BARRON'S 19

1860 1880 1900 1920 1940 1960 1980 2000 2020 2040

Aging Too Fast

France(145 years)

Sweden(89 years)

United States(75 years)

China

(25 years*)

India(35 years*)

The time it takes for people over 60 to grow from 10% to 20% of the population varies around the world. Developing markets like China

and India are aging much more rapidly than Western industrialized countries, leaving them less time to prepare.

60+ age group accounts for 10% of population 60+ age group accounts for 20% of population

*China and India are estimated years for when then 60+ age group will reach 20% of each countries’ population. Source: World Health Organization

With life spans getting longer, pressure is mounting to find ways to help people grow older with

dignity, without bankrupting governments or overburdening the young. What the U.S. can learn

from Japan, Australia, Sweden, and China.

By Reshma Kapadia

How to Fix the Growing

Global Retirement Crisis

Paul Irving, chairman of the Milken Institute

Center for the Future of Aging. “Population

aging is something we can either ignore at our

peril, or we can embrace the reality and change

our policies, practices, norms, and culture and

capitalize on it.”

The magnitude of the demographic change is

forcing a reckoning. At this summer’s G-

meeting, the world’s top policy makers for the

first time identified aging as a risk that needs

to be addressed. No country has developed the

perfect elixir, but a look around the world offers

glimpses of what is working—as well as pain

points that can inform how the U.S. tackles its

own aging boom. Barron’s tapped policy watch-

ers, academics, and experts on the aging indus-

try globally to see which countries offer lessons

for the U.S. in tackling various facets of aging,

including working longer, retirement savings,

long-term care, and caregiving.

Japan

A Guide to Working Longer

Japan has traditionally celebrated residents’

100th birthdays by sending them a sake bowl.

Originally made of silver, the bowls are now

silver-plated, as the crush of centenarians

strains the budget. Japan is ground zero for

aging: It has the world’s longest life expectancy

and a historically low fertility rate, which both

contribute to labor shortages and put intense

pressure on its pension system.

It also boasts one of the world’s highest

labor-force participation rates among older

adults; 59% of men ages 65 to 69 are still work-

ing, compared with just 38% in the U.S. “Ne-

cessity often drives innovation,” says Catherine

Collinson, head of the nonprofit Transamerica

Center for Retirement Studies. “There’s a tre-

mendous sense of urgency, given the extreme

nature of its aging population and labor short-

ages that have prompted them to rethink

working lives versus retirement, and seek out

innovative solutions.”

Japan has chipped away at the generosity of

its national pension system for decades and has

been gradually increasing the eligibility age—

currently 65, though Prime Minister Shinzo Abe

is considering raising it above 70. The retire-

ment age in Corporate Japan is also changing.

Mandatory retirement age used to be nearly a

decade beyond the average life expectancy; but

now, the retirement age is 60, and life expec-

tancy is 84.

Japan has been providing incentives for com-

panies to retain retiree-age employees, and it

The idea of moving into a nursing

home is abhorrent to most Ameri-

cans, but many older Swedes have

to lobby to get into one. Aging

parents in the U.S. may remind

their adult children to visit them,

but China requires it by law. Visit playgrounds in

Japan and you’ll find elder-friendly fitness equip-

ment instead of monkey bars and slides. We are

at the beginning of a global aging boom—and

countries all over the world are facing the same

challenges. Some are coming up with creative

ways to address the looming retirement crisis.

There are more adults over 65 than there

are children under 5, globally. And by 2050,

one out of every six people—or 1.6 billion—will

be over the age of 65, according to the United

Nations’ latest estimates. That will be a big

problem.

Cultural norms, demographics, and economic

and political systems vary, but the challenge is

the same: How do graying countries find fis-

cally sustainable ways to support longer life

spans without bankrupting governments, over-

burdening the young, or abandoning those who

need care?

Japan is at the leading edge of the trend—

28% of its population is already 65 or older—

forcing it to tackle the challenge head on. China

has a bit more time, but not much: Its society is

aging faster than any other. Life expectancies

lengthened by 30 years within a half-century.

That’s roughly half the time in which Western

industrialized countries saw that happen, giving

China far less time to prepare. Even Sweden,

which regularly ranks high on retirement-

preparedness lists and as one of the happiest

places for older adults, faces budgetary pres-

sures as those over 80 become the fastest-

growing part of the population.

“I’d love to tell you that dramatic cultural

differences dictate differences in investment and

interest, but ageism is a global challenge. If we

don’t tackle investing in prevention and wellness

programs and extending the possibility of work

lives, keeping people active and socially engaged,

the costs are potentially overwhelming,” says

T

7 Things We

Learned From

Reporting on

What Retirement

Looks Like

Globally

1. R-E-S-P-E-C-T

The Japanese have

a national holiday

called Respect for

the Aged Day in Sep-

tember. Companies

and organizations

have special events

to assist the elderly.