I don’t see why you are counting future earnings rather than present earnings.
Thought experiment: imagine next year from Jan 1st to Dec 31st, literally every 25-year old stops working and simultaneously everyone who was due to retire in that year has their retirement delayed by one year.
The total size of the workforce remains constant.
If this became a permanent feature of society [0], GDP, average corporate income, and tax revenue, would all be constant.
Private pensions as well as states pensions would also pay out less in total, as there would be less years between retirement and death. How much would your pension pay, relative to parental leave, if someone equivalent to you were to reach pension age today? Because that’s the amount available for paternity in this thought experiment, not the number that your actual pension will be worth when you reach pension age.
[0] For a one-off year it would appear higher, but that’s an illusion caused by old people having more experience and therefore higher productivity and income; it obviously wouldn’t remain true once those 25-year-olds with one fewer years of experience each became 65.
I take your point on not accounting for interest growth. Well explained. Thank you.
My actual retirement is my defined contribution 401(k) account. The amount I put in now grows until I draw it down in retirement. There’s no one who will give me a year of their 401(k) drawdown, of course. What 401(k) money I and my wife don’t spend is part of our estate and inherited just like any other type of private savings.
Defined benefit plans (“private pensions”) are rare (and becoming more rare) for the current workforce.
Social Security is more than a rounding error in the retirement picture, but it’s by far the minority of income for most professional jobs. That’s literally the only “pension style money” that’s available to me and it’s about $1400/mo as far as I can tell. That's not going to take the typical 25-year old new parent very far I don't think. (It's slightly over the federal minimum wage for one full-time worker.)
$1400 is average. Assuming a decent professional salary and depending on when you retire, it could be closer to $2,000-$3,000.
But of course your basic point stands. Absent a separate defined-benefit pension (which still exist from older jobs in some cases), SS is fairly minimal by itself even if you own a house.
You are though, by definition, taking away an average benefit from those who would retire to give to parents, so I think average is the right reference figure when contemplating "what would the parental benefit be if funded from social security delays?"
Thought experiment: imagine next year from Jan 1st to Dec 31st, literally every 25-year old stops working and simultaneously everyone who was due to retire in that year has their retirement delayed by one year.
The total size of the workforce remains constant.
If this became a permanent feature of society [0], GDP, average corporate income, and tax revenue, would all be constant.
Private pensions as well as states pensions would also pay out less in total, as there would be less years between retirement and death. How much would your pension pay, relative to parental leave, if someone equivalent to you were to reach pension age today? Because that’s the amount available for paternity in this thought experiment, not the number that your actual pension will be worth when you reach pension age.
[0] For a one-off year it would appear higher, but that’s an illusion caused by old people having more experience and therefore higher productivity and income; it obviously wouldn’t remain true once those 25-year-olds with one fewer years of experience each became 65.