As increasing numbers enter retirement to be supported by a declining pool of workers, governments will struggle to meet the pension pledges of the past. The latest version of the
Allianz Pension Sustainability Index (PSI) shows a large number of the 54 countries studied in need of reforms to ensure the long-term sustainability of pension systems.
However, reforms typically involve trimming benefits to maintain public finances in face of significant demographic developments. Future retirees expecting generous retirement benefits based on what was paid to previous generations will be disappointed. To compensate, governments have sought to spread the retirement income of citizens across a wider base.
Doing the garden, digging the weeds Baby boomers are asking more from retirement
This involves promoting a multitiered structure for retirement provision, including through occupational schemes and private savings. The result is that far greater responsibility is now placed on individuals to plan and save for retirement. Today, this means far more than simply “knowing one’s number,” explains Stacy Schaus in “
How much do I need to retire?”. It involves setting strategies to create an income stream sufficient to maintain the individual’s lifestyle in retirement. Failure to do so, even if the individual starts out with unbridled possibilities, could lead to problems later in life. OVERCOMING THE DORIAN GRAY FIXATION
Yet despite the challenges that population aging presents to society, aging itself should surely be treated as an opportunity. A much older Paul McCartney, still actively recording and touring at the age of 74, would probably be one of the first to agree that aging may not be as scary as once feared. Increasingly, his peers are agreeing. Data extracted from ELSA, the English Longitudinal Study of Ageing, shows that the percentage of men and women reporting a positive view of aging increases from age 50 to age 65.
Ursula Staudinger, a life span psychologist from Columbia University, is not surprised. She notes that society is losing its “Dorian Gray fixation” on youth. She traces it to around, when the sheer numbers of graying baby boomers forced marketers to begin to portray more and more midlife people in advertisements. This is positive, she argues, because as a society of longer lives (she rejects the term “aging society” as it is only the population that is aging), “we need to put a limelight on the strengths and weaknesses of each phase in life.”
Ken Dychtwald, president and CEO of Age Wave, a consultancy specialized in aging research, sees it similarly. For businesses, he believes aging populations will present
some of the greatest market opportunities and industries poised for growth. While many still expect the youth market to expand, aging populations are in fact pulling the marketplace in new directions, he argues. He points out that the 111 million Americans today over 50, many of them part of the baby boomer generation, have transformed almost every aspect of the modern world, including everything from food and fashion to the workplace and leisure time. He told PROJECT M that “they won’t just fade away – they will transform aging and the market place that serves it.”
Read part I of this article