Burden of Aging Population "Less Than Feared," Study Says

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"In 2000, the [average-age] American had to plan for 43.5 years of remaining life," the researchers write. "In 2050, the average American will have to plan for a future lifetime of around 45.8 years."

So the average age of populations in developed countries is creeping up. But in the future, average-age people in these countries may expect to live longer.

The researchers said that in many ways older people will be much healthier in the future and will behave as if they were much younger. Such a scenario has far-reaching implications for society—from the planning of retirement communities to government pension provisions.

With baby boomers fast approaching retirement age, a major concern for industrialized countries is how to support these retirees.

In the U.S. the Bush Administration has proposed major reform of the Social Security system, with a proportion of a worker's taxes going toward private pension funds.

In Japan there are plans to increase pension taxes from around 14 percent of salaries to 18 percent by 2017 and to cut pension payments from 59 percent of average wages to 50 percent.

Pension Shortfall

In Britain, Adair Turner, head of the government's Pensions Commission, has suggested raising the retirement age of professional workers to 70 to help bridge an estimated 50-billion-U.S.-dollar (27-billion-pound) shortfall in pension provision. The current government pension age in Britain is 60 for a woman and 65 for a man.

Study authors Sanderson and Scherbov agree that reform is needed. But if prospective age is taken into account, they said reform need not be as radical as many people propose.

Employing official retirement age as an example, the researchers point out that, using conventional calculations, Japan will have around 518 people over retirement age per thousand workers in 2020. However when the concept of prospective age is applied, the figure falls to 417 retirees per thousand workers.

In the case of the U.S., where the birth and immigration rates are significantly higher than in Japan, the researchers' calculations actually show fewer retirees per thousand workers in 2020 than there were in 2000 (206 vs. 209, respectively).

"In the U.S., the increase of two months per year in the age at which a full Social Security could be received would virtually guarantee the sustainability of the pension system without reducing promised benefits," the researchers write.

Taking a retirement age of 65 in 2000, that would mean raising the official Social Security retirement age to 68 in 2020. The researchers suggest adding three months per year for Germany, raising the retirement age there by five years over two decades.

"If you do this," Sanderson said, "the number of people that have to be supported by people of a working age would be much smaller. So even if people aren't taking up private pensions, this reform in itself will pretty much solve the problem."

He added, "Retirement age doesn't have to go up by very much and doesn't have to go up by big jumps, and it doesn't have to be very scary."

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