Population aging is a global phenomenon. Countries around the world are experiencing increases in life expectancies and lower birth rates. Globally, by 2050, senior citizens (aged 60 years or above) will represent 21.1% of the world’s population, according to a survey by global insurance and financial services provider, Aegon.
Governments around the world are either contemplating or have started implementing reforms, such as increasing the age at which people become eligible for government retirement benefits. Although people’s attitudes toward those changes vary across the globe, there is a common and growing appreciation that a flexible retirement offers an opportunity to stay active, engaged, and productive, according to Aegon’s fourth Annual Retirement Readiness Survey (ARRS).
The survey comprises 16,000 respondents in 15 countries across Europe, the Americas, Asia and Australia. It explores workers’ retirement expectations and the extent to which employers are facilitating the transition.
People’s expectations regarding when and how they retire is often shaped by government policies. For example, the survey found that 44% of employees in Spain expect to retire the year they turn 65, but pension reforms agreed to in 2011 will gradually increase retirement age to 67 years over the period 2013-27. In China, the official retirement age is 50 for women and 60 for men, which explains why nine out of 10 survey respondents there expect to retire before the age of 65.
The mindset of working beyond traditional retirement age varies greatly. Globally, the survey found, 51% of all employees now expect to retire at 65 or later, or not at all. Additionally, 55% of employees aged 55 and more see a flexible transition into retirement, with an even higher proportion of younger workers envisioning this.
The opportunity for training and acquiring new skills is particularly important for older workers who want to work past normal retirement age. But only 9% of the workers aged 55 years and above say their employer offers retraining opportunities to help them phase into retirement.
Some workers may want to continue working in their current role, while others may wish to explore new or less demanding opportunities with their employer.
As many as 50% of survey respondents who are not fully retired think that their employer doesn’t offer enough information and support to prepare for retirement. Notably, this level of agreement is highest in Spain, Poland, Hungary and Japan—the four countries where workers feel least positive about retirement generally.
Employers face risk of being negatively affected by population aging. For decades, employers have shaped their business practices based on the assumption that their workers will retire at a certain age. What employers may not yet realise is that the percentage of working-age individuals relative to the overall population is declining. When baby boomers and older workers retire, there will be fewer workers available to take their place. Employers should be better equipped with succession plans.
How is flexible retirement viewed in India?
India has the youngest population in the Aegon study—more than half of its population is below the age of 25 years.
However, life expectancy is expected to rise to 73 years in 2050 from 66 now, challenging the sustainability of the country’s retirement system. This will also naturally increase the age of the workforce.
