Experts Call for Skipping Daily Coffee to Plan for Retirement Ahead! Why Is Coffee So Expensive?

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The Rising Challenge of Aging Population

When you saw the title of this article, did the first thing that came to your mind look like this meme:

According to reports, as of the end of 2021, China's population aged 60 and above reached 267.36 million, accounting for 18.9% of the national population, of which the population aged 65 and above reached 200.56 million, accounting for 14.2% of the national population. It is projected that by 2027, the proportion of elderly population will increase to 20%, entering a deeply aging society.

By 2050, the elderly population will reach 487 million, accounting for one-third of the total population, and a super-aged society will accompany the entire retirement careers of those born in the 1980s and 1990s. This means that in 2050, one out of every two or three people will be elderly, with two people supporting one elderly person.

Retirement Planning Challenges

In recent years, news about "pension funds being insufficient in some provinces and cities" has been reported from time to time, and how the post-80s and post-90s generations will support themselves in retirement has become a painful concern for many. In response to this problem, in 2021, Zhou Yanfang, a deputy to the National People's Congress and deputy general manager of Pacific Medical Health Management Company, submitted multiple suggestions related to elderly care and hoped to accelerate the promotion of commercial pension insurance and the construction of the third pillar of pensions, namely personal pensions.

During this year's Two Sessions, the Southern Metropolis Daily launched a retirement forum, inviting 50 experts to discuss retirement issues. Among them, Dong Keyong, the secretary-general of the forum, expressed his personal views on personal pensions. He believes that personal pensions are accumulation-type pensions, so the earlier one participates, the better. Especially since the country still has tax preferential policies, it is more meaningful for young people, and such a system can be said to be designed for young people.

The Coffee Savings Analogy

By planning early, for example, drinking one less cup of coffee per day and saving 30 yuan, one can save 900 yuan per month, which is close to the country's tax benefit of nearly 1,000 yuan. Saving one cup of coffee per day can help prepare for everyone's future retirement.

(Editor's note: According to the latest guidelines, the annual contribution limit for personal pensions is 12,000 yuan, or 1,000 yuan per month. After obtaining a 1,000 yuan tax benefit quota through personal retirement investment, the taxable amount decreases by 96.3 yuan, accounting for 9.6% of the tax benefit quota. As income increases, the proportion of tax difference to tax benefit quota also increases.

This means that the 1,000 yuan invested monthly into a personal pension account can enjoy about 3% tax-benefit returns even without any investment operations. If combined with investment returns from stable retirement products, the overall returns will be even more considerable.)

Coffee Consumption Reality

However, how many young people can actually afford to drink a 30-yuan cup of coffee every day? A 30-yuan cup of coffee might be a normal price for a small number of people, but even so, the proportion of people who spend 30 yuan daily on coffee is extremely small.

Many netizens expressed that let alone a 30-yuan cup of coffee, they can only afford to drink a 10-plus yuan coffee once or twice a week at most, after all, the price of one cup of coffee can already buy a very filling meal. Some netizens also said, "Drinking coffee is just something I occasionally do to relax myself. Must this kind of happiness be 'exploited' too?" "Most people who can drink it daily probably buy their own coffee beans to brew, which costs only a few yuan per cup..."

A More Realistic Perspective

To some extent, there's nothing wrong with this expert's viewpoint, but the analogy might not be appropriate. Being able to take out 1,000 yuan every month to contribute to a personal pension is not an easy task for many young people.

After all, expenses aren't just about coffee - other living costs are the biggest expenditures. Regardless of the salary level at any stage, everyone has their own expenses, which can't simply be saved by drinking less coffee.

At the same time, while coffee is a daily necessity for some people, many, many others don't have the habit of drinking coffee/consuming coffee. If the discussion is genuinely meant to be sincere advice for all young people, saving on coffee is inevitably not a suitable analogy.

Image source: Internet

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