Friday, September 7, 2012

Diminhsing returns

As the pension debacle continues on into a withering stalemate I, in my wisdom, believe i have come up with a solution. My last blog about GP pensions was unpopular and to be fair, i am not particularly surprised. We are all conditioned, not accepting less for more as an individual – even if it is for the greater good
Buts lets look at the principal of the pension. We put in a fixed proportion of our income, the government, by the means of being our employer, puts in a slightly larger amount and at the end of this, we get a fixed sum every year, index linked until we die. Now if we can briefly ignore the fact that in the last 10 years GPs have also had to put in their own employers contributions, and look at another of the principles and how this could change

The idea of a fixed income for life is nice, but not entirely fair. If i retire in good health at 67, and i I hope I will be, able to enjoy my retirement for another 10 or more years before degeneration takes its inorexible toll, and I have to give up the base jumping, bed hopping high octane lifestyle and replace it with games like snap, hide and seek with the GTN spray and trying to beat my personal best at hours sleep without having to urinate, my needs will change. In short my outgoings will decline in parallel with my sphincter control. If i live to be a 100, and given my pizza stuffing and wine guzzling lifestyle in the youth of my retirement, i will try and make this as unlikely as possible, my income needs will be very low indeed
If fate deals me a worse hand and I am in poor health at retirement with diabetes, high blood pressure, some nasty incurable venereal disease and failing bodily functions, I can probably safely predict that my lifespan will be shorter and thus I might as well make the most of my pension while i can
So why not have a system where at retirement you have a pot x which previously would have given me a pension of y every year year, which given a predicted healthy lifespan can be tiered. Thus for the first 5 years i might actually take my pension at y plus a third, the next 5 at y, and after that my pension income can wither away every 5 years as i spend less time doing the things I enjoy, and more time just enjoying the fact that I can still do the toilet.
Thus if i am unfortunate enough to live beyond 90 for another 10 years, i will become a diminishing burden on the pension system and instead can be an increasing burden on my relatives