For many young people there is no time like the present when thinking about their life. When we are young we tend to think about how happy we are now and not ponder too much on what our quality of life will be like later. Most people using the OECD Better Life Index are below 65 years-old, and people of working age (20-64 year-olds) make up the largest part of the population, outnumbering the elderly (65+ years) four to one.
But a look into the future gives a very different picture. Life expectancy at birth is already approximately 80 years among OECD countries, a gain of more than 10 years since 1960, and the average fertility rate of 1.74 is below the replacement rate. This means that the population is getting older and it is projected that by 2060 there will be fewer than two people of working age for every one of pension age. So instead of just thinking about how our life is now, we should start thinking about how it will be in the future.
A look at how life is for the elderly of today gives us a mixed picture. OECD Pensions at a Glance 2013 identifies income as a crucial factor in determining how life is going to be in our twilight years. Recently, OECD countries have had some success in this domain, with the average poverty rate among the elderly falling from 15.1% in 2007 to 12.8% in 2010, in spite of increasing poverty rates suffered by the rest of the population due to the crisis. Incomes of people aged 65 years and older in OECD countries reach about 86% of the level of disposable income of the total population. But just as for other issues, there is a gender gap among the elderly. As women live longer, they are more likely to end up living alone on a low income in their old age, and are therefore more at risk of poverty.
Our health and social support networks (friends and family) are other important measures that affect our well-being later on in life. Not surprisingly, the elderly are among the least satisfied with their health. But they are also the least likely hang out with friends, with 20% of people aged 65 and over reporting no contact with friends. Access to public services is particularly important for our older people, as they need more care than the rest of the population.
With spending on long-term care sometimes exceeding 60% of disposable income, we have to find new ways to sustain ourselves in old age. In some cases this has led to some rather drastic solutions. In Switzerland, the prices for care are so high (between USD 5 000 and USD 10 000 a month), some families have resorted to the rather controversial solution of exporting Grandma and Grandpa abroad to more affordable retirement homes as far away as Thailand. Coincidentally, Switzerland also has one of the highest old-age income poverty rates (22%) in the OECD. In Korea, where the population is ageing rapidly, families have come up with a less extreme alternative. They have managed to work around the strains of taking care of their older relatives by using the new Ubiquitous Health House system (uHouse) that relies on Internet technology to monitor their loved one’s health. This allows families and the elderly to maintain privacy and independence while facilitating family care, and is designed to substitute for hospital service.
So as an ageing population and the effects of the crisis continue to put pressure on pensions and the quality of life of the elderly, we should all be asking ourselves, how life will be when we are older?