this post was submitted on 22 Jul 2025
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They do. While economy in general hasn't exactly flourished in the last years, they're still fine and can afford it, while still doing lots of other stuff. This is going to become a big issue in the future if not addressed. But we're not there yet. I mean I'm not advocation for doing nothing here. It certainly needs to be solved. I'm nust questioning whether disembowelment at the age of 65 is the best bath forward here.
Honestly? We can't eventually afford to pay for everyone's retirement.
American system with the 401Ks and stuff is looking better by the day, as there you're supposed to earn your pension and it keeps earning interest while you're still working. It's still not an ideal system, but if you take that, increase the tax benefits, and in addition to employer matching, add government matching...
Of course what good is money when there's nobody to work and actually produce things... But at least it would take most of the burden off young people.
Right now, 12% of what I earn goes to the pension system to fund current retirees. This is going by the full salary fund not gross income, because in Estonia, gross income isn't actually gross income (there are employer side taxes so us employees don't think about how much our income is really taxed). The funniest thing of course is that "social tax" only comes out of salaries, never dividends. So while they'll say companies are paying it, it's directly based on what the company's paying it's employees. In all honesty, it's the employees paying it via reduced gross salaries.
So 12% isn't much, but consider that in 1994 the retirement age was 60 for men and 55 for women. In 1998 it was decided that by 2016 it would be 63 for both. In 2009 they decided it'd be 65 by 2026. Starting 2027 it'll rise as life expectancy rises. National pension prediction calculator says my estimated retirement age is 69. In all reality, I don't expect to ever be able to retire, not on national pension anyway. There won't be enough young people to pay for my retirement. But I have to keep paying for the current old people, who got to retire at 63, some of them even younger. Amazing system.
Most European countries impremented comprehensive welfare states after the end of WW1 or WW2 despite their economies being in horrendous shape (and there being far less median wealth then than there is now).
That makes it obvious that this is an argument over spending priorities, not over affordability per se.
Median wealth is irrelevant, that's just money. You have to keep in mind that to produce goods and services that money can buy, you need people who can work. Right now we've still got more people working than not. This will not be the case forever.