensions are vulnerable over the long term and it locks your money away (which is a good thing for some people). Once decent company / civil service pensions are getting hammered and changing rules around social care contributions present a significant risk to retirement savings, property, inheritance and pensions. The poorest people are saving nothing towards their retirement out of fear of having it taken away and will throw themselves on the mercy of the state.
Many people will have an impoverished retirement if they manage to retire from work at all. People will literally have to work till death.
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