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Consequences of Global Aging & Number Population Growth

The rise in life expectancy has produced gaps families' financial planning, as the number of retired and elderly people continues to increase. Unfortunately, social systems for elder care have not increased at the same rate. This "shortfall," which includes Medicare, Social Security and personal retirement, has the potential to create a financial strain on the economy.

  1. Work

    • The decision of when to retire is one faced by every aging citizen and is often dependent on making a comparison between retirement savings and life expectancy. Many people whose retirement savings were reduced by market forces during poor economic times have been forced to remain in the workplace for longer periods of time. These career extensions can have a further slowing effect on the economy as there are fewer job openings available.

    Medical Costs

    • A longer life expectancy has a direct correlation to an increase in required medical care. As a result, Social Security and Medicare programs require additional tax support to provide necessary care over the course of extended lifetimes. As an employee, you begin paying into these medical retirement programs when you're young, but the amount you contribute is based on your life expectancy at the time you're working. As the life expectancy grows, a discrepancy between the amount paid into the programs and the actual cost of your medical care can grow. This discrepancy places a higher burden on current taxpayers.

    Retirement Savings

    • As your life expectancy increases, the amount of time you can expect to spend retired increases. In 1960, employees could expect to spend less than a year in retirement, but as of 1995, the average number of retirement years had increased to more than 12, according to The National Institute on Aging. This means that upon retirement, you have to rely on your savings to support you for many more years than prior generations.

    Family Structure

    • Global aging is forcing families to provide years of extended care to aging relatives, including medical expenditures and dealing with physical needs such as cooking and cleaning. This change in the family structure forces families to make allowances for older relatives and can place a sizable financial strain on them. In many cases, this includes the necessity of moving elderly relatives into your home when other long-term care options aren't available.

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