Every one of us dreams of a calm and decent retirement, without struggling for existence. For many years, the pension system has been successfully operating in developed countries, ensuring people not to worry about their future. But can we rely on it today?
Pension system now and then
For the first time, the mandatory state pension was introduced in Germany at the end of the 19th century. In those days, with an average life expectancy of 50 years, only 1% of citizens received well-deserved pension. At the same time, 20 workers accounted for only one pensioner, allowing the system to be both effective and realistic. Today the situation has changed dramatically.
Improved living conditions and a far better medical care have led to the fact that people began to live much longer. At the same time, the birth rate in most developed countries is at a very low level – an alarming trend for modern social security. Experts at the World Economic Forum predict that if the current trend continues, the majority of pensioners will end up in poverty by 2050.
Let’s review the pension systems of different countries in more detail:
Retirement age: women – 55 years; men – 60 years
The average monthly pension: 184 EUR
The pension reform bill, approved by the government last year, outraged the society. The budget deficit in the Pension Fund of the Russian Federation that was caused by the ageing population and the decrease in the number of working citizens triggered the controversial reform. It was decided to gradually raise the retirement age to 60 and 65 years for women and men respectively by 2028. This prospect looks especially grim for Russian men, whose average life expectancy is barely 66 years.
In the photo: protesters with an inscription on the poster: "I want to live off my pension, not die at work!".
Retirement age: 65 years
The average monthly pension: 640 EUR
In Britain, the number of citizens aged 85 and over is dramatically increasing. The state encourages residents to stimulate voluntary private savings and plan their finances for decades to come. In Britain, the “fuel poverty” phenomenon is widespread – people cannot afford to keep their homes adequately warm at a reasonable cost. This problem affects the elderly the most. According to estimates of the British IPPR research center, 25000 retirees die in poorly-heated homes every winter.
Retirement age: 65 years
The average monthly pension: 800 EUR
This amount looks good only on paper. It should be noted that the monthly living wage in Germany is 1240 euros, while the poverty line is defined as less than 969 euros per month. The population of Germany is aging faster than in other EU countries: every fifth resident of the country is over 65 years old.
Retirement age: 67 years
The average monthly pension: 900 EUR
The number of pensioners in Spain is increasing by 125000 people annually. At the same time, according to Eurostat, the unemployment rate in 2018 was 16%. The population is declining, the outflow of young people migrating to other countries is massive. Fewer workers can keep the pension system going. A raise of retirement age sparked large-scale protests.
In the photo: Spaniards demand decent pensions.
Retirement age: 67 years
The average monthly pension: 1000 EUR
During the economic boom, Italy had the capacity to pay up to 90% of the final salary as a pension, based on a fixed accrual rate. Given such fiscal profligacy, the government must now spend more than 16% of GDP on pensions. The country’s fertility rate is one of the lowest in Europe – 1,35 children per woman, according to the World Bank data. Researchers from the University of Pittsburgh believe that it’s time for Italians to “say goodbye” to high pensions.
Retirement age: an average of 65 years
The average monthly pension: 1050 EUR
For a long time, the US pension system was considered exemplary. Yet the baby boom period of the post-war years is now part of the past, and baby boomers themselves began to leave the labor market en masse, causing an acute shortage of budgetary funds for pension needs. One third of American pensioners is at risk of living below the poverty line. In 2016, 50% of homeless people in the United States were over 50 years old. By 2034, social insurance funds may be completely depleted, leaving Americans to rely on personal savings, corporate pensions and savings accounts.
In the photo: nearly 40 million people in the US live below the poverty line. Many of them already reached the full retirement or pre-retirement age.
How to protect yourself from the pension crisis?
The fact that the state will take care of you later in life raises doubts among people all over the world. Money is unstable and particularly vulnerable to misuse. Inflation, economic crises, bank failures and political turbulence – all the aforementioned factors can reduce or even nullify your savings.
How can people of working age ensure Financial Security and save financial gains?
There is a proven financial tool that is not subject to economic and political changes – GOLD.
By purchasing gold, you get the ideal financial tool that:
doesn’t depreciate and protects capital from inflation;
is not affected by the decisions of states and banks;
has been recognized worldwide;
is always in demand.
Do not wait until the situation reaches a critical point. Your Financial Security is in your hands! Start creating its foundation today!