Surviving retirement: the pension crisis in the face of global aging


The United States, the United Kingdom, France, Korea, China, Japan… All of these countries are at risk of going bankrupt because they are not prepared for their aging populations. How did these countries get here? How can we fix it?

In our wealthiest countries, the number of older homeless people is on the rise, as are the number of retirees using food banks. Is old-age poverty an inevitable global catastrophe? Through a unique blend of comedic animation, expert interviews, and personal stories from around the world, Your Life as a Centenarian explains how we got into this mess and what we can do to get out of it.

Japan, the first country affected

Until about 150 years ago, life expectancy was 40 to 45 years. You reproduced and then died. No one predicted the increase in life expectancy that we are seeing today. One of the first countries to face an explosion in the retirement population was Japan. Nearly 28% of the Japanese population is over 65, and this age group continues to grow. By 2039, it will represent 40% of the population. This means that people are receiving a pension for much longer than expected. However, the Japanese pension system does not have enough resources to pay for this long and is therefore starting to run out of money. To address this problem, Japan, for example, has introduced a law raising the retirement age to 80 for civil servants. The risk of old age is therefore not to die, but, financially speaking, to live too long.

In addition, times have changed. Children, busy with their own needs, are no longer able to take care of their elders as before. If we do not plan now, the future will be a disaster.

Rents too high and food too expensive

In the United States, especially in the Los Angeles area, which is considered the “homeless capital”, the cost of housing is extremely high, forcing many elderly people to become homeless. Rents often exceed the amount paid by social security. These rents are rising rapidly, while incomes remain fixed, putting retirees in a difficult situation.

In many countries, food banks play a crucial role in feeding people on low incomes. Originally created for the homeless in Berlin, the German system, called Tafel, continues to grow. There are now more than 900 Tafel food banks in Germany. According to the OECD, the poverty rate among older Germans is actually 10%, well above the 4% claimed by politicians.

A Brief History of Pensions and Retirement

The word “pension” dates back to ancient Rome, where a form of payment was distributed to retired centurions. The military was the most likely way to obtain a pension. In 13th century England, there was a scheme for officers of the Royal Navy. In the United States, pensions were promised to veterans of the Revolutionary War and the Civil War.

Otto von Bismarck is credited with introducing the modern pension system, which was available to everyone. However, even this system had a retirement age that was out of reach for most. President Roosevelt implemented a similar system in the United States, setting the retirement age at 65, when life expectancy was 62. The American pension system was based on an intergenerational funding model, fueled by the post-war baby boom.

The Current Situation in the United States
Today, the world’s population of 8 billion can be divided into three groups: middle-aged workers, young people, and retirees. However, by the end of the century, the population is expected to reach 11 billion, with a radically different demographic structure. In the United States, 80 million baby boomers are retiring, or 10,000 a day, but half of them have not saved enough. They therefore rely on the public pension system, which is based on a young-worker funding model.

The system works as long as there is a large enough working population to support retirees. But with life expectancy increasing and births declining, this model is becoming unsustainable. Currently, the U.S. pension system is running a deficit of $34 trillion.

Countries such as Russia, the United Kingdom, France, Korea, Japan, and China are all facing similar challenges. None of these countries are adequately prepared for the ageing of their populations, which could lead to major financial crises.

This article is originally published on



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