Thanks to the miracles of science and better nutrition, we’re getting older and we’re living longer. Only a few generations ago, the average global life expectancy was 34 years. Today, it is 71 – with roughly half of those born in the Western world expected to live past 100. But is this blessing a curse in disguise? While we all might prefer for ourselves and our loved ones to live longer, demographic shifts and new economic realities will place seismic pressures on future generations of our world’s retirees. Simply put, we are at the dawn of an enormous-global pension savings gap. Addressing this gap will require drastic changes to the way we live, spend and invest.
Faced with the reality of our times, Mercer collaborated with the World Economic Forum to pinpoint possible solutions for this unprecedented global retirement challenge. In a study of eight nations – including China, Japan and India – we discovered an immense gap between aggregate savings and expected annual retirement income totaling 465 trillion renminbi (RMB) – one and a half times the combined gross domestic product (GDP) of all eight countries. China had the biggest gap as a multiple of GDP.