How prepared are we to face old-age ?
Reports from ILO, World Bank and OECD shows that the world’s population is aging rapidly. It is estimated that there are approximately 670 million people across the world over the age of 60. It is about 10.4 percent of the global population. By the year 2050, the total number of elderly people over 60 years is expected to have reached around 2 billion, or 21.7 percent of the total population in the world.
When people are in good health and are in productive age, they work and contribute to the development and progress of the country. Therefore, it is important that when they are older and can no longer work and contribute, they are not left behind. The prosperity achieved by the country should also be shared with them in the form of old age income security.
Further, an average citizen is not a good financial planner and might fail to set aside sufficient and well-diversified savings while young, thus running the risk of falling into poverty when old. Family support is not always available for all the elderly people, and it declines as economic development happen. Further, urbanization, migration, and labor force mobility adds to the dwindling family support. In most of the countries, elderly citizens rely traditional family support, which is under pressure.
According to the Population & Housing Census of Bhutan, 2017, the total population of Bhutan was 681,720. Out of 681,720 Bhutanese population in all age group, 63,775 were above 60 years of age. The composition of older people against total population in Bhutan was 9.36% in 2017. The total number of older people over 60 years is expected to double by the year 2030. The elderly people are more exposed to the risk of poverty than the rest of the population because of their higher vulnerability to sickness and disability.
In view of the above, reliable mechanisms that ensure systematic protection against risks of vulnerability for older persons are required. While some population groups make individual efforts and make arrangement like personal savings, investments and also through family support mechanisms, majority of the world’s population, especially in the developing world find it difficult to have access to old age retirement schemes.
In fact, in most developing countries, sources of income are unreliable even during working age for most people. This is mainly because many citizens are engaged in informal occupation and do not have reliable sources of income. Therefore, only a fraction of the world population has the capacity to fend for itself during old age. Income security in old age also helps in reducing inequality within and among countries and ensuring decent standard of living for all people.