In addition to a wonderful answer from @Grovkin, who covered financial management & investing.
The solutions as per question don't work.
My answer would be similar to his but would cover a different scenario. Maybe, it won't give you a direct answer, but it will help you understand the situation.
Let's assume there are 10 (P1-P10) people in a country. Just 10. Fictional nation.
Say, P1 orders a product from P2.
- P2 sources some parts from P3 and P4. Assembles & processes them and
delivers to P1.
- P3 sources some chemicals from P5 and uses it to deliver to P2.
- P4 uses some minerals from P6 to make a product and sell it to P2.
- P7 provides software services to P2 and P3.
- P8 facilitates the delivery of the goods from one to other.
- P9 provides banking transactions and other stuff.
- P10 provides the much needed social services to all, like laundry, cleaning, etc.
When P1 makes a payment to P2. P2 pays others in his supply chain. This continues and everyone gets paid.
If P1 is a company like GM, making cars, then all 10 in the country are making a part of the product and getting paid. Essentially creating jobs for the others in the system.
If P1 (GM) decides to make a futuristic flying car, then looking at the demand, P9 may start aviation research and produce services for P1.
If P1 decides to make a robot for doing janitorial services, then looking at demand,
P10 may start a moulding company to produce parts for P1.*
If you look at the above examples, the whole future of P2-P9 depends on the direction taken by P1. The living standards, the expectations of P2-P9 are directly related.
Consider a scenario, where P1 wants to file for bankruptcy. What would happen to P2-P10?
Coming to the real world, demand is a varying factor in any economy. When the demand falls, the demand (for products/services) is artificially driven by the governments (by spending money) to create opportunities. In turn the spender goes into debt (P1, as per our example).
After the great 2008 financial crisis, the US government did,
loan to companies like Tesla to create demand (jobs for P2-P10)
Invested heavily in oil drilling and search. Today, US has shale because of this spending (and jobs for P2-P10)
- Invested heavily in drones and automation tech for military use.
- Invested in climate and weather research, using which we can exactly predict the crisis today.
The government is taking a part of money (taxes) from its citizens and spending the same (giving it back) to produce real products and services. The taxes collected were again invested back in the nation creating a demand. This additional demand has created more companies and gave more money back to people.
So, technically, the tax dollars (except the contributions to pensions) paid by people/companies aren't with the government anymore. In addition, the government actually borrowed more and created demand, so P2-P10 can have jobs/let's say a purpose. All people have to be responsible for the nation's debts. Using the newly created products (shale/Tesla, etc.) the nation can pay off its debts (the US debt is 22 trillion).
Coming to your question.
Now, P2-P10, seeking their tax payments back for pensions.
To be fair,
- The government doesn’t have that money anymore.
- They were able to pay taxes, because the government artificially created a demand. They had jobs. Enjoyed life and now want their money back.
It might not happen. (Possible if, From @Grovkin answer, if inflation rises.)
If it happens in the current form, the whole nation might go bankrupt.
The traditional pension systems are broken. They were initially implemented with flawed assumptions, populist considerations and statistical expectations, which were never possible in real situations.
The government wont be able to fulfill all pension promises. If they do, it's by raising debt, essentially a country (all people) borrowing from other nations to pay for pensions, for which future generations will have to pay for. (If inflation rises to a significant level, this scenario is out of the question.)
In other words, if pension payments are made (without inflation rising) your kids must pay some 70-80% or maybe more in taxes to serve the nation debt. Is it fair?
US debt per papita (person) is now at 65000$. After government spending, it can hardly pay interest on the debt. Additional borrowing for pensions means, next generations will have to be slaves for others (With no inflation).
This is an extremely complex subject. I just scraped the surface of a mountain.