Pensions and Longevity in the US

Amy R Kessler, Karen P Glenn and Stephen C Goss

There are four primary types of retirement programme in the US, but too many of its citizens are not well prepared for a secure retirement. We need to help individuals save, invest and plan to achieve financial wellness and retirement security. The need for change is intensified by a macro-demographic “ageing” shift that is well underway, with fewer working-age people (at ages 20–64) compared with the population over 65. Due to lower fertility rates after 1965 and increasing lifespans, the US moved from about 14 people aged 65 or older per 100 working-age people in 1950 to 25 in 2015, and will move towards 40 in 2050, according to the Organisation for Economic Cooperation and Development (OECD). Alongside many other countries with an ageing population, the change in age distribution affecting the US will require policy solutions that encourage more saving for retirement, working to older ages or, more likely, both.

While this shift in the age distribution is largely the result of the drop in birth rates after the “baby boom” era (1946–65), declining death rates have a gradual and steady effect that will continue even after the “boomers” have retired and have been replaced at

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