Why the French Are Angry About a Plan to Retire at 64
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Hardly. The world’s population of people aged 60 years and older is expected to double by 2050, according to the World Health Organization, while fertility rates are in long-term decline. The financial strain is challenging old-age support systems and leaving many countries facing tough choices about raising the age of retirement, cutting benefits or lifting taxes. Pension shortfalls will be the equivalent of about 23% of world output by 2050, the Group of 30 consultancy estimated. One key measure is the old-age dependency ratio — the number of older people compared to the population that is working age. In Europe and North America, that ratio will be about 50 per 100 by 2050, according to UN forecasts, a rise from 30 per 100 in 2019. In short, we’re on a trajectory toward a smaller share of people paying taxes and a higher proportion drawing pensions. By 2035, the basic US system known as Social Security will no longer be able to cover payments, forcing a 20% reduction in benefits, according to its trustees.
primary selling points of union negotiators for decades. You might not like your job, but we’ll make sure you are looked after in your (lengthy) retirement. With union workers negotiating favourable terms, government pensions have also become more generous.
It’s hard arguing that pension benefits should be less generous when we are talking about people who are inhibited from working at their prior peak of productivity. Nevertheless, everyone is aware funding for these pension obligations is grossly inadequate. The challenge is politicians tend to put off discussion of these problems until the last minute because they lose elections. One thing for certain is every developed country will need to deal with this issue over the coming decade and raising the retirement age is the least difficult option. If countries fail in implementing that step then more onerous measures will be forced upon them later.
That’s one of the primary arguments for a lengthy inflationary trend. If government choose instead to monetise the debt and devalue fiat currency that will result in both higher nominal rates, negative real rates and a strong gold price.