Retirement before 60 is a dream, but money is lacking – 06/13/2023 – Market

At the same time that life expectancy increases in the world, the desire to retire before the age of 60 grows, according to a report published by the World Economic Forum in partnership with the consulting firm Mercer.

A survey carried out by those responsible for the study with about 400 people showed that, among those under 40 years of age, 44% would like to stop working by age 60 or earlier, despite the increase in life expectancy and the low level of reserves financial accumulated for the stage of retirement.

Also according to the survey, 55% of participants said they did not save enough or do not know if they will have what it takes to maintain their standard of living at the time of retirement.

“This shows a significant disconnect between what people ideally want and what might happen in reality. In practice, leaving work at this early age will exacerbate the gap in savings and target retirement income,” says the report, which points out that the intention to retire before age 60 can also be harmful in macroeconomic terms, by reducing the workforce available in the market.

Increasing periodic contributions to the formation of social security savings, working longer, accepting a lower income in retirement and adopting higher risk investment strategies are pointed out by researchers as alternatives that can be adopted to improve the financial situation in the future.

Average life expectancy on a global scale rose from 48 years in 1950 to 66.8 years in the 2000s, reaching the mark of 73 years in 2019. The study also indicates that, according to United Nations estimates, by 2100, global average life expectancy is expected to reach 81 years.

The report also highlights that, while increased longevity represents an important achievement in the wake of the advancement of the health sector, it also brings challenges to how people will deal with the additional expenses they will incur.

According to the study, as people live longer lives, businesses, government and individuals need to rethink how they view aging and retirement and explore new approaches to dealing with the ongoing demographic transformation.

“It has become clear that to help people plan a long, healthy, resilient and sustainable life, a holistic approach is needed, which emphasizes more than just financial resilience, but also prioritizes health, human connections, purpose and quality. of life”, says the report.