The future of retirement is starting to look like a benefit only for the wealthy, sources say. And that’s a worldwide problem.
Known as the “slowest moving financial crisis of our time,” a Bloomberg article on the issue said, “Public finances are buckling as retirement promises made to previous generations collide with the realities of an aging population. State pension costs in developed economies, often already the biggest single area of government expenditure, are projected to soar and leave scant room for other spending priorities.”
The article continued, “Back in 1980, pensions consumed about 5.5% of GDP, and by 2040 that could top 10%, according to the best available data from the Organization for Economic Cooperation and Development.”
Although economists around the world agree that laws need to change, only about half of Organization for Economic Cooperation and Development countries have passed a law to increase their countries’ retirement age.
According to the OECD ilibrary, “Over the past two years, limited policy action took place to directly change retirement ages; exceptions are the increase in Sweden, cancellation in Ireland and postponement in the Netherlands. Other retirement-age measures were taken in the Slovak Republic and Slovenia, and among non-OECD G20 countries, Brazil introduced minimum retirement ages.”
This issue has affected people nearing retirement age with the fear that they will not be able to afford it. Natalie Elphicke, 52, a United Kingdom Parliament member, said in a recent debate on retirement age, “For a person of my age, the statutory pension is like one of those Scottish mountains. It is an optical illusion: As we get ever-closer, it seems that there is just that bit further to go.”
Last Dec. 8, members from Congress proposed the Retirement Savings for Americans Act. “Roughly 40 million Americans lack access to an employer-sponsored retirement plan, which represents a significant roadblock to achieving financial security for their retirement,” said Sen. Thom Tillis, R-North Carolina. “The Retirement Savings for Americans Act tackles this real problem by establishing a pathway for savings for Americans lacking retirement options.”
The bill’s main purpose is to aid middle- and lower-class Americans who do not have the finances to retire. According to Bloomberg, “By 2034, Social Security will only have the money to cover about 80% of scheduled payments unless government action is taken, according to its trustees.”