If your retirement plans consist entirely of that pension you’ve been promised, it’s time to start looking elsewhere.
As you probably know, pensions are giant pools of capital responsible for paying out retirement benefits to workers.
And right now many pension funds around the world simply don’t have enough assets to cover the retirement obligations they owe to millions of workers.
In the US alone, federal, state, and local governments, pensions are about $7 TRILLION short of the funding they need to pay out all the benefits they’ve promised.
(** And that doesn’t include another $49 trillion in unfunded Social Security obligations…)
America’s private pensions are in bad shape too — a total of around 1400 corporate pensions are a combined $553 billion in the hole. Plus, 25% of those funds are expected to go broke in the next decade. But the pension problem is much bigger than just what’s happening (though the US problems are SEVERE).
In 2015, the total worldwide gap in pension funding was $70 TRILLIONaccording to the World Economic Forum. That is larger than the twenty largest economies in the world combined.
And it’s only gotten worse since then…
The WEC said that the worldwide pension shortfall is on track to reach $400 trillion by 2050.
And what solutions did they suggest?
“Provide a ‘safety net’ pension for all.” You know, sort of like Social Security… which as we mentioned is $49 trillion in the hole. Not exactly a sound solution.
Another solution the WEC offered was to increase contribution rates– in other words, forcing current workers pay more to support retired workers.
Only one problem with that… global demographics are awful. There just aren’t enough young people being born to pay out benefits for retirees.
And that problem is coming to a head in South Korea, where about 13% of the population is currently of retirement age: 65 or older.
By 2060, 40% of the population will be over 65.
And, you guessed it, there aren’t close to enough people being born to burden that load.
Read the full article at Sovereign Man: The Pension Crisis Is Bigger Than the World’s 20 Largest Economies | Sovereign Man