Individuals living all across the globe are living 3 years longer than anticipated on average, pushing up the expenses of ageing by 50% and the pension and government funds are ill prepared, as per the IMF. Already the expenses of caring for ageing baby boomers is initiating to pressure the government expenses, especially in the progressing nations where by 2050 the older individuals shall match the figure of workers almost 1 for 1. The IMF research shows that the main issue is world-wide and that longevity is an enhanced risk than considered.
If all in the year 2050 lived only 3 years younger than now anticipated, in the line with the mean underestimation of long life in the past, community shall need additional resources which are equal to 1-2% of the GDP every year. For individual pension plans in US alone, an additional 3 years of life shall add 9% to the liabilities, the IMF reported in encouraging the governments as well as the private sector to get ready for the threats of longer life duration now.
Pensions are now only covered
The demographers for many years have suspected that the longevity of the life duration might decline in the developed nations. However with ongoing progresses in the medical technology, it has not occurred as it was anticipated. In urgent economies, the mounting standard of living and the growth of the health care even are adding to the life duration. Steps which the government can adopt to manage the threat of individuals living longer are to increase the age of retirement, augment the taxes to finance the public pension plans and reduce the merits – all the steps are already being considered by the advanced nations.