In 2006 we witnessed the beginning of a period with a major economic, social and political impact on mankind, namely the retirement of very many persons, former “baby boomers”. This generation is the result of a spectacular demographic increase after the Second World War, which lasted until 1963. Since then, the population growth rate has steadily decreased; therefore the population aged 65 and over is going to double by 2030. In OECD member states, the future 25 years will witness the retirement of 70 million people, and only 5 million persons are going to start their active life in the same period of time. On the other hand, 25 years ago, the situation was somehow reversed: 45 million retirees were replaced by no less than 120 million “baby boomers”.
In a previous article we were talking about ageing, caused by the increase in the living standards, and, implicitly, in the life expectation, but also about the drastic decrease of the birth rate. This type of demographic evolution implies various costs, especially with regard to health, the expenses in this sector increasing with the population growth. In order to explain better this situation, we shall use the cases of OECD countries, the select UN club. In these cases, the budgetary expenses for health amount on average to 9% from the total budgetary expenses, double compared to the 1970s. Of course, regardless of the development level of a state or the large budgetary revenues, a state will not afford to spend more and more in a certain sector. Thus, countries like France, Austria, Sweden, Poland or Romania increased their minimum retirement age, so as to benefit more from the services of this large generation.
Prolonged vacation
The above-quoted AXA survey analyzed the respondents’ perception with regard to the retirement age and the period after it. 85% of the interviewed retirees admitted they retired before 65, as they considered the period after it as a prolonged vacation after a lifetime of work. The same persons who retired before the actual retirement age answered, some might say surprisingly, that they were fit to continue working, in average, until 76. Although they think of themselves as fit for work up to a quite impressive age, they plan and manage to retire before the legal age.
As shown in the above graph, approximately 42% of the respondents plan to retire before 65. More than this, 57% of this total number of retirees takes this step, so more than those who plan to do this.
Experience shows that, per total, the quality of life after retirement, stays the same or increases. Thus, 31% of the interviewed pensioners stated that the quality of their life increases after retirement. However, it seems that the living standard does not necessarily determine the quality of life. Therefore, among the respondents who stated that the living standard was lower (35%), only 25% reported a decrease in the quality of life. Of course, money does not bring happiness, and the extremely flexible program a retiree can compensate for the lack of resources.
A survey conducted in Romania by the LIGHTHOUSE company indicates that most employees in Romania associate retirement with a period of loneliness, health problems and a general lack of the necessities for a decent living. On the other hand, the same survey indicates us that the age bracket most concerned with long term saving for pension is between 35 and 44.
Old age, where are thou?
One of the key questions of this survey was clear and direct: When does old age begin? The result was that as we move on in age, old age is seen as being further and further away. For instance, respondents with ages between 25 and 34 say they will consider themselves to be old after 66. On the other hand, those of 55 and over think they will be really old at 76. It all depends on the perspective: if you find someone who has heard of the Koror Island, that person will tell you it is a small island in the South Pacific, but if you ask someone from the neighboring island, Angaur, they will tell you it is the big island, north to them. The same attitude is seen in the case of questions regarding the age where respondents believe they would be fit for work. And this value increases with age.
On the other hand, the opinions related to everyone’s future after retirement are quite constant in almost all countries subject to the AXA survey. Even if targets might seem high, they seem to be present in the life after retirement as well. Let’s explain the current situation better: three quarters of the active population today is expecting a better quality of life or at least a quality as good as the one they currently have. The Chinese seem to be the most optimistic, half of them being persuaded that their life will improve after retirement. In other countries, the employees’ optimism is not that high as in Japan and Portugal, where 44% and 40% respectively of the respondents say that, after retirement, the quality of their life will suffer.
When we think about the quality of life, we don’t think just about money, we think about being healthy and having the time to spend it. Money is not everything, but the perspective we have on our life certainly depends on our income. According to the mentioned survey, the positive attitudes towards this period of life relate to the possibility of engaging in more recreational activities, such as sports, gardening or tourism. The optimists see this period as a new beginning, a new life with different activities and a totally different type of rewards. Family plays an important role for Europeans. Thus, the Belgians, the French or the Germans related their activities to the family ones, as family plays a vital role in their life. On the other hand, sports seems to be preferred by most respondents, in half of the surveyed countries, sporting activities were among the first ones mentioned when talking about spending the free time after retirement.
Health, as it is better than anything else!
It is quite understandable that medical problems multiply with age and the costs related to this sector increase consequently. For the retirees’ state of mind, feeling healthy is very important. More than half of the respondents who retired (53%) described themselves as being healthy. The top positions were occupied by Anglo-Saxon countries, from the former British Empire, such as: New Zeeland, Australia, Canada or the United States. On the other hand, the Latin peoples suffer from the health point of view, France, Belgium and Portugal. The latter represents the red lantern of this ranking, with only 47% of the retirees considering themselves as healthy.
We can corroborate these results with the diet and the lifestyle of retirees in these countries. Thus, the Anglo-Saxons are very careful about what they eat and their daily program.
Inflation of population, wealth and welfare
As mentioned already, mankind went through a demographic “boom” until 1963, which continued after that date in other countries as well, such as China or India. This evolution brought an economic increase worldwide, translated into a higher living standard. Thus, only 20% of the representatives of this generation have low incomes and describe themselves as pleased or very pleased with their living standard.
It is very interesting to see that countries like China or India evolved in time both in terms of fertility and life expectancy, the latter being an indicator of the living standard. In the figures below you will notice how these two countries removed the largest part of the gap that separated them from the developed countries.
One of the conclusions we can draw from these graphs is that some countries that we have considered as part of the third world until recently, such as Saudi Arabia, Algeria or India, recovered a lot, being now closer then ever to the Western standards. Unfortunately, the African countries, we used Nigeria as an example, did not make the same progress like the Asian countries.
Here is why we can notice a similarity with regard to the expectations and perceptions on life after retirement on all three continents surveyed by AXA: America, Asia and Europe. The problem of massive retirement, be it early or not, shall accentuate as Europeans and Americans will be joined by Asians, who went through this demographic “boom” a bit later.
