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The working population across the globe is continuing to push the average age of retirement well beyond traditional standards. With more and more people remaining at work well into their 60s and 70s, there seems no end to the trend of people continuing to work well past the traditional age of retirement.
In the UK, a 2011 report by the Trade Union Congress (TUC) showed that between April 1992 and December 2010, the number of people aged 50 – 64 years old at work increased from 56.5% to 64.9%.
In the US, the story is the same; recent research by the Vice President of Research for Advisor Perspectives, Dr. Doug Short, demonstrated that the ratio of workers aged 70 years and older among the employed has increased nearly 45%.
While the number of elderly workers is increasing, Short’s study shows that the amount of workers aged 25 to 49 shrank consistently since 1995 at a range between -2.4% and -2.6%. It is increasingly the case that former executives and managers that cannot afford their retirement are re-entering the work force in the menial, entry-level jobs that used to belong to the younger population.
Relying on the insignificant payments of government entitlement programmes is resulting in people being unable to afford retirement at 65 and working in an entry level job when they should be putting their feet up. The downside of the growing life expectancy and the retiring baby boomer generation is that governments have to pay more retirees for longer, leaving less money for younger generations when they retire in the future. This pension time bomb is set to cause major problems in the economic demographics in countries with mature economies throughout much of the 21st century.
A study by Korea Development Institute (KDI) in 2002 projected the percentage of employees in the workforce over 64 years old is to double by 2030 and nearly triple by 2050. In fact, the Korean population is aging so quickly that the tax revenue of smaller youth generations may not be able to fund the government and its massive pension payments. This will lead to the country’s projected bankruptcy by 2053, according to the National Pension System.
According to TUC’s General Secretary Brendan Barber, ‘low wages and poor pension provision … mean that many people cannot afford to retire at 65’. Without the proper financial planning, you could join the increasing number of people around the world forced to work into their late 60s, 70s and even 80s to make ends meet.
The message is clear: if people want to enjoy a comfortable retirement, they need to make provision early in their working lives. For assistance with your retirement planning, get in touch today.
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