Markets continue to hit all-time highs, but retirement unease also feels as high as it’s ever been. It’s a similar phenomenon to the one playing out in the labor market — record low unemployment, but broad-based fear that most jobs will be automated in a generation. From a cyclical, near-term perspective, we’re in a great spot. But structurally, we have some pervasive and unsolved retirement challenges.The largest global pension crisis is looming
The global retirement crisis is looming
The World Economic Forum released a white paper detailing how the six largest international retirement systems are projected to reach a combined $224 trillion gap between projected retirement needs and what we’re actually on track to have saved by 2050. Today, the gap stands at $70 trillion. Kicking the can down the road seems like an increasingly untenable option. Read the press release and get the full report here.
Could personality affect longevity?
A Florida State researcher recently received a $2.8 million grant to research whether the origins of personality affect longevity. Many location-based and socioeconomic factors play into the development of personality, and this researcher wants to learn further about the impact of those factors, how they shape us and our habits, and how that affects our lifespan. Read the details of her research plan here.
5 Ways Pensions are Better than 401(k)
Wouldn’t it be nice to age without the fear of running out of money? This isn’t an abstract idea — for a wide swath of Americans, pensions once provided this piece of mind. But the social contract between employers and employees is mostly broken and only government employees and a tiny fraction of private sector workers get them. I wrote in Forbes this week about pensions, their decline and what it means for you. You can check it out here.
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Thoughts worth more than a penny…
Retirement has been in the news this past week. The World Economic Forum’s report has sparked a much-needed debate. Controversially, the report draws a corollary with climate change — the pace of change is slow enough that we (as myopic humans) have a difficult time addressing the problem.
I was encouraged that the report included solutions rather than just a litany of problems. Like all difficult problems, I think there are two things we must remember.
First, there’s no silver bullet. Attacking a problem like securing longer retirements for more people in aging populations can’t be done with just one change. It requires broad-based, inter-generational changes.
Second, actually addressing the problem will require some real sacrifice. Higher taxes, higher retirement ages, lower standards of living — each of these things sounds so unpalatable that you’ll rarely hear a politician utter them.
But if you’re trying to solve a serious problem and your solutions don’t involve some real pain, well then we’re probably just rearranging deck chairs on the Titanic, so to speak.
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To Your Continued Longevity,
Matt and the Blueprint Income Team