The world might run out of people

Re:The world might run out of people by ryandrake on Wednesday February 06, 2019 @11:44AM (#19096708)

From a purely economic standpoint, treating kids like a retirement investment seems absurdly risky compared to the alternative. According to this link [1] the average cost of raising a middle class child to age 18 is $233,610. Plus the average cost of a 4 year out of state university [2] $36,420 equals $270,030. That’s $12,274 a year for 22 years. Let’s say instead you put that into a pre tax IRA earning 6%. At the end of those 22 years your balance is $532,597. Let that grow for another 10 years and you’re at $852,155. Assume 15% effective tax rate at retirement you have $724,331 after tax.

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...

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Re:The world might run out of people by polskibus on Wednesday February 06, 2019 @11:56AM (#19096890)

This model may work when you don't have a kid but most people do (ie the size of the workforce is stable). It does not account for situations where workforce drops by large % and there are much more retirees than workers.

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Re:The world might run out of people by ryandrake on Wednesday February 06, 2019 @12:17PM (#19097195)

At what workforce % does compounding interest stop working? Or are you saying interest rates will become negative as the workforce drops? Society’s experience replacing workers with robotics and automation may suggest otherwise.

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.

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Re:The world might run out of people by polskibus on Wednesday February 06, 2019 @01:39PM (#19098185)

I'm saying that if today there is one caretaker for one retiree, but tomorrow there's one caretaker for 3 retirees then caretaker tomorrow can easily demand a lot higher pay than today - he'll work for the highest bidder. Compound interest gains can be offset by this inflation. Similar localized inflationary pressures can be seen in SV where there is limited supply of houses and there are many highly paid specialists who generate demand for those houses.

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.

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Re:The world might run out of people by ryandrake on Wednesday February 06, 2019 @09:28PM (#19102420)

Not all retirees will need “caretakers”. My guess is by the time I retire there will be a robot to inject me with my meds and another one to wipe my rear—as long as my retirement savings holds up I won’t need to hire anyone.

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Re:The world might run out of people by magduf on Thursday February 07, 2019 @10:45AM (#19105866)

If it gets to the point where I need a full-time caretaker, then it's time for me to check out, because I have no desire to live life that way.

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