What they have to say isn’t necessarily new, but we like the way they say it.
Mercer is taking recent doomsday retirement predictions from the World Economic Forum to heart, which makes sense, since the company is the WEF’s partner on the latter’s sci-fi sounding “Retirement and Investment Systems Reform Project.”
The Forum recently predicted an eye-popping $224 trillion global retirement funding shortfall by 2050. Mercer pegs the current gap here in 2017 at $70 trillion, and identifies challenges that need to be addressed—quickly.
Jacques Goulet, president of Health and Wealth for Mercer, refers to it as, “one of the greatest crises of our time, for which there is no silver bullet.”
Goulet believes that the issue of financial security is not just about retirement, but instead about broader financial wellness concerns that plague individuals at varied life stages. These financial concerns undermine social and employment productivity, challenging people to think differently.
“We do not believe that this is merely a ‘retirement savings matter.’ The retirement savings gap is part of the significant financial security issue that is chipping away at productivity and putting individuals into periods of financial instability,” Goulet says in a statement. “Helping to find solutions to this problem goes to the core of our mission at Mercer, our offerings and our extensive research and data in this area.”
He claims financially secure individuals are confidently able to set and achieve financial goals for themselves and their households, to support their dependents, to enjoy a desired quality of life, and to cover emergencies, without worrying about whether their future income is enough to cover expenses or to sustain retirement.
The challenges are outlined in a new report titled “Bold Ideas for Mending the Long-Term Savings Gap,” some recognizable, and others not so much:
- Longer lives combined with lower birth rates
- Lack of easy access to pensions and savings products
- Individuals ill-prepared for greater financial responsibility in retirement
- Lack of trust in financial markets and products
- Low growth environment
- Gender imbalance in long-term savings
“Given the current size of the retirement gap, all relevant stakeholders need to act now,” adds Renee McGowan, Global Head of Individual Retirement Solutions and Financial Wellness with Mercer. “People need to understand what ‘good’ looks like when it comes to savings products, advice, and decisions. But they also need to have the confidence to act on their knowledge to achieve the best outcomes.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
