|
"Why do people need to change? Quite simply because it will not be possible to finance increasingly long periods of retirement."
|
|
Monika Queisser
|
The world's population is ageing - and it's forcing us to make some tough choices about how we pay for our collective old age.
Across the world people are living longer, healthier lives, and they are having fewer children. On the whole, that's good news - but it also means that older people are becoming a larger and larger segment of society.
Looking into the future, there will be fewer and fewer people paying taxes, relative to the number of people who are drawing a state pension.
That's without even looking at the cost of healthcare, which is also expected to grow as the age of the population increases.
Amsterdam Forum examined the evidence and looked at the possible solutions.
The panellists
Dean Baker - Co-Director of the Center for Economic and Policy Research (CEPR), Washington, USA
Nico van Nimwegen - Deputy Director of the Netherlands Interdisciplinary Demographic Institute (NiDi), the Hague, the Netherlands
Monika Queisser - Senior Economist at the Organisation for Economic Co-operation and Development (OECD), Paris, France
 |
 |
| Click to listen to the programme | |
Nico van Nimwegen on the phenomenon of the ageing society:
"You can see it coming for a very long time. So the ageing that we are having today has its roots in the past 50 or 60 years. And so that means also if you look at the future of population ageing … it's very easy to predict, because the elderly of the future are living today."
Nico van Nimwegen on why population ageing is good news:
"Population ageing … is actually a success story. …If you look at the root causes … there are two. In the first place we have fewer children … On the other hand we live longer, and we have invested as much money in living longer as in having fewer children."
Monika Queisser on fertility rates:
"You need 2.1 children [being born] per woman - even though that number sounds terrible, who wants to imagine 2.1 children! - but this is what they call the replacement level of the fertility rate … and if it's lower then that means that ultimately your population will be shrinking, which is something we're already seeing in Japan for example."
Nico van Nimwegen on why population ageing is here to stay:
"There is no demographic solution to population ageing, because what would you have to do? You would have to substantially increase fertility … I cannot conceive of any policies that would come even close to reaching much higher fertility."
Dean Baker on the central problem surrounding pensions:
"Some of this is just straight arithmetic. I mean, we're increasing the ratio of retirees to workers, so other things [being] equal, that means either we're going to have to cut benefits in some ways - which could mean people have to work later in life - or we have to raise taxes."
"Would you rather have the option to retire at an early age - 62, or in many cases even earlier than that - and pay more in taxes, or would you rather pay less in taxes and look at a 65 / 66 / 67 retirement age, a somewhat older age? It's not to my mind a crisis; it's a political choice."
Monika Queisser on when people are retiring:
"There seems to be a consensus emerging around 65 as the standard retirement age - meaning the age at which you can access a full benefit. … [But some] countries are going down the route of increasing this retirement age beyond 65."
Monika Quesser on why she thinks people need to work longer:
"Why is getting people to work longer so important? That's because when people continue to work and contribute to the system you get more money into the system, and at the same time you have fewer pensions to pay out."
Monika Queisser on the nature of the 'crisis':
"It's a slow crisis … it's more like a wave that we know is going to be arriving, and we do have time to adapt our behaviour to this. But why do people need to change? Quite simply because it will not be possible to finance increasingly long periods of retirement."
Nico van Nimwegen on the need to start saving for retirement:
"People should realise that, in addition to a public scheme, they should save for their own pension, and they should have a choice - so, the ones that want to retire early will have to understand that in that case of course their pension will be much lower, and if they work much longer then in that case their pension will be much higher."
Nico van Nimwegen on the problem of complex pension schemes:
"One of the problems that we have is that we have made our system so very complicated that people are really scared away from it. I think some financial training would be necessary. But what's more important is that we make our fiscal system, our pension system, much more easy to understand, much more flexible."
Dean Baker on the false sense of security created by 'financial bubbles':
"You have a lot of people who have been seeing their house prices go up at double digit rates over the last decade, and they think that that will continue to happen, and as a result of that they think they don't have to save … In fact I think it's very likely that in many of these areas house prices will fall a great deal."
Dean Baker on why this is not a new problem:
"I guess I just get a little less worried about this because it's not new. I mean, we're looking at the population ageing in the future, but it has already aged hugely thus far … You can look at a country like Japan, and you already have 23% of the population, almost, over age 65. The US won't get [to that point] for over 50 years."
George, Los Angeles, USA
"Age is strictly a case of mind over matter. If you don't mind, it doesn't matter.
The best is yet to be,
The last of life, for which the first was made.'" (Rabbi Ben Ezra, Robert Browning)
Vera, British Columbia, Canada
"I was born in 1940 and I don't think that it is my generation that is causing havoc on this planet. Rather, it is the 'baby boomers' generation who must have more, bigger, faster, instantly, of everything, with little thought - if any - of the consequences for the entire world. Stop interfering with nature."
Roberto, Miami, Florida
"As a 45 year old individual, I have had to pay for the errors of an ageing population bent on a Cold War. Now I have to pay for their excesses in pensions. My generation is doing the same thing to future generations until they do not have Social Security or Medicare in America."
Jasmin, India
"An ageing society will surely put a burden on the healthcare systems as more and more acute diseases are becoming chronic and manageable, and degenerative diseases like dementia and Alzheimer's are on the increase, which means a burden on the aged population itself as the number of younger people is decreasing due to small or no families. Ultimately the government will have to bear the burden of this comparatively less productive strata of the society."
Tags: ageing population, Amsterdam Forum, benefits, demography, elderly, old age, pension, social security