According to a new report issued by The World Economic Forum (WEF) the retirement age should be raised in rich countries by 2050 to age 70. Their report comes as global Life Expectancy is rising and humans are living longer. In 2013, the U.S. Census Bureau projected that in America around 20% of the population will be 65 or older by 2050. This mirrors part of the WEF's warning in their report.

What does this report say?

The reason that The World Economic Forum report recommends increasing the retirement age has to do with a globally aging population.

By 2050, the number of people over the age of 65 will more than triple to 2.1 billion worldwide. By 2050, the number of workers for each retiree will be 4 to 1, half of what it is today. The reason that this issue will affect rich countries is because they have the lowest birth rates, the highest percentages of senior populations and older average life expectancies that are only increasing.

As part of the WEF's report they studied Australia, Canada, China, India, Japan, the Netherlands, the United Kingdom and the United States. Just in these eight countries they estimated that the retirement savings gap would go from $70 trillion dollars to $400 trillion by 2050. The retirement savings gap is based on the amount of money required in each of the countries studied to guarantee a retirement income equal to 70% of a person's pre-retirement income.

Retirement increase is not the only solution

Simply put, people will need to work those extra years in order to save up the money need to retire. However, The World Economic Forum and those who worked with them on the report said that this cannot be the only solution to supporting the world's aging population. People also need to work on increasing their own personal savings and becoming more financially literate so that they can better do so.

They also said that governments and the private sector needed to do more to provide programs to support people's retirement. The WEF said countries should collect and combine pensions data to give people the complete picture of their financial position.

The U.K. has already taken some steps forward

In the United Kingdom (UK), they have already taken some positive steps forward on increasing the retirement age and taking stress of their pension system.

From 2018 to 2046 the state pension age will increase from 65 to 68. A report from the county's Department for Work and Pensions suggested that those under 30 may not receive a state pension until they are 70. They have also set up an auto-enrolment system so that more people will have access to a pensions saving. The World Economic Forum has praised these reforms but says more work still needs to be done.

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