Good news! People are living longer.
Not so good news. Retirement plans aren’t keeping up.
People are now living about a decade longer. Unfortunately, retirement plans were largely designed for the shorter lifespans.
“By 2050, the total gap is a predicted to be a staggering sum of $400 trillion – roughly five times the size of the global economy today.” – World Economic Forum
In the US in 2015, the gap was already $28T, exceeding GDP. By 2050 the gap for the US is projected to be $137T. Such shortfalls are quickly passing from abstract debates to current events. The idea of retirement is being redefined as many never expect to be able to afford to quit their jobs. This ripples into unemployment for younger people as older people are less likely to leave and open positions. Tax policies were already touchy, and this makes that discussion and action tougher. Considering the size of the deficits relative to GDP, basic governmental changes will be required in the US and in many other nations. China’s and India’s deficits are growing faster than the US’ and influence billions of people.