Latin America braces for a shift as its older people population is set to soar. ECLAC forecasts a jump to 200 million by 2065 from today’s 50 million.
This aging trend mirrors global patterns, with the senior population expected to hit 2.1 billion by 2050. Such growth strains healthcare, pensions, and labor markets.
In response, regions are crafting strategies for sustainable, equitable aging, inspired by the World Economic Forum’s (WEF) vision.
The focus lies on reimagining pension systems to support future retirees financially.
Pensions play a pivotal role in this new longevity economy. FIAP warns that pension costs will dominate Latin America’s public spending by 2065.
However, current pensions often fall short, covering only 61.4% of an average salary. This gap underscores the need for additional pension plans.
FIAP also highlights the value of older workers, advocating for flexible work arrangements, ongoing training, and workplace modifications.
Addressing aging challenges begins with evaluating national pension schemes and retirement ages.
Solutions include not just ensuring adequate pensions but also promoting longer careers through savings and investment.
FIAP Recommendation
One FIAP recommendation is to raise retirement ages to balance the shrinking worker-to-retiree ratio.
This approach is crucial, especially as informal and gig economy jobs rise, which often bypass social security contributions.
A gradual increase in retirement age, linked to life expectancy, is suggested. Seven nations already adjust retirement ages to life spans.
FIAP urges Latin America to adopt similar policies, starting with equalizing retirement ages for people of all genders to narrow the pension gap.
Manage aging with financial resilience, education, health focus, career growth, social ties, and inequality awareness.
A thriving job market is vital for sustaining finances across generations.
However, barriers remain for older workers seeking employment. Equally, enhancing financial literacy is critical, as limited knowledge exacerbates wealth and longevity disparities.
The OECD’s 2023 survey shows a global need for better financial education.