How can the government make sure that people save enough money to live on when they are old?
It is claimed that people’s ability to work is not infinite, so they have to earn a high enough income in order to provide a good level of living conditions when they stop working.
Thus
, the government wants to be sure that publicity has money for retirement.
In general, in terms of macroeconomics theory, there exist two types of retirement systems and governments choose one of them or just a combination. The first is called PAYG or Pay As You Go which means that the generation of workers now pays a part of their salary to pensioners and the next generation will provide pensions for those who work today and in the future will be retired. However
, this
system does not really work well in countries with the growth rate of publicity decreasing, such
as Russia and other European countries as each next generation is smaller than the previous one. Therefore
, the amount of money people get becomes smaller as well, which can be followed by problems in the economy.
Besides
, there is another system applied in many places these days, it is called Fully Funded, the concept means that employees save a certain part of their incomes through special organizations such
as pension funds, investment funds and other companies which invest their money in the stock markets. Hence
, due to
the percentage of yield of corporate stocks and government bonds people can get a passive income in the future.
In conclusion, I would like to say that the government is interested in the savings of citizens, so it makes it available in different ways, and pension systems are one of these.Submitted by ddoiron on
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coherence cohesion
Ensure that your essay has a clear, identifiable structure with an introduction, body paragraphs, and a conclusion. Use linking words to make the structure more apparent.
coherence cohesion
Support all main points with specific examples or explanations. Avoid general statements that are not conclusively backed by detailed evidence or analysis.
task achievement
Address the task directly from the beginning and maintain a clear position throughout the essay. Make sure to directly answer the question by focusing on how the government can ensure people save for retirement.
task achievement
Include a wider range of ideas related to the topic. While discussing pension systems is relevant, also consider other government measures like incentivizing savings or financial education.
task achievement
Use specific examples to illustrate how different retirement systems work and their effectiveness in ensuring savings for the elderly. This can include case studies from various countries or statistical data.
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