Why does government have to intervene?

What does the economic theory of smoothing consumption mean?

If you want to maintain a same standard of living, when you are young, you
should save some money when you are working and use it when you retire. If
thats the case, the government doesnt need to intervene.
What are the key reasons for government intervention?
Market failure: (Market will not allocate resources efficiently)
1. Distortion from other public policies: inefficiency created by government
policies, double taxation of savings, income tax system. People will prefer
to spend than saving it.
2. Concessional treatment of other form of savings, that kind of savings
cannot be used for retirement. Housing market
3. Public provision of age pension
4. Lack of appropriate products, here we mention retirement income stream
products. Normally the annuity market is not well functioning. Adverse
selection.
Failure in planning and execution of lifestyle savings:
1.
2.
3.
4.

Insufficient savings
Myopia
Procrastination, do it today or do it later and they will do it later.
How long you expect to live? How much money you need for that? Thats
not certain.
5. Change of tax rules, government policies.
6. It is difficult for ordinary people to know how much they have to save. The
problem of execution is also an issue, people even though they have a
well-defined plan they might not execute it.
Poverty relief and redistribution:
1. They try to reduce poverty and increase equity.
Economic growth and efficiency:
1. They want to stimulate growth and increase the output in the economy.
Individual and economy wide criteria:
Individual risks are addressed.
Coverage risk: The risk of not being covered.