Four workers to each pensioner just doesn't add up
The ratio of people in the workforce to those in retirement will fall from 8:1 to 4:1 by 2050 if retirement ages do not change, and the global economy will not be able to bear the burden, the World Economic Forum (WEF) has said
Life expectancy has been growing globally by an average of one year every five years since the middle of the last century, and a baby born in 2017 can expect to live to over 100, the WEF said in a report (PDF) on the implications of this change on pensions and retirement.
Someone who retires today in Japan at the age of 60 can expect to live for over 45 years, spending 20 per cent to 25 per cent more time in retirement than in the workforce, the WEF report said.
Retirement systems that were designed to support a retirement of 10-15 years will have to change to prepare for this "seismic shift", it said.
The challenge can be reduced if increases in life expectancy are matched by corresponding increases in the retirement age, but so far "we have seen only gradual steps to increase retirement age.