Academy of Social Sciences: Young people whose pension will run out in 2035 should plan as soon as possible

category:Finance
 Academy of Social Sciences: Young people whose pension will run out in 2035 should plan as soon as possible


If the retirement age is 60 years old, the earliest group of post-80s in 2035 is only 55 years old, not reaching the retirement age. That is to say, the post-80s generation is likely to become the first generation without pensions.

Chinas pension problem is a real and huge crisis. Recently, during the Dalian Summer Davos Conference, Li Zhaoqi, president of Mercer (China) Limited, an international human resources consultancy, said in an interview with reporters from the China Times that young people should start planning for old-age investment as soon as possible.

Old-age society brings pension crisis

Mercer Consulting publishes a Mercer Melbourne Global Pension Index Report every year, using more than 40 indicators to evaluate 34 major global pension systems. Melbourne Mercer Global Pension Index report in 2018 shows that China scored 46.2 points and was rated D on the basis of considering the adequacy, sustainability and integrity of the pension system. This is down 0.3 from last year, but since China was included in the system in 2009, the highest score is only 48.0 points, and it has always been in the D level of 35-50 points.

According to the report, China is facing a huge pension gap in the long run, and there are many hidden dangers and challenges in pension implicit debt and empty account operation of personal accounts. With the extension of personal life span, the number of this gap will continue to soar.

According to the data of the National Bureau of Statistics, in 2018, Chinas population aged 60 and above was 249.49 million, accounting for 17.9% of the total population, of which 166.58 million people aged 65 and above, accounting for 11.9% of the total population. Usually, in international standards, the proportion of the elderly population over 60 years old in a country or region reaches more than 10% of the total population, or the proportion of the elderly population over 65 years old reaches more than 7% of the total population, which is recognized as entering an aging society. At the same time, fertility has continued to decline. In 2018, the number of births decreased by 2 million compared with the previous year, and the birth rate was the lowest since 1978.

According to the current pension system in China, the old people are currently receiving pensions from the pension insurance paid by the young people. However, in the future, as the main contributor of pension, the number of young people is decreasing, which will inevitably lead to the declining trend of total pension income.

However, the report also points out that China lags behind Australia, Canada, Chile, Colombia, Germany and the United Kingdom in the Melbourne Pension Index because Chinas pension system and its improvement are still in its infancy. But on the whole, its pace is steadily rising, and has drawn lessons from other developed systems, is developing a pension system with Chinese characteristics.

Aging is not only a problem facing China, but also a worldwide pension gap. However, compared with other countries, people in China are heavily dependent on the government and employers, and only regard them as key players in implementing these pension plans.

In a question about Who is responsible for ensuring that people can earn enough income to meet their basic needs after retirement? Among the survey questions, the results show that 74% of Chinese believe that they are personally responsible for retirement income, which is lower than the global average of 81%. Among them, 52% believed that government was responsible, significantly higher than 31% worldwide.

According to the report, Chinese people have not yet established the concept and habit of pension savings and pension investment, and family financial management still stays at the stage of meeting daily urgent needs. Nearly a quarter never calculated the amount they needed to retire, and only 20% did so with the help of financial advisers. In the developed countries of Europe and America, pension security is the highest goal of family financial management, which needs to be formed through a lifetime of pension savings and pension investment.

We cant expect social security to make up for the gap in retirement income. If the pillar benefits provided by social security schemes should be protected, the country must use more ways to solve its long-term payment challenges. The report makes recommendations on how individuals plan for old-age security. And Li Zhaoqi also said that young people should believe in compound interest, believe in the power of time, and start investing in bonds or stocks that can beat inflation earlier. The compound interest rate of 2% per year is 20%, which is considerable in the end. In view of the current situation that many people go to Hong Kong to buy insurance products, she pointed out that the insurance products themselves are very complex, and it is difficult to distinguish the good from the bad on the surface. For example, the insurance of 1000 yuan may not be better than 1500 yuan, nor worse than it. We should carefully look at the specific terms and rates of return. Of course, there are also some regulatory risks, because the purchase of products from mainland insurance companies is protected by the mainland insurance law, while the insurance policies in Hong Kong or elsewhere are not protected by the mainland law. Source: Responsible Editor of China Times: Wang Xiaowu_NF

We cant expect social security to make up for the gap in retirement income. If the pillar benefits provided by social security schemes should be protected, the country must use more ways to solve its long-term payment challenges. The report makes recommendations on how individuals plan for old-age security. And Li Zhaoqi also said that young people should believe in compound interest, believe in the power of time, and start investing in bonds or stocks that can beat inflation earlier. The compound interest rate of 2% per year is 20%, which is considerable in the end.

In view of the current situation that many people go to Hong Kong to buy insurance products, she pointed out that the insurance products themselves are very complex, and it is difficult to distinguish the good from the bad on the surface. For example, the insurance of 1000 yuan may not be better than 1500 yuan, nor worse than it. We should carefully look at the specific terms and rates of return. Of course, there are also some regulatory risks, because the purchase of products from mainland insurance companies is protected by the mainland insurance law, while the insurance policies in Hong Kong or elsewhere are not protected by the mainland law.