“Almost all countries will face a very significant deterioration in public finances
over the next half-century as a result of demographic change, unless a countervailing
fiscal adjustment is put in place…”
Dr. Moritz Kraemer
Head of the European Sovereign Ratings Group
Standard & Poor's
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The worldwide old-age dependency ratio is estimated to surge from 19 percent in 2005 to 45 percent in 2050. (Standard & Poor's Sovereign Ratings)
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Emerging market sovereigns likely will grow their pensions at an average 2.2 percent of GDP. (Standard and Poor's)
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Today there are between 2.5 and 4 workers per pensioner in advanced nations, but by 2050, there will only be 1 to 2. (UBS Investment Research)
Because we're living longer, we can't think of retirement in a traditional way. The current systems in place weren't created for the exploding aging populations worldwide and therefore cannot support them over time. Individuals retiring at the traditional ages 55-65 must anticipate living over 30 years in retirement. Governments must adjust their public programs to be sustainable given the aging population. At the same time, individuals must take personal responsibility for their financial security as they age. We must plan to work longer and save more, and to ensure that our savings, combined with government pensions, provide us adequate income until the end of our life. Whether you're 70 or 17, demographic trends show you have a long life ahead, and it's never too soon to prepare for the future.
