Sunday, June 29, 2008
The nemesis of pensions?
Is this man the nemesis of funded retirement systems? At any rate, Aubrey de Grey's work on life extension by regarding ageing as a curable disease gains increasing attention and traction, as witnessed by a veritable burst of recent media coverage such as Wired's. If his claim that life expectancy of about 120 years may be achievable to currently living generations, this would indeed pose a major challenge to retirement systems which rely on predictable mortality tables that shift slowly. Hence this space is certainly worth while watching for black swan risks.
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At least two factors are working against viable Euro-pensions. Longer age-span, and low fertility.
In 50 years, half the populations of several countries will vanish. Not all at once, but over time for lack of replacement.
Robots and other automation may fill the gap. A continent of pensioners supported by robots--imagine that.
I tend to disagree with that generalisation. While both factors are true and will make pensions more expensive to cover, the changes are relatively sluggish and they are rather predictable, so they can be addressed, unless vested interests (politics) prevents that from happening.
What I'm saying with this post is that an unexpected acceleration of the hitherto rather stable increase in life expectancy would create havoc.
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