Is your (now 32 year old) kid going to have the means to provide you that much assistance in your retirement?
1: http://money.com/money/4629700/child-raising-cost-department...
2: https://www.collegeraptor.com/find-colleges/articles/afforda...
Now may be the best time to stop having kids and instead invest what you’d otherwise spend. Chances are there will be few remaining un-automated jobs by the time they need employment. I say this as someone who has a kid—I fear for her future honestly.
Now translate demand for housing to demand for services, and low supply of houses into low supply of workers providing those services. Everyone around you is using compound interest, so relative to each other you have similar purchasing power to them. Now you compete with the same people for those services. It's the relative power that really decides whether you can afford the services or not. If the workers don't have to compete with each other then you'll spend all that nice compound interest chasing them.
What? This is why investment advice for retirement generally revolves around allocation into stocks and bonds while leaving only an emergency fund plus regular expenses in more liquid assets like savings accounts. Inflation will only eat your savings if you fail to invest. If you want to talk about risk, well, inflation is why a total failure to accept risk is extremely risky!
To take the extreme example, if everyone tried to save up and then take a sabbatical year in 2025, they would all find that their money became almost worthless -- they could buy capital goods (made before) but nothing else.
Before Paul Krugman metamorphozed into a political hack, he wrote some quite solid stuff about economics. His famous baby-sitting co-op [1] runs into this problem: Everyone wishes to earn tickets on weekdays / winter and spend them on weekends / summer, but this is impossible:
Now think about what would happen if there are a lot of old retired people but the number of people willing to work for them is 50% of what is required, in most branches of the economy.
Money will start chasing the workers, and they pay will sky rocket. It's more like SV skyrocketing housing prices and total compensation, bit wider in scope.
Why do you think that this will entirely fail to incentivize prospective retirees to work for more total years of their lives in order to benefit from increased pay?
Depends on what you're counting on in the future.
If you want to be taken care of when you're older, and almost no one has children, then your future is bleak no matter how much you earn now. Inflation will eat most of your savings that you'd want to spend on care. Of course there's immigration or you can move but you're going to be lonely nevertheless.
It may sound controversial but it's a bit like not getting vaccinated and counting on herd immunity. Who would be writing all those HN comments now if our parents hadn't had children?