explanade
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- May 10, 2008
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So the World Economic Forum sees a looming shortfall of retirement savings for people around the world.
In 2015, this shortfall is estimated to be $70 trillion but by 2050, it could balloon to $400 trillion.
It appears their definition for sufficient retirement savings to fund a full retirement is 70% of pre-retirement income not counting Social Security or similar govt. programs.
One of the reasons is that there's an overall trend towards pushing workers towards defined contribution plans, or shifting the burden from companies/govt. to workers to save enough.
And then they compare that against average life expectancy resulting in most people falling short of having enough by around 10 years -- 8.3 for men, 10.9 for women, 9.7 combined, for 65 year olds.
And the highest shortfall are Japanese women, around 20 years, because they have the highest life expectancy at 87.1 years but even more interestingly, they invest to conservatively:
https://www.bloomberg.com/news/arti...sk-running-out-of-money-a-decade-before-death
Unfortunately, people in the last 10 years of their lives may not be able to command enough political help. They may vote but already there's intergenerational hostility -- some people in their 20s and 30s believe Social Security and Medicare won't be available for them and blame Boomers for the situation.
If older people continue to work past 65 years of age, that will probably alienate the younger people even more.
In 2015, this shortfall is estimated to be $70 trillion but by 2050, it could balloon to $400 trillion.
It appears their definition for sufficient retirement savings to fund a full retirement is 70% of pre-retirement income not counting Social Security or similar govt. programs.
One of the reasons is that there's an overall trend towards pushing workers towards defined contribution plans, or shifting the burden from companies/govt. to workers to save enough.
And then they compare that against average life expectancy resulting in most people falling short of having enough by around 10 years -- 8.3 for men, 10.9 for women, 9.7 combined, for 65 year olds.
And the highest shortfall are Japanese women, around 20 years, because they have the highest life expectancy at 87.1 years but even more interestingly, they invest to conservatively:
While Japanese workers save no less than others, they tend to invest in very safe assets that produce few gains over time, Yik said. As a result, average savings in Japan are only enough to cover 4.5 years of retirement.
Meanwhile, life expectancy at birth for Japanese women is 87.1 years -- the highest in the world, according to the Organization for Economic Cooperation and Development -- and 81 years for men.
https://www.bloomberg.com/news/arti...sk-running-out-of-money-a-decade-before-death
Unfortunately, people in the last 10 years of their lives may not be able to command enough political help. They may vote but already there's intergenerational hostility -- some people in their 20s and 30s believe Social Security and Medicare won't be available for them and blame Boomers for the situation.
If older people continue to work past 65 years of age, that will probably alienate the younger people even more.