The risk of a global retirement crisis, blockchain is hope

Three factors leading up to the pension crisis

The first that we can see most clearly, many countries are cutting pension funds. These countries are being overspending, high public debt leads to an insufficient state budget.

The next which leads to the risk of a retirement crisis is that the population is getting older. Leading to a decrease in the proportion of working-age citizens. According to a report, in China – the most populous country in the world, the number of people aged 65 and over accounts for 11% of the total working age and will increase to 42% by 2050.

The third is rising inflation all over the world. Some currencies lose the value of 1%-2% over a month. In which some countries have lost their currency privilege such as Venezuela, Zimbabwe. The amount paid monthly by the employees to the retirement fund is insufficient to pay the employees monthly in retirement.

Government solutions

To against this crisis, governments are gradually raising the retirement age and cutting welfare. This way is intended to increase the number of years of employees as well as reducing the number of years that the pension fund has to pay monthly for employees in retirement.

The average age at which employees will be entitled to a full pension is over 65 by 2050, from 63 to 65 for men and women from 60.

Many countries choose welfare reduction options, which require employees to save more. In addition to reducing welfare, retirement contributions will increase from 2% of income to 8%.

And governments will continue to change and the retirement age will increase higher than expected.

"My mother retired during her heyday. My mother is now 58 and she has retired at the age of 56, but this is unlikely to happen in our generation."

Blockchain is hope

Noticed, blockchain operates as a ledger that records all data transparently, it helps to engage individual communities into a large with no border. This is great, isn't it?

This ledger system is a completely transparent blockchain system, it allows individuals to check the funds they have contributed to pension funds. That transparency allows individuals to plan their retirement for themselves. Because they can clearly know what pension funds are investing in and, more importantly, the transparency of funds in using capital to build a sustainable retirement fund for employees.

As mentioned in previous articles, blockchain helps eliminate agencies that mean the cake will not be broken into small pieces. Blockchain ledger will make the storage process transparent, less unnecessary intermediary, which would surely be a better choice than traditional pension funds today.

Blockchain motivates the younger generation to save, today the younger generation is becoming more and more interested in cryptocurrencies than stocks, bonds and bond funds. They realize the value behind this interesting technology is transparent and public to the world. That allows them to have more control in their investments and only they have control.