Impact of Declining Birth Rates: Workforce Shift and Potential Retirement Age Increase
As advancements in medical science continue and improvements in the quality of life occur, retirement age, typically around 60 years or so, has seen individuals enjoying longer lifespans and adopting healthier lifestyles. Consequently, retirement planning expenses have been steadily increasing day by day. This has led to a global realization among many analysts that it is now time to reconsider retirement age. In March, investment firm BlackRock issued an annual letter for investors.
Fink CEO Larry Fink has issued a warning to employees who are hoping to retire comfortably and financially secure at the age of 60. According to Fink, as global life expectancy increases and the prospect of living longer becomes more accepted, social security becomes weaker, and retirement expenses rise. Fink warns that retirement may not be feasible for most individuals at the age of 65. According to Fink, in order to have a comfortable and modern retirement, working beyond the age of 65 is necessary. Several governments have been gradually increasing the retirement age, and between May 2026 and March 2028, the pension age in the UK will be raised from 66 to 67.
By the year 2044, the retirement age could potentially increase to 68. Due to the increasing population of elderly individuals at the beginning of the millennium and the strain on labor caused by this demographic trend, Thailand has implemented a policy allowing workers aged 55 and above to return to work in the private sector after retirement. Global life expectancy has risen from 67 to 73 between the years 2000 and 2019. According to the United Nations, by the year 2050, one in every six individuals worldwide will be aged 65 or older.
In the 2011 census, the elderly population aged 60 and above constituted 8.6% of India’s total population, which translates to around 10.3 crore elderly individuals. By the year 2050, India is projected to have over 30 crore elderly individuals aged 60 and above. Several states, including Madhya Pradesh, and various departments, including the health department, are considering increasing the retirement age of employees from 60 to 62.
Considering the increasing elderly population, there is a discussion about raising the retirement age to reintegrate seniors into the workforce. As the population of elderly individuals grows, there will be a higher number of retirees compared to those actively participating in the workforce. This scenario is expected to emerge in the UK by 2029. Brazil may witness a similar situation by 2035. In the United States, this trend could manifest by 2053, while in India, it might occur by 2048.
The increase in the elderly population imposes economic burdens on societies. Hence, several countries have implemented policies to raise the retirement age with the aim of extending individuals’ working lives.
