Demography is the study of population – births, deaths, ages, life spans, migration, and so on. Governments can record the changes but in free societies can do very little to change the overall trends. It’s a bit like the tide coming in – you can adjust where you sit on the beach but you can’t stop the water rising.
Research by worldwide organisations including the United Nations and European Union shows disturbing trends such as these:
There are three irreversible demographic trends behind these figures. First is the bulge in retirement from the baby boomers (those born between 1946 and 1964). Many of the early baby boomers have either already retired or are close to it, and the late boomers are well into planning for their retirement. This bulge will guarantee a high proportion of older people in our society in the future.
Second is the fall in fertility rate. In developed societies we are not having enough babies to replace ourselves.
And thirdly, better nutrition and medical care means we are living longer.
These three trends mean:
Every nation’s medical and social security system depends on taxpayer money to fund its existence. Politicians may be unwilling to admit it but some unpopular decisions will have to be made. The simple choices are to raise taxes or restrict access to government benefits to only the most needy. The longer the decisions are delayed, the more difficult the transition will be.
The constant decline in birth rates will stunt the growth of national economies. As the consumer population decreases, production and product advancement will decrease due to a lack of demand, and economies will follow.
What does this mean for you?
Of course, it depends on your age and financial situation. Self-sufficiency in retirement should be a goal for everyone – nobody wants to be reliant on a heavily burdened and potentially restrictive welfare system. Being self-sufficient will give you the freedom to choose the lifestyle you want.
If you are a long way from retirement, make a commitment now to be a self-funded retiree. Investigate the many opportunities to accumulate a healthy superannuation balance by your preferred retirement age. With more time up your sleeve the contributions can be far more manageable.
If you are planning on retiring soon, you may need to review what retirement means to you and look at other options such as working a few more years.
If you are already retired and rely on government benefits, you may need to consider learning new skills so you can supplement your pension and personal income with paid work.
This all sounds like a reality we would rather not hear, but like the tide coming in, there is not much we can do to stop it.
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