World Pension Cup Is About Half Full
Adding an extra $1 trillion per year could push the assets up to the brim.
The people of the Earth have set aside about half of the assets they need to provide a comfortable retirement income for all, according to the Global Federation of Insurance Associations, which includes the American Council of Life Insurers.
That estimate is part of the federation’s look at major world risk protection gaps. Risks covered by the analysts include health, cybersecurity and natural catastrophes, as well as longevity.
About 780 million of the world’s 8 billion people were over the age of 65 in 2020. In 30 years, the population could rise to about 9.8 billion, with 1.5 billion being over the age of 65, according to projections cited by the analysts.
Today, the average number of years of life expectancy at the typical retirement age is 20 for men globally and 24 for women.
The world has a total gross domestic product, or income, of about $95 tillion, with a total of about $56 trillion to $58 trillion in public and private retirement assets, and $9 trillion to $10 trillion in annual public and private retirement benefits payments per year.
The world needs about $51 trillion in additional assets to fund solid retirement benefits for all, and it could do that by contributing an extra $1 trillion to retirement funds per year, the federal analysts conclude.
Susan Neely, the president of the ACLI, is also the president of the Global Federation of Insurance Associations. She said insurers around the world are already acting to close protection gaps.
“Closing the gaps will also require action from policymakers, to create environments in which risks can be managed and mitigated,” Neely said.
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