Bloomberg: It’s not just America. New data show people all over the globe don’t understand basic concepts of investment and inflation. “Most online quizzes are relatively mindless, promising to reveal which vegetable, sandwich or rock band best represents your personality. That was not the case for a short online test given to 16,000 people in 15 countries this year. It revealed just how unprepared a good chunk of the world is for retirement. The three-question test, given as part of the Aegon Retirement Readiness Survey 2018, measured how well people understand basic financial concepts. Many of the participants failed the quiz, with big potential consequences for their future security. Beyond the sobering lack of financial literacy, there were some rather curious data in Aegon’s annual survey, published on Tuesday…”
The case for a new social contract for retirement – “Alex Wynaendts, CEO of Aegon, outlines the case for a new social contract for retirement and calls for a more positive view on aging. “The need for a new social contract is urgent. People are today living longer than at any other time in history. While this is a cause for celebration, it also poses profound and far-reaching challenges for society. In many countries, the traditional social contract for retirement – based on the three pillars of social security, workplace retirement benefits and personal savings – is crumbling, and responsibility is shifting fast from governments and employers to individuals.
Perhaps the biggest challenge of all is that we need to ensure the long-term sustainability of social security benefits. Ultimately this requires governments to make difficult financial decisions and trade-offs, such as reducing retirement benefits, raising taxes or increasing the retirement age. What we need is to ensure fairness across generations, reducing the risk of poverty for the elderly now and in the future. In a world in which responsibility for preparing for retirement is shifting, we need to ensure that there is universal access to long-term saving products and services that encourage people to save. By doing so we will be able to serve otherwise vulnerable groups, such as those working on a freelance basis or taking time out of work to care for family and loved ones…”