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Blockchain, Featured

Blockchain to Redress the Retirement Crisis

Blockchain has an answer to the crippling state of present pension management. Alternative verticals are available to be explored that promise lucrative returns and secured retirement life.

Long gone are the days when people worked their lives out for an organization, happily retiring with the promise of pensions. These days the concept of pensions is too overbearing for the organizations and they make no such promises. Those that did find it hard to abide by those as the burden of a great many fall onto fewer young workers. Also, the young workers face the insecurity of working out their own pension plans. So, overall, the situation is grave and precarious.

Also Read: Where Does Blockchain Stand in the Mainstream?

The Woes

Pensions do exist with certain companies. However, the majority of them struggle to deliver on their promises. This is largely attributed to the corrosive facade of the global economy. Current trends of automation and the surging expense of modern medicine tend to condense the funds required to meet the obligations to former employees.

Those many retirees who still rely on pensions are helpless as their situations grow increasingly insecure. The monthly payout is growing higher by the day as the projected returns fail to turn in as much. The risk of default is high to the economy as a whole.

There continues to remain a significant gap between the pension funds and the outstanding liabilities to the pensioners. This gap is nowhere near closing and the volume of deficit implies that the thread is just about to snap.

What led to this situation is a grievous lack of transparency in all stages and shocking economic shortsightedness. The persons with responsibility failed to come up with an investment planned that would sustain an expense of this magnitude.

This implies that even the young workers today need to be concerned about saving up enough to sustain themselves through their old age. Adding to the cause is the increased life expectancy of average people.

The bottom line is that the reassurance of pension is over. While this has grievous effects on the elderly it bothers the young no less.

Probing the Issues

It is getting clearer by the day that the people responsible for maintaining a pension fund failed miserably. What was needed was market foresight and honest goodwill towards to answer to the faith of the employees. Adding to that was a series of pilfered and mismanaged funds.

The lack of transparency and accountability put the pensioners in a pathetic situation when they learned of their jeopardized pension only when it was made public.

Shifting workforces no longer adhere to the traditional format of work wherein they could rely on the employer-provided pension. Independent workers and entrepreneurs must work out a pension scheme on their own. Hence as it appears, the companies are paying out more to support the former employees than the money they are taking home.

The Blockchain Redressal

A system may be in place wherein employees are guided towards a gainsome assortment of investments that will secure their retired lives. This will involve human and machine collaboration to come up with a plan to optimize the returns on investments.

Among the several advantages of blockchain, an important one is providing insights into future market trends. Blockchain in combination with Machine Learning and Artificial Intelligence sift through historic data to identify a pattern and use the same to predict the future turns of events. This may prove effective in determining the perfect pension plan.

The performances of fund managers and other personnel should work on an incentivized scheme, to encourage innovation in operation.

The blockchain platform works to link pension funds to fund managers. All institutional participants must go through a vetting process to make sure that only the valid entities are permitted to participate. Blockchain’s immutable ledger facility makes it safe from malicious attacks and attempts to defraud the system. This will ensure all involved actors act in their best interests.

Also Read: Core Banking Solutions Makes Modern Banking a Little More Easier

Interested investors can be offered alternative forms of investment in the form of cryptocurrencies, real estate tokens, and others

Retirement Planning to Be Enforced

Needless to say that the former ‘relaxed’ retirement approach towards future investments does not work in favor of a comfortable retired life. People need to be actively involved while planning their own future. If pension funds are reinstated, all settles well, if not, people after retirement must be prepared to explore verticals at the correct time.

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