Aging Population a Growing Worldwide Concern
America’s 65-and-over population is projected to nearly double over the next three decades, ballooning from 48 million to 88 million by 2050 — but what will that mean for retirement?
Baby Boomers began reaching age 65 in 2011, and by 2050 the elder share of the U.S. population will increase to 22.1%. In 2015, 14.9% of the U.S. population was 65 or over, according to the U.S. Census Bureau.
A new report
from that agency notes that the last recession had a major impact on unemployment rates and financial assets among many older people in more developed countries. However, the trend of rising labor force participation rates among the population age 60 and older in those countries was not halted.
Among other references, the report draws on findings from a 2013 Aegon study and finds that while 40% of American workers were not confident that they would be able to fully retire with a comfortable lifestyle, that was better than most of the other countries in the study. Only Canada (33%) and China (20%) rated “better” in terms of confidence. The U.S. fared better than countries like Germany (41%), the Netherlands (45%), the United Kingdom (50%), Japan (57%), and France (57%).
That said, the Census Bureau projects the U.S. population will age at a slower rate compared with other countries. Worldwide, the 65-and-over population will more than double to 1.6 billion by 2050, according to the report. However, while the United States was the 48th oldest country out of 228 countries and areas in the world in 2015, the U.S. is projected to slip to 85th place because of the more rapid pace of aging in many Asian and Latin American countries.
The Oldest Nations
Japan is the current oldest country in the world and will retain that position in 2050, according to the report, though South Korea, Hong Kong and Taiwan are projected to overtake Germany, Italy and Greece for second, third and fourth place by 2050. In fact, some countries, including China, India, Indonesia, Brazil, Colombia and Cuba, will experience a quadrupling of their “oldest-old” population, those 80 and over, from 2015 to 2050.
Europe is still the oldest region today and is projected to remain so by 2050, but aging in Asia and Latin America has accelerated in recent decades. Asia is also notable for leading the world in the size of the older population, with 341 million people 65 and older. On the other hand, Africa remained young in 2015, where only 3.5% of the total population was 65 and over.
While more than 90% of the older population receives a pension in more developed countries, such as Japan, the United States, Australia and Italy, public pensions cover less than a third of the older population in China and a 10th of those in India, the two countries with a total population of more than a billion each.
Global life expectancy at birth was 68.6 years in 2015 and is projected to rise to 76.2 years in 2050. The population age 80 and over has been growing faster than the population of people between ages 65 and 79 because of increasing life expectancy at older ages.
The report notes that declining fertility levels have been the main driver of population aging, although rates of fertility decline vary by region and country. Currently, the global fertility rate is near or below the 2.1 replacement level in all world regions except Africa.
The message for those who work with retirement plans in the U.S.? There are challenges ahead — but it could be ‘worse.’