Retirement Trajectory

A citizen, first in war, first in peace and first in the hearts of his country men ............. Henry Lee (1756 - 1818, funeral ovation of General Washington )

French pensioners currently enjoy higher average incomes than working-age citizens due to strong public pension funding, early retirement eligibility, and high replacement rates, but these factors are creating financial pressures on the public system.

This financial advantage for retirees has evolved over decades, with retiree income growing by over 160% between 1970 and 2020, while working-age income double

Maintaining such pension levels is increasingly expensive and a concern. France spends around 14% of its GDP on pension contrasting sharply with places like the U.S. and Australia, where retirees earn significantly less than working adults.

Demographic Trends:

• Aging populations are increasing dependency ratios worldwide, with about 18% of the global population projected to be over 65 by 2030.
• Developed countries like Japan and Germany have dependency ratios exceeding 50%, straining pension systems.
• Emerging markets like India are rapidly expanding national pension systems.
• Average life expectancy has risen globally to around 74.4 years, leading to longer payout periods.
• Retirement ages are rising globally, often approaching or exceeding 67 years in many OECD countries, to ease pension system burdens.

Pension systems are also transitioning from defined benefit (DB) plans, where employers guarantee pensions, to defined contribution (DC) plans, where individuals bear investment risk, especially in the U.S., Italy, and Europe while older workers are adopting technology and flexible work arrangements to extend workforce participation.

Global pension fund asset is estimated at over USD 60 trillion, with key markets holding 91% of these assets. To ensure sustainability and security of retirement income countries have to implement reforms, and enhancing governance. While ageing entrepreneurs must periodically evaluate their succession plan.

See You at The Top