from the ConferenceBoard.ca
By 2050, the number of people aged 65 and older will more than triple, to 1.5 billion worldwide. Aging presents a significant challenge to the long-term sustainability of public finances through increases in demand for public pensions, health services, and long-term care in Canada and its peer countries. Together, rising life expectancy and low fertility create a demographic pincer movement, the impact of which is sharpened by increasingly early retirement. In Europe, there are about 35 people of pensionable age for every 100 people of working age. If present demographic trends continue, there will be 75 pensioners for every 100 workers in 2050.
Canada, like its peers, has a greying population. In 2030, an estimated 23 per cent of the Canadian population will be over age 65, double the share in 1990.
Elderly poverty is both a social and a fiscal problem that will be exacerbated as higher percentages of populations in developed countries move into the over-65 demographic. Poverty rates among the elderly tend to be highest among women, particularly widows over the age of 75. This is largely due to pension allowances that have traditionally been linked to employment history.
As Canada and its peers work to encourage the growth of private pensions as a means of decreasing reliance on public pension systems, the most vulnerable among the elderly are being put at greater risk of poverty. According to The European Centre for Social Welfare Policy and Research, “Systematic reforms have changed the nature of pension provision from defined benefit type provisions to defined contribution type provisions.” Defined contribution plans—in which people receive only what they put into the plan plus whatever that investment earns—can result in a greater risk of poverty in retirement for people who have earned less while working.
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